IBM and Yahoo take different paths to executive picks

The recent appointment of Scott Thompson as chief executive at Yahoo represents a stark contrast to the approach taken by other high-profile computing firms in the past year.

Thompson, a former president at PayPal, was hired following an external search. In comparison, IBM's recently appointed chief, Virginia Rometty and her management team have been selected following an internal recruiting and promotion policy.

Industry analyst Charles King said the two appointments reflected companies with different needs and different structures.

King, founder and principal analyst for Pund-IT, pointed to the Rometty hiring as a textbook example of a stable company with a strong succession policy. In transitioning power from Sam Palmisano to Rometty, the company was able to execute in key areas.

The analyst noted that IBM was predictable and meticulous in its actions, while maintaining leadership and avoiding the mistakes of its competitors.

Yahoo, meanwhile, once again ventured outside its own campus to find a new chief executive. Following the short-lived reigns of Carol Bartz and Jerry Yang, the company tapped Thompson as the latest architect of its ongoing corporate transformation.

A different approach is not necessarily the wrong move for Yahoo, however. King told V3 that, while Yahoo is desperate for strong leadership, IBM is a relatively stable company with a wealth of corporate in-house talent.

"The big difference is that, in the case of IBM, you have a company that is obviously firing on all cylinders," he explained.

"With Yahoo, you are looking at a company that has been sputtering in the slow lane and there are questions about how safe the tyres are."

While Thompson's appointment differs from Rometty's, Yahoo's decision draws parallels with another IBM appointment. With IBM facing desperate times in the early 1990s, the company took a risk in bringing in Louis Gerstner.

"[At the time] Lou Gerstner came on board… there were serious doubts about whether IBM would be able to survive," King said.

"He came in and made some radical changes in the core organisation. He also made some culture changes. He reshaped IBM in his image."