Sunday, 13 February 2005

Corporate leadership

In the wake of the dismissal of Carly Fiorina as CEO of Hewlett-Packard, Reuters has a story which highlights how some of the managers who left HP during her tenure went on to firms that competed against the company.

Carly Fiorina Castaways Now Compete Against HP
Under Carly Fiorina, Hewlett-Packard Co. saw an unprecedented exodus of top managers, many of whom now run rival businesses that are beating the pants off the printer and computer maker in the marketplace.
Former HP president Michael Capellas and former operations chief Jeff Clarke are just two one-time HP stars who are now successfully running other tech businesses.

The day after the ouster of Fiorina as HP chairman and chief executive, investors taking stock of HP's competitive stance saw a company that had lost some of its best talent -- putting it in a tight spot in the cutthroat printer and computer markets.

"The thing that's driven me nuts about the company is that it always seemed like the best people, for one reason or another, ended up leaving," said Dan Niles, chief executive of asset management firm Neuberger Berman Technology Management...

Insiders blame Fiorina for the brain drain... "You run through the list and ask, so what exactly was wrong with these people? Because they are now at other organizations and they are absolutely killing HP in a lot of ways," said Niles.

The moral of the story is that investors who assess the CEO must also include an assessment of how he or she affects the performance of other top managers. While strong leadership is often considered an asset, a strong-willed CEO can also drive away other managers from the company, or turn them into yes-men.

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