Thursday, September 22, 2011

Whitman named HP CEO: When hiring chief executives, how much does actual industry experience count today?

Well, they've pulled the trigger, again: the HP board has canned one CEO, Léo Apotheker, and brought in Meg Whitman.

Was there any thought about naming someone internally? Or someone with experience in the computer hardware industry? It doesn't appear so.

Meg Whitman has already been called a "celebrity chief executive" by one critic of the move. But that is probably more than a bit unfair for someone who has worked at Proctor & Gamble, The Disney Company, Hasbro and Stride Right, in addition to her more famous stint at eBay.

But of course Stride Rite is not making tablets, let alone servers. And Hasbro, though she was in charge of Mr. Potato Head (yes, it's true), did not build a mobile ecosystem around the little guy.

The old school way of finding a CEO that could compete with a company that is driving you crazy – in this case, Apple probably applies – would be to steal an executive from the competition. But HP's board always seems to be in a hurry to both create the vacancy and then to fill it.

The parade of HP CEO in just over 13 months:
Mark Hurd, Léo Apotheker, and today, Meg Whitman.

I suppose one could say that the media business is not much better at these kinds of things. More often or not, and no matter how large the company, it is someone who is related to the Chairman that gets the job with results that are just as predictably disastrous. The excuse, though, is that somehow these people have the business in their blood, as if newspaper or magazine publishing was an as-yet undiscovered gene.

Well, good luck to Whitman, and to the employees of Hewlett-Packard. I just hope Whitman doesn't make the mistake of coming to work her first day with an iPad in her briefcase.

Update: CNN is reporting that outgoing CEO Léo Apotheker will be getting $25 million from HP in order to get out of town – $7 million in severance and $18 million in stock.

Now think about this for a moment: his severance package was negotiated by the board of directors before he came on board. Apotheker had just been fired from his position at SAP, and no doubt got a nice severance package from that company – though I would guess there is no way that company's board would have arranged for so big a parachute. Now, one year later he is fired again. What a racket.

I wonder what Whitman's negotiated severance package looks like. Same board, same situation, bet it is at least this big.