by Susan J. Aluise | April 23, 2014 2:17 pm
What do Mark Fields, Jeffrey Clarke and Satya Nadella have in common?
Well, all three rank among the biggest names in the 2014 class of incoming CEOs of publicly traded companies — and all three take the helm at a critical point in their corporations’ destiny.
Now comes the hard part.
While getting the top job is a rush, that exhilaration can be short lived: just ask General Motors (NYSE:GM) CEO Mary Barra, who less than 90 days into her new job faced the ire of Congress over a GM recall crisis. Another Class of 2014 CEO, Mozilla’s Brendan Eich, lasted only 10 days after his 2008 donation to the Prop 8 campaign seeking to ban same-sex marriage in California came to light and raised the ire of the LGBT community.
Even without high-profile corporate crises or PR blunders, succession planning has always been one of the biggest challenges for corporations. With the dramatic rise in executive churn, the heat is on these new CEOs to balance the competing interests of delivering shareholder value today and visionary leadership for the future.
Let’s break down Mark Fields, Jeffrey Clarke and Satya Nadella to see if they have the right stuff:
With widespread reports this week that Ford (NYSE:F) CEO and turnaround master Alan Mulally will step down before the end of the year, COO Mark Fields, his hand-picked successor, is expected to step up to the plate.
Investors and the automotive world have had a long time to watch the 53-year-old Fields, who has spent nearly half his life at Ford. Fields, who took over North American operations the year before Mulally came on board, drafted “The Way Forward,” a cost-cutting plan to strategically realign Ford to new auto market realities.
Still, it was Mulally, an aerospace engineer who had spent 37 years at Boeing (NYSE:BA), who took a sluggish, unwieldy carmaker that lost $12.7 billion in 2006 and turned it into a leaner, meaner competitor that earned $8.6 billion in 2013. It was also Mulally who in 2006 mortgaged Ford’s future to obtain a $23.6 billion cushion that kept the company out of bankruptcy and bolstered the company’s position.
Fields was a trusted commander at Mulally’s side the entire time, but what kind of CEO will Fields be once Mulally has moved on to his next big challenge?
As his 25-year tenure supports, Fields is the ultimate Ford insider — he’s also close to Executive Chairman Bill Ford. That said, he easily adapted to outsider Mulally’s management style of cutting across fiefdoms within Ford and forging greater collaboration among the management team. That suggests Fields either can easily adapt tactics to accomplish important priorities, or he’s an enigma hiding in plain sight.
Fields has demonstrated that he’s not afraid to make tough decisions, particularly on the cost-cutting side. But the jury is out on how well he can navigate challenges that require more of a velvet glove than the iron fist: future relations with the United Auto Workers union, for example, as well as the plan forward for Ford Europe and the master strategy for emerging markets like China.
Fields also will be judged on executing Ford’s new “Blueprint for Mobility” successfully. At the New York Auto show this month, he threw down the technology gauntlet by proclaiming that Ford is now thinking “not just like a car company, but a mobility company.”
Having a solid grasp of forward-focused technology is essential to Ford’s future, but even founder Henry Ford viewed technology and innovation as an enabler of business strategy, not the strategy itself. That adds to the challenge Fields will have following a rock star CEO who quite literally drove Ford back from the brink.
This is a big week for MSFT’s new CEO Satya Nadella: Analysts will be looking for clues about his vision for the future on the tech giant’s earnings call Thursday — the day before the company’s expected close of its $7.2 billion deal to acquire Nokia (NYSE:NOK).
Steve Ballmer, who had been CEO of MSFT since 2000, was always going to be a tough act for any chief to follow — a process further complicated by the lack of any serious succession planning. After a wild CEO search that generated candidates like Ford’s Alan Mulally, Qualcomm’s (NASDAQ:QCOM) Steve Mollenkopf, and Ericsson (NASDAQ:ERIC) CEO Hans Vestberg, MSFT refocused its search within the company.
Nadella, a 22-year MSFT veteran who helped drive the company into the cloud services arena, won out, officially taking the helm on Feb. 4.
Satya Nadella is a solid choice — as a Microsoft insider, he knows the inning and the score. The first huge test will be managing the integration of the Nokia acquisition, which MSFT is counting on to advance the company’s mobility strategy.
But this new devices business, which is being identified to partners as “Microsoft Mobile Oy,” brings with it former Nokia CEO (and MSFT alum) Stephen Elop, who was once a contender for the job Satya Nadella now holds. Elop will report to Nadella and will head up Devices, MSFT’s Surface line and will be involved in the evolving Xbox business.
That said, Nadella will need more than tech savvy to succeed in his new role: He must work closely with former Symantec CEO John Thompson, who replaced iconic founder Bill Gates as MSFT chairman in February to chart the course for the company’s future. But while Ballmer and Gates are out of Microsoft’s daily operations, they own a ton of MSFT stock and still will influence the company’s direction.
Satya Nadella is a good choice at the right time for Microsoft, but it remains to be seen whether he will be given the autonomy to execute a focused strategy, or whether MSFT will be hobbled by multiple executive fiefdoms.
When Eastman Kodak (NYSE:KODK) tapped Jeff Clarke, a former technology executive and private investment partner as CEO last month, it was a clear sign that the 126-year-old photographic film company saw its future in technology.
Clarke takes the helm from Antonio Pérez, Kodak’s president since 2003 and CEO since 2005. Those were tough years by any measure, since Kodak not only was late to the digital camera market, but Pérez had to shut down factories and heavily outsource to cut costs on low-margin products and processes.
By January 2012, Kodak filed for bankruptcy but creditors gave it a small but significant life vest: 18 months and $950 million to come up with a reorganization plan that could help Kodak rise from the ashes. The new Kodak is a technology company focused on digital imaging and graphics for business users — a focus that seems to leverage Clarke’s background and strengths. The particular value proposition Clarke brings to the table is in the area of business-to-business (B2B) technology product strategy and marketing.
In January, Kodak was relisted on the NYSE under the ticker KODK and for now, the company’s future is in commercial printing with a twist. The company’s Prosper Press Platform, launched last year, is being marketed as a “high-performance solution for a range of digital printing applications, such as direct marketing, commercial print, and publishing.”
One key challenge for Clarke will be convincing potential B2B customers that KODK’s intelligent printing system is really a paradigm leap from existing technology and processes. If not, innovative processes that could provide a foundation for touch sensors and applications in commercial printing could fall victim to low-margin commodity pricing.
Clarke’s tech industry background at Hewlett-Packard (NYSE:HPQ) and CA, Inc. (NASDAQ:CA) gives him a solid understanding of the perils of a rapidly changing technology landscape, while his experience as Managing Partner of Augusta Columbia Capital keeps him well grounded in the need to deliver shareholder value.
Still, births are a lot easier than resurrections — Clarke might not have an abundance of time to get KODK’s restart picture perfect.
As of this writing, Susan J. Aluise did not hold a position in any of the aforementioned securities.
Source URL: http://investorplace.com/2014/04/ceo-satya-nadella-mark-fields-jeffrey-clarke/
Short URL: http://invstplc.com/1iMdbOU
Copyright ©2016 InvestorPlace Media, LLC. All rights reserved. 700 Indian Springs Drive, Lancaster, PA 17601.