A Rare Glimpse Inside The Life And Mind Of Oracle CEO Mark Hurd
We were meeting at Oracle's upscale executive offices on the top floor of the main building at its Redwood City, Calif., headquarters, accompanied by two of his personal PR team and Oracle chief marketing officer, Judith Sim. They weren't there as handlers. Hurd was in full control of the conversation, his answers, what he was and wasn't willing to say.
We were there to talk about the journey that landed him in the unprecedented role of the second-ish CEO of Oracle, a job he's sharing with Oracle's long time finance wiz Safra Catz. (Both of them have the official title of "CEO," not "co-CEO," we were told.)
Hurd is one of the more interesting characters in the high-tech world of celebrity CEOs.
He is closed and private, while also being open, gregarious, opinionated and always willing to crack a joke, all in a thick East Coast accident ("I grew up in New York city and I moved to Florida in high school." Miami.)
For instance, he won't talk much about stuff other CEOs are normally happy to share, like his parents' professions or his philanthropic interests.
But he did tell us:
- He grew up the son of a well-to-do father that worked in the financial services industry.
- He's been married to his wife, Paula, for "going on 25 years," and they have two daughters, one in college the other in her late teens. When asked for details about his family, he riffed on the joys of married life (making the room laugh) but expertly sidestepped my questions. Upshot: "They're great kids and their dad loves them a lot. I have a wife who's a great mom."
- As a wealthy CEO, he does give to charity, but he if he has a foundation or a formal giving arrangement, he won't talk about it. He will discuss his support of his alma mater, Baylor University. which he attended on a tennis scholarship. He's on the board of regents for Baylor and has given so generously to the tennis program that they named the tennis center after him.
- Has Bill Gates ever talked to him about joining his Giving Pledge, to give away most of his wealth to charity? "No." (Note, Oracle founder Larry Ellison, the world's fifth richest man, also didn't like to talk about his charitable contributions, but Gates's friend and Pledge partner, Warren Buffet, did eventually convince Ellison to sign the Pledge.)
(You can read a full transcript of our interview here.)
A "Jump Ball"?
After 37 years, Ellison stepped down as CEO, promoting his existing right-hand man and woman, Hurd and Catz, who had already been job-sharing the No. 2 role of president.
Ellison became CTO, leading product development, (always been his favorite focus), and remained their boss by becoming Executive Chairman of the board.
Shared CEO structures are rare and, typically, temporary. Sooner or later, one of them moves on and the other rules alone. For that reason, industry insiders see this as a giant job interview between Hurd and Catz for the day when Ellison really leaves the company.
Call it a "jump ball."
In fact, Ellison is famously fond of competition. Among Oracle's massive sales organization, the basketball term "jump ball," describes a situation where two or more salespeople compete for the same sale with the same customer. The idea is to squeeze out competitors by having your own hungry salesforce blanket the market.
The "jump ball" is "not a good process," Hurd told us, and he officially got rid of it as he revamped Oracle's sales force over the last two years. (Although we understand from some salespeople we talked to a few months ago that jump balls still happen on occasion.)
As for a jump ball for the sole CEO job between himself and Catz, he says he's not focusing on that but is all about "moving the company forward."
And he's got nothing but praise for Catz.
"I've done this CEO job three times, I've done them alone and now I've done them with a partner. When you work with someone like Safra who is smart, knows the business, is a fierce competitor, is easy to work with, it's a hell of lot easier than doing these jobs alone. I love every minute. I see her all the time. Virtually every day," he says.
Jump ball or not, the Oracle co-CEO job is a crowning moment for Hurd in a career filled with epic, and very public, ups and downs.
It's especially sweet given the controversial way he arrived at Oracle.
From Tennis Pro To CEO
Hurd's first reign as CEO began in 2003 at computer equipment and consulting company NCR.
He joined NCR in 1980 as an entry-level salesperson straight from college, after he tried his hand at his dream job: being a professional tennis player.
He had attended Baylor University on a tennis scholarship and gave himself a couple of tournaments after college to chase his dream.
"I wasn't good enough," he told us. "I got of out of college and I was beating really good guys but not good enough to be a [Roger] Federer, to be the best."
It wasn't just the idea of not being the best that stopped him. He also loved business - he studied marketing in school - and he worried that if he spent years playing tennis without striking it big, he would be risking his chance at a great career.
"It's tough to re-enter the work force," he told us. "So I went out and got a job. And that's how I wound up at NCR."
It turned out to be a good choice. He spent 25 years at NCR, working his way up to CEO, leaving only when Hewlett-Packard came calling. Hewlett-Packard recruited him to replace Carly Fiorina, the CEO it had just fired.
Hurd was (and still is) known for his "execution" leadership skills, particularly reining in costs.
He's been called a human calculator with a near photographic memory. ("I like numbers," he says when asked about this stuff. "I remember a lot of things. I've had to tell people, 'don't tell me something you want me to forget.' I usually get the question, 'How do you remember that?' - well you told me!")
Larry Ellison Scoops Him Up
Hurd led HP for five years after Carly Fiorina's reign. He was at first praised for cleaning up the company's financials. But then he was criticized for cost-cutting actions that some felt were too heavy-handed. (We've heard stories of employees being told to work at home, and pay for their own internet and phone.)
He was forced to resign in 2010 over a scandal accusing him of sexual harassment with an HP contractor. HP's board investigated the claim and concluded no sexual harassment took place, and the woman making the accusations later recanted some of them. But HP's board said that they did find issues with his expense account. He publicly apologized for "instances in which I did not live up to the standards and principles of trust, respect and integrity" and left with a $40 million severance package.
HP and Oracle had been close business partners. HP sold a lot of expensive computer servers designed to run Oracle's software. Mark Hurd and Larry Ellison knew each other and became friends.
Ellison not only scooped him up after he left HP, but publicly defended him, too.
In an email to the New York Times, Ellison said, "The H.P. board just made the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago," he wrote. (Steve Jobs was Ellison's next door neighbor and friend, too, by the way.)
Ellison had just completed the acquisition of hardware company Sun Microsystems, and was set to start competing with HP. The software business and hardware businesses are two very different beasts and Oracle didn't have the expertise in house to run Sun.
Hurd did. It was still a bumpy ride to integrate Sun. Ellison's game plan wasn't to become another HP. He simply wanted to stop having to depend on HP or IBM to build systems to run his software. Ellison wanted to create his own machines specially tuned to make Oracle's software, particularly its flagship database, run faster and do more.
When Oracle hired Hurd, HP sued over that, and over Oracle's decision to stop selling a version of its software that would run on HP's high end servers. The lawsuit led to the disclosure of some interesting and sometimes embarrassing emails from Oracle employees who didn't seem very excited to sell Sun's products.
HP won the server lawsuit and the two settled over hiring Hurd, with Hurd agreeing to give back some of his HP stock options included in his $40 million severance package.
And Oracle has since released a whole bunch of special servers that it says are selling well.
The "Fabled" Cost Cutter
Hurd had no comment to our questions about HP. He and current HP CEO Meg Whitman are neighbors, both living in the affluent Silicon Valley town of Atherton. But Hurd doesn't see her around town and has no opinion to share on if he likes her or not.
HP simply wasn't getting enough return for the money it spent, he explained.
"You're never wanting to have a day when you have extraneous costs. Frankly, I think some of this is fable as much as anything, but when you have spending levels whether it's in sales or R&D, etc., people tend to equate more spending on R&D means you're going to have more good products ... That's not true," he said.
"Anytime you have spends, your objective is make them as effective and efficient as you can. One of the things I'm proud about at Oracle, it isn't just our R&D spend (which, by the way is large), but our yield for it is incredible. You have to look at both sides of the equation."
At Oracle, revenue growth is the big goal. He's been telling employees to spend what they need to get it.
During his first few months at Oracle he asked every one of his direct reports for a three-year plan. He then said: "Make that three-year plan a one-year plan." And he told them: "We are going to invest, but we are not changing our revenue goals. If you tell me something will grow the top line, you have unfettered access to the checkbook.''
Last year, just before the holidays, Hurd met with a sales group and asked the sales manager (several layers of management from him) what she needed most. Her response: "More Reps." Mark shocked her when he agreed to hire them on the spot.
A Kinder Oracle? Not Quite
As for his plans for Oracle, next up is to change the company's reputation for being hard to work with.
"We've had tremendous yield out of our R&D. We also acquire companies. The good news is we get a ton of new products through R&D and acquisitions," he says.
The bad news?
"My number-one issue with customers is this statement: 'I didn't know you did that. I didn't know you had that.'"
He also hired more than 4,000 sales people and turned them into product "specialists" on particular products, restructured quotas to boost hardware sales, and changed territories. It was a tough transition for some salespeople, and some salespeople complained, while others left, sources told us.
Now Hurd has to figure out how to tell customers about this tide of new Oracle products without subjecting them to a constant wave of sales calls from different salespeople.
"To a degree, when you wind up as a specialist (for instance a specialist selling to HR, to the CFO, selling to the head of sales), in many cases our customer won't feel all of that is coordinated as well as it needs to, [to] get a holistic multi-year plan with Oracle," he told us.
Oracle says that it's making progress on that front, citing improvements on internal customer satisfaction surveys that it wouldn't share with us. (They did point us to a glowing column recently written by a CIO who is head of the Independent Oracle Users Group).
But that doesn't mean Oracle is going to become some kind of kinder, gentler Kumbaya company.
The most famous anecdote about Hurd in the halls of Oracle is this one: He was speaking to his sales team and pacing the room, as he often does when he speaks. And he stepped on a power cord taped to the floor.
He stopped, looked down and said, "You see this cord? This is the oxygen flowing to our competitors. I want you to step on this cord and stop the flow of oxygen.''