Download the authoritative guide: Cloud Computing 2019: Using the Cloud for Competitive AdvantageDirk Meyer, the former CEO of AMD, was let go by AMD because he didnt have the vision AMDs board wanted in a world where the PC market is owned by AMD competitor Intel and PCs are being rapidly being overwhelmed by tablets and smartphones.
But this brings to mind another company, HP, which replaced Lewis Platt because he lacked vision with Carly Fiorina who did have vision and then replaced her with Mark Hurd, who didnt have any more vision than Platt did and created a whole bunch of new problems. Currently Steve Jobs is the top-ranked CEO in the world but he isnt a visionary, yet he does have the knack of being able to recognize a great vision and then co-opt it and, through excellent execution, own the result.
Lets explore replacing a CEO this week.
Dangers of CEO ReplacementFor AMD, the danger, as HPs history demonstrated, is that visionaries often suck at execution and it is that execution skill that is the more valuable long term.
But it is also not unusual to see the situation degrade, unless the board really thinks through what they want in a CEO and recognized both the weaknesses and strengths of the replacement. If they dont, the replacement could actually be worse than the CEO that is being replaced. Much worse.
A CEO Isnt a Normal EmployeeA CEO isnt someone who can typically be pulled out of an existing support structure and dropped in someplace else. The best example of this was the selection of Bob Frankenberg to run Novell in 1994. He failed spectacularly after only two years in the CEO job. He had been very successful in HP but was lost in Novell.
But his performance at HP had been as a member of a team in a unique environment that only existed in HP. He didnt pull his team with him and attempted to build a new one from scratch. It didnt go well and he became one of a series of failed CEOs, with the end result that Novell was recently broken up and sold in part.
Another example of a CEO who parachuted in without bringing his own team was Jim Barksdale at Netscape. He was brought in to be the adult in what was a very young company and attempted to drive the firm to the enterprise long before it was ready. The end result was that Netscape, the Google of its age, was sold for pennies to AOL, which then effectively killed the company.
The latest example is Yahoo, which hired Carol Bartz, who came in as a very highly regarded and successful CEO but failed to build a successful team. She ended 2010 as the most highly paid underperforming CEO. This wasnt her fault. She was simply the wrong person for the job. In her case she was a sustaining manager for unique software firm and they needed a turnaround manager for a web property.
Unlike, say, a Purchasing Agent, where the title and job are very similar company to company, CEOs have vastly different jobs in different firms. Steve Jobs, as successful as he is, for instance, would likely fail at AMD and Microsoft because he doesnt partner well and cant deal with much complexity. On the other hand, he could likely build another Apple and, with the right team and product mix, could repeat his success.
AMD needs a CEO that is strong on leadership, SOCs, operations and customer relationships and has a record of seeing market moves early and taking advantage of them. Any shortcoming would need to be assured by a member of the CEOs staff. Louis Gerstner, who is credited for turning around IBM, couldnt have done it without CFO Jerry York, who was handpicked by IBMs board because of his unique turn-around skills, skills that Gerstner lacked. Jerry was actually more responsible for the initial success than Louis was.
What AMD NeedsAMDs board appears to want someone that can go after the tablet, smart TV, and smartphone opportunities while anticipating others (like embedded systems) where AMD currently isnt as significant as they could be. They could draw from an Asian company where the right mix of skills exists but likely would run into cultural problems much as Intel did when they hired Eric Kim to be their CMO.
Ex-Intel executive Pat Gelsinger, who was the visionary in Intel and showcased strong execution skills and is now in line for the CEO position at EMC, would probably be the best domestic example of the type of talent they should look for. He has the right skills and visionary requirements for the job; the only issue is that he likely wouldnt take it. But, were I running the search, thats where Id start in terms of building a decision template for the perfect AMD CEO.