New Compaq CEO rallies troops;
others yet to enlist
By DWIGHT SILVERMAN
Copyright 1999 Houston Chronicle
As far as Laurie Frick is concerned, Michael Capellas, the
new chief executive at Compaq Computer Corp., passed her
test.
In a pep rally Friday morning, Frick heard Capellas say time
and again that he wanted his employees to build "cool
products."
During a Q&A session, Frick -- who is vice president of
consumer peripherals -- asked what he meant by "cool."
"When we sit down with you to show you a product, what are
you going to be looking for that's cool?" she asked.
"What's cool to me? Ease of use -- when I can sit right down
and use it right away," Capellas responded. "Cool is when I
can do something I didn't know I could do before."
Frick said his answer "blew me away."
"I was kinda testing him," she said. "I think this guy is for real.
That was not a by-the-book answer -- he gets it."
And what made her think she could stand up before her
colleagues and "test" Compaq's CEO?
"He seemed like a real person," Frick said.
On Cappellas' first full day as Compaq's new leader. He
passed muster with the troops, but that was the first step.
Now he must guide the company through treacherous
changes in the marketplace, as businesses buying computers
shift from resellers who long were a key market of Compaq's
marketing program, to buying them directly from
manufacturers.
He faces internal challenges as Compaq continues to struggle
to integrate Digital Equipment Corp.
He also must deal with a skeptical Wall Street, which was
surprised by his appointment Thursday.
He faces financial analysts on Wednesday, when he leads the
company's second-quarter earnings announcement. Compaq
officials have warned to expect a 15-cent loss per share, as
well as details on pending layoffs.
Compaq closed down 1/2 at 24 1/2.
Some analysts believe Capellas may have been picked
because board Chairman Benjamin Rosen -- who ran
Compaq in the 14 weeks it was without a chief executive --
can easily tell him what to do.
"He is no more than an executioner for Ben's ideas," said
Ashok Kumar, an analyst in Minneapolis with U.S. Bancorp
Piper Jaffray who has been very critical of Compaq's
management. "If this doesn't work, the fault rests entirely on
Ben, and Ben alone."
In an interview Friday, Capellas said it's understandable that
some people would challenge whether he has the right stuff to
run a $40 billion company.
"That's a reasonable question to ask, because there's a
stereotype that to be in this job, you have to have done X,"
Capellas said. "But there are people who have made great
successes of themselves in the technology industry who had
not run a company before."
Capellas said a good chief executive must understand
financial concepts, have an innate ability to relate to people
and must be able to think strategically.
The main thing he needs to learn is to take what he knows
and use it on a grander scale.
"You have to learn to manage the complexity of problems of
this size," he said.
Capellas agreed that one of those problems is meshing the
cultures of Compaq and Digital. Both current and former
employees say a "culture war" is hindering the company's
progress.
"They are indeed very different cultures, and the first thing
you have to do is acknowledge that the problem exists," he
said.
Capellas said the company must remove overlapping products
so that groups working on different products don't compete.
He also said that Compaq's employees must be unified on
their strategy, and quit using terms such as "Compaq classic
and Digital classic" -- which reflect people thinking of these
businesses as separate entities.
"You can't force people to think alike, and it takes some time
for cultures to get together," he said.
Capellas described himself as "a people person" and "a social
animal," and it showed during the Friday morning meeting.
Charismatic, articulate and direct, his performance was a
stark contrast to the more subdued public appearances by his
predecessor, Eckhard Pfeiffer.
"Here's what you can expect from me," Capellas told the
group, as a computer presentation flashed on large screens
overhead with a list.
"I will be passionate and involved," Capellas said. "I will
communicate openly, honestly and often ... I will not sacrifice
the future of the company. And I will do what I say."
He also had expectations for his employees.
Capellas said he expected them to be an advocate for the
customer; to "build cool stuff"; to communicate openly and
honestly with each other; to do what they say; and to have
more fun working there.
He also said he wanted to encourage more risk-taking in the
organization, "because risk-taking is the heart and soul of
innovation."
Although he is not well-known outside Compaq, those who
have worked with him since his arrival in August 1998 as the
company's chief information officer say they are not surprised
at his ascension.
"I can definitely say he is one of the smartest people I ever
met," said Ed Straw, Compaq's senior vice president of supply
chain management. Straw said that when he was recruited to
join Compaq earlier this year, it was a meeting with Capellas
that convinced him to take the job.
Capellas spent part of Friday moving into his new office on
the eighth floor of Compaq's executive building. Overnight,
workers removed two desks used by Frank Doyle and Robert
Ted Enloe, the board members who, along with Rosen,
comprised the interim "office of the chief executive." The
desks were replaced by black leather chairs and a couch.
Before his name was painted on the door, Capellas was
already at work, playing phone tag with Microsoft Chairman
Bill Gates.
"That's one of the first things you have to do when you take
this job -- call Bill Gates!" he quipped.
Capellas said the company had named William B. "Bo"
McBee III as vice president for quality and customer
satisfaction, a new position. McBee will be responsible for
quality-control programs and improving Compaq's relationship
with customers.
Capellas said the company had chosen, but was not ready to
name, a vice president to oversee Compaq's Internet business
initiatives. |
