To fill its vacancy at the top, the board of Advanced Micro Devices Inc. needs to first shore up its credibility, define what it wants in its next CEO, then identify that person and sell them on taking the job, according to a veteran executive search consultant.
Andy Price, managing partner at executive search firm Schweichler Price Mullarkey and Barry, said AMD must first define what the company is looking for in a CEO so that it can present an attractive opportunity to "A crowd" chip executives.
Given the abruptness of Meyer's departure and the vague description of what the board wants in its next CEO put out by AMD in last week's announcement, Price said the board has a credibility problem that may make top candidates squeamish. Candidates will first and foremost want to know exactly why Meyer was forced out, particularly since Meyer was widely praised for helping stabilize AMD in difficult times, according to Price.
"The first question people are going to ask is, 'What's the real story about Dirk,' " Price said. AMD's board needs to have a credible response, and credible description of what it wants in its next CEO, he added.
Drawing parallels between Meyer's abrupt departure and the credibility problem faced by Hewlett-Packard Co.'s board in the wake of the Mark Hurd scandal, Price said the common perception is that AMD's board was rushed into a decision, calling into question the board's credibility.
"That's what people are thinking about AMD's board. They need to fix that yesterday," Price said. "If they are smart, what they [board members] will do is think long and hard about how to define this visionary that they publicly described."
Price, a 16-year veteran of executive searches for technology and alternative energy companies who helped LSI Corp. land Abhi Talwalkar in 2005, said the list of the most intriguing candidates in the semiconductor industry is, like any industry, a short one. Any executive on the list is going to have multiple options, he added.
But Price said AMD's top job is an attractive one, because there are only so many interesting public companies in the semiconductor space and few boast of AMD's long history and track record.
Price recommended that AMD's board conduct a precise, surgical search after it arrives at a concise definition of what it wants in its next CEO. He also recommended that the company consider a mix of players inside and outside of the semiconductor industry.
"I think they need to mix non-industry players in their candidate list for sure," Price said. He added that the first question AMD should pose of candidates is "What are you going to be in this role for AMD?" Careful gauging of the responses to that question will be critical, he said. "The evaluation should heavily emphasize the candidate's game plan."
The "nucleus" of AMD's search will depend on what the board believes AMD's future to be, Price said. The task will be to choose the candidate that the board believes will best lead the company to that future, he added.
Price was hesitant to discuss specific candidates that he thought might be attractive to AMD. But he did offer one: Craig Barratt, president and CEO of Atheros Communications Inc. Qualcomm Inc. announced Jan. 5 that it expects to acquire Atheros during the first half of the year, in a deal worth $3.1 billion. Qualcomm said Barratt is expected to join the company as president of Qualcomm Networking & Connectivity.
But if Barratt would prefer the challenge of running the ship at AMD, Price thinks he would be worth consideration. "Surviving the WiFi wars and succeeding in that very difficult space—and creating that much wealth for shareholders—is a great screening criterion," Price said. Price, whose firm has not been retained by AMD to conduct the search, said if he was involved, he would try to find candidates who have "done something very interesting and very hard."
Rather than looking to candidates in the PC OEM space, Price said AMD should be looking to the future, considering candidates associated with Android and companies like ARM Holdings plc., HTC Corp. and Samsung Electronics Co. Ltd.
"PC OEMs are yesterday's news," Price said. "The story now and in the future is mobility in computing. That's a way more interesting category than people turning the cranks at HP and Dell. It would be a big mistake to go after a big company, usual suspect, crank-turner type," Price added.
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