A Tale of Two Tech CEOs: Carol Bartz and Steve Jobs

Not all executives are equally adept at the difficult task of turning around an ailing technology company.
Posted September 8, 2011
By

Rob Enderle


Former Apple CEO Steve Jobs and former Yahoo CEO Carol Bartz: It is rather fascinating that both CEOs had their names turned into a verb. Yet even here they are opposites.

To be Steved was to be fired by Steve Jobs on a whim. I’ve known folks at Apple who have been fired (and remained working there) three or more times by Jobs. To be Bartzed was to be fired over the phone. Given that being Steved required Steve Jobs and being Bartzed was more generic, it is somewhat ironic that the verb from Bartz’s name may be the more lasting.

Just like the fictional character Bizzaro was the opposite of Superman, Bartz turned out to be the opposite of Steve Jobs. And this is why Yahoo gave Bartz the boot and Apple would dearly have liked Jobs to remain forever.

Comparing what Jobs did at Apple to what Bartz didn’t do at Yahoo provides an interesting contrast – it’s performance at the extremes.

Salary

Steve Jobs started out with a visible salary of $1, and although Apple did pay for his jet (which was hardly cheap) and gave him lots of stocky options, the impression was his financial future was tied to Apple’s. Bartz, on the other hand, had a massive salary that almost immediately made her one of the most highly paid underperforming CEOs in the world.

When CEOs of a company in trouble make so much money – particularly when they are doing layoffs or trying to cut costs – it creates the image of a royalty and tends to build massive resentment in the employee base. This resentment generally works against success and cause folks in the firm to work against the interests of the CEO. Carly Fiorina was another example of this problem, and she was partially shot from inside of HP while she was there.

The CEO compensation has to be part of the solution, and with Bartz and Fiorina it became a problem. Steve Jobs and Apple pointed the way.

Vision

Boards often have a real vision problem when picking a new CEO to fix a broken company. This is why so many turnarounds fail. If you don’t know what you want the company to become, you really have no idea what core segment skills you need the CEO to have, and you get executives like Bartz or Fiorina. Interestingly Fiorina actually had a pretty good vision for HP but she lacked the skills to properly execute it.

Steve Jobs initially fell back on the vision that created Apple. He showcased that it initially was still viable enough to balance costs and revenues, buying him time to come up with a new vision that became the core of a the new Apple.

This late vision was largely based on an idealized view of Sony (compare Sony’s tablets to the iPad, for instance). I continue to find this ironic because, ten years later, Apple is almost the most valued company in the world while Sony can’t seem to find profit. Bartz never really was able to come up with a vision, which contributed greatly to her failure.

Simplicity

Steve Jobs inherently got that the core to fixing a complex problem is to first simplify it. By nature he is a minimalist and that inherent aspect of his personality really helped set the foundation for Apple. That foundation was critical to Apple’s recovery.

Bartz did negotiate out of search but the result seemed, because it required a new integration with Microsoft’s efforts, to actually create a more complex company rather than a simpler one.

Yahoo still seems to have a lot of distinct products and properties, most of which are marginalized. Email, IM, photos, etc.: none are getting the funding they need to be dominant in their respective areas, and all of consuming enough resources so that Yahoo is limited in what it can accomplish.

Here the new CEO will need to take a hard look at Yahoo against where they want it to go. He or she will need to trim off anything that isn’t directly strategic so that enough resources can be applied to what is left to assure success.

That success can then be used to build confidence in employees, customers, and investors who in turn will help propel Yahoo back into a growing and vibrant company.

Skills are Critical

Turning around a company isn’t difficult for the people who have the right skill sets and where the company hasn’t slipped so far into debt that there is no longer a path back. Steve Jobs took a company in far worse shape than Yahoo and turned it into one of the most highly valued companies in the world.

He did they by assuring he didn’t get in the way (compensation), setting a viable direction consistent with Apple’s design and his own skills (vision), and by making an unsolvable problem solvable (simplification).

Bartz neither had these skills herself, nor built a team that collectively could demonstrate the critical skills needed to get the job done. Her salary got in the way of success, she couldn’t create or drive the needed vision, and Yahoo remained too complex to turn around with the tools she brought to the table.

In short Bartz was fired for doing nearly the exact opposite of what Jobs did to become CEO of the decade. There is a lesson here that goes to the core of why Steved refers to Steve Jobs firing others and Bartzed refers to Bartz herself being fired.

What is amazing to me is how many CEOs seem to work to emulate Bartz and not Jobs. Hmmm, seems like this week “irony” is my middle name.




Tags: IT management, Apple, steve jobs, Yahoo, Carol Bartz


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