5 ms·

I am just a dumb developer, so I am probably not quite getting the subtle management logic at play here, but what's with random incompetents being appointed CEO

I am just a dumb developer, so I am probably not quite getting the subtle management logic at play here, but what's with random incompetents being appointed CEOs and paid millions of dollars to make things worse or at least not much better? (Bartz at yahoo, Apotheker at HP)It seems like a systemic inefficiency to me. (btw this is a genuine question, not snark. I'd appreciate anyone versed in how boards etc work enlightening me) On that note aren't the legions of VPs that infest such companies supposed to be a "bench" for selecting a CEO from in an emergency? If you have half a hundred (or more!) VPs and none of them can step up and be CEO in troubled times, why pay them millions of dollars? Also, why exactly Meg Whitman? Just because she happened to be available and doesn't have another job? (Isn't that telling about her desirability as a CEO?) How long before they look far yet another saviour on a white horse?

tybris 15y ago
Because the board in older companies usually consists of people with MBAs from expensive schools who just don't get technology (hint: it's not about cutting costs, it's about building technology).
- pedalpete 15y ago
  I think that is a gross generalization, and I think in large corporations like the ones we are referring to, their is room for MBAs. Better there then in start-ups ;) There is no rule that an MBA can't 'get' technology. It isn't about building technology either, it's about proving something people need and want, and getting them to pay for it. Technology is only a component of that.
  - burgerbrain 15y ago
    There may not be any codified rule, but it does seem to be the rule.
  - tybris 15y ago
    > it's about proving something people need and want, and getting them to pay for it. HP sells more stuff that people want than almost any other company (printers, desktops, etc.). Yet they're failing. Successful technology companies (Apple, Amazon, Facebook, Google, Dell, Oracle) have business and technology interwoven like yin and yang. Business fuels technology, technology drives the business. You get there by building your business and your technology hand in hand. If you stop building, you'll fail on both. That's what you don't learn in an MBA.
- chollida1 15y ago
  > Because the board in older companies usually consists of people with MBAs from expensive schools who just don't get technology ( Is that true? here's your chance to get a data point. Show me which people on HP's board hold MBA's http://h30261.www3.hp.com/phoenix.zhtml?c=71087&p=irol-govboard http://h30261.www3.hp.com/phoenix.zhtml?c=71087&p=irol-g...
  - throw_away 15y ago
    Here's the breakdown: Andreesen - no mba (http://www.nndb.com/people/442/000022376/ http://www.nndb.com/people/442/000022376/) Apotheker - no mba (http://www.nndb.com/people/417/000253655/ http://www.nndb.com/people/417/000253655/) Babbio - MBA (http://www.nndb.com/people/159/000124784/ http://www.nndb.com/people/159/000124784/) Baldauf - masters in econ (http://www.nndb.com/people/177/000124802/ http://www.nndb.com/people/177/000124802/) Banerji - MBA (http://bx.businessweek.com/kellogg-school-of-management/shumeet-banerji-binging-on-the-booz/9534964054866995264-700335e7ac716de6c75cb211226fdaac/ http://bx.businessweek.com/kellogg-school-of-management/shum...) Gupta - MBA (http://www.nndb.com/people/889/000168385/ http://www.nndb.com/people/889/000168385/) Hammergreen - MBA (http://www.nndb.com/people/169/000124794/ http://www.nndb.com/people/169/000124794/) Lane - No MBA (http://www.be.wvu.edu/hall_fame/lane.htm http://www.be.wvu.edu/hall_fame/lane.htm) Livermore - MBA (http://www.nndb.com/people/763/000128379/ http://www.nndb.com/people/763/000128379/) Renier - MBA (http://en.wikipedia.org/wiki/Gary_M._Reiner http://en.wikipedia.org/wiki/Gary_M._Reiner) Russo - No MBA (http://www.nndb.com/people/753/000126375/ http://www.nndb.com/people/753/000126375/) Senequier - No MBA (http://www.hp.com/hpinfo/newsroom/press/2011/110120xa.html http://www.hp.com/hpinfo/newsroom/press/2011/110120xa.html) Thompson - MBA (http://www.nndb.com/people/187/000118830/ http://www.nndb.com/people/187/000118830/) Whitman - MBA (http://www.hp.com/hpinfo/newsroom/press/2011/110120xa.html http://www.hp.com/hpinfo/newsroom/press/2011/110120xa.html) so, eight of fourteen.
    - PakG1 15y ago
      Lane's the chairman though. Does that count for anything?
    - chollida1 15y ago
- maukdaddy 15y ago
  Thanks for the gross generalization! Some of us are highly technical, began in the technology field, and then got an MBA. Some of us have MBAs and can even code!
  - nknight 15y ago
    And how many boards of multinational companies are you on? I read the comment as "an MBA is their only qualification", not "MBAs are inherently incapable of understanding technology".
blackguardx 15y ago
I was with you until you mentioned Bartz as an example. She was actually really good as the head of Autodesk. Yahoo has languished, but at least she didn't make any company killing decisions like Fiorina or Apotheker.
- deleted 15y ago
  [deleted]
- plinkplonk 15y ago
  sure (and upvoted) but I was just using "incompetent as incompetent does" as the guiding rule, not really looking at past records etc. What exactly did she do at Yahoo anyway that made the situation there better? AFAIK the good engineers at Yahoo are running out the door as fast as they can. Not sure that is the sign of a thriving company (but then I have zero upper management experience etc and am just a dev and so could be missing something very obvious - and hence the question). That said, feel free to substitute Bartz with anyone else you consider an incompetent CEO. Doesn't affect my post much. My curiosity is about what the hiring of CEOs at great cost then firing them (also at great cost), and replacing them with even more dubious people, reveals about the system and the forces at play. For eg: if Apotheker was let go at SAP then what made him a good choice for HP?If he couldn't be an effective CEO at SAP which is an enterprise software company, then how is he a good choice for turning HP into an enterprise software company? I just don't get the logic there. Why aren't the people who made that decision now being fired along with Apotheker? How are such decisions taken, and more importantly how do such poor decisions survive the scrutiny of investors etc?
- slantyyz 15y ago
  I wonder how hamstrung Bartz was by the board of Yahoo, and perhaps the culture of Yahoo itself. I don't have any knowledge of Bartz's experience at Yahoo, but I can definitely say that it's very hard to make systemic changes when you're not given the tools to do so.
  - brianbreslin 15y ago
    All the reports seem to indicate it was a culture thing that caused tons of infighting and excess bloat in the ranks. People would have 6 different bosses on a project or no one knew who was responsible for anything. This is what I've gathered from all the blogs.
pedalpete 15y ago
I agree with your comments about the 'bench', unfortunately, in many companies, the great people you have on the bench get snatched up by competitors, particularly if you are unable to inspire them with a coherent vision. Tim Cook was lured too Apple from Compaq, and though he was only at Compaq for 6 months, I suspect he was not engaged by HPs strategy there (I'm not positive that this was post-merger, but I think it was). Theoretically, some companies are better able to keep bench warmers happy waiting for their time to shine. Obviously Apple has done a very good job at maintaining their top people. I think Microsoft has done a decent job as well, though loosing Ray Ozzie I think was a tough one. Of course, not everybody has the capability of being a great CEO either. Particularly of coming in and operating somebody else's company. So some of the people who are sitting on the bench hoping to get called up have unrealistic expectations. Bartz was far from genius, but nobody else has come up with a brilliant strategy for the troubled Yahoo! either. Apotheker had a strategy in mind, did a VERY poor job of selling it to the public. We'll never know if it was a flawed strategy or not, though it definitely seems so at this point. I think he is partially being made a scapegoat here as well. The board was sold on the vision and gave him the go-ahead, and now that Wall Street is showing its doubts, the board is getting rid of the CEO. The board needs to take some responsibility here, and from the history, it is obvious the HP board has some serious issues. HP is in a slightly better position that Yahoo!, but they desperately need to find their next growth opportunity. They thought they'd rule the world with WebOS, but their execution was so flawed that they blew it. I have a touchpad (got the $99 deal), and you'd have to be incompetent to think that device could compete with the iPad at the same price. So the problem is two-fold. First off, there doesn't seem to be capable internal leadership to pull from, and external expectations are high for a new leader who will drive change similar to the return of Steve Jobs to Apple. But there was nothing to loose at Apple. The company was almost gone if I recall correctly. Either it would completely fail anyway, or it could come back a success. HP doesn't have the luxury of throwing everything out. They are a successful company, but investors want to see new growth in a very competitive market (both hardware and IT services). So the job isn't a simple one. Do these CEOs earn their huge salaries? I don't think so. I'd like to see more CEOs put their money where their mouth is and take the majority of their salary in options, and I think the board should require that. Please don't refer to yourself as 'a dumb developer'. I think your question is completely valid, and I wish I could provide a better answer. Hopefully this gets you part way there.
lukifer 15y ago
The short version: the skills it takes to become a leader may or may not coincide with the skills it takes to be a leader. And board members are subject to the same irrationalities and social exploits as the rest of us.
alttag 15y ago
> ... what's with random incompetents ...? I think at least part of the answer is that research shows groups are, in some instances, shown to make worse decisions than individuals. In groups, individual biases are magnified, and the group process introduces a whole host of potential decision flaws (e.g., information hiding, social loafing) while not consistently compensating for individual decision weaknesses. Groups often make less optimal decisions than individuals, especially in subjective cases.

tybris 15y ago

Because the board in older companies usually consists of people with MBAs from expensive schools who just don't get technology (hint: it's not about cutting costs, it's about building technology).

pedalpete 15y ago
I think that is a gross generalization, and I think in large corporations like the ones we are referring to, their is room for MBAs. Better there then in start-ups ;) There is no rule that an MBA can't 'get' technology. It isn't about building technology either, it's about proving something people need and want, and getting them to pay for it. Technology is only a component of that.
- burgerbrain 15y ago
  There may not be any codified rule, but it does seem to be the rule.
- tybris 15y ago
  > it's about proving something people need and want, and getting them to pay for it. HP sells more stuff that people want than almost any other company (printers, desktops, etc.). Yet they're failing. Successful technology companies (Apple, Amazon, Facebook, Google, Dell, Oracle) have business and technology interwoven like yin and yang. Business fuels technology, technology drives the business. You get there by building your business and your technology hand in hand. If you stop building, you'll fail on both. That's what you don't learn in an MBA.
chollida1 15y ago
> Because the board in older companies usually consists of people with MBAs from expensive schools who just don't get technology ( Is that true? here's your chance to get a data point. Show me which people on HP's board hold MBA's http://h30261.www3.hp.com/phoenix.zhtml?c=71087&p=irol-govboard http://h30261.www3.hp.com/phoenix.zhtml?c=71087&p=irol-g...
- throw_away 15y ago
  Here's the breakdown: Andreesen - no mba (http://www.nndb.com/people/442/000022376/ http://www.nndb.com/people/442/000022376/) Apotheker - no mba (http://www.nndb.com/people/417/000253655/ http://www.nndb.com/people/417/000253655/) Babbio - MBA (http://www.nndb.com/people/159/000124784/ http://www.nndb.com/people/159/000124784/) Baldauf - masters in econ (http://www.nndb.com/people/177/000124802/ http://www.nndb.com/people/177/000124802/) Banerji - MBA (http://bx.businessweek.com/kellogg-school-of-management/shumeet-banerji-binging-on-the-booz/9534964054866995264-700335e7ac716de6c75cb211226fdaac/ http://bx.businessweek.com/kellogg-school-of-management/shum...) Gupta - MBA (http://www.nndb.com/people/889/000168385/ http://www.nndb.com/people/889/000168385/) Hammergreen - MBA (http://www.nndb.com/people/169/000124794/ http://www.nndb.com/people/169/000124794/) Lane - No MBA (http://www.be.wvu.edu/hall_fame/lane.htm http://www.be.wvu.edu/hall_fame/lane.htm) Livermore - MBA (http://www.nndb.com/people/763/000128379/ http://www.nndb.com/people/763/000128379/) Renier - MBA (http://en.wikipedia.org/wiki/Gary_M._Reiner http://en.wikipedia.org/wiki/Gary_M._Reiner) Russo - No MBA (http://www.nndb.com/people/753/000126375/ http://www.nndb.com/people/753/000126375/) Senequier - No MBA (http://www.hp.com/hpinfo/newsroom/press/2011/110120xa.html http://www.hp.com/hpinfo/newsroom/press/2011/110120xa.html) Thompson - MBA (http://www.nndb.com/people/187/000118830/ http://www.nndb.com/people/187/000118830/) Whitman - MBA (http://www.hp.com/hpinfo/newsroom/press/2011/110120xa.html http://www.hp.com/hpinfo/newsroom/press/2011/110120xa.html) so, eight of fourteen.
  - PakG1 15y ago
    Lane's the chairman though. Does that count for anything?
  - chollida1 15y ago
maukdaddy 15y ago
Thanks for the gross generalization! Some of us are highly technical, began in the technology field, and then got an MBA. Some of us have MBAs and can even code!
- nknight 15y ago
  And how many boards of multinational companies are you on? I read the comment as "an MBA is their only qualification", not "MBAs are inherently incapable of understanding technology".

blackguardx 15y ago

I was with you until you mentioned Bartz as an example. She was actually really good as the head of Autodesk. Yahoo has languished, but at least she didn't make any company killing decisions like Fiorina or Apotheker.

deleted 15y ago
[deleted]
plinkplonk 15y ago
sure (and upvoted) but I was just using "incompetent as incompetent does" as the guiding rule, not really looking at past records etc. What exactly did she do at Yahoo anyway that made the situation there better? AFAIK the good engineers at Yahoo are running out the door as fast as they can. Not sure that is the sign of a thriving company (but then I have zero upper management experience etc and am just a dev and so could be missing something very obvious - and hence the question). That said, feel free to substitute Bartz with anyone else you consider an incompetent CEO. Doesn't affect my post much. My curiosity is about what the hiring of CEOs at great cost then firing them (also at great cost), and replacing them with even more dubious people, reveals about the system and the forces at play. For eg: if Apotheker was let go at SAP then what made him a good choice for HP?If he couldn't be an effective CEO at SAP which is an enterprise software company, then how is he a good choice for turning HP into an enterprise software company? I just don't get the logic there. Why aren't the people who made that decision now being fired along with Apotheker? How are such decisions taken, and more importantly how do such poor decisions survive the scrutiny of investors etc?
slantyyz 15y ago
I wonder how hamstrung Bartz was by the board of Yahoo, and perhaps the culture of Yahoo itself. I don't have any knowledge of Bartz's experience at Yahoo, but I can definitely say that it's very hard to make systemic changes when you're not given the tools to do so.
- brianbreslin 15y ago
  All the reports seem to indicate it was a culture thing that caused tons of infighting and excess bloat in the ranks. People would have 6 different bosses on a project or no one knew who was responsible for anything. This is what I've gathered from all the blogs.

pedalpete 15y ago

I agree with your comments about the 'bench', unfortunately, in many companies, the great people you have on the bench get snatched up by competitors, particularly if you are unable to inspire them with a coherent vision. Tim Cook was lured too Apple from Compaq, and though he was only at Compaq for 6 months, I suspect he was not engaged by HPs strategy there (I'm not positive that this was post-merger, but I think it was). Theoretically, some companies are better able to keep bench warmers happy waiting for their time to shine. Obviously Apple has done a very good job at maintaining their top people. I think Microsoft has done a decent job as well, though loosing Ray Ozzie I think was a tough one. Of course, not everybody has the capability of being a great CEO either. Particularly of coming in and operating somebody else's company. So some of the people who are sitting on the bench hoping to get called up have unrealistic expectations. Bartz was far from genius, but nobody else has come up with a brilliant strategy for the troubled Yahoo! either. Apotheker had a strategy in mind, did a VERY poor job of selling it to the public. We'll never know if it was a flawed strategy or not, though it definitely seems so at this point. I think he is partially being made a scapegoat here as well. The board was sold on the vision and gave him the go-ahead, and now that Wall Street is showing its doubts, the board is getting rid of the CEO. The board needs to take some responsibility here, and from the history, it is obvious the HP board has some serious issues. HP is in a slightly better position that Yahoo!, but they desperately need to find their next growth opportunity. They thought they'd rule the world with WebOS, but their execution was so flawed that they blew it. I have a touchpad (got the $99 deal), and you'd have to be incompetent to think that device could compete with the iPad at the same price. So the problem is two-fold. First off, there doesn't seem to be capable internal leadership to pull from, and external expectations are high for a new leader who will drive change similar to the return of Steve Jobs to Apple. But there was nothing to loose at Apple. The company was almost gone if I recall correctly. Either it would completely fail anyway, or it could come back a success. HP doesn't have the luxury of throwing everything out. They are a successful company, but investors want to see new growth in a very competitive market (both hardware and IT services). So the job isn't a simple one. Do these CEOs earn their huge salaries? I don't think so. I'd like to see more CEOs put their money where their mouth is and take the majority of their salary in options, and I think the board should require that. Please don't refer to yourself as 'a dumb developer'. I think your question is completely valid, and I wish I could provide a better answer. Hopefully this gets you part way there.

lukifer 15y ago

The short version: the skills it takes to become a leader may or may not coincide with the skills it takes to be a leader. And board members are subject to the same irrationalities and social exploits as the rest of us.

alttag 15y ago

> ... what's with random incompetents ...? I think at least part of the answer is that research shows groups are, in some instances, shown to make worse decisions than individuals. In groups, individual biases are magnified, and the group process introduces a whole host of potential decision flaws (e.g., information hiding, social loafing) while not consistently compensating for individual decision weaknesses. Groups often make less optimal decisions than individuals, especially in subjective cases.