Knight Ridder/Tribune Business News
August 7, 1997 | Lashinsky, Adam
Aug. 7--In shaking up its board of directors Wednesday, Apple Computer Inc.
hopes to jump-start the company with an infusion of four high-profile
executives who have a combination of computer industry experience and financial
turnaround savvy.
It also severed ties with the man who most defined its storied corporate
culture with the resignation of longtime director Mike Markkula.
But announcing new directors was the easy part. Still in question is who
will agree to be CEO with Apple's mercurial co-founder Steve Jobs as a board
member. What's more, three of the four new board members -- Jobs, Oracle Corp.
Chairman Larry Ellison and Intuit Inc. CEO William V. Campbell -- already have
full-time jobs, limiting the time they can devote to Apple.
And in Ellison, busy fighting his own battle over network computers with
Microsoft's Bill Gates, Apple may be choosing a confusing voice at the top of a
company that's just crafted a pathbreaking deal with a longtime adversary.
The naming of one new director, however, ensures Apple will have strong
guidance from at least one executive with time to devote to the company.
Jerome B. York, chief financial officer of Chrysler Corp. and
International Business Machines Corp. when both companies went through painful
turnarounds, is regarded as a tough, shrewd, demanding executive. Hughes
Electronics Corp. executive Gareth C.C. Chang and E.I. DuPont De Nemours &
Co. Chairman Edgar S. Woolard remain on the board.
What's certain is that the many critics of Apple's board no longer can claim
its directors won't know their way around a software program or a balance
sheet.
"You've gone from a board that, to put it kindly, was dormant, to a
board of relative luminaries," said J.P. Morgan Securities analyst Daniel
R. Kunstler. In additional to the departure of Markkula, who joined Apple's
board in 1977, newer members Katherine M. Hudson, CEO of W.H. Brady Co., an
industrial products company in Milwaukee, Wis., and investment banker Bernard
Goldstein of Broadview Associates L.L.P. also resigned from the board.
Markkula and Goldstein didn't return phone calls; a spokeswoman for
Hudson said she had no comment.
Apple, which did not name a chairman, has three remaining board
positions to fill. One is reserved for its as-yet-unnamed president and CEO,
said Chief Financial Officer and acting Chief Executive Fred D. Anderson.
Jobs' ascension to the board from his position as "senior
adviser" marks the capstone of a remarkable comeback. In 1985, Jobs left
Apple with hurt feelings when he couldn't see eye-to-eye with then-CEO John
Sculley. He returned to Apple only last year when former Chairman and CEO
Gilbert F. Amelio bought Jobs' Next Software Inc.
Now Jobs will focus on "providing a lot of vision and refocusing
the company on broad leadership," said John T. Thompson, vice chairman of
executive recruiter Heidrick & Struggles, who is heading the hunt for
Apple's next CEO.
"Steve is one of the most persuasive individuals in the high-tech
industry, and if anybody can convince people that Apple has a chance, it is
probably Steve," says Sculley, now a private investor.
But Jobs also presents challenges, especially for anyone considering
taking the CEO spot. Said an investment banker who knows of at least one
executive who turned down the position, "Steve is one of the world's
greatest second-guessers."
Joining Jobs on the board is Oracle's Ellison, a flamboyant and
hard-charging executive who flirted recently with launching a takeover bid for
Apple. Ellison's presence will make for interesting internal strategy debates
at Apple, as he is known for his animosity toward Gates and Microsoft, Apple's
new investor. Ellison is championing the network computer technology that has
been squarely aimed at challenging Microsoft's operating-system dominance.
Former Apple executive Campbell said he "came on the board to help
advise the company in its desire to get back on its feet." Campbell said
he told Jobs, a close personal friend, "If you're in, I'll be in,"
when he was approached to join the board. He said, however, he isn't interested
in being Apple's CEO. "I have a job," he said. "I run
Intuit."
Campbell, who worked at Apple from 1983 to 1991, headed sales and
marketing and was the founder of Claris Corp., Apple's software subsidiary. He
also was CEO of Go Corp., the failed pen-based computer company. A former
Columbia University football coach, he's highly regarded as a caring motivator.
The other significant addition to the board is York, renowned for his
turnaround efforts, first at Chrysler in the 1980s and then at IBM in the
1990s.
"He is very disciplined in his thinking and is a kind of
no-nonsense guy," said John C. Wilson, a headhunter specializing in
financial executives for Korn Ferry International in San Francisco.
York, who didn't respond to a phone call, is vice chairman of Tracinda
Corp. in Las Vegas, the investment arm of corporate raider Kirk Kerkorian.
But it is the departure of Markkula that most marks the end of the
original Apple Computer. For it was Markkula, far more than Jobs, co-founder
Steven Wozniak or anyone else, who defined Apple Computer, created its vaunted
and flawed corporate culture -- and held the real reins of power there for 20
years and through four CEOs.
Markkula deliberately crafted the culture that paid homage to engineers
over marketers, placed the company rather than customers at the center of its
universe, and did everything in first-class style.
"Every company has a culture, whether they want one or not. In
Apple's case, it was deliberately done from day one," he told the Mercury
News in 1994. "One of my personal goals with Apple was to build a company
the way I wanted it to be."
But Markkula exercised his power behind the scenes, making or at least
agreeing to all the company's major decisions while never taking the spotlight.
He rarely appeared at public company events and even less frequently granted
interviews.
Concluded journalist and author Robert X. Cringely, "In his role of
reluctant kingmaker, Mike Markkula didn't provide a service to the
company."
Mercury News Staff Writer Rory J. O'Connor contributed to this article.
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