Preparing for the Worst: Tech CEOs' Successors

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Steve Ballmer
Steve Ballmer
Source: Microsoft

Microsoft (NASDAQ: MSFT) is going through quite a sea change with the retirement of Bill Gates and the departures of veterans Jim Alchin and Jeff Raikes.

But even after concerns about his handling of the failed attempt to buy Yahoo, Steve Ballmer is still firmly in the saddle. He's the second-largest shareholder in the company behind Gates, after all.

Unlike Gates and Ballmer, any successor will likely not have originated within the software industry as early entrepreneurs give way to businesspeople.

CFO Chris Liddell came from International Paper while COO Kevin Turner joined from Wal-Mart -- two mass-market industries that require a sharp understanding of managing the supply chain, noted Stuart Williams, senior analyst with Technology Business Review.

"As Microsoft moves more into doing hardware and embedded systems, they have to know how to manage those skills, so you see people like Turner and Liddell emerging at Microsoft, as opposed to people with pure software skills," he said.

Jeff Raikes
Jeff Raikes
Source: Microsoft
Microsoft declined to comment on this story.

Bajarin agrees Ballmer won't be shown the door anytime soon, but admits he was caught off guard by Jeff Raikes's decision to leave to run the Bill & Melinda Gates Foundation.

Raikes had headed Microsoft's business division and is credited with the creation its immensely profitable Microsoft Office application suite.

"I always thought if there was a guy who could step in, Raikes would have been the one who could have done that," he said.


Over at Oracle (NASDAQ: ORCL), it's long been assumed that President Charles Phillips would take the mantle when CEO Larry Ellison retires or falls to the dangers of his adventurous extra-curricular activities.

Not necessarily, Williams said.

"Larry Ellison hasn't indicated that a successor [has been] picked or planned," he warned. "If you look at how responsibilities are delegated in the firm, I think that what you have is a CEO who is still involved in the operation and direction of the firm and there is a deep bench, but there is no clear successor."

Oracle declined to comment on this story.

Larry Ellison
Larry Ellison
Source: Oracle
King said that while Ellison is as tied to his firm as Jobs is to Apple, they are very different companies. "Oracle is not the sort of company that would hit the skids [without Ellison] the way Apple would be if Steve Jobs took a quick exit," he said.

One reason is that he likes Ellison's cast of executive vice presidents. "Oracle is another company where I think Ellison is willing to surround himself with strong personalities and smart people."

"He can't do it all," he added. "He's not without an ego but he is fairly aware of his own limitations."

Cisco Systems

As much as we can't imagine Apple without Jobs and Oracle without Ellison, it's also hard to imagine Cisco Systems (NASDAQ: CSCO) without John Chambers. He's probably executed without error longer than any of his counterparts. But like everyone else on this list, John Chambers is not immortal.

The company was shaken up in December when Charles Giancarlo, a 14-year veteran of the firm and its executive vice president and chief development officer, left to join an investment from. Giancarlo was long the presumed successor to Chambers.

Williams notes that Cisco has started to rotate its talent management into India and other international posts.

John Chambers
John Chambers
Source: Cisco
"They are starting to look much more internationally for their management team," he said. "That's looking ahead, seeing it will be a global business and wanting to have peers and ties to all those regions and cultures so we can grow those businesses successfully."

Eventually, he figures, Chambers will signal that he's found someone to become his heir, and will begin to rally support for them.

"Chambers is the kind of person to bring someone along and build consensus that this is the person to succeed him," Williams said. "He has that methodical approach."

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