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Taking on the big questions facing CEOs, boards, and shareholders.

Did Meg Whitman Fail?

January 23rd, 2008 @ 7:38 am

16 Comments

Categories: Best Practices, CEO Succession, Corporate Governance, Entrepreneurialism, Management, Mergers, Strategy, Technology

Tags: Meg Whitman, eBay Inc., CEO, Mergers & Acquisitions, Corporate Law, Gender And Diversity, Investment, Finance, Business Operations, Human Resources

This is a tough question to ask because Meg Whitman has been a legendary Silicon Valley CEO for 10 years and one of America’s leading women CEOs, but ask it we must: does her expected departure from eBay at the age of 51 signal a management failure on her part?

First the caveats: Whitman did an exemplary job lining up her successor, the highly likeable and energetic John Donahoe, who is 47. And yes, it makes some sense for a CEO to limit his or her tenure to a decade. And there have been broad shifts in the worlds of technology and finance that no CEO can possibly resist.

But the fact remains that Whitman’s core business of online auctions is in trouble, as per this excellent piece in the Wall Street Journal. As widely noted, eBay has lackluster customer service and the user interface has not kept pace with the times. Ten percent fewer customers visited eBay.com in December than in December 2006, according to Nielsen Online.  That was obviously a peak shopping month because of the Christmas holiday. If eBay was off 10 percent in visits in a peak month, what’s going on?

Part of the explanation is that Whitman spent too much money on acquisitions, mostly notably Skype. The company has acknowledged that it overpaid by at least $1 billion. The question we have to ask is, did Whitman spend eBay’s money in the wrong way? By making all the acquisitions, did she take her eye off her core asset?

Her departure at age 51 certainly suggests she knows that something went wrong on her watch. Very few CEOs decide to voluntarily retire until their late 50s, much as Steve Reinemund did at Pepsi. It’s too young an age to go out to the pasture and graze.

So however many times Whitman has been on the cover of Fortune, and no matter how lionized she was as a pathbreaking woman CEO, it appears she didn’t live up to her own hype.

 
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  •  
    1

    deinert

    01/24/08 | Report as spam

    Lack of customer service and knowledge of staff

    Last year I canceled my Ebay account because of repeated attempts to correct a problem with Ebay customer service. It started out that one of the vendors on the Ebay site took a payment from me, then rejected it and refused to sell me the product that I had won a bid. I contacted the vendor three times (he had no customer service, was rude and threatening), then customer service eight times. Each time the customer service person did not know about my previous contact with customer service. Each time they offered me different advice. I provided customer service with cut and paste information from their web site showing the vendor had broken their rules, and posted deceptive advertisement. I showed that I had got the winning bid, paid for the product and the vendor would not ship. The vendor continued by returning the fee and threatening me that I would be a non paying bidder. After several attempts to solve this problem on line, I asked for a phone number to call and talk to a person. I was told there is no phone number. The last email that I sent, requested information of the CEO and board of directors. I was told that they did not have that information and even if they did they were not allowed to pass out phone numbers or contact information of any corporate personnel. Checking Hoovers on line failed to produce contact information on EBay. So what does this say for her time at the helm.

  •  
    2

    bholstein

    01/25/08 | Report as spam

    Bingo. This is it

    Thanks for your explanation. If you as a customer were that frustrated, it helps us understand what went wrong. BH

  •  
    3

    GiselaGiardino

    01/24/08 | Report as spam

    RE: Did Meg Whitman Fail?

    I wonder if we may connect this with Niklas departure as Skype CEO months ago. I think that above all eBay problems on itself, something went very wrong about this Skype aquisition, and some heads above (Pierre O.?) noded and wanted the ones responsible for this to be put aside, perhaps for true reasons of incompetence or perhaps as a political move to show shareholders that the company it??s trying to heal itself after commiting this mistake, by separating these people from the core team.

  •  
    4

    Michael Fitzgerald

    01/24/08 | Report as spam

    RE: Did Meg Whitman Fail?

    In perhaps an odd coincidence, the CEO of Perkin Elmer, also 51, left his job, as well. he's going to advise a Goldman Sachs private equity group.

    his quote: "I'm 51 years old. My kids are out of the house. And I have some flexibility to try some new things that I want to do while I still have enough runway left."

    http://www.boston.com/business/healthcare/articles/2008/01/24/outgoing_perkinelmer_chief_sets_a_new_course/

  •  
    5

    Meryl333

    01/24/08 | Report as spam

    RE: Did Meg Whitman Fail?

    Why must you put this in terms of failure? She succeeded.... things
    are changing and she has the good sense to name a good successor...
    It is so easy to look for signs of failure... esp. with women, no?

  •  
    6

    bholstein

    01/25/08 | Report as spam

    No, this is not targeting women

    No, I'm not picking on her because she's a woman. Yours is the kind of allegation that prevents clear, reasoned analysis. If anything, she's had a remarkable free ride precisely because she has been such a prominent female CEO. Something obviously went wrong and we have to face the facts. Bill Holstein

  •  
    7

    kerrie@...

    02/05/08 | Report as spam

    Free ride? No. She said a decade....

    I wouldn't agree that she's had a "free ride" because she is a woman--where is the evidence for that? One point that has not been made is that from the beginning she stated that she didn't want to stay in this job for more than a decade--she is keeping her word. I don't think a lot more needs to be read into it.

  •  
    8

    bgilpatrick

    01/24/08 | Report as spam

    RE: Did Meg Whitman Fail?

    In the words of Robert Greene, based on the centuries' old wisdom of Niccolo Machiavelli:

    Do not go past the mark you aimed for; in victory, learn when to stop.

  •  
    9

    mweiner@...

    01/25/08 | Report as spam

    Fail? Not at all

    Regardless of the age, each CEO has a certain amount of 'juice' in them. Meg Whitman most certainly did not fail. She built e-bay into the powerhouse operation where it could even afford to make an aquisition like Skype. No one person can bat .1000 with every try. When stockholders' demands for consistent results, in an industry like technology, influence expansion decision making, it is a recipe for missteps and mistakes. Knowing when you've reached the point of diminishing returns as a CEO is a smart move, and a good CEO knows when to pass the reins to new blood.

  •  
    10

    nonamesplease

    01/25/08 | Report as spam

    RE: Did Meg Whitman Fail?

    Yup, she did fail. eBay is a weak brand that has become weaker under her term. It is the last walled garden on the internet. It is a motley collection of garage sale quality merchandise. Who want a brand that stands for garage sales? The user experience sucks. It has the most antiquated and klunky web site imaginable. Always yesterday's internet, never tomorrow's and it never will be. I predict we will not hear much from Meg from now on. She may be better suited to the non profit sector. Maybe she can go run the Red Cross or something.

  •  
    11

    Caroline Schroder, Sulgrave Resources & Research LLC

    01/25/08 | Report as spam

    RE: Did Meg Whitman Fail?

    Meg Whitman never did enough to solve the inherent image/service/credibility/legal issues surrounding listing of stolen, infringing and misrepresented goods. E-Bay serves as a legitimized fence.

  •  
    12

    jpmuir@...

    01/28/08 | Report as spam

    RE: Did Meg Whitman Fail? Customer Service

    I quit buying or using eBay years ago because of similar issues (as described above) with eBay's unwillingness to stand for its customers (purchasers) as opposed to its sellers. Meg Whitman had rhetoric about that and other issues regarding eBay and couldn't really deliver on them. The web site is a disaster mess and probably needs scrapped in favor of something less cluttered and confusing. The last time I looked at it confirmed my decision to stay away, aside from the issue of no customer service, not it its too much to manage. Maybe the new business model will become sellers selling to themselves (and screwing each other). To be fair, I have in the past purchased items from very customer friendly vendors in eBay, so my guess is that a bad apples spoiled the barrel.

  •  
    13

    inquiries@...

    01/30/08 | Report as spam

    RE: Did Meg Whitman Fail?

    She did not fail. Is the only acceptable ethic for billionaires to work, work, work? How old is Bill Gates, the new people's farmer?

    It's just that the economy has slipped a bit.

  •  
    14

    deinert

    01/30/08 | Report as spam

    Look for the good

    Something I have read recently, look for the good and check the facts. I believe that is is the utmost importance to look at the behavior, and leadership, NOT the gender. Double standards still exist, and we must resist that; we must reward good leadership.

  •  
    15

    joe.kurtzke@...

    03/27/08 | Report as spam

    RE: Did Meg Whitman Fail?

    No she did not fail. From as far back as High School she has worked from a set of plans and generally achieved those goals she set out to achieve.

  •  
    16

    deinert

    04/01/08 | Report as spam

    Failure or not

    Did Meg learn from her mistakes? Did Meg see how and why the company under her helm experienced the issues that caused consumers and staff grief? I am sure that Meg added value to the company, yet we all have blind spots, which are exactly what they are called "blind spots" Has she learned what they are? If she has more yes answers to these questions than no, she did not fail. It is also a timing issue , things, work, play depend on proper timing.

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