As Oscar Wilde’s Lady Bracknell might have put it, for an industry to lose one CEO in a week may be regarded as a misfortune; to lose two looks like carelessness. That nevertheless was the case in the first full working week of January 2009 when Invensys Process Systems (IPS) was thrown into a degree of disarray matched only by the English cricket team with the announcement on the Thursday from Invensys CEO Ulf Henriksson of the departure of IPS president and CEO Paulette Eberhart and, on the following day, Honeywell announced the somewhat more orderly appointment of Norm Gilsdorf as president of Honeywell Process Solutions (HPS) following the unscheduled retirement of Jack Bolick.
Add in last September’s appointment of Steve Sonnenberg as president of Emerson Process Management following John Berra’s move up to chairman, and three of the world’s six major process automation vendors have acquired or are looking for new CEOs in little more than three months. Perhaps it’s all a ploy by ARC to boost flagging attendance at next month’s Florida forum as competitors turn up to see what the new boys look like — or register their interest in any unfilled vacancies.
Out of the blue
News of the IPS upheaval came completely out of the blue, not just for outsiders but, we understand, even for those at the very highest level within the company when Henriksson made the following statement to employees:
“I am announcing today that Paulett Eberhart, formerly president and CEO of Invensys Process Systems, is no longer with Invensys. I will be stepping in as acting president and CEO of IPS with immediate effect and will be spending the next few days with the IPS leadership team in Plano working with them on their AOP reviews. I would like to thank Paulett for her efforts over the past two years and wish her every success in the future.”
No explanation, then, for Ms Eberhart’s departure, leading to inevitable speculation along Marilyn Monroe “Did she jump or was she pushed?” lines. We can presumably discount the suggestion made in one quarter that it was INSIDER’s report of her absence from the recent IPS’ U.K. press briefing that led to her downfall, but it is an open secret that her strategy of developing IPS into a consulting and services company modelled on her previous company, EDS; her policy of recruiting key executives, many from EDS, with no experience of the process automation industry; and her decision to move the IPS headquarters from Foxboro, Mass., to Plano, Texas, a suburb of Dallas close by the former EDS headquarters and her own home, had not endeared her to some IPS veterans. Many of those had been brought in from rival process automation vendors as part of earlier attempts to strengthen the management team and had been prominent among a recent spate of senior departures.
One such was Chris Lyden whose move to become president of Houston-based process — and specifically alarm management — software and consulting services company PAS was announced in early December. Lyden was recruited to IPS from Honeywell by former IPS CEO Mike Caliel in 2003 to become vice president of global marketing and played a key role in the revival of the fortunes of the company including the 2006 launch of InFusion. He had previously spent 26 years with Honeywell, including spells as vice-president of sales for Honeywell HiSpec Solutions and vice-president, general manager. He also held leadership positions in a number of key industry segments including power generation, hydrocarbon processing, upstream oil and gas and chemicals, all of it experience which IPS can ill afford to lose.
By contrast, the policy of appointing industry outsiders to key positions was demonstrated once more by the recent appointment of Pierre-François Coissac as vice president of sales for Europe, Russia and Africa (EURA). The press release announcing his appointment described him as being “responsible for the company’s sales operations across the EURA region, overseeing its growth, vision and business development” and said that he would be “helping to lead the company’s mission of producing a world-class, consultative sales organization,” but once again, as we have noted before, made no mention of what IPS actually does in terms of developing and selling process automation systems.
Ulf’s strategy too
It seems unlikely that Eberhart’s departure will herald an immediate change of strategy, since her objectives have enjoyed the fulsome support of Ulf Henriksson throughout her period in office up to and including the company’s most recent results presentation. Indeed his statement following the announcement of her departure appeared to confirm that the broad strategy would remain in place, not least because of his own close involvement with it. On the other hand. many of her recent appointees are likely to be feeling less than totally secure, lacking either specific industry expertise or a close relationship with the CEO.
But it would not be true to say that the two years of Eberhart’s stewardship have been by any means wasted. As we reported in December 2008, the most significant achievement of the period has been the long overdue integration of the various constituent companies making up IPS into a single, integrated process automation solutions provider with a single integrated sales force. That integration, surely the original logic behind the creation of IPS in the first place, had been initiated under Eberhart’s predecessor, but had been brought to fruition only in the past year. As a result IPS, it can be argued, is a stronger and more internally coherent organization than when she arrived, albeit one whose eventual shape and posture remains unclear to many both within and without the company.
As to the question of her ultimate successor, the fact that Henriksson had decided to take over as caretaker suggests that, in his view at least, there is no obvious internal candidate within IPS capable of taking over even on a care-and-maintenance basis. Henriksson is faced with something of a dilemma; either appoint a trusted lieutenant from one of Invensys’ other divisions and face criticism for again appointing someone without specific sector experience, or look for a high flyer from among IPS’ competitors and tacitly concede that the Eberhart strategy ― and her original appointment ― was a mistake.
Meanwhile industry and analyst attention is already focussing on whether this latest episode increases or decreases the likelihood either of IPS being sold off by Invensys or of Invensys itself becoming an acquisition target. To judge by market reaction neither possibility seems imminent; Invensys’ share price has proved unusually stable in recent weeks, hardly changing on the day Eberhart’s departure became public and dipping by only a couple of percentage points at the beginning of the following week.
Matters appear to have been handled rather more adeptly at Honeywell where only a single mention of Jack Bolick’s retirement on Jim Pinto’s blog on January 7 preceded release of the formal press statement on January 9. That, however, focused not on Bolick’s retirement, mentioned almost in passing in a single sentence, but on Norm Gilsdorf’s appointment. “He replaces Jack Bolick, who retired from Honeywell after 10 years of service, including six years as president of Honeywell Process Solutions,” is no more informative about the reasons for Bolick’s departure than the IPS statement is on that of Eberhart and must raise concerns that it has been precipitated by a recurrence of the health problems he experienced back in 2006, although everyone will sincerely hope that that is not the case.
That his departure came as a surprise even within Honeywell seems to be confirmed by the fact that, as recently as December 16, HPS’ UK PR consultancy, Weber Shandwick, had responded to an enquiry from INSIDER by forwarding a statement which informed us that “Jack Bolick and some members of the Honeywell Process Solutions senior leadership team will relocate to Houston to be closer to customers and EPCs. A specific date for the relocation has not been determined.”
Whether Gilsdorf will be relocating back to Phoenix or to Houston remains to be seen, but the fact that he has only been in post as vice president of HPS EMEA since February 2008 lends further credibility to the suggestion that this was anything but a long- anticipated development.
Gilsdorf came to the EMEA post, not from elsewhere in HPS, but from Honeywell’s process technology subsidiary UOP with whom he had held various posts since joining in 1977. Immediately before moving to HPS, he was the senior vice president and general manager of UOP’s Process Technology and Equipment business, serving the refining, petrochemical and gas processing industries, an experience which could prove invaluable as HPS works out how to continue to make money in the downturn. The fact that he seems to have leapfrogged a number of HPS high flyers, including his immediate predecessor at EMEA, Paul Orzeske, suggests that Honeywell Automation and Controls president and CEO Roger Fradin regards him as a safe pair of hands, as was confirmed by Fradin himself in the appointment announcement when he said that “Norm’s background, capabilities and proven track record as a senior leader make him a perfect fit to lead the business forward.”
Meanwhile, many within HPS and the wider industry will be regretting the departure of Jack Bolick, who must take the lion’s share of the credit for bringing HPS back from the brink following the debacle of the failed merger with GE in 2001, and for developing it to the point where it is once more accepted even by major competitors as one of the leading contenders in today’s process automation marketplace.