The loneliness of the CEO

With IT vendors struggling to transform their businesses, amid increasing popularity of the cloud, Amro Gebreel and Simon Quicke profile the state of affairs for some of the most prominent CEOs

Right now, with the CEOs of IBM and Acer forgoing their bonuses and Microsoft’s search for a head honcho only just concluding after dragging on for months, you might think that it is not the job of anyone’s dreams to get to the top of the corporate tree in the technology world. 

Once in the big office, with your name on the door in gold lettering, all eyes are fixed on you, and as some of the incumbents in the hot seats in some of the leading technology companies can no doubt testify, the large salaries are well earnt wading through stress, analyst calls, dealing with the media, staff and the ever-expectant investors. 

Looking at some of those currently steering their ships through choppy waters to safer seas you will see plenty of charismatic leaders taking different approaches to running their firms. Here are a few of the main runners and riders.


The transformer

The vendor is a couple of years into a five-year turnaround plan spearheaded by its CEO Meg Whitman. It is her vision that dominates discussions at quarterly earnings calls and at investor meetings. So far there have been job cuts, difficulties over the fallout from the Autonomy purchase and a fair amount of cleaning up to do after the last CEO who, among other things thought it was a good idea to indicate the firm might exit the PC market

But now, back in the tablet space and fresh from putting out a strong hardware roster to support the launch of Windows 8, the firm appears to be heading in the right direction. Whitman herself admits there is still more work to be done and the vendor needs to be made
simpler to work with and must ensure it doesn’t miss out on some of the major industry elements including the cloud. 

But at least she is getting through without having to talk about giving up bonuses, unlike some of her rivals who are also finding life interesting as they move towards a world dominated by the cloud. 


All change? 

Market watchers reacted with excitement to rumours that Ford’s CEO Alan Mulally might take up the CEO position at Microsoft, following the exit of Steve Ballmer. The idea of someone outside the industry coming in seemed to be a positive, but the vendor opted to promote from within, choosing its cloud boss Satya Nadella

The Microsoft search for a CEO has also given an insight into what makes a good candidate these days with the board giving a picture of just what it takes: Microsoft chairman Bill Gates said it is a complex role to fill, involving a complex business model and the ability to lead a highly technical organisation and work with top technical talent.

The firm noted it had only had two CEOs in 38 years and is “determined and confident that the company’s third CEO will lead Microsoft to renewed and continued success”. 

All eyes will be on Nadella, but recent strong quarterly numbers, helped by decent Xbox One and Surface sales, have made life for the new CEO slightly easier.


The hair shirt 

Despite selling its PC business to Lenovo in 2005, IBM’s situation is far from rosy, with the hardware side of the business still causing headaches As well as announcing thousands more job cuts, following its latest annual results, CEO Ginni Rommetty and other senior executives opted to forgo their bonuses.

The decision to sell off the x86 server business to Lenovo shows there is a determination to reshape the business and the sights are firmly set on the cloud and software arenas. Rommetty was also notable for being the first female boss at IBM. In her two years at the helm she has already had to make several tough decisions about headcount and speaking about its most recent financial results said that the vendor would “continue to transform our business and invest aggressively in the areas that will drive growth and higher value”. 


The last man standing 

The recent musical chairs in Acer’s CEO role demonstrates how hard the top job can be when it involves dealing with a vendor in trouble. Ultimately, who wants to take a position that  is going to be tough? Some CEOs pride themselves on being ‘turnaround experts’ and years ago Apple plumped for that option with Gil Amelio, before Steve Jobs returned. But at Acer the focus has been on trying to get some continuity in the top role.

The hardware player has been hitting the headlines since November 2013, when its then CEO of two years, JT Wang, resigned on the back of bad financial results. And events took an odd turn a couple of weeks later when his replacement, Jim Wong, resigned before he had even officially taken up the post. 

The approach from the latest CEO, Jason Chen, is to get the company back on track by writing off $44m worth of raw materials inventory. Senior executives have also voluntarily taken 30% pay cuts “to share responsibility”.

Just before the results, in his first press conference, Chen admitted the firm had got things wrong in the past with its decision to back product segments, like the ultrabook, that failed to deliver. 


The name on the building 

We all know the story of a teenage Michael Dell setting up the firm that became a billion dollar global vendor out of his bedroom. For a long time that was the main thing we knew about him, until last year when it emerged he had a vision, which meant taking the firm back into private hands. 

After a prolonged fight with investor groups and billionaire investor Carl Ichan the results went Michael Dell’s way and he managed to get the green light to take the firm private. His argument was that it needed to be away from the public gaze of Wall Street to make changes needed to keep the firm going. The transition he wants to a services-led business is not one that could happen with quarterly revenue targets hanging over his head. Plenty of CEOs under attack from investors will be envious if the move means a more straightforward life for Michael.


The character 

These days Larry Ellison spends more time on boats, but the larger-than-life character used to be one of a handful of CEOs who appeared at events and got people talking as much about them as their products. Another, in days gone by, was Scott McNeally, but the Sun boss dipped out of public view after Ellison picked up his firm back in 2009.

What Ellison shows is that when you have confidence and oneness with the business you lead, you can get away with a fair amount. Analyst conference calls and keynotes usually involve a combination of boasts about how good the latest products are, along with a few swipes at main rival SAP. Not many could pull it off as well as Ellison and, when it was revealed that he could not attend a keynote session at the firm’s recent user conference, the audience was noticeably thinner. 


The double act 

In contrast to Oracle the German firm SAP has opted in the last few years for a joint CEO approach with one coming from Europe and the other from the US. It has been a solid double act, which has seen the firm steer in the direction of big areas of cloud and big data.

Going forward it will just be Bill McDermott flying solo, which could be an interesting time for him and the firm’s staff and investors, as the other co-CEO Jim Hagemann Snabe moves to the executive board in May. 

The double act seems to work for SAP and has delivered stability and helped the firm go through its own transformation, it’s entering the fifth year of that process, as it moves towards cloud and big data. 

CEO transformations 

CEOs all face the same challenge as they take their firms from one world into another. Some are ahead, some, like, had the benefit of starting in the cloud, but all will have to get there. HP, Microsoft, IBM, SAP and Dell  are just a selection of the largest IT vendors going through this transformation. If Meg Whitman is right, then by 2017 it will be an easier place for those captains of the IT industry. But only if they make the transformations needed to ensure their survival. Until then, expect more bonus-payment cuts, more falling on swords and plenty of entertaining quarterly earnings calls.

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