The succession malaise at Big Enterprise Vendors

Succession planning is often ignored at big software vendors. The problems it brings are not inconsiderable.
Written by Dennis Howlett, Contributor

It must be a slow news day when Henry Bloget pulls an evisceration of John Chambers, CEO Cisco outta his ass with the fiery title: THE TRUTH ABOUT CISCO: John Chambers Has Failed. I think he could be right but for the wrong reasons. As I opined on Google Plus:

He misses the underlying point - networking has become a commodity and in commodity markets it is almost impossible to sustain growth the way Bloget expects to see it when compared to other tech. He does make a good point about the foray into consumer - that was definitely poorly thought out - as were their internal social strategies. On balance, the notion of bringing in a change of leadership might be a good thing - if Cisco has a succession plan in place.

Who cares you might say but I am a firm believer in ensuring I understand the likely longevity of a software vendor before advising a client. The last few years of furious paced rollup, especially at the hands of Oracle, means that names which were once regarded as innovative some years back are flagging today under the dearth of R&D resource. But the broader question of succession is pertinent.

Even if you agree with Bloget's assessment who is going to run the ship - or ships? In common with a number of software companies, there is no obvious succession plan at Cisco that makes sense.

Look at what happened at SAP when Henning Kagermann and Shai Agassi left. The company was left in the hands of the wrong chap at the wrong time in the wrong job. He fell on his sword within 10 months. SAP lost years of momentum as a result. It has taken co-CEOs Bill McDermott and Jim Snabe well over a year to start righting the ship and even now some of us have a clutch of tough questions we believe the company needs to answer.

Consider what's happened at Microsoft the last few years since Bill Gates left. It's only a few weeks since some people were baying for Steve Ballmer's head.

Then there is the ongoing angst at HP - that company's recent history is the stuff of a Shakespearean tragedy.

What would happen if Larry Ellison, CEO Oracle fell overboard one of his yachts, or choked on some tofu? As far anyone can tell, there is no succession plan though wiseacres reckon that's not a problem for Ellison as he plans to rule from beyond the grave. But seriously...

Jim Goodnight has done a phenomenal job building SAS Institute into one of the largest, if not THE largest privately held software companies still capable of attracting some of the finest PhD minds on the planet. Yet he shows no sign of hanging up his spurs and again, there is no obvious successor.

We need these huge companies to be successful and remain relevant yet the appalling lack of apparent continuity in the wake of an anticipated or sudden departure is worrying.

The vendors always argue they have so much bench strength that any transition may mean a hiccup but that's all it is. Nonsense. There is no history of that with one recent exception: Google. Co-founders Page and Brin had the foresight to realise they needed help and for 10 years, Eric Schmidt provided that in spades, allowing them to mature as managers while not losing their founding ethos. Some argue that in the transitional process, Google lost its way, becoming a tad too bureaucratic. Maybe so, but only a fool would deny Google's ability to pivot as it has with Google Plus. Oh yeah - and turning in a handsome Q2 result last week.

Any company that ignores succession planning is negligent. In that context, whether Chambers should go seems something of a moot point.

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