Google CEO Eric Schmidt: Was He Just In The Right Place At The Right Time?

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Silicon Alley Insider raises a provocative question about Google CEO Eric Schmidt: how much have he and his leadership contributed to the company’s success? Is he smart or the luckiest man in the world? Clearly Schmidt is smart but the article tries to dissect Google M&A activity and results during Schmidt’s tenure to determine whether Schmidt was instrumental in Google’s success or whether it “would have happened anyway.”

The critical assessment at the end is the following:

It seems, therefore, that Eric’s legacy might eventually look like Meg Whitman’s — a non-founder CEO who was lauded as a genius for years thanks to the success of the company…but whose contribution to that success was likely highly overrated.  The going is now tougher.  And in Eric’s case, as in Meg’s, a lot of his legacy will depend on what he does next.

I don’t agree with some of the analysis in the piece, but the general concept of the article I think is quite valid.

Most CEOs are highly overrated — witness the crisis in the US financial markets. The guys at the helm of the involved Wall Street firms emerged as people who didn’t really understand what was going on with the complex financial instruments that got their companies into trouble. In addition, many of them also emerged as people who were simply milking the system and their clients fees for hefty — perhaps “unconscionable” is a better word — salaries and bonuses that were unjustified by the performance of their firms overall.

And then there are the CEOs of US automakers . . .

We can probably say that many corporate CEOs are people who’ve had the right mentors and internal champions, are typically politically savvy and have “done their time” in the system. But there are others who are truly talented and even visionary. I’m not going to go on about this; it’s more properly the stuff of “business bestsellers.”

For the most part, the CEOs who turn around companies are the ones in my mind who truly show themselves to be critical (literally) to the success of their organizations. Former Yahoo CEO Terry Semel seemed to be one of those people, but when Yahoo began to falter in 2006, the popular assessment of him changed. He seemed to be unable to right the ship. Today Carol Bartz is charged with that task. If she does it, she’ll likely be lauded as a great CEO.

Tim Armstrong at AOL gets similar a chance to prove himself. Despite its traffic and assets, AOL is generally regarded as an also-ran right now. If Armstrong can turn things around, he will have proven himself. But what about Schmidt over at Google?

I found the press release announcing his appointment in 2001:

As an internationally recognized technologist and business leader, Schmidt brings more than 20 years of software development, management, and marketing experience to Google.

“Eric is exactly the right leader for Google,” said Page. “His extensive technology background and vision for the potential of the Internet complement the efforts that Google is making in defining a leadership position in Internet search and navigation. His strong management experience will help shape Google as we continue our growth and global expansion. And most importantly for anyone taking on the CEO role at Google, Eric is a natural fit with our corporate culture.”

As one might expect, Valleywag/Gawker has a relatively harsh assessment of Eric Schmidt, citing unnamed former Sun and Novell employees as sources.

Even if Eric Schmidt doesn’t deserve substantial credit for Google’s ascent to the top of the mountain, as the Silicon Alley Insider piece argues, it could be argued that the “cultural fit” and relationship between Schmidt and co-founders Brin and Page was instrumental in Google’s enormous success. In other words, conflict within this group or divergent leadership styles might have had the opposite effect on Google and the rank and file. Look how much time was wasted over the past year or so at Yahoo with all the leadership wrangling, politics and distractions.

The CEO is part of a larger team and has to create an organizational structure and environment that allows that leadership team as well as the rank and file to succeed. So far it would appear Schmidt has helped do that. The CEO also must help recruit and retain great people to run the organization. Google has clearly done that, although now it’s losing some of those folks. But I agree with Silicon Alley Insider that, now, under the economic pressure of the recession, we get to see a bit more clearly how talented a chief executive Mr. Schmidt truly is.