I will be posting daily excerpts of my 2007 book, Hiring Secrets of the NFL, over the next several weeks leading up to the Super Bowl. Please feel free to comment.
Consider a software firm whose growth has stalled, and hires a President who was wildly successful during the boom era of the 1990’s. But a successful executive in that era was trying to hit home runs, to grow a large company and have a successful IPO.
Software has become a mature, rather a growth industry, and standards for companies going public are more rigorous today’s Sarbanes Oxley environment. A software firm is more likely to be successful attacking niche vertical markets, rather than attempting broad rapid growth. And acquisition by a larger firm is a more likely long-term goal, rather than an IPO.
To successfully grow the firm under these new conditions, success in sales management might be less relevant than a track record of efficiently building targeted solutions to specific industries, and building successful channel relationships.
Few executives in recent history had the charisma of Carly Fiorina, the CEO of Hewlett Packard from 1999 to 2005. Her ability to motivate employees and customers was considered critical to HP’s turnaround.
But Fiorina had no track record of large scale, long term operational excellence, nor was she a visionary. Her track record was as a successful sales executive during the 1980’s and 1990’s, the Golden Age of the computer industry. She was strategically creative and highly articulate.
Unfortunately, by 1999 the PC industry had become unprofitable to everyone but Dell, the Fedex of the PC industry. HP would have been best off have pursuing a niche strategy, investing in its profitable businesses such as printing and imaging, and retaining the profitable instrument division, rather than spinning it off as an IPO into Agilent. HP should have gradually stepped away from the low-margin PC market, as IBM had done, rather than spending $24 billion to acquire Compaq and double up its challenging bet on PC’s.
Hewlett Packard’s CEO as of this writing (2007), Mark Hurd, is less of a “star” than Carly Fiorina, but his track record of success making NCR Teradata a successful niche vendor explains his current success at HP.