2011: The Year of CEO Failures
David Pogue at the New York Times has written a damning summary of three major business CEOs and the failures they led at their respective companies.
"There was Hewlett-Packard’s chief, Léo Apotheker, whose software company background apparently left him baffled by H.P.’s hardware business. He killed off H.P.’s promising, brand-new TouchPad tablet only seven weeks after its release, along with Palm Pre phones and a huge range of products based on the company’s WebOS operating system—and proposed jettisoning the computer business that had made it famous.
After a huge public outcry, he was fired, and the new chief executive (Meg Whitman) reversed the changes or suspended them.”
Netflix was another big story this past year, particularly its decision to change the very way it ran its business:
"There was Netflix’s C.E.O., Reed Hastings, who decided to raise the price of Netflix’s most popular plan 60 percent — and then split the company in two. One would just mail DVDs, while the other would offer streaming movies from the Internet. Each company would have its own Web site, movie queues, billing and name (Netflix and Quickster, or Qwikster, or Qwiquster, or something). It would require twice as much administrative effort by its customers, and it made no sense whatsoever.
After a huge public outcry (and after losing a million customers), he backed off from the company-split idea and left well enough alone.”
And then Cisco, which killed the popular Flip camcorder:
"There was Cisco’s chief executive, John Chambers, who decided to shut down the Flip camcorder business he had bought only two years earlier for $590 million. Killing off the Flip involved taking the world’s most popular camcorder off the market and laying off 550 people.
After a huge public outcry, well, nothing happened. He’s still the C.E.O., and the Flip is gone.”
The point of Pogue’s article is succinct and ultimately so simplistic you know each CEO believes it in his own heart but made knuckle-headed decisions anyway:
You are only in business because of your customers. Disregard them at your own peril.