Tuesday, October 15, 2013

Does bringing ex-CEO help firms transform?

Does bringing ex-CEO help firms transform?


There's some news/rumors floating around these days that Bill Gates would take the helm back from Steve Ballmer at Microsoft. Personally, I don't believe this would happen as Bill is very much involved in philanthropy work with "Melinda and Gates" foundation and believe he has crossed that desire to run a profit organization. Sure, he still loves Microsoft and is chairman of the board. However, his vision and thought process to help poorest of the people come to next level by helping them in areas of basic necessities is remarkable and applaud able. Initiatives around having a "polio free" world, working with Pharma companies and investing heavily in creating medicines to eradicate malaria, TB and others is more important than selling Windows :) Sure, Google and other companies are also contributing to the world in such areas... but for someone like Bill this is full time job~! :)

However, these rumors of having Bill rejoin as CEO started me thinking that do companies really outperform/transform themselves by having prior leaders join back?

JC Penny would bring back ex CEO Ullman back and ousts someone who was trying to transform the company - Ron Johnson! Without Ron having enough time/opportunity and lacking full support for transformation, Ron was left lonely... fair?
Results: We haven't seen outstanding results yet...but time will tell..

Infosys gets ex CEO Narayan Murthy back, good move but is it a great choice? Sure, he was the co-founder and CEO who deeply believed in the company and it's success. But what does his return indicate? Lack of next generation entrepreneurs in the company or just boredom.
Results: We haven't seen outstanding results yet (this quarter was helped with Rupee dropping significantly)...but time will tell..

Apple - had a slightly different story by having Steve Jobs come back but that was with an intent to buy his company Pixar back. Also, point to be noted is that Mac is still struggling to have its market share against PC. They have been successful in few of their recent products (iphone, ipad and others) because of weak competition and being the first adopters to consumer market. Ofcourse, Steve had stewardship qualities that helped Apple transform but lets not forget the distinguished engineers who toiled hard to get finest products out.

Recently, with P&G's former CEO A.G. Lafley's return puts the iconic company's reputation at stake as well. All will rest on whether he can turn around P&G quickly....

I think returning the reins to a former CEO signals of desperation and failed succession planning. Hiring a CEO is a very key decision and I am sure lot goes into the thinking left to the best of the lot! :)

Cheers - DJ
 

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