AMD is currently doing very well, but when CTO and EVP Mark Papermaster came on board, the company was in a different position.
Papermaster, who was previously at Cisco, Apple, and IBM, could have been tentative and risk-averse in his new job at AMD. Instead, he gambled big on a full redesign of AMD’s architecture. The effort was successful, partially because of moves by Intel, AMD’s largest competitor, during this same period.
Let us talk about Papermaster’s success.
Executive failures and successes
Papermaster was a success at AMD, but I have seen a lot of outside executives come in destroy companies as well.
Executive staff at large, complex companies can range from power players to position holders, from people that overcome and people that merely get by. In addition, large, complex companies can turn out poorly rounded executives who do not understand the parts of the business for which they have no responsibility. Finally, executives do best when they take jobs like their experience — and do worse when taking a job far removed from what they know.
The worst example of this I have seen was a sales executive who was hired by a restaurant supply company that was having trouble expanding. He overstaffed sales but did not understand the business, so the sales costs quickly overwhelmed revenues. Instead of growing the business, he buried it. I have seen executives leave large tech companies and do very badly when removed from the corporate environment they depend on.
On the other hand, large tech companies are strong on process, quality control, and, if executives have attended the corporate university and more internally, they tend to be overachievers and of value, if the job and industry are consistent with their training and experience. Papermaster knew microprocessors better than most, and at AMD, he became a superstar. His success was the result not only of his training and experience, but of being right for a job that made the best use of that training and experience.
Mark Papermaster’s success
The recipe for success for a senior executive in a new company is a combination of four things: flexibility, willingness to learn; experience, both in technology and the industry overall; management skills; and integrity. Let us take each one in order.
Executives often have trouble adjusting to different cultures and ways of doing business. If they are not flexible, they will try to turn their area of responsibility into the mirror image of where they used to work and that tends to work out poorly. The comment, “That’s not the way we did it at my prior company,” comes off as elitist and un-empathetic. I worked for one exec who would often criticize his subordinates for poor security, while behaving in an unsecure fashion himself and that did not end well. The ability to mesh with the new environment is critical to success. Papermaster and, for that matter, his CEO at AMD, Lisa Su, both did that well. In fact, both Papermaster and Su are excellent examples of well-trained and flexible executives in jobs that showcase their skills and expertise.
Experience is also critical. Papermaster’s experience at IBM was in IBM Microelectronics, the firm’s processor business, making him a near perfect fit for any other executive microprocessor job, except for support roles, like finance, marketing, and HR, which require very different specialties.
Management skills are very important, training for which IBM is one of the better resources. Most IBM managers I have known and worked for had excellent management skills. Papermaster is clearly an excellent manager.
Integrity is incredibly important. The higher in an organization an executive goes, the more temptation there is to self-deal. The “I” in IBM should stand for integrity because driving integrity into the process is something that was built into IBM over the first 50 years of its existence. It stumbled on this a bit in the 1980s but reinforced that strength again as part of the company’s turnaround effort in the following two decades. While I am sure there are exceptions, ex-IBM executives have higher integrity and a lower focus on personal wealth growth than most of the companies I follow.
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What to look for in an executive
An executive from a successful company is not a magic pill to fix your company’s weaknesses. You need to make sure their motivations, experience, education, and demonstrated capabilities drive the hire. At an executive level, education does not matter, unless they have fabricated it. For instance, a Harvard degree should only have an impact if the employee lied about it or if it resulted in a unique set of contacts that could benefit your business.
Determine if the candidate is dependent on things from their prior company that were provided to them or whether they built their own teams, to make sure they can function in an environment different than the one they were in. If they were terminated from a prior job, do your homework. Validate the why.
Papermaster was successful because he was well matched to the job he took at IBM and one of the strongest and most ethically sound executives in the market. While there is always a bit of luck in any turnaround, you need far less if you properly match the person to the job that needs doing. Making sure of that match is worth the effort to assure a result like Papermaster accomplished at AMD.