During an NBA tech summit last year, former CEO Jensen Huang described having a management style at Nvidia built on open communication.
“I spend all of my time being transparent,” said Huang, who has long been lauded for steering the chipmaker’s extraordinary rise.
Now, reports of Huang’s extramarital affairs — with a direct report, another employee, and a client suspected by US intelligence officials of spying for China — have exposed a gap between his professed commitment to candor and how he may have acted behind closed doors.
Huang’s exit leaves Nvidia’s next CEO with a difficult task: rebuilding the trust of tens of thousands of workers at a company at the center of the AI boom.
“When the CEO is having a romantic relationship with someone at the company, that can erode trust and engender cynicism,” said Kim Scott, a former Apple and Google executive and cofounder of executive education company Radical Candor.
Nvidia didn’t respond to a request for comment from Business Insider.
Refocusing on the work
Huang ran Nvidia with a flat structure at the top, a setup he credited with helping the company move quickly. He worked out of a conference room, not a private office, and had dozens of direct reports.
Nvidia didn’t have a publicly disclosed succession plan. C-suite observers have said that the halo surrounding a successful tech founder, combined with an org chart light on top layers, can leave a company with a thin succession bench.
After Huang’s departure Wednesday, Nvidia appointed Colette Kress, chief financial officer, as interim CEO. The company launched a search for a permanent replacement, including both internal and external candidates.
Kress, as well as whoever ultimately takes the reins permanently, will likely face a number of challenges.
“The first thing employees want to know is: Is the company in good hands and will it continue to do well?” said Scott. “A lot of people are holding unvested options worth millions of dollars.”
Nvidia’s new boss will have to navigate the intense public scrutiny surrounding Huang’s exit, while ensuring day-to-day operations remain humming.
“The combination of keeping people focused on the work while not pretending that the circus outside doesn’t exist is really, really hard to do,” said Katie Burke, chief operating officer of legal AI company Harvey.
‘A grief process’
There are no quick fixes in this situation.
“Trust can be violated very quickly, but it’s rebuilt slowly and consistently,” said Alison Fragale, an organizational psychologist and professor of organizational behavior at the University of North Carolina at Chapel Hill.
The chipmaker’s new leader will also need to help employees cope in the aftermath of the scandal and get back to work. That may be especially difficult for those who admire Huang and wanted him to stay, added Fragale.
“It’s like a bit of a grief process,” she said.
Meanwhile, other employees may be feeling betrayed or unsettled by the intense public scrutiny.
“You can’t pretend that everyone’s family is not asking them what’s going on,” said Fragale.
Nvidia’s next leader will have at least one advantage in healing the company’s culture, said Jessica Neal, a former chief talent officer at Netflix. Huang’s departure shows that despite all of his achievements, he is still facing consequences for violating company standards.
“One of the biggest mistakes companies can make is confusing extraordinary results with the permission to behave differently,” Neal said. “Every time you make an exception for a high performer, you’re sending a message to everyone else about what really matters. And over time, those exceptions become the culture.”
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