Why Mark Hurd is a Bad Match for Oracle

As a turnaround CEO, Hurd could be unmatched, but he would not be the best choice if you wanted to build a company rather than sell one.
Posted September 9, 2010

Rob Enderle

Rob Enderle

We seem to be surrounded by drama in the tech sector based on some questionable decisions at the moment. The most recent is the hiring of Mark Hurd, the former HP CEO, by Oracle this week. While the entire event had me write up a story line for a potential sitcom or reality TV show, ( I know, I should likely keep my day job) it also showcases what may be a very bad practice of mismatching the skills of the employee with the job.

Let’s separate from the drama and talk about why Mark Hurd is a bad match for Oracle this week.

What Mark Hurd Was

At HP, Mark Hurd was positioned as an executive with operational excellence that exceeded most others. After the fact, we learned that he actually was something quite different. The skill that Hurd demonstrated is more similar to an executive who is expert at packaging companies for sale.

At both NCR (where Hurd was before HP) and HP, he cut expenses to extremes while working to increase his own income. This gets the financials in line and few acquiring companies look at morale as a unique problem and anticipate it in any case. Once the sale is done, the Hurd-like executive moves on to the next project and the lack of employee loyalty becomes someone else’s problem to solve. It is one of the most lucrative types of jobs in the industry but it takes a relatively heartless person to do it because of the adverse impact on employees.

NCR had been sold previously, and the result for the old AT&T was so bad that the acquisition was reversed. This means it would be difficult to sell again. And while it seemed likely that Dell at one point would buy them, that never happened.

HP wasn’t looking to be packaged for sale but Hurd packaged them anyway. He made the firm vastly more valuable to a buyer but stripped out much of HP’s R&D and employee loyalty to get it there. In effect to gain short-term advantages, which is consistent with a sale strategy, Hurd traded off long-term success. This showcased Hurd, after the fact, to be the wrong guy for a CEO job at a company that wasn’t planning to be sold.

As a turnaround CEO, Hurd could be unmatched, but he would not be the kind of executive you would get if you wanted to build a company rather than sell one.

Oracle’s Problem

Oracle has a huge problem with Sun Microsystems. The company was failing when Oracle bought it, having tried to switch from a proprietary hardware strategy to an Open Source software strategy and finding the move to be too great to accomplish.

The purchase process wasn’t well orchestrated and it was blocked by the European Union, which made problems worse. Sun bled qualified people at massive rates. By the time Oracle had completed the acquisition they had little more than a shell of brands and products in a company that many would argue was simply not viable.

In short, the skill set they desperately need is that of a builder. They need someone who can draw in creative and driven new people and help them reconstruct a new company with elements of Oracle and Sun, a company that can effectively compete against IBM, HP, Dell, Microsoft, and Acadia.

They need someone like an Andy Grove, Bill Gates, Steve Jobs, Ken Oshman, Larry Ellison, Joe Tucci or Thomas Watson Jr., executives who had the skills to develop their respective companies, build loyal employees, and drive their companies strategically to dominate their chosen segments for a time.

I reference Ken Oshman because his ROLM telecommunications company at its peak was the quintessential example of what can be done if you think strategically. Or if you consider what can happen if you lose track of that and focus on short-term financial goals, which is eventually much of what killed that firm after he departed and it was purchased by IBM and Siemens.

Wrapping Up

Hurd’s skill set, which trades off the strategic for the tactical, would have been great at Sun while it was being packaged for sale to Oracle. But it will likely be unsuccessful in the recovery stage it now finds itself in. Key employees will not want to stay with Oracle if they believe that Hurd will mostly cut their benefits, entitlements, and shift their jobs to lower cost locations without them. Attracting qualified employees will even be more difficult and the ones they do get are will likely be in “any port in a storm” mode and unlikely to be particularly loyal.

This is a bad match of skills and one you would think Larry Ellison would know to avoid. However I think it is increasingly likely that Hurd got fired as a result of taking advice from Larry Ellison, first on hiring the individual Hurd conflicted with, and second on how he handled the problem -- the combination of which got him fired. As a result I believe this is largely Larry’s attempt to make up for messing up Mark’s life. If I’m correct, Larry would be wise to simply send some flowers and an apology card next time.

This editorial commentary and the opinions expressed are solely those of the author and do not reflect those of Internet.com.

Tags: Oracle, IT management, IT managers, HP, Hurd

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