Are tech firms prone to CEO upheaval?

Former Hewlett-Packard President and CEO Mark Hurd pauses during a press conference in Palo Alto, Calif.


Kai Ryssdal: This was the first trading day investors had to weigh in on the fortunes of former Hewlett-Packard CEO Mark Hurd. Hurd resigned late Friday in what was first called a sexual harassment case, but what is now officially a "falsifying of expense reports with a whole lot of questions unanswered" case. HP shares ended the day off 8 percent from Friday's close, a fairly strong reaction to what is, in essence, a case of non-business CEO trouble, not really a defect in HP's underlying business model. It is, of course, one of the biggest technology companies out there.

John Moe hosts APM's technology program "Future Tense." John, good to talk to you.

John Moe: Hey Kai.

Ryssdal: So, what is it about technology companies and CEOs. Are they just especially vulnerable?

Moe: Well, look, all businesses are fast-paced, unless you're running an artisanal candle-making company. But tech companies are even more intense, even more fast paced. It's not enough to do what the company's always done; you have to do it better and you have to invent something nobody's ever done before. It's a pressure cooker. So it's intense, it's competitive and when something isn't working, sometimes the CEO gets whacked.

Ryssdal: All right, but let's look at HP specifically here for a second. Mark Hurd was, by all accounts, doing great, the company was doing fine and then this happens. What was it at HP, do you think, that caused this departure?

Moe: You know, there's so many scandalous TMZ-type stories that go along with him leaving that company. I just wouldn't want to be working in human resources at HP right now. But it's hard to say. That's a company where Hurd came in, he was able to cut a lot of costs, he was an efficiency guy. He wasn't necessarily "I've dreamed up the next iPad" kind of guy, but HP is at a really pivotal point right now. They acquired Palm for $1.2 billion. They're trying to figure out how to work in all that technology and all those executives from Palm. HP is working on trying to launch a tablet computer. They don't want to just be the paper company anymore in an increasingly paper-less world.

Ryssdal: Let me ask you the obvious tech company CEO question: Another company up there in Silicon Valley, Steve Jobs, Apple and the whole founders dilemma thing. I mean, there's a guy who truly is pivotal to the future of the company.

Moe: Despite the fact that he was fired by Apple at one point, and then eventually, brought back. And you know, also, in that area of the world, you have Mark Zuckerberg at Facebook. I think the idea of a founder/CEO, they're always going to have a little bit more, or a lot more, of an advantage than somebody who's just jobbed in to that office. They can evangelize the company, they can tell the story of how the company was built and they're right there in the creation of it. And when you're in a tech industry, when the people involved in it are in this hyper-competitive world and they're putting in the long hours, the charismatic leader, the person with the original vision is a very powerful component. That's something that Hurd never had.

Ryssdal: John Moe, host of our sister program "Future Tense," talking about Mark Hurd and Hewlett-Packard and the troubles that that company might be having. John, thanks a lot.

Moe: Thanks Kai.

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Interesting article, but I'd like to take some issue with John Moe's answer to Kai's first question. Moe writes: "All businesses are fast-paced, unless you're running an artisanal candle-making company," and goes on to lay the foundation (perhaps unintentionally) for excusing bad behavior due to the unique pressure of running a tech company.

I happen to run an artisanal candle-making company, and find it astonishingly fast paced. After fifteen years in sales and management in big companies, including a stint running a $100MM market for a Fortune 500, I now find that the day to day pace leading a small business often brings more challenges than I faced in the proverbial business "big leagues."

As small business owners, we daily manage finance, product development, sales, staffing, production, marketing, distribution, IT, and more. When I was in the corporate world, I had talented staff that I trusted to handle most of those things. Now it's me, and a tiny handful of co-workers who are family, friends, often volunteers. We may not face the pressure of launching the next iPad, but every product we do create can risk the whole enterprise.

Running an artisanal candle company is about being very close to the customer, having a literal hand in every product we make, and creating something useful that is live or die for our little business. And like most small business owners, I'm never tempted to mess with the expense report or any of the other shenanigans seemingly so common to high flying CEO's. The business is more important than me, something that many CEO’s seem to forget along the way.

Perhaps rather than excusing these guys' bad behavior (even if unintentionally) based on the supposed "pressure" they face, we should hold them more accountable, stop the golden parachutes, and demand more integrity, hands in the business, and less celebrity from our top managers. Maybe it’s the pace and pressure of artisanal candle-making companies and those like us, where the leaders live the business, that allows us to be the engines of job creation that we have always been.

Dan Catlin
Middle Davids Artisan Candles

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