How Leadership Change Can Shape an Industry

My first job after college was at Travelers, one of the largest insurance companies in the world. I started as an analyst in a leadership development program with a bunch of new grads. It was a work hard, play hard environment which I enjoyed. This was also my crash course in Corporate America 101. I had a front-row seat to leadership shakeups and their lasting impact.

There was a rising star, let’s call him Leon, who was well-liked, respected, and moved up the ranks quickly. If any recent hire had the opportunity to work on a project led by Leon, we took it. He was a rising tide who could lift all boats like LeBron James enabling Mo Williams to become an NBA All-Star and champion.

Leon was soon promoted from director to VP. At 30 years old, he would now manage the P+L for a small territory seen as a proving ground for young execs. If he succeeded, he would continue upwards.

But his promotion sent shockwaves across our 200-person department. It even caught the eyes of our competitors at The Hartford who had a similar organizational structure.

In the year and a half that followed, Leon’s promotion was a domino that kicked off several departures from disgruntled directors who felt passed over. Some of them now had to report to Leon, who was younger and had less experience. Others felt discouraged that Leon was yet another member of the “boy’s club” that reflected the homogenous executive ranks. If Leon was what leadership wanted, and they didn’t fit the Leon mold, then they might have hit their ceiling in our department and company.

But Leon’s promotion had inspired some young leaders too. They felt encouraged that meritocracy beat seniority. They saw a future where if they put in work and brought fresh ideas to the table, that they could move up like Leon.

His promotion also inspired top execs who wanted their own Leons to lead their territories. Our little corner of the insurance world went into Sean McVay Effect mode. If a 30-year-old head coach could turn around an NFL team, then a 30-year-old VP could turn around an underperforming region too.

Leon’s jump felt big at the time, but let’s be clear. This was still a middle management role with an annual compensation package that was likely around $200,000. You’ve probably worked with a few Leons before. You might be a Leon yourself! It’s not a unique situation.

But there’s Leon, and then there’s the recent shakeups at Atlantic Music Group. The new CEO, Elliot Grainge, is the 30-year-old CEO of 10K Projects and the son of Universal Music Group CEO, Lucian Grainge. This transition has some similarities to Leon, but there are more layers here.

The stakes, salary, and control are much higher. Atlantic is one of the marquee major labels. Plus, there’s the father and son dynamic. There is also the departure of beloved leaders who were synonymous with Atlantic’s brand. Not to mention, one of those leaders is yet another woman who “stepped down” from her role as the head of a major label. And to top it all off, there are celebrated execs who will now report to the newly-minted Grainge.

The shockwaves aren’t surprising, but those shockwaves have played out both privately and publicly. Executive turnover often stays positive in the media, even if the transition is tense behind closed doors. But Grainge’s promotion has been treated differently.

Anonymous execs have publicly questioned the decision. Other pieces have called out the major label group’s decline in superstar acts over the years. Some have speculated on the impact that this will have on other labels.

Most of the time, if a beloved exec gets fired, they “part ways” with a glorified press release. The goal is to leave everyone’s internet footprint as positive as possible. Sure, there may be a few rumors floated around in more gossipy outlets, but the real conversations stay private. While I never agreed with this approach (which is a topic for another day) I respected the intent.

But let’s fast forward a few years. What if Warner Music Group’s bet on Grainge pays off, Atlantic breaks some big acts, its market share jumps, and it rivals Republic and Interscope yet again for the top spot?

We may see more attention to operators building outside the major label system. Who has the next 10K Projects? Who has their ear to the streets? Who can identify and develop talent in a less expensive and more efficient way than the majors have?

And on the personnel side, how may this affect the current leadership landscape? Who will leave their role because they don’t fit the mold of the newer major label heads? Who gets inspired and believes that they could be a few years away from running a major label like Grainge? And how will these transitions play out both privately and publicly?

We’re in newer territory here, especially as the industry evolves. But we’re also in familiar territory. There are plenty of questions, and more shakeups may come. But we likely have an idea of how this will all play out.

P.S. - In case you were wondering, Leon continued his upward ascent. He is now one of the highest-ranking officers in the entire insurance industry.