Comment by ang_cire | Hacker News Reader

Comment by ang_cire | Hacker News Reader

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> I realized the fundamental problem wasn't my absence. It was a systematic mismatch between Leo Apotheker's experience and the role he was asked to fill.

> SAP's annual revenue while Leo served as its CEO was approximately $15 billion. The HP board hired a CEO whose largest organizational experience was running a company smaller than HP's smallest division. Based purely on revenue management experience, Apotheker wouldn't have qualified to be a Executive Vice President at HP, yet the board put him in charge of a $125 billion technology company.

> This wasn't just a cultural mismatch—it was a fundamental scale and complexity mismatch that should have been immediately obvious to any functioning board. But nobody asked the right questions about whether Leo's enterprise software background prepared him to evaluate consumer platform technologies such as WebOS, and I wasn't there to provide what my colleagues called "adult supervision."

Yup, sounds about right.

At some point "management" and "executive management" started (falsely) being viewed as their own dedicated skillset that is independent and unrelated to the business itself, when in reality they still require specific understanding of the skills and processes over which they preside. You can't just drop any CEO into any other CEO position, and think they'll succeed.

>> At some point "management" and "executive management" started (falsely) being viewed as their own dedicated skillset that is independent and unrelated to the business itself, when in reality they still require specific understanding of the skills and processes over which they preside. You can't just drop any CEO into any other CEO position, and think they'll succeed.

There are aspects of management that are independent of the business being managed. But somehow in the 90's CEOs and business schools turned that into something like "management is a generic function independent of the business being run. With an MBA and you can run Coke GM or Intel all the same."

> "management is a generic function independent of the business being run. With an MBA and you can run Coke GM or Intel into the ground all the same."

I felt it needed a little tweak. You are exactly right otherwise IMO.

They were all very successful at doing that. The financialization of everything was the death of all these businesses.

Very well and succinctly put.

When I talk about the same topic with a friend, we say variants of "MBAs ruin everything they touch". But what we really mean is what you said.

Sure, I don't mean to imply that there aren't additional skills required to manage something, but you still have to fundamentally understand the thing that you are managing.

The idea that management can be subordinate/project/industry-agnostic is the mistake.

You can't (based purely on work experience, not talking about individual abilities) go from managing a coffee shop to running IBM... OR VICE VERSA

If this assertion is rankling anyone, I invite them to look up how many private investment firms are failing spectacularly to manage small businesses they acquire (e.g. dentists and vets) and running them into the ground, by trying to make them operate like SaaS companies.

So true. A friend of mine worked as a manager at an ECO diary producer (milk, cheese yoghurt). An investment firm bought the owners who build the company from nothing for a substantial sum. They then brought in a new young executive team who mainly had experience and making online clothes and food retail startups. Initially the owners had a requirement to consult to the business for some amount of time. That was quickly dropped as they didn't want the old owners to "interfere" (essentially telling the exec that they what they wanted to do didn't work). After less than a year my friend and the product manager where the only managers left from before and they had become the "nay sayers" (I.e. telling the boars their ideas and execution don't work in this industry) and where eventually let go. By this time they had lost major costumers, majorly invested into equipment that still didn't work (as the product manager predicted from the get go) and the company was probably worth less than half. I just read the news that 7 years later they sold at 2% of the purchase price. Cases like this should really be mandatory study.

> private investment firms are failing spectacularly to manage small businesses they acquire (e.g. dentists and vets) and running them into the ground

Absolutely, but (and this depends upon the "financialization of everything" point someone made above) that doesn't matter, because in the meantime they'll have personally made a profit on the deal. Building (or keeping) a sustainable business was never one of their goals. I call it "extractive capitalism", and it's ruining the world.

the old "it's all the same shit" fallacy that i loathe so dearly

I can only say that it's really refreshing when you talk to a CEO who is interested and understands the products the company is working on. Unfortunately it's pretty widespread to have the top layers of the company only thinking about numbers and deadlines, not the product.

Defector had a great piece on roughly this point: https://defector.com/how-will-the-golden-age-of-making-it-wo...

You can't blame an MBA for this debacle. Léo Apotheker studied economics in college and had no formal education in management.

Drucker would argue you need practice (e.g. actually doing the work) rather than an educational background to be a good manager.[0] So I would argue he didn't have the experience to be a manager at that level.

https://mlari.ciam.edu/peter-drucker-s-vision-of-management-...

You say 90s but sounds suspiciously like John Scully and Apple in the 80s

Lou Gerstner at IBM is probably the outlier that supported this line of thinking. He was at Amex, RJR Nabisco before IBM.

Maybe I'm misunderstanding, but IIRC Gerstner's time at IBM was 100% financialization. He didn't solve any of IBM's core problems. Outside of the momentary bright spot of "Global Services" the largest impact he had was selling off IBM's immense real-estate (and other) capital they had acquired by being a capex business for a 100 years, and converted that all to a decade long free rent/etc 0 opex business, Along with EOL'ing their pension program, and a lot of other 'quality of life' stuff that made them one of the best companies to work for. It made the numbers look great as he "reduced overhead" in the short term, bur just created further long term problems. If IBM could have caught just a single one of the tech waves of the next 25 years they would have done fine, but for some reason they continue to snatch defeat despite seemingly always being in the right place at the right time. But it seems they always overcharge, over engineer, whatever their solutions and the market rejects them. (ex, flash arrays, POWER as an alternate hyperscaler server arch, watson/ML, failing to capitalize on centos, etc, etc, etc) while dumping spinning disk, fabs, etc at roughly the right time.

Was that intended to be similar to the real life movement of John Sculley from Pepsi to Apple?

> At some point "management" and "executive management" started (falsely) being ...

Correct. Not just CEOs I have seen it starting from position of Director and above in technical or related companies.

To hide skill gap of leadership is the cottage industry of metrics and reports where endless summaries of performance (technical, financial ... all varieties), operations, QA, development, customer feedback and myriad others are generated on daily, weekly, monthly basis. And during leadership review sessions teams are asked for 10% improvement for next quarter.

If these reports and feedback were any good, these companies would be operating like Navy seal teams by now.

https://en.wikipedia.org/wiki/Nirvana_fallacy

Oh, it's worse in some ways - Leo didn't leave SAP to take this job. Instead, SAP's board chose not to renew his contract in Feb, 2010, so he resigned.

SAP board; This guy sucks let's move on

HP: we'll take him!

Exactly.

Leo Apotheker really did not understand software development and all of nuances running a software company.

While Henning may not have been particularly business-savvy, Leo demonstrated a fundamental lack of understanding of SAP’s value network.

I know a guy who held this attitude. He somehow got into a top MBA program without any undergrad degree and poor grades. (Bribery, one wonders)

Got his MBA, eventually bragged about how he lied his way into a CTO position with no tech skills. Lasted about 6 months. No longer listed on his LinkedIn.

After all that, somehow still hasn't eaten his humble pie. Still believes this idea you don't need to know stuff about technology to manage a technology organization.

I can find countless examples of this both ways. Some people are great CEOs able to turn around a company/industry they knew nothing about before. However there are a lot of bad CEOs out there. And being in a company/industry for decades is a good way to turn a bad CEO into a mediocre one which is an improvement I guess. Sadly I have no clue how to make a good CEO - and see no evidence anyone else does.

Most companies that have been around for decades would be absolutely fine with a mediocre CEO.

In my opinion, mediocre is an excellent strategy when optimizing for longevity and durability.

ie Google

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