CJ - "Not CEO material"? I'm not sure what standard you are holding him to, but in terms of visionary leadership and strategic positioning, I would put him right at the head of the pack, way ahead of Carly, years ahead of Michael Dell, leading MSFT in his thinking by at least 6 months. Let's look at a couple of the changes he has made and maybe you'll see what I mean.
When Capellas came on board, CPQ was regarded as a fading PC power, struggling with the acquisition of a bunch of incompatible components from Tandem and Digital, stuck with a distribution model which made them uncompetitive in costs, with no center of gravity. But think about what the other "leading" CEOs were saying at that time - and it was just a year ago.
Dell was talking about the inevitability of his business model driving into the server space, and how his costs were half of anyone else's costs (which of course is complete nonsense unless we limit "cost" to the direct manufacturing cost, which is perhaps 10% of cost of goods). MSD was Poo-pooing the idea that PCs would get commoditized, that Dell's business model would not translate to the enterprise space, that appliances and handhelds would be important. Carly was developing a "concept" message which had almost no substance in terms of product direction, and no notion of where technology direction would go in the next few years. MSFT was hyping Win2K, sending the basic message that finally getting to a stable and scalable product would be the answer to all of MSFT's problems.
Capellas came out with a vision that to me was very convincing. He said that PCs would remain important but would shift from the central role they had played in the past. He felt that the center of gravity of the infrastructure would move from base platforms - PC desktops and servers focused around one stack or another (i.e. MS vs. Solaris for example) to one where the net itself became a kind of meta-platform. In that world, the interoperability of back end systems, and their ability to migrate services, content delivery and transactions close to "the edge" become the key competitive advantages, the way raw transaction capability was in the last generation. On the other side of the equation, a host of new access paradigms would appear - handheld and mobile devices and products morphed from other worlds, like cell phones.
What's more, he put that into action. On the product side, he kicked off the zero-latency initiatives in the "old line" divisions (Tandem and Alpha), a radical shift to endpoint devices targeted for the new world (iPaq, the Aero handhelds), and initiatives with CMGi and others to develop some reality in the "internet as a platform". At the same time, he was repositioning CPQ to be a supplier to the ASP space, which was just beginning to be visible to the other big suppliers, and drove alliances with Exodus, Digex, Cable and Wireless, and others to get on the forefront. All of those required new thinking, new business models, new distribution. Much of that work bore fruit in the first few months of Capellas' tenure.
Now we see the major players - most recently MSFT - announcing big shifts in their business plans which reflect a nearly identical view of the world. CPQ has been developibg this thinking for a year, pushing the ideas into the market and the product groups, developing the thinking with key partners like MSFT and Oracle.
This is what a CEO is supposed to do, and I feel that Capellas is about the best in the business at this point. The areas where I would fault him are in basic blocking and tackling - cutting costs, getting the organizational components cleaned up, getting the physics of distribution cranking. Those are all things that a lot of good people in the business could do, and the right path for CPQ is to add that kind of senior executive talent to the mix. |
