When is it time to say, ‘Our CEO’s got to go?’

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By Denzil Doyle

By definition, innovation is all about change, which means that the duties and responsibilities of a high technology CEO are bound to change as the company grows.

While a board of directors must pay close attention to those changes and how well the existing CEO is reacting to them, the board must resist the temptation to terminate the CEO prematurely. This is particularly true if the founding CEO is a technical person. Many directors are of the opinion that it is their responsibility to bring in a more “business-oriented” person at the first sign of trouble.

Unfortunately, business orientation can mean different things to different people, but as a general rule, the following four parameters are important in a CEO’s evaluation:

  • Management – getting things done by implementing and following policies and procedures
  • Leadership – getting things done by example
  • Technology know-how
  • Marketing know-how

The following are examples of a CEO’s proficiency in each of the above on a scale of one to 10:

Management

1 – Poorly organized, lacks self discipline, poor team player, poor delegation

5 –Good planning, execution, administration and control skills

10 –Good delegation, sound policy formulation, simple rules

Leadership

1 –Low energy level, erratic behaviour, frequent procrastinator

5 –Medium energy level, follows simple principles, procrastinates frequently

10-High energy level, good judge of people, good communicator

Technology Know-how

1 – Does not understand published articles in the field, must delegate all technical decisions

5 – Can pursue technical discussions with the company’s CTO, understands product migration strategy

10 –Understands the company’ technology, product and market strategies in detail, respected industry spokesperson

Marketing Know-how

1- No direct sales/marketing experience, weak network, no account management experience, poor communicator

5 – Capable of closing a major sale, can prepare account management plans

10 – Can assume the role of VP Sales/Marketing, has a natural flair for selling, trusted by customers

Whether it is the above set of parameters or one that is more related to a specific company’s day-to-day operations, it is important that the decision to replace the CEO is not left to intuition. It must be a rational process.

By way of example, the financial community was adamant that Ken Olsen, the founding president of Digital Equipment Corp., be fired when the company’s annual sales were about $60 million because he turned in a bad quarter. His board disagreed and he went on to achieve sales of over $10 billion before leaving some 15 years later.

Image: LexisNexis

Denzil Doyle’s involvement in Ottawa’s high technology industry goes back to the early 1960s when he established a sales office for Digital Equipment Corporation, a Boston-based firm that had just developed the world’s first minicomputer. The Canadian operation quickly evolved into a multi-faceted subsidiary. When he left the company in 1981, Canadian sales exceeded $160 million and its employment exceeded 1,500. In his next career, Doyle built a consulting and investment company,Doyletech Corporation, that not only helped emerging companies, but built companies of its own. In recognition of his contributions to Canada’s high technology industry, he was awarded an honourary Doctorate of Engineering by Carleton University in 1981 and a membership in the Order of Canada in 1995.

 

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