Join CDN as we take a look back at some of the worst bosses in the history of high tech. We start our search in 1981 with the launch of the IBM PC. I’m sure there were horrible CEOs before 1981, but the industry, along with the channel, was just getting its feet wet.
The IBM PC basically launched the IT channel business, so we would start there. We also have a little bit of a Canadian spin to our worst tech CEOs list by making sure that at least all the companies mentioned had a major stake in the country.
And, just for fun, we decided to rank the CEOs on how bad they were. We start our list at No. 10.
It may be a bit unfair to list Michael Cowpland at No. 10. The British-born executive did accomplish a lot of great things, such as founding Mitel Networks and developing CorelDraw, but his unrelenting battle with Microsoft over desktop productivity suites proved to be a very poor decision.
Several other tech companies such as IBM/Lotus, Borland, WordPerfect and Novell tried to battle Microsoft on software suite sales without any luck. Does anyone remember the Borland Office?
Cowpland acquired WordPerfect for more than Novell paid for it ($158 million). Then products such as Paradox and Quattro Pro were acquired from Borland to be the suites’ database and spreadsheet. Corel Presentations was developed to compete with PowerPoint, but lacked the features and robustness of the Microsoft product.
The WordPerfect Office Suite did outsell the Lotus SmartSuite but was no match for Microsoft Office. In fact, pirated Office out-paced the WordPerfect Office in terms of number of users.
Cowpland did make forays into Linux with little success and the topper was the Ontario Securities Commission investigation near the turn of the century that he used insider information to sell $20 million in Corel shares before releasing disappointing financial results.
Michael Spindler is the forgotten CEO at Apple. He replaced John Sculley in 1993. Sculley is famous for getting rid of Steve Jobs. The Berlin-born Spindler is famous for reaching the top at Apple. But Spindler had several annoying habits, such as working around the clock. He put in more hours than Jobs did, if you can imagine that. But this workload led to unmanageable stress. He would check himself into clinics and sometimes would even pass out in his office.
Spindler worked harder at keeping his job than actually doing his job. He rebuffed a consummated deal between Sun Microsystems and Apple by bringing in IBM at the last second to produce PowerPC processors. The main reason for this was that he knew by aligning with Sun he would never become the CEO.
After he became CEO, he basically disappeared from public view, which was uncharacteristic for Jobs and Sculley, who were always touting Apple superiority and innovation. When he did present, Spindler mostly read from prepared speeches with his head down and then simply walk off the stage.
The MacClone idea came under Spindler’s watch as CEO. The MacClone idea was poorly executed. Radius, Motorola and upstart Power Computing made low cost MacClones that cannibalized real Apple Macs. After the success particularly of Power Computing, Jobs refused to license MacOS 8, basically ending the MacClone movement. Power Computing was later forced to sell their company to Apple.
Others mistakes, such as misjudging the popularity of Windows 95 and the Newton, led to Spindler getting dumped by Apple’s board. He was replaced by Gil Amelio, who had the strength and insight to bring Steve Jobs back into the fold at Apple.
No. 8 Jonathan Schwartz – Sun Microsystems
The demise of Sun Microsystems was truly sad. Sun founder and long time CEO Scott McNealy made things really interesting in the IT space. Unfortunately, his hand-picked successor, the pony-tail sporting Jonathan Schwartz, was only great at social media.
His final words as CEO were a Tweet. Within the 140-character constraints imposed by Twitter, he was eloquent, closing his message with a haiku.
“Today’s my last day at Sun. I’ll miss it. Seems only fitting to end on a #haiku. Financial crisis/Stalled too many customers/CEO no more”.
Social media prowess is one thing, but business prowess is quite another.
Schwartz inherited a profitable company but, under his watch, Sun never turned a profit consistently. His big acquisition — My SQL — was a flop. He was also unlucky as the financial crisis hit most of Sun’s best customers.
Its one thing to be saddled with a bad CEO, but Borland couldn’t decide which horrible CEO to stick with.
In what looks like a numeric impossibility, Borland during a 23 month span in the mid-90s employed seven CEOs. It all started with the legendary Philippe Kahn, who gave Borland stability for 12 years at the top; not to mention unprecedented success in the market place.
Kahn announced his well-earned retirement on Jan. 1995. He would be replaced by Gary Wetsel. Who was replaced by William F. Miller. Miller was replaced by Whitney G. Lynn. After Lynn’s kick at the can, Dave Fuller came in to be CEO. He was replaced by Tod Nielsen. Finally, in November of 1996 Borland hired former Apple senior executive Del Yocam, who managed to hold on to the CEO’s job for three years.
From more than a decade of stability and growth, Borland turned itself into a laughing stock and made the CEO’s office a revolving door. Some of the bone-headed moves these executives made were to change the company’s brand from Borland to Inprise. The name change led the market to believe Borland went out of business.
When Borland regained its senses it dropped Inprise and returned to Borland. Yocam went out the revolving door, only for Fuller to come back in as CEO. Borland was finally put out of its misery in 2009 when it was acquired by Micro Focus for $75 million.
No. 6 Sanjay Kumar – CA Technologies
Sanjay Kumar was ousted as CEO of Computer Associates in April 2004 and pleaded guilty two years later to charges including falsely reporting hundreds of millions of dollars in revenue for licensing agreements before the deals were finalized.
Several other CA executives were also implicated in the financial fraud. Kumar reported to federal prison in August 2007 to begin serving a 12-year term. A U.S. District Court judge ordered more than $1 billion in restitution to the victims of the company’s securities fraud. CA paid $225 million of that total, leaving $798 million in restitution to Kumar.
For every good thing Carly Fiorina did during her time at the top of HP, she did at least two things poorly.
Fiorina executed the largest merger in high-tech history between Hewlett-Packard and Compaq. But her six-year run at the helm of HP ended over disagreements about future direction with the company’s board.
Fiorina’s last words as CEO were: “We have differences about how to execute HP’s strategy.”
Most boards would not care if the CEO had horrible relations with employees, but in the case of Fiorina, it turned into a huge factor. Under her watch, HP gave 30,000 loyal employees pink slips. HP stock lost half its value. She was a huge proponent of sending jobs overseas. And the way she executed it was nothing short of terrible.
Fiorina did bring in celebrity endorsers such as Oprah Winfrey and Gwen Stefani, along with buying corporate jets for senior executives, even though HP’s corporate policy was to fly coach.
But her biggest mistake was acquiring Compaq, which really turned into acquiring Compaq, Digital Equipment Corp. (DEC) and Tandem Computers. Compaq acquired Tandem and DEC. But what she really end up buying was technology that was no longer relevant in the market place.
It’s not everyday you actually see a high profile CEO get fired right in front of your eyes. But that’s what happened to me when I was covering the Compaq conference in Houston, Tex., in 1999. That morning Compaq CEO Eckard Pfeiffer gave a keynote address where his special guest, Intel CEO Craig Barrett, razzed him over his bad financial quarter. Later that afternoon, Pfeiffer was shown the door by chairman Ben Rosen.
Pfeiffer was the CEO from 1991 to 1999. He acquired Tandem Computers in 1997 so that Compaq would have a high-end server line. But, then he went out and acquired Digital Equipment Corp. for a reported $9 billion a year later for mid-range computers that the market was already rejecting. What made this deal even worse was that Pfeiffer had no clue about DEC’s search engine technology, called AltaVista. AltaVista became a predecessor to Google and Yahoo. Pfeiffer was good at acquiring companies, but he was horrible at integrating them.
Just like Fiorina, Compaq lost half of its stock value under Pfeiffer’s watch.
No. 3 Frank Dunn – Nortel Networks
In 2004, Nortel CEO Frank Dunn got the boot (along with CFO Douglas Beatty) for his part in a widespread accounting scandal. Dunn was charged by the SEC with directing an earnings management fraud to meet earnings targets, fabricate profits and pay performance-related bonuses. And the Royal Canadian Mounted Police charged him and other Nortel execs with making falsifying financial results and knowingly deceiving or defrauded the members, shareholders or creditors of Nortel. These alleged misdeeds forced Nortel to reissue its financial statements for 2000, 2001 and 2002 and for the first and second quarters of 2003.
Nortel’s downward spiral pre-dated Dunn, but his team’s efforts didn’t do anything to slow the company’s eventual path to bankruptcy in 2009. Dunn was acquitted last year of all charges. He got a better fate than Nortel.
When you come perilously close to putting an historic, iconic American company like IBM into bankruptcy, you deserve to be the second worst CEO in technology.
John Akers was the CEO of IBM between 1985 and 1993. Before Akers became CEO, IBM had an iron-clad lifetime employment policy. That meant that if you were lucky enough to get a job at Big Blue it was guaranteed for life no matter how poor your performance was. But Akers was forced to chop close to 50,000 loyal IBM workers in 1991 as the company was imploding around him.
Under his watch, IBM reported the biggest yearly corporate loss in business history at $5 billion. Akers poor performance and the company’s gridlocked culture forced IBM to look outside its doors for a savior. That savior was Lou Gerstner. Akers was forced to retire on, of all days, April Fool’s day in 1993. Akers was so stuck in doing things the “IBM way” that he became indecisive in a time of true crisis for Big Blue.
Akers usually makes the list of the worst business CEOs of all time and there is no surprise that he would make CDN’s list. Making matters worse for Akers is that he also was on the board of directors of Lehman Brothers when it filed for bankruptcy.
The disaster that is Leo Apotheker. His time at the top of HP was short and it was memorable.
When you look back at Apotheker’s 11 months as HP CEO it’s hard to choose which terrible idea was the worst.
What led to Apotheker being ousted was that he drove people crazy. There was this story of Apotheker sending a senior vice-president on an 11 hour flight to Europe for a two hour meeting and expecting him back in the office the next day, as an example.
The biggest shock from Apotheker was his idea to exit the hardware business. Sure, there were a few missteps, but HP had acquired or produced an end-to-end portfolio that is unmatched by any other competitor. He moved too quickly on that, trying to replicate the success of Lou Gerstner at IBM. The only difference is that Apotheker is no Gerstner.
Gerstner never vocalized that IBM wanted out of the PC business. Apotheker made it known to all that he was holding a fire sale.
Apotheker acquired Autonomy for $11 billion, which was extremely expensive for a company few had heard of. Then, in his infinite wisdom, Apotheker shelved the webOS and the HP TouchPad just after it was released to market. Way to build the momentum, Leo.
Most people will say that his biggest mistake was acquiring Palm, but that actually happened before he got the job. But he could have seen that strategy play itself out instead of axing it right away.
And the whole lawsuit against Oracle to continue the Itanium platform made no sense whatsoever.
In the end, HP could not wait to get rid of Apotheker and paid him $9 million to go away.
Good work if you can get it.
