Lessons learned from failed tech CEOs

9 May 2012

Despite the fact some technology companies are picking themselves up and brushing themselves off following the tumultuous reigns of their previous CEOs, there are lessons to be had from those men and women who once held the leadership positions.

Siliconrepublic.com takes a look at five former CEOs and the business lessons that can be learned from their experiences at the top of tech companies.

Who: Former Research in Motion (RIM) co-CEOs Jim Balsillie and Mike Lazaridis

The story: The two co-CEOs who presided over BlackBerry maker RIM’s meteoric rise and spearheading of the smartphone a decade ago and its slow, steady demise in the face of competition from Apple’s iPhone and Google’s Android OS stepped down from the helm earlier this year.

It’s been a fateful year for RIM. A poorly executed rollout saw its PlayBook tablet – which many saw as a meaningful competitor to the iPad – result in a total failure and in recent months, a global outage of the BlackBerry email network damaged the platform’s hitherto secure and reliable reputation.

In addition, investors and employees alike bleated to RIM’s management team to overhaul RIM’s strategy in the face of a growing pool of competitors. It seemed to many outside the company that RIM had never quite gotten over its leadership position a decade ago when, at the dawn of the smartphone revolution, its BlackBerry platform set the standard for corporate communication.

Thorsten Heins is now the new CEO of the company, and Lazaridis and Balsillie remain on board as directors and significant shareholders.

Lesson learned: Don’t rest on your laurels.

Former RIM CEOs

Former RIM co-CEOs Jim Balsillie (left) and Mike Lazaridis

Who: Former Yahoo! CEO Carol Bartz

The story: Yahoo’s chairman of the board fired Bartz over the phone in September 2011 as part of a major reorganisation of the internet portal company.

Bartz’s tenure at Yahoo! has been, if anything, difficult and she presided over tough and alarming decisions for shareholders, such as search advertising deals with Microsoft’s Bing search engine. Her last few months at Yahoo! had been marked by difficult relationships with the company’s trading partners in Asia.

Former PayPal executive Scott Thompson now has Bartz’s old job, and Yahoo! is likely aiming to capitalise on his ability to grow user numbers and expand into new markets to turn around its fortunes.

Lesson learned: Know your limits and don’t get in over your head.

Carol Bartz

Former Yahoo! CEO Carol Bartz

Who: Former HP CEO Mark Hurd

The story: In August 2010, Hurd resigned following an investigation surrounding a claim of sexual harassment against him.

The investigation determined that while there was no violation of HP’s sexual harassment policy, there were violations of HP’s Standards of Business Conduct.

“As the investigation progressed, I realised there were instances in which I did not live up to the standards and principles of trust, respect and integrity that I have espoused at HP and which have guided me throughout my career,” Hurd had said. “After a number of discussions with members of the board, I will move aside and the board will search for new leadership.”

Cathie Lesjak took over Hurd’s role as interim CEO, until a permanent replacement, Léo Apotheker, was hired to fill the job (but more on him later).

Meg Whitman is HP’s current CEO, while Hurd is now president of Oracle Corporation and a member of the company’s board of directors.

Lesson learned: Do we really have to spell this one out?

Mark Hurd

Former HP CEO Mark Hurd

Who: Former HP CEO Léo Apotheker

The story: Poor HP. First it handled sexual harassment allegations concerning its then-CEO Mark Hurd, then its board fired its next CEO, Léo Apotheker, in September 2011. Apotheker had been in the job only 10 months.

When Apotheker came on board, he led dramatic strategy changes which frustrated investors, such as reshuffling the management team and beginning the process of axing HP’s PC and webOS divisions.

HP then began to lay off hundreds of staff in its webOS division.

The computer giant also cut its sales forecasts three times since Apotheker became CEO. He had said he would change HP’s focus to software, cloud computing and connectivity, which may have led to the proposed spin-off of HP’s PC business.

Meg Whitman has replaced Apotheker, and HP said it will not spin off its PC division, adding that it would be better to keep its Personal Systems Group (PSG) within the company for its shareholders and customers.

Lesson learned: Don’t let yourself be shackled to out-of-date business ideas and pay attention to major trends in changing markets that could benefit your business

Leo Apotheker

Former HP CEO Léo Apotheker

Who: Former Apple CEO John Sculley

The story: Sculley joined Apple in 1983 and power struggles with the company’s co-founder, Steve Jobs, began.

Jobs was reportedly forced out of the company in 1985, and Sculley’s choices then nearly led Apple to bankruptcy. He focused more on risky and costly projects that flopped, such as the Newton, a buggy PDA, rather than on Apple’s core products.

He also jacked up the price of the Macintosh at a time prices for computers across the industry were falling as the result of the ‘Test Drive a Macintosh’ marketing campaign that didn’t quite work out.

In 1987, Sculley published his autobiography, Odyssey: Pepsi to Apple, and gave each Apple employee a copy at Apple’s expense, in the hope of inspiring “excellence”.

Well, the company’s stock continued to slide, and Apple’s board gave Sculley the heave-ho in 1993.

Jobs later rejoined Apple to take the helm as CEO until his death in October 2011. Tim Cook is the company’s current CEO.

Sculley is now an active investor and adviser in healthcare-related start-ups.

Lesson learned: You need to fully understand something in order to manage it well.

Tina Costanza was a journalist and sub-editor at Silicon Republic