Betting on business model transformation through appointment of new leaders

As companies must manage multidisciplinary and
multigenerational workforces, maintaining properly
trained leaders, with visions closely aligned to the
organization’s DNA rather than investor expectations,
will provide a strong foothold in a largely disrupted IT
services market. The impact on employee culture,
morale, purpose and other organizational behavior
largely depends on the CEO of the company, particularly
if a new one needs to be selected. Promoting from
within typically inspires employees, as is often the case
when a company is performing well, such as with
Accenture; external candidates are often brought in for
fresh, new ideas and are associated with a last resort
measure for companies in distress, similar to Conduent,
DXC Technology (DXC) and Cognizant, to an extent.
While changing a company’s DNA overnight is
impossible, with many examples of leaders who have
tried and failed, embedding new ideas to drive change
must start with a solid foundation. As the decade wraps
up and many ICT vendors place bets on appointing
and/or hiring new CEOs, the question about new ideas
and their execution has yet to be answered. CEOs who
can execute on their initiatives at scale, beyond the
marketing hype and PR, will most likely succeed.

A few recent highlights:

• In TBR’s view, the CEO changes at Atos and Capgemini will not impact performance. They are both planned, and for Capgemini, the former CEOs will remain part of the board. Both companies will have former CFOs leading, so there will be very strict execution based on numbers. TBR does not expect the stepping down of Atos CEO Thierry Breton on Oct. 31 and the appointment of Elie Girard, current deputy CEO and CFO, to change the company’s strategic direction or to negatively impact Atos’ performance. Atos has been working on a CEO succession plan since the beginning of 2019, when it appointed Girard as deputy CEO. While Girard became CEO on Nov. 1 and will be responsible for the overall management of the company, the chairman of the board position was separated from the CEO’s responsibilities and filled by Bertrand Meunier as nonexecutive chairman of Atos SE’s board of directors. In September Capgemini’s board of directors chose Chief Operating Officer Aiman Ezzat to succeed Paul Hermelin as CEO in May 2020. While Ezzat will become CEO and be responsible for the overall management of the company, Hermelin will remain chairman of the board. This will provide a smooth transition in Capgemini’s top executive role and avert potential execution challenges if a future CEO was to step down completely. Ezzat has been with Capgemini for 20 years and has a deep knowledge of the company from holding leadership roles, such as CFO and, most recently, chief operating officer. TBR expects Ezzat to continue to implement Capgemini’s strategic plans in the coming quarters.
• Accenture appointed Julie Sweet as CEO effective Sept. 1, 2019. Previously Sweet led Accenture North America operations, where Accenture Technology is a key contributor to revenue performance and the company has successfully executed on its 2017 initiative to recruit 15,000 employees and open 10 innovation hubs across the region by 2020.
• On April 1, 2019, Brian Humphries took the reins as a CEO of Cognizant, succeeding company co-founder Francisco D’Souza. Shortly after the former Vodafone Business lead stepped in to head Cognizant, the company announced plans to provide voluntary separation to 300 top-level executives in late May. The layoffs, which are part of Cognizant’s efforts to improve its cost structure, have primarily been focused in the U.S. and India.
• DXC Technology elected former Accenture Operations lead, Mike Salvino, to take over from Mike Lawrie as the company’s CEO. We expect Salvino’s background in operations and DXC’s recent purchase of Luxoft to further expand the company’s opportunities within the BPaaS space.