Apple, HP, Microsoft and IBM: Their CEO Choices and Repeated Mistakes

Rob Enderle
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It amazes me how often we repeat the same mistakes. And not just repeat the mistakes of others, but our own.


You can look at Google and wonder how the heck the founders came out of a school that clearly focused on Microsoft's mistakes and yet still make most of the same ones. Or how Microsoft could have a series of products across a decade that failed, only to have Apple do something similar and succeed? It is because we generally don't focus on why the problem occurred; we focus on punishing the people who made the mistake, which is why there appears to be more effort on covering problems up than in ensuring they don't recur.

Let me make my case with HP and Apple.

HP's CEO Choices

We'll start with Carly Fiorina. It was clear she didn't know the business and with a marketing background wasn't going to be good at operations. The board caught this problem and tried to slot Michael Capellas into a role as a strong No. 2 after the Compaq merger. Carly forced him out, because she saw him as a threat, and eventually was fired.


At the core of this problem was the fact that HP's board was subordinated to the CEO; Carly was initially the executive chairman. This means the only tool the board had to correct Carly's unwillingness to have a strong COO was to remove her as chairman, which they did. But they didn't create an executive chairman and the only tool they then had was to fire her, which they did as well.


So, at the core of the problem wasn't Carly's selection, it was the inability of the board to take corrective action. Kind of like if you went to a doctor and gave him a gun as the only tool he or she was allowed to use. Eventually you'd get shot. What is sad for Fiorina is she didn't just lose the job at HP, she lost her future.

In comes Mark Hurd. He tricks Patty Dunn (the non-executive chairman) to taking the fall for pretexting and then steps in as executive chairman. Once again the board's only remedy now is to fire him and he once again gets fired.

Leo Apotheker then became a panicked choice by a panicked board and his firing can still tie back to the Mark Hurd termination. I should point out that the board was nearly gutted with the last two changes so experiences couldn't transfer unless someone took notes (which apparently either few did or few read).


Finally, with Meg Whitman, they put in Ray Lane as executive chairman so the problem should not recur. But it took making the mistake twice before they actually put in place a mechanism that would allow the board to direct the CEO rather than only being able to fire her. Whitman's first major moves of consolidating her major organizational and staffing issues were nothing short of brilliant and likely at least partially due to the fact that Ray Lane is a part of the solution process and not being rolled over.

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