IBM, Apple: Stark Contrasts in CEO Succession

 
 
By Jeffrey Burt  |  Posted 2011-10-26 Email Print this article Print
 
 
 
 
 
 
 

IBM's selection of Virginia Rometty as its next CEO is a testament to Big Blue's corporate culture, and will make the transition easier than what Apple may experience in the wake of Steve Jobs' death, analysts say.

IBM and Apple, both hugely successful companies that are undergoing a change in top leadership, are a study in contrasts when looking at their CEOs and how they're replacing them, according to analysts.

Apple for more than a decade was led by the charismatic Steve Jobs, who co-founded the company in the 1970s, was kicked out in the 1980s and returned in the 1990s to lead it to incredible heights, making it the most valuable company in the world. Jobs was the driving force behind such ground-breaking products as the iPod, iPhone and iPad, and his passing earlier this month threatens to leave a significant hole in Apple's future.

At IBM, Sam Palmisano has guided the company for about the same amount of time, pushing the tech giant into such areas as cloud computing and analytics, and driving its Smarter Planet initiative. Under Palmisano's leadership, IBM has pursued high-margin technologies-shedding such commoditized businesses as PCs-while weathering some difficult economic times.

Now both companies are moving forward with new CEOs. Former Apple COO Tim Cook has taken the reins at Apple-he was appointed CEO in August, after Jobs resigned due to his deteriorating health-while Virginia Rometty, IBM's senior vice president and global sales leader, will take over at Big Blue Jan. 1, 2012. However, while Jobs' passing has shaken Apple and generated some angst in the industry over how the company will fare going forward, IBM's selection of Rometty-and the positive feedback it's received in the industry-is an example of IBM's historically strong succession planning, according to analysts.

It also shines a harsh light on the recent difficulties at rival Hewlett-Packard, which now is operating under its third CEO in a year and fourth in just over a decade, starting with Carly Fiorina, who was followed by Mark Hurd, Leo Apotheker and, now, Meg Whitman. And unlike IBM, HP has gone outside the company to find its CEOs, all of whom met with varying degrees of success.

"IBM has one of the strongest institutionalized succession plans of any company in the world," Rob Enderle, principal analyst at The Enderle Group, said in an email to eWEEK. "This is largely why it is one of the few firms that has lasted a century. It got off plan in the '90s, but Sam put it back on plan and Rometty's selection was consistent with this century-long program."

That contrasts sharply with Apple, whose identity was tightly tied to Jobs, according to Enderle and Charles King, principal analyst with Pund-IT Research.

"The differences between Apple and IBM in leadership/change couldn't be starker," King wrote in an email. "Apple was (and likely would still like to be) a company led by a lone, powerful, charismatic chief executive. The fact is that executive succession plans are a fact of life in corporations-no one lives forever. Apple's refusal to create or put into place a formal plan, even after Jobs' health became a matter of public record, was frankly at odds with the best interests of its shareholders."



 
 
 
 
 
 
 
 
 
 
 

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