Compaq Reorganizes Again
May 5th, 2000 - In the latest of a string of upper-level resignations,
Compaq Senior Vice President Enrico Pesatori announced he was leaving
the company to become CEO of start-up Synaxia Networks, located in Reading,
UK. Pesatori was most recently the Group Manager of the Enterprise Solutions
and Services Group.
bigger news was what happened as a result - or was it a cause? - of the
resignation. Instead of announcing a replacement for Pesatori, CEO Michael
Capellas split up ESSG, promoting some groups (the Industry Standard and
Business Critical Server Groups and the Storage Products Group now report
directly to Capellas) and combining others in what is hoped to be a more
rational sales and support organization.
After gaining a market perception of a company thrashing about, some observers
had hoped the days of turmoil were behind Compaq. However, it may be that
this latest reorganization will do no major harm.
There are two aspects to this announcement: the reorg and the resignation.
We'll look at the easier one first.
When you pick up the appellation "journeyman executive", it's generally
not an indicator that you're another Bill Parcells. (For those who don't
follow American football: Bill Parcells is a football coach known for
taking terrible-performing teams and turning them into Super Bowl contenders
or champions.) After six companies in ten years, one questions how much
value Pesatori adds to any given situation. It is also rumored that few
persons inside Compaq (including CEO Capellas) are shedding tears over
his departure. In addition, the speed with which Mr. Capellas eliminated
the position indicates the value he placed on that role. At least Pesatori
didn't get the "left to pursue other interests" slap.
reorganization is tougher to call. On the one hand, turmoil is rarely
good for an organization. People invariably spend more time trying to
figure out where they'll land, or fighting turf wars, or just generally
getting overcome by internal politics. However, if the ESSG needed leadership
and Mr. Pesatori was unable to provide it, this shakeup might help the
troops rally a little. We expect Compaq's competitors will try to capitalize
on the opportunity, by questioning Compaq's focus/commitment/whatever
and playing the FUD card. It is up to CEO Capellas and his new reports
(Mary McDowell, Bill Heil, and Howard Elias), as well as VP Peter Blackmore
(who now has service/support added to his current sales and marketing
responsibilities) to reassure their customers that everything's going
to be OK.
Customers should not alter their purchasing plans as a result of the reorganization.
The short-term effects seen by customers - at least on the development
side - will be negligible. The movement of the service/support group creates
the bigger uncertainty, especially when Compaq has suffered from a reputation
for lower reliability (ref. Computerworld survey, 11/99). Although Compaq
appears to be more attentive to reliability concerns these days, customers
tend to remember a negative longer than Compaq would like. Customers should
seek assurances from the appropriate level of Compaq management that their
purchased systems will not become "orphans".
the longer term, customers should keep an eye on the development side,
to be sure that product deliveries don't start slipping. Missed schedules
are good indicators that the reorganization caused more problems than
it solved. If Compaq continues to deliver products and technology in a
timely manner, then it will have weathered the storm well.