New Siebel chief says he can do better, but when and how?

Coming up on a year as CEO of the 'troubled' Siebel Systems, former IBM'er Mike Lawrie was rolled out to the press to talk about whatever milestones were achieved during his first 11 months on the job. Less than two weeks later he was unceremoniously sacked, replaced by George Shaheen, who had been a Siebel board member for a decade. Judging by his recent remarks in an InformationWeek cover story published the week of April 4, Lawrie may have had a hint that his tenure was in jeopardy and wanted to get his side of the story on record before he signed an exit agreement that sealed his lips: 

As a CEO, you've got a lot of different levers that are available to you to get a company moving again. You don't get a company moving overnight. This isn't measured in quarters. It's measured over years. You can look at the strategy as a lever you can pull as the CEO. Well, we've changed the strategy. You can change the management system, and we've done that. You can take a look at your acquisitions and your de-acquisitions. We've done that. You can take a look at your leadership team, and we've been doing that, and there's more coming there. Then you can look at the culture--the real underbelly of the company. How do things really get done here? Well, the way things really got gone at Siebel was they were pushed up to a couple of people to make decisions. As long as you did that, you were never really accountable if things went wrong. You did what you were told, you worked very hard, and as long as you had the right people involved, you were immune from the accountability. That doesn't scale.

Lawrie's long-goal was to move the company beyond the CRM application space, into consulting, integration and other services. Instead of competing in a $20 billion market with declining market share, Siebel would take on a much bigger market, which Lawrie sized at more than $100 billion. That is an extreme, risky makeover, which would take a few years to pan out, and require some quality M&A.

The Siebel board clearly wasn't on the same page, especially after missing the finanical targets in the last quarter by at least $25 million. But, Shaheen doesn't stand much more chance that Lawrie of fixing Siebel, which is sandwiched between SAP on the high end and salesforce.com at the other end, competing for customers in an era of integrated enterprise suites and lower cost, hosted solutions. A group that owns about one third of Siebel's shares wants the company to acquire $1 billion of its shares (Siebel has more than $2 billion in cash) and find a merger partner. Oracle has been mentioned as a merger partner, but the company is still a python that has swallow an elephant, digesting other acquisitions. In recent remarks at the company's user conference in Barcelona, Shaheen said:

 

I think what our customers and Wall Street are saying to us is that we can do better. Frankly I think we can do better. We can do a better job of reacting to our customers' needs.

In the InformationWeek article, Lawrie said:

I'm not a big believer in complex strategies. I am a big believer in fairly straightforward strategies that can evolve and be flexible over time. That's what we're trying to build here. People can't rally around complexity. They can rally around simplicity. So Siebel--it's all about the customer.

So, both want to make life simpler for the customer. What CEO doesn't? From a distance, I see more fear and uncertainty in the act of deposing Lawrie than a strong, strategic move to make customers happy. Customers and shareholders, as well as employees, will see it that way until Shaheen and company can demonstrate how the post-Lawrie regime is going to revive Siebel's fortunes and reputation or sell it to the highest bidder.