Big Shoes to Fill at Adobe
A little more than a year ago an exhausted Bruce Chizen was just landing in Barcelona. He'd been on a plane all night and, despite the rigorous travel schedule associated with being chief executive officer of Adobe Systems (ADBE), he'd never gotten very good at sleeping on planes. As the plane taxied to the gate, a groggy Chizen checked his Treo and was jolted by bad news. The son of Adobe India's CEO had been kidnapped. "This is hell," he thought to himself.
It was then that Chizen knew he would retire sooner rather than later. He already knew he didn't want to be CEO for the long haul and had told the board as much. But he was also torn. Adobe was on a roll. On his watch, the stock had risen 40% and revenue had more than doubled. Chizen's crowning achievement: the acquisition of Macromedia, maker of the Flash technology that enables online animation and video. Chizen still loved wandering among Adobe's engineers, discussing products and how they're being improved. And of course, he enjoyed the adulation of Wall Street and his customers.
Chizen's Step Down Surprised Many
But the drawbacks were legion. There were new corporate governance regulations and the daily headaches that come with running a $25 billion company. Then there were the many things he couldn't control, like the kidnapping. And the landing in Barcelona crystallized it, he says. "It wore on the whole week and it was emotionally painful," Chizen says. "Thankfully, his son was returned, but I said to myself, 'Do I want to spend the rest of my life doing stuff like this?' "
The answer became known Nov. 14, when Adobe said Chizen, 52, would step down as CEO. I, for one, was taken aback. I have covered Adobe for years, and the company's products go a long way to putting food on my table. Any publication I've ever written for has used Adobe software, be it Photoshop, Illustrator, PageMaker, or InDesign. I recently authored a book on Web 2.0 companies; Flash technology is a big reason many of them are so captivating. And my husband is a graphic designer. The only company he may love more than Apple (AAPL) is Adobe. "They make my whole life possible," he says. Plus, the Brooklyn-born, excitable Chizen always seemed to have more passion about Adobe than anyone else—and not in that phony, media-trained-executive way.
The decision shocked Wall Street, too. Shares slumped as analysts and investors mulled the implications for one of software's better performers of late. Stepping into Chizen's shoes will be Adobe's longtime No. 2, Shantanu Narayen. But Chizen was for so long the public face and scratchy voice of Adobe that even analysts and reporters who covered Adobe for years hadn't met Narayen in person. No one knew what to make of the change.
A Very Different Style
The two men are very different. That became clear when I sat down with them recently in their first in-person joint interview since the succession was announced. Chizen is a hustling, charming salesman. Narayen is a shy, engineer type. The differences helped make them a great team for the 10 years they've worked together. But tech is littered with examples of strong No. 2's who never made strong No. 1's. Kevin Rollins of Dell (DELL) springs to mind.
Within Adobe, there was little surprise at Narayen's ascension. He had been the heir apparent for years. Every unit except legal, finance, and human resources was already reporting to him, and even before becoming chief executive he had run engineering and products—the core of any tech company. His only real rival for the job was Macromedia's former chief executive, Stephen Elop, who has since left the company (BusinessWeek.com, 6/19/06).
Indeed, Narayen makes no bones about how much he has wanted this job—even after hearing all the things Chizen won't miss about it. "This is a dream come true for me," he says. "I'm going to miss our partnership, but we are one of three or four companies in the world who can make the Web experience better than it is today."
Narayan's Mandate: Selling AIR
He's referring to Adobe's ambitious new product line, called "AIR," short for Adobe Integrated Runtime. The technology takes the best of what Adobe and Macromedia had done well separately, by essentially merging the Web browser with the desktop.
Google (GOOG) and Salesforce.com (CRM) are already moving desktop tools into the browser. AIR would go a step further.
In some ways, it's an even more ambitious strategy than one pursued by Chizen for so long. Chizen spent much of his time selling businesses on Acrobat, the platform-agnostic document-creation software. Narayen is talking about changing the way people access the Web—arguably a feat that's both broader and riskier. And just as the Acrobat product called for a salesman CEO, AIR calls for an engineer CEO. Adobe will need to woo and stay attuned to the needs of the software developers who will play a key role in the success or failure of AIR.
Doubts aside—including my own—Narayen does have a better pedigree than Chizen had when he took over. Chizen laughs when I ask if a salesman CEO is better for Adobe than a former engineer. He says people had many doubts when he followed Adobe co-founders John Warnock and Chuck Geschke. "When I first got promoted there was an army of people saying, 'How the hell are you going to run Adobe? You are not a technologist and you are trying to fill the shoes of two people who were technologists,'" he says. "Those were all fair questions."
It just goes to show what makes a great CEO isn't the résumé, it's the person. And Chizen has been a class act. He's refusing to take a huge retirement package, saying CEOs are overpaid, and he's working 24 hours a week for the next year, so he can keep his health-care benefits and not get demoted to a part-time contractor's badge. In his final year, his combined salary and target bonus equal $809,375. Office scavengers are already loitering around his office seeing if there's a monitor or two they can poach.
So the only way we'll know if Narayen goes the way of Rollins is to watch him in action. I, for one, will be watching closely. So will most of the Web, whether they know it or not.