John Cooley’s ESNUG just sent out an out-of-band newsletter listing 47 potential CEOs for Cadence which, in case you’ve been under a stone for the last couple of months, lost Mike Fister when the board fired him and his executive management team. I’m not sure if I should be pleased or annoyed not to be on the list but to my mind the list shows a typical engineer-centric view of running a company, completely overestimating the importance of technical knowledge and underestimating the importance of business strategy, leadership and a whole lot of other aspects of running a billion dollar company. I don’t know all the people on the list but of the ones I do, only a handful would not be out of their depth running Cadence.
Cooley says, “All Cadence needs is an EDA VETERAN who has the EDA common sense to make the right EDA decisions to revitalize Cadence.” I also think that understanding the EDA industry is important. There’s no substitute for having silicon in your veins. But I could also argue that the last thing EDA needs is another EDA veteran.
There is often a subtext in any discussion of Cadence that what Cadence needs is Joe Costello to come back, or to find someone just like Joe Costello. Joe clearly had EDA in his veins and also grew as both a manager and a leader as the company expanded beneath him.
So let’s look at the other EDA companies. Synopsys is doing great, the only profitable EDA company of the big four. Aart de Geus is clearly also an EDA veteran who has grown both as a manager as a leader too. But Magma is headed up by Rajeev Madhavan, another EDA veteran. How’s that working for them? And Cadence made the big “mistake” of hiring someone from semiconductor. But then so did Mentor with Wally Rhines from Texas Instruments and, to a lesser extent, Greg Hinckley who came from a tenure at VLSI Technology (full disclosure: I worked for Greg at VLSI).
But to play devil’s advocate, it is also clear that EDA’s biggest problem is that it is the life-blood of the $300 billion semiconductor industry, which in turn underpins the multi-trillion dollar electronics industry. And EDA only manages to extract $5B or so from this value chain, 1% of semiconductor and less than 0.1% of electronics.
I spent the last year or so as CEO of a small EDA company and one of the complaints of the investors on the board was that EDA people are “jaded”, persisting with a crappy business model and unwilling to try to change it. As a small startup I was stuck with the industry’s way of doing business, but for a CEO of Cadence that is not necessarily true. But do you think that the person to make a change is likely to be an EDA insider, who has spent the last ten or twenty years inside the industry accepting the status quo, or rather someone from a different industry, with different business practices. There is perhaps a parallel here with the US auto industry, which has been run by “car guys” for decades.
They are obviously not available, but as a thought experiment it is more interesting to think about how Larry Ellison, or Steve Jobs would run Cadence, rather than a laundry list of the division heads and startup CEOs of the existing industry.
Or to combine the two themes, how about Carlos Ghosn, who turned around Nissan by coming from outside the insular world of Japanese automotive after working for Michelin in France having been brought up in Brazil. He’d be an exciting choice for either Cadence (not going to happen) or General Motors.