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Boardroom Despatches: Know when to quit
And know when to hold your ground and fight

By René Carayol

Published: Wednesday 28 July 2004

We're used to the idea of a crusading business leader whose strength is tied to never giving up. But, argues columnist Rene Carayol, such a hard-headed approach can often be the undoing of such leaders - and their organisations.

On these pages in the past I have written more than once about both a fear of failure in the UK and requisite leadership skills. So don't think what I'm about to say goes against past comments. From my time in UK business, it seems there is a fine line between a 'win at all costs' approach and knowing when to back down.

I start with that caveat because backing down isn't always about being risk-averse, afraid to really go for the main prize. It is sometimes simply the right thing to do. It is sometimes the only thing that lies between success - at some future point - and failure.

Let me cast my net wide to bring you some examples of those who didn't know when to back down as well as those who will live to fight another day. Some might even characterise these two types as losers and winners.

In the first camp I would include home-making doyenne Martha Stewart, sprinter Dwain Chambers, drug-taking cyclist David Millar, Enron's Kenneth Lay, Cher - with a farewell tour that's lasted two years - and the at-each-other's-throats general-secretary and president of union Aslef, whose recent barbecue brawl was only overshadowed by ongoing hostilities between the two.

In the latter group, I single out Sonia Gandhi, former heavyweight champ Lennox Lewis, Rugby World Cup-winning England captain Martin Johnson and Nelson Mandela.

The two sportsmen I cite both knew when to quit - and that was when they were at the very top.

The two politicians, activists - call them what you will - have both faced balancing-act lives. They, when they've had the choice, have known when to do the right thing. Think how that kind of decision-making compares to the former group.

Now let's apply this to the business world we know. Who has outstayed their welcome? Who has battled on necessarily and will be remembered as a determined winner?

I would place HP CEO Carly Fiorina in the latter category. She has hung in there through extremely tough times and is turning around that giant company.

The jury is out in some ways but so too would I say that's the case with Ben Verwaayen at BT. If, as many expect, he doesn't outstay his welcome and one day quits BT with it looking much healthier than when he joined, his job will have been done.

Compare that to his predecessor, Sir Peter Bonfield, who despite good intentions ultimately hung around too long, failing to do the right thing or do the right thing soon enough.

Now take Scott McNealy, CEO and co-founder of Sun Microsystems. I don't understand what's unique about that company or even what their strategy is anymore. Sure, he scores 120 per cent on the courage chart and has been that vendor's driving force. But is it now misplaced courage? Is he still the sun in Sun?

Likewise Larry Ellison at Oracle. Who can imagine that company without him at its helm, whatever his precise job title? So let's not go as far as to say his time is up. But look at its big news of the past 12 months, the bid for PeopleSoft. I'm not sure if anyone wins if Oracle bags that rival. Time to back off.

Another winner is Steve Jobs. After a less than glorious exit from Apple in 1985, he came back in the late nineties and the company is again beating to the sound of his drum. Or at least his iPod.

His accomplishments and timing are in direct contrast to Sanjay Kumar's at Computer Associates. After serving a lengthy apprenticeship under long-time CEO and founder Charles Wang, Kumar took over at the top and came unstuck. Only his last year or so was marked by infighting with Wang and seeming difficulty in passing on the reins.

In short, no one should be bigger than the company. Nobody should be afraid to say: "Is it time to get someone else in?"

And for an example of someone who has neither won by staying nor by going look no further than Tom Siebel, founder of the eponymous enterprise applications company. He has ended up dragging his company over the coals, in every which way. He eventually put an ex-IBM general manager in as CEO - only he waited until the company had its back through the wall (which, let me tell you, is a step worse than having your back against a wall).

To end on a positive, let's look closer to home, outside of tech but at a sector I know well. Many in the media and in the City took satisfaction in waving away Phillip Green's bid for Marks and Spencer. But let me say this - he played a master stroke. He has flushed out chief executive Stuart Rose inasmuch as putting the pressure on his team to deliver over the next six months. That isn't going to happen. Come next January, who'd bet on seeing Green return?

Sometimes backing off is truly the way to long-term success.