Sometimes, CEO succession planning involves executive retirement (IBM) or tragic circumstances (Apple). Either way, Hewlett-Packard -- a poster child for poor succession planning -- can learn plenty of best practices amid the CEO transitions at IBM and Apple. Here's why.

The VAR Guy

October 26, 2011

3 Min Read
CEO Succession Planning: What HP Can Learn From IBM, Apple

succession planning

Sometimes, CEO succession planning involves executive retirement (IBM) or tragic circumstances (Apple). Either way, Hewlett-Packard — a poster child for poor succession planning — can learn plenty of best practices amid the CEO transitions at IBM and Apple. Here’s why.

Let’s start with IBM, which says Virginia M. Rometty will succeed Sam Palmisano as president and CEO on January 1, 2012. Rometty has been with IBM since 1981, climbing the corporate ranks across sales and marketing — and leading IBM’s successful services businesses. Imagine that: An internal candidate, with previous experience running one of IBM’s best organizations, shifting into the CEO slot.

Moreover, multiple IBM insiders apparently were considered for the CEO slot. Among the potential candidates: IBM software veteran Steve Mills, who successfully pushed IBM into the Windows NT software market in the mid-1990s before shifting IBM into middleware, eBusiness and business intelligence software markets in recent years. Palmisano praised Mills in an interview with The New York Times, though he said Rometty was the best candidate for the CEO slot.

Apple Had a Plan, too

Let’s shift our attention to Apple, where Tim Cook recently succeeded the late Steve Jobs as CEO. Cook joined Apple in 1998 and earned a reputation for matching Jobs’ demanding management style. Cook overhauled Apple’s manufacturing processes and is widely credited for building an Apple supply chain that somehow meets customer demand each time a new iPad or iPhone surfaces.

Yes, Apple’s latest quarterly results fell short of Wall Street’s revenue forecasts. But nobody is second-guessing Cook’s shift into the Apple CEO post — at least not yet. Also, Cook has been rumored as Jobs’ potential successor since at least 2008, when Fortune Magazine took a close look at Cook’s rising influence within Apple.

Translation: Wall Street always worried about Apple’s succession plan. But it’s clear Cook was the CEO in waiting since at least 2008.

How HP Lost Its Way

And what about HP?  When Lewis Platt stepped down as HP CEO in 1999, it set of a string of CEO hires that has so far included:

  • Carly Fiorina (2000 to 2005; the Lucent veteran exited amid a cloud of controversy)

  • Robert P. Wayman (interim CEO, February to March 2005)

  • Mark Hurd (2006 to 2010; the NCR veteran exited amid a cloud of controversy)

  • Cathie Lesjak (interim CEO, August to October 2010)

  • Leo Apotheker (November 2010 to September, 2011; the SAP veteran exited amid a cloud of controversy)

  • Meg Whitman (September 2011 – present)

Anybody else seeing a pattern here? Since at least 1999 there has been no internal succession plan within HP. During the latest shift  from Apotheker to Whitman, HP Chairman Ray Lane suggested that HP insiders were not yet to ready to take the company’s CEO post.

The VAR Guy’s question: Why not? Given HP’s track record with CEO changes over the past decade, isn’t it time for HP to start acting more like IBM and Apple, where CEO succession planning apparently are the norm?

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