CEOs, Shake-ups, and Clogging Up the Works

Last week saw two major shake-ups high up in the technology industry, and big names will soon have new leaders.  Hewlett Packard’s attempt to bring in new faces after scandal forced former CEO Mark Hurd out of the company seems too little too late. In contrast, Google co-founder Larry Page’s surprise rise into the CEO position in place of Eric Schmidt is galvanizing the search-engine giant to take on looming rival Facebook. Both are technology titans with budding identity crises in the face of competition, so how is one reboot taken so well, and the other seen as the mark of failing leadership?

The answer, of course, is timing. Changing leadership is a lot like changing gears of a car with an automatic transmission: you have to do it at just the right moment, or you will wreck your engine. HP is limping out of a controversy, and changing board members now is not the clean slate stockholders need to renew faith. Google, on the other hand, is switching to turbo at the right moment; with Facebook debuting its new mail client in the early spring, Google needs to bring in big guns for the inevitable showdown for top internet company.

Stockholders must feel the throughput, the smooth change of leadership, to stay loyal in this tough economy. HP didn’t have the structure in place to enact an effective transition that would allow stockholders to feel the change’s worthwhile impact. As a result, their last minute replacements read as an attempt to lick wounds rather than a move to strength. Google’s CEO change was unforeseen by most, but the company’s recent struggles in the area of social networking have hobbled its desire to grow. Page is determined to take an aggressive stance at Google’s partnerships with other businesses, a key component in remedying their current plight. Thus, Google’s execs saw a place for struggle and chose to transition as quickly as possible to avoid minimal stock damage.

In this race, changing gears is a necessary part of getting to the top of the tech world, and if HP doesn’t watch out, they’re headed for a spinout. Coordinating a calculated and well-timed transition is essential, and benefits only come to those who mind the speed and shift accordingly.