Despite The HP Disaster, Meg Whitman Is Not An Awful CEO

[Anonymous]

<p><font size=”5″><strong>Here’s Why, Despite The HP Disaster, Meg Whitman Is Not An Awful CEO</strong></font></p>
<p>By Nicholas Carlson    <br />
<font size=”4″>Despite <a class=”hidden_link” href=”http://www.businessinsider.com/blackboard/hp”>HP</a&gt; being a huge mess right now, and her losing campaign for California governor, <a class=”hidden_link” href=”http://www.businessinsider.com/blackboard/meg-whitman”>Meg Whitman</a> is not as ineffective of an executive as you might think.</font></p>
<p><font size=”4″>So argues Marc Bodnik, Silicon Valley startup investor and COO at <a class=”hidden_link” href=”http://www.businessinsider.com/blackboard/quora”>Quora</a&gt;.</font></p>
<p><font size=”4″>Bodnik says that actually, Whitman is a “very strong leader,” and “among the most successful” CEOs in Silicon Valley.</font></p>
<p><font size=”4″>Here is his full-throated defense, which we’ve republished with permission:</font></p>
<div class=”col w6_5 main_col”>
<div class=”question row”>
<div id=”ld_xAtRXC_42397″>
<div class=”question_topics_editor”>
<div id=”__w2_S9Nw0sX_view_topics” class=”view_topics”>  <font size=”4″><span id=”ld_PxpWfM_41323″><span id=”ld_PxpWfM_41324″><span class=”question_context”><span id=”ld_PxpWfM_41325″>Meg Whitman</span><span class=”normal”>:</span> </span></span></span>What’s so great about Meg Whitman?<br />
<br />
</font></div>
</div>
</div>
<div class=”e_col p1 w4_5 question_text”>
<div id=”q_view” class=”q_view col w5″><span id=”__w2_GwHIxHY_toggle_link” href=”http://www.quora.com/Meg-Whitman/Whats-so-great-about-Meg-Whitman#”&gt;
<div id=”ld_xAtRXC_42402″>
<div class=”w5 question_text_edit row”><font size=”4″>It’s easy to criticize from the cheap seats.<br />
<br />
I think the answers on this page don’t understand the nature and challenges of organizational leadership. Great leadership is almost never about pitching a perfect game. Great leaders make mistakes and have setbacks, but learn from them and recover.<br />
<br />
There are very few CEOs in Silicon Valley who have had a near-perfect record. And most of them are founders: Jeff Bezos (founder), John Chambers, Larry Ellison (founder), Bill Gates (founder), Andy Grove (almost founder). Maybe a few others. And even these guys each had setbacks.<br />
<br />
It’s important to understand that conventional wisdom in Silicon Valley among most senior operators and investors is that Meg Whitman did a very good job running eBay.</font></div>
</div>
<div id=”ld_xAtRXC_42403″>
<div class=”row w4_5 question_details”>
<div class=”inline_editor_content”><font size=”4″>She was a terrible gubernatorial candidate despite spending tens of millions of dollars of her own money trying to get elected, and now HP seems to be in a downward spiral. Was she a good CEO for eBay? What about her earlier career? What is she good at?</font></div>
</div>
</div>
</span></div>
</div>
</div>
</div>
<div id=”__w2_t229Mbj_actions” class=”col side_col”>
<div class=”e_col w2_5 page_opts “>
<div class=”signup_column_spacer”>
<div id=”__w2_jGJUOrz_container”><br />
<font size=”4″>I think the answers on this page don’t understand the nature and challenges of organizational leadership. Great leadership is almost never about pitching a perfect game. Great leaders make mistakes and have setbacks, but learn from them and recover.<br />
<br />
There are very few CEOs in Silicon Valley who have had a near-perfect record. And most of them are founders: Jeff Bezos (founder), John Chambers, Larry Ellison (founder), Bill Gates (founder), Andy Grove (almost founder). Maybe a few others. And even these guys each had setbacks. <br />
<br />
<strong><em>It’s important to understand that conventional wisdom in Silicon Valley among most senior operators and investors is that Meg Whitman did a very good job running eBay. </em></strong><br />
<br />
<strong><u>Whitman leadership: overall 10-year performance</u></strong><br />
Over a 10-year period:<br />
</font>
<ul>
<li><font size=”4″>Whitman was the CEO who led and scaled eBay, working with founders who weren’t interested in day-to-day operations. Contrast this with other companies (Google, LinkedIn, Yahoo) where the CEO was part of a leadership team that included engaged founder(s). Whitman was really in charge and should get a ton of credit for the company’s success.</font></li>
<li><font size=”4″>Whitman drove eBay’s stock price from ~$2 per share to the low-$20s -> i.e., building a ~$30 billion market cap company.</font></li>
</ul>
<font size=”4″><br />
</font>
<div><font size=”4″><img src=”http://qph.cf.quoracdn.net/main-qimg-33d3940df979b0ae21d494e3c5722f5c&#8221; class=”qtext_image zoomable_in zoomable_in_feed” alt=”” /></font></div>
<font size=”4″><br />
<em>I see Meg Whitman’s tenure lined up against the 2008-2012 stock price graph in 3 steps: (1) She left eBay in January 2008, when the stock price was about $30; (2) the market crashed in late 2008 and in 2009 eBay bottomed at about $10 per share; (3) in 2010, eBay recovered to the low/mid-20s.</em><br />
<br />
</font>
<ul>
<li><font size=”4″>She drove huge revenue and profits growth during this period.</font></li>
<li><font size=”4″>She drove eBay’s acquisition of PayPal in 2002, which is arguably eBay’s crown jewel business today. In hindsight, this deal looks like a no-brainer (in fact, it looks like one of the best acquisitions in U.S. corporate history); but, according to my sources, the deal was controversial when it happened; in fact, Howard Shultz resigned from the Board because he was against it. <strong>In summary: eBay paid $1.5B for PayPal and now it is worth $25-30B.</strong></font></li>
<li><font size=”4″>She handpicked a successor (John Donahoe) who has apparently done a very good job and has doubled the stock price (now $50+ per share).</font></li>
<li><font size=”4″>She made one clear M&A mistake (Skype), which was a huge distraction but still resulted in a net gain to eBay when it was sold. </font></li>
</ul>
<font size=”4″><br />
<strong><u>Whitman eBay leadership: early days</u></strong><br />
Whitman was <u>critical</u> to eBay’s early success. <br />
<br />
I’m close to a number of people who were early employees at eBay; for example, I was close for some time with Rajiv Dutta, who served multiple roles including CFO, GM of Skype, and GM of PayPal. My sources shared some interesting insights with me about the company’s early years:<br />
</font>
<ul>
<li><font size=”4″>Whitman joined eBay when there were only 30 employees, when it was largely a Beanie Baby/collectibles community. </font></li>
<li><font size=”4″>Whitman was the leader who drove eBay to expand across verticals. She studied eBay’s early, fanatical consumers, and those customers convinced her that that eBay could be a real platform. <strong>Whitman believed strongly that eBay could grow bigger than collectibles, but many investors, even at the IPO, doubted that. </strong></font></li>
<li><font size=”4″>”Before Whitman, 6 other CEO candidates (and many VCs) turned eBay down because they did not see the company’s strategic opportunity.”<br />
</font></li>
<li><font size=”4″>Whitman was integral to attracting eBay’s early tech talent, and her leadership was instrumental to scaling eBay as a platform. </font></li>
<li><font size=”4″>eBay crashed in 1999 and she gets credit for saving it. “Pierre had largely checked out at that point, so Whitman had to run everything on her own and bring in the talent.”</font></li>
<li><font size=”4”>One of the boldest things Whitman did which no CEO had done to-date was to set a 3-year revenue target for the street. “In 2001 eBay went out with a target of $3B in revenues by 2004 and then, 3 years later, they beat the target. Mary Meeker had been on record at the time saying that Meg was crazy to do this, that it was CEO suicide. It was incredibly bold, incredibly galvanizing and eBay beat it! It worked.”<br />
</font></li>
</ul>
<font size=”4”><br />
It is extremely difficult to succeed as the CEO of a huge company in Silicon Valley when you are not the founder and not an engineer. Meg Whitman is one of the few exceptions. To be clear, yes, Whitman made mistakes and had weaknesses; she wasn’t as strong a technology leader as Jeff Bezos or Eric Schmidt. So, yes, I agree with the core critique that is popular -> had she been more focused on product and technology, Meg Whitman could have built an even bigger business out of eBay (and PayPal) and competed more effectively with Jeff Bezos and Amazon. </font></div>
</div>
</div>
</div>
<p> </p>

[Author]

December 13, 2012 at 8:59 AM