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BUSINESS


A tale of two CEOs Steve Jobs Apple


Not many CEOs get sacked by the business they founded, only to come back 12 years later and lead it to world domination. Jobs, however, did just that. And there can be no clearer illustration of the effect of the right CEO on a company’s fortunes than the career of the late Apple visionary.


Jobs was booted out by his board in 1985, and didn’t come back till 1997 – by which time Apple shares were at a low of $3.19 (they’d reached $17.50 in 1992). Following his return, Apple earnings have grown nearly 35 per cent per year. The resurrection took a while to get up to speed, as Jobs steered Apple back to his own vision, but soon there was no stopping him: Apple’s stock price hit nearly $400 by the end of 2011. Was Jobs too central to its success? Only time will tell…


Leo Apotheker Hewlett-Packard


In February 2010, Apotheker resigned after two years leading business software maker SAP, where he’d raised eyebrows by attempting to push up prices. He joined HP in November 2010 with little hardware experience, and HP’s stock subsequently lost nearly half its value.


Last August, Apotheker tried to pull several controversial moves: the purchase of search-software firm Autonomy for a jaw-dropping $10.3bn, the discontinuation of the HP TouchPad, and the idea that HP should spin off its once-dominant PC division. This didn’t go over well with investors, who feared he might run the company into the ground. For the second time in as many years, Apotheker stepped down after a short stint as CEO, to be replaced by former eBay CEO Meg Whitman. Though it wasn’t all a disaster – his severance package was worth around $13 million.


to wait six months to announce it – especially as people loved Rose so much.” Of course, it’s probably no easier inheriting


a company that’s in trouble. When former GE man Peter Löscher arrived at Siemens in 2007, he was the first top executive in the 160-year history of the company to be hired from outside. That’s a big ask, especially when the company had just been fined $1.34bn for bribery. Like Bolland, Löscher launched an extensive tour around the business to listen to what employees and clients had to say. He also applied his own principles, including what he defines as having a “true north – a clear definition for myself of right and wrong”. Graeme Millar’s tenure at JT began in less


intense but similarly uncertain times: shortly after the States abandoned an attempt to sell it. He came in and displayed a similar curiosity. “The first few weeks were about meeting customers, employees, the unions, the government and the regulators,” he says. “I asked two questions: what’s good about what we’re doing, and what’s not good? After that the job gets quite easy – do more of the good, and less of the not-so-good.” The message from the Channel Islands,


then, is that a successful CEO spends most of their time listening to others but, like Löscher or Jobs, is never be afraid to be themselves either. “If someone asks you to the pub, you wouldn’t run a risk assessment and write a business case,” agrees Winsor. “Similarly, you shouldn’t hang your own characteristics on the coat hook and just go by the rule book when you turn up at the office.” Equally, as Lloyds’ Horta-Osório quickly


Andrew Dann, CI Managing Partner at Ernst & Young. “The CEO is fundamental to getting the tone right, setting consistent values and acting as a role model to inspire and motivate people. That makes them more engaged with clients, which in turn leads to more work. The people should come first, but the CEO has a key role to play in ensuring that happens.” So the CEO’s job is to prime people to take


responsibility. Sounds easy enough. But first they have to join a company and make the role their own. This is often less than simple, yet how it’s handled will have lasting effects.


Taking the reins Research from US consultant FTI shows that the initial reaction to a change of CEO can have a longer-term effect on share price. Six months after the new CEO started, companies with a positive stock price reaction on day one


46 businesslife.co February/March 2012


saw their stock outperform the market on average by about 19 per cent six months after the new CEO started. Those with unsuccessful CEO transitions underperformed the market by an average of nearly 17 per cent. Little and Cirrus worked extensively with


Marks & Spencer when Stuart Rose stepped down in May 2010. The company had lost its figurehead, and stakeholders were understandably concerned. Incoming CEO Marc Bolland kept the market waiting till that November before revealing his strategy. Yet such confidence and clarity proved reassuring. “There was pressure from the City, and he was criticised, but he was very clear from the start about what people could expect,” says Little. “It worked in the end, but it was a gutsy move


Right: António Horta-Osório Previous page: Steve Jobs


learned, a healthy CEO will leave the work pressures on the peg before heading home. n


DAVE WALLER is a freelance business writer


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