February 1 2004 by Chief Executive
YOU MIGHT THINK that with a diminishing number of Enron-like scandals, the turnover in the corner office would be easing, or at least becoming more predictable. But late in 2003, there were a surprising string of comings and goings, including the departure of two of the most prominent women executives. Although ethical issues played a role, the bigger consideration seemed to be performance-or lack thereof. Here’s a scorecard:
Betsy Bernard resigns as president amid revenue decline, replaced by former colleague Bill Hannigan.
The scoop: It was mission impossible for Betsy. No one could stop the decline of AT&T-and she quickly became the sacrificial lamb.
Phil Condit is forced out and Harry Stonecipher, former CEO of the acquired McDonnell Douglas, parachutes from the board back into the CEO role.
The scoop: Condit was a disaster. The board should have acted much sooner. But directors made a mistake in going with Harry. He’s part of the problem, not the solution.
Chairman and CEO Leo Mullin “retires” amid a flap over his compensation and is replaced by two board members. Former General Motors CEO Jack Smith becomes chairman, and Gerald Grinstein becomes CEO.
The scoop: Leo had to split after losing the confidence of his own people. But the solution implies continuity when radical change may be the only way to save Delta.
Co-CEO Betsy Holden steps aside amid price pressures and the lack of new products and is replaced by another co-CEO, Roger K. Deromedi.
The scoop: Okay, Betsy was a brand-extender, not a new product person. But the co-CEO arrangement was clearly unworkable. And Altria, which owns 84 percent, wants big changes so that it can spin Kraft off.
The board passes by Mike Z., the designated internal succession candidate to Chris Galvin, and taps Ed Zander, former president and COO of Sun Microsystems.
The scoop: The board wanted more abrupt change than promoting an insider would signify. But they waited way too long. Motorola might not be fixable. And Ed is bound to have big problems with the Midwest engineering culture in Schaumburg.
|BY the NUMBERS|
In Wal-Mart’s Wake
WAL-MART a boon for local economies? Not a chance, say critics like Al Norman, anti-sprawl activist and author of Slam-Dunking Wal-Mart. “Bringing a Wal-Mart to your town is supposed to be a shot in the arm,” he says. “Instead it’s a shot in the head.” Recent studies say the retail giant’s colossal growth comes at the expense of existing stores.