CEO is easily one of the most coveted job titles in the country. Thus, it is quite a surprise that some talented individuals purposely avoid it. Get the story and reasons behind their decision here!
Business Week shares…
Dave DeWalt is known within Silicon Valley for his technical chops, charisma, and business accomplishments, including reinvigorating security software maker McAfee and selling it to Intel (INTC) in 2010 for $7.7 billion. At 47, he now has bigger ambitions. “Running a big-cap company is considered the crowning achievement in many people’s careers, and I feel that way,” says DeWalt.
Such talk makes DeWalt an anomaly. In tech circles, the C-suite at a publicly traded company is no longer the be-all and end-all. Just look at the troubles Yahoo! (YHOO) and Hewlett-Packard (HPQ) has recently had to find new leaders. HP canned former SAP (SAP) Chief Executive Officer Léo Apotheker after just 11 months—then faced a barrage of criticism for replacing him with HP director and former eBay (EBAY) CEO Meg Whitman without bothering to look beyond its boardroom.
Industry consolidation has created a small number of huge technology companies, such as HP, Cisco (CSCO), and Microsoft (MSFT). They’ve stumbled in recent years as disruptive developments like the mobile revolution and the dash to the cloud shake the entire sector. As the job of leading these companies gets tougher, fewer talented leaders have the skills—and inclination—to do it. Rather than wait for high-profile CEOs such as Cisco’s John Chambers, Microsoft’s Steve Ballmer, and Research In Motion’s (RIMM) Mike Lazaridis and Jim Balsillie to step down, many potential replacements have decamped for more exciting and potentially more lucrative gigs at startups or as investors. “This is the first time in tech history that you have this many companies with CEOs approaching 60 that don’t have any obvious successors,” says John Thompson, vice-chairman of recruiting firm Heidrick & Struggles (HSII).
Boards of directors get low marks on recruitment and retention, too. Only give much attention to succession planning once the crisis hits, says Jeffrey A. Sonnenfeld, senior associate dean of the Yale University School of Management. New hires like Bartz and Apotheker are set up for failure as boards prioritize near-term earnings over long-term risk-taking. “We’ve been weeding the qualified people out of the system for the past 15 years,” says Roger McNamee, a longtime technology investor and co-founder of Elevation Partners.
Tech companies could have excelled at developing CEOs. Once executives prove themselves in a given area—say, software engineering—they rarely go through General Electric (GE) -style development programs to get exposure to a business’s full breadth. There are exceptions: Intel and IBM (IBM) are both organized so that top executives get to run multibillion-dollar business units. For instance, IBM Senior Vice-President Michael E. Daniels runs the $56 billion services business. At Intel, young executives have an apprentice system where they shadow top executives (current CEO Paul S. Otellini spent years carrying Andy Grove’s bags). As a result, both companies have succeeded in finding internal candidates for the top job. But this is not the norm in Silicon Valley, where most companies are organized along strictly functional lines such as marketing. “The tech industry is great at producing technology, but it’s not producing leaders,” says Rosabeth Moss Kanter, a professor of administration at Harvard.
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