• 01/26/2004
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Top Execs At Gateway, Novell and Sun Speak Out

Gateway, Novell and Sun are irrelevant, critics say. But as their CEOs have made bold changes to ensure their companies can still compete, detractors wonder if these men are up

"If you look at the amount of change we've been through in the past six months--the new management team and product intros, changing our sourcing model and sales processes, remodeling our stores, changing our internal processes and systems--there are a lot of fundamental changes going on simultaneously in a short period of time," Waitt says. "But it's like living in a house while you're remodeling: It's a little more difficult to have a good quality of life. Now we'll work more on fine-tuning that experience so we don't have to go through the construction phase again. That's when it'll start to be fun."

But before anyone at these companies begins to experience anything close to that--remember, they have collectively laid off thousands of workers in the past two years--the CEOs of Sun, Novell and Gateway must address serious problems in and out of their organizations. The challenges these companies face amount to what may arguably be called the three toughest jobs in technology. Although all three enjoyed stock appreciations in 2003, they face a host of serious issues this year. Novell, for example, is struggling to prove that it still matters, Sun that it can still compete and Gateway that it can still execute. Of the three, Gateway faces the biggest financial crisis, Sun the largest technological predicament and Novell the most pressing customer loyalty problem.

All three have reacted in an extraordinary fashion, surprising critics and rivals alike by taking exceptionally large risks that will either make or break their companies. In the pages that follow, we examine the tough jobs these CEOs have and what they are doing to rediscover what Stanford Business School professor Jerry Porras calls a company's "enduring purpose," or reason for being. The graduate business school's Lane professor emeritus of organizational change and behavior, Porras says figuring out that riddle is one of the most fundamental issues a company must sort out.

"They have to look at the degree [from] which they've drifted from their enduring purpose," Porras says. "It goes beyond what products and services they're offering. It should guide everything they try to do strategically."

Porras says organizations that don't have an enduring purpose often settle for the best profit opportunity available to them. But that can lead to potentially disastrous repercussions, some of which Sun, Novell and Gateway now grapple with. Read for yourself why the three CEOs of these companies confidently believe they are in the best position they have been in years despite what detractors say. Their response to all the criticism thrown their way: Bring it on.
Although they run very different companies, Messman, McNealy and Waitt actually share much in common, in addition to having some of the toughest jobs in technology. Each man, for example, was there at the birth of his respective company. Each also serves as chairman of the board in addition to CEO, and each has greater entrepreneurial and managerial skills than technology vision. There are other similarities, too: Each, for example, has moved the geographic center of his company to a new locale, though in McNealy's case it was only a few miles, and each depends on tight alliances with partners for a sizeable part of his sales. Moreover, each has a specific nemesis that is richer, more powerful and currently seen as more capable. In the case of Gateway, that, of course, is Dell. For Novell, it's Microsoft, and for Sun, it's IBM principally and Microsoft, too.

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