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When George W Bush wanted a vice-president, he appointed Dick Cheney to head up a search team. When the team reported back, the selected candidate turned out to be…Dick Cheney. The Cadence board, having been a major contributor to Cadence’s problems through their selection of executive management and guidance given them, have also been off searching for a new CEO. And the selected candidate is…Lip-Bu Tan, member of the Cadence board.

Along with that are a number of conflicts of interest. Lip-Bu will remain chairman of Walden International, a venture fund which he founded, but nothing has yet been said about Flextronics, SMIC, MindTree, Creative Technology and probably other places where he is also on the board.

Most of the discussion about who should be CEO has centered around whether it would be better to have an insider who knows a lot about EDA, or someone from outside who knows nothing about EDA but at least doesn’t come with all that EDA baggage. But now we have a different hybrid, someone who doesn’t know that much about EDA but comes with all the baggage anyway.

I don’t have any inside information but I assume that it turned out to be impossible to tempt anyone competent to take the CEO position with the company, industry and economy in the state it is. “I’ll just keep my nice senior VP position at Megacorp, thank you.” So it is time for the Cadence board and insiders to clean up their own mess and get the company into good enough shape that they can tempt a new leader to take over in a couple of years.

Of course, my view is that there is plenty of EDA knowledge inside Cadence already but it needs to be lead in a different way to be successful again. At least Lip-Bu has one good thing to work with: people are not all baling out of Cadence since there is really nowhere else to go right now. So he has time, which is often one of the factors in shortest supply when trying to turn a company around.

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.