Oracle founder CEO to steer 37 long term into legend?

Ellison (Larryellison), who had just finished his 70 birthday last month, finally made a change.

37 years after he founded and led Oracle, he announced last week that he would step down as CEO of Oracle and continue as executive chairman. Mr. Ellison's chief executive will be replaced by Hurd, the company's current joint president, Hurd and Chavelat Caze (Safracatz).

As the only CEO in Oracle's history, and the CEO of the longest-serving technology company in Silicon Valley, Ellison's entrepreneurial and business career has made Oracle the dominant company in the traditional commercial software market, with a market capitalisation of $182 billion trillion and an annual revenue of $38 billion. Mr. Ellison himself ranked seventh in the global rich list with 46 billion dollars.

"It's legendary that Mr. Ellison has been the CEO of the company so long and still has a good track record." "strategy& Global partner Xu Yunjian, a management consultancy, told the first financial daily that this was about him being the founding CEO, on the other hand, about the environment of the Times, and if in the present historical period, a corporate CEO can serve more than 30 years, And it may be harder to achieve better performance.

The CEO's new challenge

As the founding CEO, Ellison is the newest of Silicon Valley technology companies. The founders of the same period had already retired, and Bill Gates gates Microsoft reins 10 ago, and Steve Jobs handed the CEO post to Tim Cook (Tim) shortly before his death in 2011.

"As the founding CEO, Ellison has a unique role in the business," he said. "Huppenling, executive director of the China Academy of Ken-resistant, said to the first financial daily, just like Ma Yun in Alibaba, horse of Tencent, they and the enterprise internal blood and cohesion and join the professional managers have essential differences, if not out of their will or I do not adapt to the internal and external challenges of enterprises, The board would not normally drive it away.

The Times environment may also have created the Ellison legend, in fact, for a long time in the past, the stability of the CEO, long term is considered an advantage. Welch Jackwelch the helm of GE20 until 2001, and his successor, Immelt (Immelt), reshaped GE over the past 13 years and pushed the company towards globalisation Bai Chuli, Mileswhite's chief executive, has held the post for 15 years.

"But the situation is very different now. Xu Yunjian said, first of all, the external environment changes quickly, more intense competition, consumer demand is also leading to the elimination of knowledge faster, which requires the CEO's own learning ability than strong, with the Times, otherwise its original advantage ability and external rapid changes can not match.

Secondly, the role of technological development in the promotion of the company is more obvious, a once-dominant company may be subverted by the innovation revolution, and if companies and their CEOs fail to control the impact of innovation and technological trends, it is hard to adapt to the new situation by retaining the long-term mindset; and globalization is also a new challenge for CEOs, World economic integration today, if the CEO does not have enough global vision, also can not adapt to the new environment.

So while Oracle's latest fiscal quarter is not as good as Wall Street's expectations, "in these three ways, Mr. Ellison has been CEO of Oracle for more than 37 years and has repeatedly defeated rivals that pose a threat, making Oracle the world's largest corporate software company, a legend." "Xu Yunjian thinks.

Seasonal model of tenure

Compared to Mr. Ellison's "long tenure", a report released by the nonprofit Research Consortium's World Large Enterprises association in April said that the average CEO's working time in recent years was only 9.7 years in Fortune's 500 U.S. list in 2013.

The LG Economic Research Institute analyzed the longevity CEO's performance, believed that they are advantageous to the company and the enterprise development, through strengthens the enterprise medium and long term plan, carries out the long-term strategy, pursues the management innovation, enhances the enterprise the strength; frequent change of CEO may lead to short-term effects, prompting the CEO to pursue short-term performance or

But the danger that CEOs are too long is clear. Dong Ningyu, professor of Organizational management at Aetna School of Economic Management at Shanghai Jiaotong University, said the CEO of longevity may have made the organization too conservative, pushing for a strategy that was once effective but now obsolete, or because the inner kingdom was too powerful to create a variety of contradictions.

For CEO term and company performance, Dong Ningyu, foreign scholars think there is a "inverted U-shaped" relationship, and put forward the CEO term of the season model, including appointment period, exploration period, mode selection period, pattern gathering period and function obstacle period, " Mature enterprises under the leadership of a CEO will experience a gradual increase in performance to the later stage of stagnation, the need for new thinking to activate, different enterprises at different stages of the inflection point of time different.

The danger to the CEO's long tenure is that companies change leaders too often. Yahoo, who hired Marissa (Marissa) as its current CEO, has changed its CEO 8 times in 17 years: The average time is only 2 years.

"Now the Internet enterprise development and change rapidly." Huppenling said that companies and their boards may be more impatient, often hope that the new CEO is more sensitive to the business direction, the industry's development is more forward-looking, I hope that 2-3 years or so will be able to see performance virtuous cycle performance, so the industry CEO changes are more frequent.

Xu Yunjian also said: "If the enterprise in the mature industry, competition is relatively flat, different CEO candidates may not be very big, but if it is today's science and technology industry, the risk is big, change fast, CEO replacement frequency is also higher, unless the CEO himself is a certain aspect of technology, and can drive the company's subversive innovation and development. ”

How long is the CEO term?

So how long does it take for a CEO to be more conducive to the company's development and performance?

Although the number of talented leaders is not pat, but Xu Yunjian that 7-10 years seems to be more appropriate: a CEO to arrive usually takes six months to 1 years to understand the enterprise, and then look at the long-term development of the enterprise strategy and planning to take measures, may also need six to 1 years of time, It may take 2 years to see the initial results, and then, as the market changes and the competitive environment changes in time to adjust the strategy, real to see the changes and results may take 4-5 years.

"Without a 2-term (4-year term calculation), it is difficult to plan for the long term. "Xu Yunjian said, and if the CEO knows he may not be able to do it for a long time, it's likely to do something flashy, boost the short-term stock price, let the option sell at a high price, without considering the best way for the company's long-term development, and then retire gracefully and let the successor fix the damage to the company.

However, research has shown that the CEO tenure of the world's largest companies is growing shorter than it was ten years ago. An annual survey by strategy&, a consultancy, shows that the average term of the world's top 2500 companies CEO2010 year is about 6.5 years, while the average term for 2000 is 8.1 years, and the CEO's average term is 18 months shorter than 10 years ago. The planned replacement CEO (the board of directors arranged ahead of the CEO's date of departure) has shortened the average term in the past 11 years by 30%, from 10 to 7 years.

For this trend, Xu Yunjian said that because of the current economic growth in the active period of rapid development, so the overall performance of the average CEO term is shortened, but if the economic and technological development in a relatively stable stage of development, the CEO term may be extended, "This is with the situation of economic development has a tendency to fluctuate." ”

From a single enterprise, "the CEO's life span is not the length, but the CEO can have constant reflection, innovative thinking, self-improvement ability." "Now, even the traditional industry CEO needs to think more about how to combine with the Internet for production, sales, and after-sale, so that the CEO can be the driving force of the company's change," Huppenling said. "Getty Figure

(Responsible editor: Lvguang)