Tuesday, April 21, 2009

Jonathan Schwartz Writes His Toughest Ever Email

Oracle-Sun: Jonathan Schwartz Writes His Toughest Ever Email
"So today we take another step forward in our journey, but along a different path - by announcing that this weekend, our board of directors and I approved the acquisition of Sun Microsystems by the Oracle Corporation for $9.50/share in cash. All members of the board present at the meeting to review the transaction voted for it with enthusiasm, and the transaction stands to utterly transform the marketplace - bringing together two companies with a long history of working together to create a newly unified vision of the future."

Someone at Digg asked why Sun was up for sale in the first place and another posted this entertaining diagram. A good corporate strategy should always have a clear vision of what a company hopes to achieve. Everything else and every decision made should be to achieve this end goal. Once you lose track of this vision and treat strategy formulation as a haphazard, short term focused activity, any promising company can end up with a diagram similar to this. Most executives we see today seem to be narrow in focus and selfish in their decision pushing. 

There's an interesting debate going on at HBR these days along with supporting articles, that try to figure out exactly what the core causes are. Some say it's just plain selfish greed while others argue the lack of ethics training in Universities. My personal view is that at some point higher up in the corporate hierarchy, there should be a benevolent dictator. One who is passionate about the vision and can objectively analyse any decision to filter out the real motives behind those arguing for or against it. Because those very executives will one day enthusiastically approve a decision to sell your company too after directing it to the brink of bankruptcy. I feel sorry for Sun's engineers (those of Sun and MySQL apparently) who will now have to look elsewhere before the lay-offs come. They are the hard working souls who will end up becoming statistics!
"The blistering economy has taken a toll on the tech sector, claiming 84,217 jobs in the first quarter. As a result, we may see more mergers like this morning's $7 billion acquisition of struggling Sun Microsystems Inc by Oracle. Sun announced 6,000 job cuts in November and could see more job loss as the combined entity seeks cost savings and positions itself against its chief rivals, IBM and HP. Overall, mergers and acquisitions have resulted in 44,379 job cuts so far this year. That is up 469 percent from the 7,796 merger-related cuts by the same point last year." [Source]