Falling Out of the Gap

Gap shareholders have been grumbling about the chain’s problems for quite a while, but it’s not likely that many of them wanted company CEO Mickey Drexler to retire. Sure, he was blamed for the company’s having “lost its way” in the past two years, filling its shelves with trendy items that failed to capture the attention of shoppers. On the other hand, Drexler always got pretty much full credit for the Gap’s incredible run of success prior to that, and the Gap faithful seemed to be waiting for him to return to form.

But now Drexler says he’s leaving, and there’s no clear successor in sight. He says his job had evolved in ways that put him out of touch with the part of the business that he loves. One suspects that some of the things he doesn’t love might be massive restructuring, shuttering stores, and laying people off. That’s just speculation, of course, but it’s not hard to imagine a scenario in which such unpleasantness is part of the Gap’s future. (It’s also much harder to take seriously Drexler’s earlier claims that the company is on the brink of a turnaround—if it really is, why wouldn’t he stay for at least some of the rebound?)

In any case, the Gap’s recent history is a cautionary tale for believers in the Great CEO theory of business. That’s because Drexler was not a fraud—he really was the perfect guy in the perfect job, with a perfect sense of what shoppers wanted. He had the touch. He made Gap-wear something that everybody had to have at least some of, he pumped life into Banana Republic, and he launched Old Navy as an overnight success story. And every article you’ve read about the Gap during its rise made it clear how vital Drexler’s own tastes and instincts were to his company’s seemingly golden touch.

Which, when you think about it, is actually pretty scary. Maybe a small start-up can get away with being totally dependent on the vision of one person, but the Gap was (and is) a giant, sprawling company, with thousands of stores and billions in revenue. At that level, the key to a successful organization ought to have a lot less to do with a single visionary and a lot more to do with—well, the organization. Yet for whatever reason, it’s those single visionaries that investors fall in love with, over and over again.

Drexler will be around through the end of the year as the company searches for a successor. And it sounds like we haven’t heard the last of him. “One of my passions is to grow things,” he tells the Wall Street Journal today. “I’ve been fortunate in my career to have been part of what are now quite large businesses, and I would like to actually be involved in something a little smaller.”

Growing a small business into a large one is obviously no mean feat. But making that large business sustainable, while not as widely celebrated an accomplishment, is probably even harder. You need more than a visionary to do it. As the Gap’s story shows, things can get ugly when the visionary blinks. Or quits.