In the corporate world, the impact of a CEO's decisions may not become apparent until years later. One pivotal choice can shape the fate of a company, and sometimes, the consequences of missed opportunities can be staggering. Case in point: chipmaker Intel's potential involvement in AI and its struggles to reclaim its former industry leadership.

According to recent reports by Reuters, in 2017 and 2018, Intel had the chance to acquire a 15% stake in OpenAI for $1 billion. Had CEO Bob Swan given the green light, that investment would now be valued at around $12 billion, based on a recent evaluation of OpenAI. Additionally, Intel could have potentially obtained an additional 15% stake in return for supplying hardware to OpenAI at cost. This missed opportunity meant that Intel, with a 30% ownership, could have been at the forefront of generative AI, a field OpenAI later debuted in 2022.

However, from the perspective of 2017 and 2018, Swan deemed the potential deal unfavorable, resulting in a missed opportunity for Intel. Intel's current predicament highlights a sobering reality: while a company can survive a wrong CEO, enduring four consecutive wrong CEOs can prove fatal.

After the departure of Intel's renowned CEO, Andy Grove, in 1998, the company witnessed a succession of four CEOs, including Swan and Otellini, who proved to be ill-suited for the position at that time. As performance deteriorated, Intel's board of directors brought in former Intel chief technology officer Pat Gelsinger as CEO in 2021, hoping to embark on a high-stakes rescue mission. However, the outcome of this effort remains uncertain, with Intel's stock price recently plummeting by 26% due to disappointing quarterly results.

The plight of Intel serves as a grim reminder of the phenomenon known as the "four-wrong-CEOs disease" that has befallen some of America's most prominent companies. Westinghouse, a once-revered pillar of American industry, suffered significant damage due to four consecutive wrong CEOs between 1983 and 1993. The company's board had to bring in an outsider CEO to dismantle and rebuild Westinghouse, but the new-look company eventually disintegrated.

The downfall of Sears, once the world's largest retailer, offers an even more dramatic tale. Four wrong CEOs between 1962 and 1986 led Sears down a path from which it could not recover. The fourth CEO's strategy involved heavy diversification into financial services, while downplaying the core retail business. This move proved disastrous, and although the financial services arm was unwound in 1992, Sears had already lost its momentum. The company's market value declined, and it ultimately succumbed to Walmart's dominance. Investor Eddie Lampert's attempt to revive Sears after purchasing the company in 2004 proved unsuccessful, resulting in the drastic reduction of its stores from thousands to just a handful.

The question arises: why does corporate downfall often require four consecutive wrong CEOs? While a single inept CEO can certainly cause damage, larger companies typically have safeguards in place to remove such leaders before irreparable harm befalls the entire organization. Jim Collins, author of popular business books, explains in "How the Mighty Fall" that there are five stages of decline: hubris borne of success, undisciplined pursuit of more, denial of risk and peril, grasping for salvation, and finally, capitulation to irrelevance or demise. It is challenging for a single CEO to navigate through all five stages, and boards are unlikely to allow one leader to take a company through such a destructive journey.

Examining Apple's situation in 1997 provides insight into the significance of these stages. Having already gone through the first three stages of decline under three consecutive wrong CEOs, Apple was on the verge of bankruptcy and desperately searching for a lifeline. The board made the bold decision to bring back co-founder Steve Jobs, who had previously been fired in 1985 and had never served as Apple's CEO. This move proved to be a turning point in Apple's history, preventing its collapse and setting the stage for its subsequent success.

It is crucial to note that wrong CEOs are not necessarily unintelligent or malevolent. Often, they are highly accomplished and driven individuals whose experiences or temperaments do not align with the needs of a particular company at a specific time. The responsibility ultimately rests on the fallible human decision-makers in the boardroom.

The lessons from Intel, Westinghouse, and Sears highlight the delicate balance between leadership and the long-term success of a company. The importance of selecting the right CEO, as well as recognizing when change is necessary, cannot be overstated. The consequences of four wrong CEOs can be devastating, serving as a grim reminder of the perils that await when leadership falters.