Oracle Keeps Cult of Personality Alive With Ellison Move

By Peter Burrows  

Sept. 19 (Bloomberg) -- Committee for Economic Development President and CEO Steve Odland and Bloomberg Contributing Editor David Kirkpatrick discuss the life and career of Oracle CEO Larry Ellison. They speak on “Bloomberg Surveillance.” (Source: Bloomberg)

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Oracle Corp. issued a four-paragraph press release yesterday to announce Larry Ellison’s resignation as chief executive officer. The word “continues” appears in it no less than five times.
The word choice signals an impulse to reassure investors and others that Oracle is staying on its present course. That makes sense on three levels.
For starters, it’s probably true. Ellison was named chairman and takes on the title of chief technology officer, while promoting his longtime lieutenants, Safra Catz and Mark Hurd, to CEOs. That preserves the triumvirate of power that has existed at Oracle for the past four years, with Ellison set to continue what he’s done for decades. The Oracle founder previously also
left day-to-day management to others, such as Ray Lane in the 1990s, while he dove deep with technologists to hatch new products and hone the company’s strategy.
“I don’t think the announcement changes much,” said Charles Giancarlo, a former Cisco Systems Inc. executive who also worked at private equity firm Silver Lake. “Larry has always focused on technology and strategy. For decades, he’s had other people run day-to-day operations.”

Founder-CEO Generation

Another reason is more cosmic. Ellison is one of the legendary company founders that built the modern high-technology industry in the 1970s -- companies that to a great degree were able to stay ahead of fast-changing trends because they were built in the image of their leaders. Whether at Steve Jobs’s Apple Inc., Bill Hewlett and Dave Packard’s Hewlett-Packard Co. or Bill Gates’s Microsoft Corp., it was cult-of-personality-based management.

Photographer: David Paul Morris/Bloomberg

Larry Ellison, outgoing Chief Executive Officer at Oracle Corp.

The trouble with that model is that leaders leave -- and the transition is rarely pretty. Apple almost perished after Jobs left for a spell starting in the 1980s. Hewlett-Packard lost its focus on innovation after its founders retired. Rather than adapt to new trends such as cloud computing and mobile devices after Gates stepped back at Microsoft last decade, the company went into an innovation funk.
That’s not likely to happen at Oracle. So long as Ellison is in the building -- or logging on from one of his yachts -- his will will be done no matter his title.
“Larry is still in the picture,” said Joe Grundfest, a corporate governance professor at Stanford Law School.
Lastly, Oracle made it clear that there’s still a technologist calling the shots there. Apple’s Jobs, among others, have argued that technology firms go wrong when the people who invented the products that made them successful are replaced by salesmen or operations experts whose focus isn’t on the future.
That’s led to a return to popularity for the nerd-in-chief. Microsoft picked longtime engineer Satya Nadella as CEO in February, as well as announcing that Gates would take a part-time role in product development. Companies including VMware Inc., Intel Corp. and Juniper Networks Inc. have also promoted technologists to the CEO jobs in the past few years.