Great CEOs Must be Either Technical or Financial
forbes.com
forbes.com
Furthermore, Rao's assertion that Jobs lacked "people skills" is demonstrably false. It's true that Jobs was an unrelenting perfectionist, an introvert, at times a genuine asshole, and probably narcissistic. But to say he lacked "people skills" is to ignore his profound understanding of how to communicate with people. How to inspire people, be they co-founders, employees, or customers. How to move people. These skills had to be quite strong, indeed, in order to overcome the barriers his difficult personality erected around him. When we speak of "people skills," we really need to define what we're talking about. If we're simply talking about being an affable guy, then no, most CEOs probably don't pass the test. But if we're talking about the ability to understand, speak to, lead, organize, and often downright manipulate people, then yes, "people skills" are pretty crucial.
I'd consider this similar to how he was said to have very good taste in design, even though he may not have been able to design things all by himself.
If we're defining "technical" as having a deep understanding of where technology is headed, and what its implications on various markets will be, then yes, being technical seems to convey a pretty distinct advantage in the C-suite. Conversely, lacking such an understanding dooms your company's fate to chance. You could get lucky and avoid disruption, or stumble into evolution. But, just as likely, you could miss major upside or fall into major downside. In this sense, to be technical is to have the ability to steer your own ship (for better or for worse). Not to be technical is to allow the currents to carry you where they may (often for worse).
"Technology skills do not necessarily mean hands-on skills, though they can arise from hands-on experience. It means simply understanding the technological state of play in the environment in a way that you can make exceptional decisions.
But the skills do have to be exceptional, even if they are not hands-on."
Ergo, the best CEOs are the "technical" ones, but not in the classic sense where technical means provided ingenious solutions to problems.
Of course there was a gulf between his technical skills and those of Woz, but few people in that era had any programming or hardware design knowledge at all.
I'd be far more interested in it if Mr. Rao had said "and now that I've said that, here's what my theory predicts about Steve Ballmer and Tim Cook, who are definitely both finance-oriented CEOs."
Also I'm fairly surprised to see this in Forbes: "In general CEOs are in an adversarial relationship with the investment community. If they are sincere about their jobs, they are in it to build long-term value in enduring companies that create real, as opposed to paper wealth. Investors generally want to simply create preferentially-predictable-to-them stock movements that they can take advantage of on their own personal wealth-building schedule, which has nothing to do with the fundamental time constants or market tempo of the company."
Did Forbes just notice that the financier class are parasites who are in an 'adversarial relationship' with people who actually create value? Pinch me!
The perspective that is lost to time is that back then Sun was kind of like AWS nowadays WRT mindshare, with the addition of hardware business, which is key to my point: likely when McNealy said that they underestimated 32bit he was eliding the problematic future they saw in the UltraSparc 3, that it was an engineering dead-end (which begat the T series), and, well...capitalists profit from externalizing their liabilities. "We're still awesome, it was 32bit's fault."
So, uhm, when were either Gates or Allen ever considered non-technical? (even relatively speaking) Which of the pair is supposedly the less technical founder? Both were extraordinarily technical. Hey Rao, your ignorance is showing.
As CEO's main job is to get more money, get new partnerships in place, etc.
founders/products architects can be Tech/Finance.
Sales is tough, very valuable and absolutely crucial to almost every organization.
But...
If a CEO doesn't present a technical advantage or cannot model their own company financially, they can probably only grow it so big.
That being said, some sales CEOs are great for maintaining a business:
Intel's CEO, http://en.wikipedia.org/wiki/Paul_Otellini Otellini is one of the few CEO's in America that came from a sales background. I would argue that he is also very strong in finance and strong technically in the sense that he understands how the pieces go together.
My point is that it is always dangerous to generalize, but I don't see how someone can grow a business successfully and not have a deep understanding of finance. Understanding how decisions impact profitability and balance sheets is crucial to making good decisions.
Not having that background is like trying to win a game without knowing the rules.
It takes years to design and tool a fab to build a new chip. Intel started the R&D process years ago to maximize battery life. But, soon they will be in lots of phones and tablets.
The part of Intel/SoC/iPad/Tablet/Phone world that people don't understand is that there is almost no profit in making low end phone chips. At $35-$45 gross per chip, they only make a few dollars in profit.
A high end i7 processor probably achieves profitability in the $700+ per chip sold range.
That means they need to sell roughly (round numbers) $700/$5 = 140 smart phone chips to make the profitability from one high end computer chip.
No one is going to try to compete with AMD/Intel on the high end since there just isn't room for a competitor and the R&D risk is too high.
For Intel, they need to get in phones and tablets for the extra profit because they can, but there isn't that much there.
Whether Otellini has done the right thing or not is yet to be seen, but I would bet that Intel will start getting design wins in the next few years and will eventually become the dominate phone processor seller.
Intel isn't going away, but it's going to have some rough times.
http://www.sap.com/corporate-en/our-company/executives/mcder...