Craig Fields's Not So Excellent Adventure

Sitting in his office at Microelectronics & Computer Technology Corp. in late February, CEO Craig Fields seemed a picture of calm. Talking through his grand plans for the technology consortium, the former Defense Advanced Research Projects Agency chief sidestepped rumors that he might be on the way out. Then, one week later on Mar. 1, Fields abruptly resigned his Austin (Tex.)-based post effective June 1, citing his "simple desire to be with my wife" at his Washington home.

What happened? Fields has spent three-and-a-half stormy years trying to remake MCC. The research consortium was formed in 1982 by powerful U.S. high-tech companies to counter Japanese initiatives in the computer industry. Despite significant progress in his drive to redirect MCC toward commercial projects and away from blue-sky research, staff morale has plummeted, employees say. Backers such as Hewlett-Packard, Eastman Kodak, Motorola, and others still fund MCC to the tune of $40 million annually, the consortium says, but that's down 27% since Fields started. Of the 20 current members, Boeing and Rockwell are no longer active in the consortium.

For Fields, things came to a head at a four-hour board meeting in Austin on Feb. 28, says an MCC insider. Board members expressed worry about a Fields initiative called MCC Ventures, launched in 1992. Its aim: to speed MCC's innovations to market by backing startups that will use the consortium's technology in commercial development. So far, MCC has launched four spin-offs, in which MCC members have a small financial stake.

But board members were concerned that too much of MCC's resources and management time were being siphoned off by the venture, the insider says. Directors, most of whom have little entrepreneurial experience, also raised questions about the spin-offs' potential for payoffs. Fields pressed for alternatives for getting MCC's technology out of its labs faster. When board members couldn't provide suggestions but remained critical of the venture, both sides agreed Fields should leave.

PROJECT PAYMENTS. Fields wouldn't discuss what took place at the meeting, but he denies that a disagreement with the board contributed to his departure. He also says that MCC's survey of member companies shows a record satisfaction level and claims funding so far this year is well ahead of last year's pace.

Certainly, there were other actions by Fields that caused controversy. To cover overhead and pay for drumming up new business, he imposed special payments of up to 20% on MCC projects.

Some companies are threatening to pull the plug on key projects, citing the payments. In February, Apple, Microsoft, Kodak, and others threatened to cut a high-profile $3.5 million software-development project called Cyc, citing exorbitant overhead payments. In a letter obtained by BUSINESS WEEK explaining the move, David E. Liddle, president of Palo Alto (Calif.) software developer Interval Research, complained that Cyc's staff had dropped to 15 workers despite funding that should have been enough to support 25. We "are subsidizing the organizational plans and ambitions of MCC executive management without even the courtesy of being consulted or informed," Liddle wrote. Liddle declined to comment.

Where does Fields's departure leave MCC? He will run the consortium until June 1 and an executive committee has been formed to find a new CEO. "I believe in MCC," says one board member. "We just need to make sure we're getting our value out of it." Fields had one approach to doing that. Now that he's gone, MCC's new leaders will have to prove they have a better one.

Before it's here, it's on the Bloomberg Terminal.