CEOs, in general, are failing at an increasing rate, and there is a significant problem if your turnover in any executive class, let alone the top class, is moving aggressively into the double digits. I’ve covered a lot of CEO failures, and Whitman’s tenure at Quibi isn’t going well. She was never going to be successful, and while the focus seems to be on her conflicts with Jeffery Katzenberg, I think the real problem is that she is continuously put in jobs she lacks the experience to do. I don’t mean the experience of a top executive; I mean the experience in the industry of the company she is running.
This issue has anecdotally seemed to be a far bigger problem with female CEOs than male CEOs, but that may be due to the enormous imbalance in terms of diversity in top leadership. There are far fewer women CEOs than men CEOs now, so their failures appear more pronounced. But in every case, I’ve personally been involved with, the core problem was one of selection not necessarily one of performance and certainly not one of sex. Though in Whitman’s case, there appears to be a blend of issues.
I’m not the only one that thought Quibi was ill-conceived, but let’s focus on why Whitman was likely the biggest problem.
The Whitman Case
I started covering Meg Whitman after she left eBay (though her coverage at that company wasn’t great) and ran for Republican Governor of California against Jerry Brown, who appeared, at the time, to be too old and too liberal for the job. She had a solid chance of winning, but her lack of experience in politics and incredibly poor judgment and ethics cost her the race. The definitive moment was when she was caught with an illegal alien as a housekeeper. This housekeeper had been with her for years and helped raise her kids, and instead of supporting that housekeeper threw her under the bus and then attempted to blame her opponent for the housekeeper’s poor treatment. In an instant, she showed a lack of support for her Hispanic employee (California has a substantial Hispanic population), a lack of integrity (it obviously wasn’t Jerry Brown’s problem), and a lack of understanding for her constituency (Hispanics at the time were relatively conservative).
Now we may accept that politicians lack integrity, but few are successful that don’t understand their constituency and know that they need to support those that support them. But in a CEO, a lack of integrity and an inability to support subordinates is deadly, making Whitman a poor choice for anything but a transitional CEO roll. (She had been a CEO before and might be acceptable as an interim place holder).
She then went to HP and joined the HP board. HP’s board after watching Sun hire a software expert and attempt to turn Sun into a software company (which failed catastrophically) tried to do the same thing by hiring a failed software CEO to run HP. They then overrode the objections of their CFO to buy Autonomy in Europe. The CEO, Leo Aptheker, failed catastrophically, and Whitman, in what in hindsight appears to be a total ethical failure pitched herself in as replacement even though she was, on paper, far less qualified than Aptheker was. Without a software leader to drive the change, it stalled, and Whitman appeared to blame Autonomy’s leadership. Right now, based on what has come out of the litigation so far, that doesn’t appear to be the case. It was more an effort to successfully shift blame than an effort to do what was right for both HP and Autonomy, and a lot of employees in both companies paid for the mistake with their jobs.
Whitman after promising to keep HP intact then executed a plan to break HP into two companies. One crippled by massive debt and holding the then declining product groups and one that seemed to be structured so it couldn’t fail. And here is where it gets interesting. Dion Weisler took over the company that couldn’t win, turned it around, and made it into what is now an impressive success. Whitman took HPE, the company that couldn’t lose, and pretty much tanked it. Weisler’s success was tied to his industry expertise, his care for his people and customers, and a fighting spirit you rarely see out of startups. Whitman’s failure was tied to a near-constant rotation of subordinates into positions they weren’t qualified for, unnecessary drama, and her lack of understanding of the core dynamics of the computer industry. (For instance, Lenovo, Dell, and the old HP use the PC volumes the enjoy to drive down component costs on servers and storage, and the full portfolio is critical for blended bids, all of which HPE lost on the split).
She has since left HPE in deep trouble, and they now do have experienced leadership, but digging out of the mess, Whitman left has not been a cakewalk because, effectively, she left HPE logistically crippled against its primary blended competitors (Lenovo and Dell).
Why Quibi Was Likely to Fail
So, the formula for Whitman’s repetitive failures is an inability to take responsibility for mistakes, an inability to support subordinates, a focus on shifting blame, and a lack of subject matter expertise. Quibi is a new form of media company making short-form content. It is kind of like a professional version of Tik Tok, or YouTube without user contributors. The ideal CEO should come out of a media production company or YouTube; the first would understand content creation, promotion, and logistics elements; the second would better understand the new format. Whitman’s background was in neither area.
Now this means she’d be dependent on subordinates that knew the industry, but she has a history of not hiring qualified people and shifting blame for failures onto subordinates. This unfortunate behavior means she is unlikely to either hire or retain the right people to be successful. And her inability to work well with others came out quickly in public dustups with Katzenberg, who did have industry experience in what appeared to be an aggressive attempt to set him up for what now appears to be designed in failure. It is interesting to note that Katzenberg, on the other hand, isn’t blaming Whitman but the COVID-19 pandemic for the Quibi failure but given YouTube and Tik Tok are doing fine in the market (granted Tik Tok has other issues) that dog doesn’t hunt.
Wrapping Up: The Autonomy of Failure
The things to look for in a successful CEO candidate have been showcased in HP since Whitman left. Both HP’s last CEO, Dion Weisler, and their current CEO, Enrique Lores, are subject matter experts and experienced leaders. Both focus on taking care of their employees and customers, have little drama, accept the mistakes they make and learn from them, and don’t seem overly focused on finding some unfortunate scapegoat to take the blame for huge mistakes. Granted, they also don’t make huge mistakes, but that is often the nature of a subject matter expert.
Now I have a working theory that minority executives because they are different, often become blame magnets, and then develop a skill to deflect blame to others even when they are at fault. I’ve been a bit of an odd duck myself. Still, because I’m analytical by nature, my first move has always been to understand what went on before reacting and then shifting blame to the executive who screwed up or, and this is often the case, the core practice that needed to be changed to avoid it happening again. But it is always far faster and easier to find a scapegoat which, if my theory holds, likely goes to the core of Whitman’s problem.
I should point out that Lisa Su, at AMD, has exhibited the same core skills as other successful CEOs. This skill set has resulted in massive success in that company, which supports the theory woman can be just as successful as men (or more so given Lisa outperformed her male predecessors) if they have the right background, personality, and education. And, I also think the failure of the current US President is mainly due to the same nearly exact, but often far more pronounced, shortcomings that Whitman has showcased.
And given that HP turned around after Whitman left, Quibi doesn’t have to fail. Still, if they focus on blame rather than understanding and fixing the core leadership problems, it will merely be another avoidable failure on Whitman’s troubled resume’. Hopefully, the Quibi board will realize this before it is too late, but given how weak boards typically are, I wouldn’t hold my breath.
- Why Banks Love IBM’s zSystem - March 17, 2023
- How Warm Water Cooling Makes Lenovo the Server Company to Beat - March 10, 2023
- HP’s Strategic Approach to Revenue Diversity Saved a Bad Quarter - March 3, 2023