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April 25, 2007
A Damn Shame
I was sitting on the tarmac at LaGuardia Airport waiting to take off for Chicago when an RSS feed from the Wall Street Journal interrupted my reverie. “Siemens CEO Kleinfeld Plans to Stand Down.” The article says that Klaus Kleinfeld plans to leave when his contract expires in September after “tense board discussions about whether to extend his tenure.”
Siemens has been buffeted by two corruption scandals, involving fake consulting contracts to bribe potential customers and payments to an employer-friendly labor representative. Only last week, Siemens chairman Heinrich von Pierer, who had been CEO from 1992-2005, the years in which the alleged bribery took place, resigned from the supervisory board.
As a matter of full disclosure, I consider Kleinfeld a friend. We met through our work. Klaus was a newly minted chief executive of the US business of Siemens and Edelman was the PR firm for his company in America. Klaus embraced his role with great vigor and genuine enthusiasm. I remember his key role in building back confidence in New York City after the horror of 9/11, when he hosted European investors and CEOs in the Big Apple on behalf of the Partnership for New York City. He trained for and competed in the New York City Marathon. He joined the Centers for Disease Control Foundation in Atlanta and counseled with CDC Director Julie Gerberding on a restructuring of the agency. He played an important bridging function between the US and Germany in the wake of Chancellor Schroeder’s very public opposition to the US military action in Iraq.
My favorite memory is of Klaus with his family standing at the window on the top floor of the NY Historical Society, overlooking the starting point of the annual Macy’s Thanksgiving Day Parade in New York City. Flanked by his wife and two daughters, he was thrilled to see the huge balloon floats, the high school marching bands and Broadway performers. He loved the experience, the unabashed display of American culture, not because it was American but because it was truly local flavor. He was happy to give his children a chance to be part of a different society, to broaden themselves.
When he returned to Munich to take a senior position as head of a large operating unit, with an implied path to the top job, there were some critics who said that he had become too American, too focused on the bottom line. About a year later, he was promoted to CEO and made it clear that he would be a change agent, determined to rationalize the company structure, to get out of businesses where Siemens could not be a leader, to invest in economies showing the best growth potential. He has kept his word, by exiting industries such as mobile telecom, focusing on health and transport, exciting investors by raising the stock price by 50%. He began to communicate differently, writing a blog each week on his travels and the progress of the business, exhibiting a more open management style than the traditional top down, hierarchical approach. His tenure was not always perfect; he sold the mobile handset business to Ben-Q, the Taiwanese electronics firm, which within a year took it into bankruptcy, putting hundreds of German employees out of work.
He is leaving with his head held high, unwilling to tolerate any longer the ambiguous position in which the Siemens board has placed him by not providing immediately the planned contract extension. He has been cleared of any wrong-doing by an independent law firm, Debevoise Plimpton. He has turned around the company, making it a focused enterprise. What he has not done is to play the game by local rules, to emphasize the primacy of country of origin and making job protection the priority over growth in revenue or return on investment. Leadership at a time of change often means taking difficult decisions and confronting the established orthodoxy. As the Joni Mitchell song goes, “You don’t know what you’ve got ‘til it’s gone.”
Posted by Edelman at April 25, 2007 4:20 PM |
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Comments
Richard, you captured the essence of the man perfectly. He is a great leader. We haven't seen the last of him. Jack Bergen
Posted by: Jack Bergen at April 26, 2007 8:50 AM
The only reason Kleinfeld had to go is because of power issues within the board of directors. He failed to build alliances there because he concentrated on his work and the communication with the Siemens community. Even in Germany and amongst the Siemens employees, he is, despite the failure of managing the cell phone business successfully, very well respected and certainly there are many people who would agree that it is a shame he is leaving.
Had he been tough enough to sit out the critical moment while his leadership was questioned by the board, he would still be Siemens' CEO. My guess is that he just did not want to be with that company anymore, because he could not identify any longer and felt his energy being eaten by intern politics. Sure enough, soon will he be back in another reponsible position and in the end Siemens will ask themselves: Why did we let him go?
Posted by: Thomas Praus at April 26, 2007 1:20 PM
I completely agree to Richard that Dr.Kleinfeld is a great leader and I feel it is definitely Siemens's loss and Alcoa's gain. I am very proud of Alcoa's Board members for bringing him in. He is one of the smartest men I have ever seen.
Posted by: Nisha Varghese at December 12, 2007 11:28 AM
I am so excited that Klaus is elected as Alcoa's new CEO!!! I am sure Alcoans will be very proud of him!!!!
Posted by: Nisha Varghese at May 8, 2008 5:20 PM