Changing of the Guard

A gradual, inevitable changing of the guard is under way at some of Orange County’s biggest technology companies.

Executive shake-ups are nothing new,but the county’s tech landscape has seen a slew of upheavals lately at some of the biggest names in the industry.

Those who founded or built up these companies are making way for new blood,often seasoned professionals from bigger companies.

They include Silicon Valley veterans or recruits from some big names in Corporate America.

The old guard is a diverse group that counts Conexant Systems Inc.’s Dwight Decker, Costa Mesa-based Emulex Corp.’s Paul Folino, Aliso Viejo-based QLogic Corp.’s H.K. Desai, Irvine-based Epicor Software Corp.’s George Klaus and Irvine-based Broadcom Corp.’s Henry Samueli.

During the past few years, every one of them has partially stepped aside,or tried to,ushering in a new class of leaders known for their global experience and polished managerial skills.

They include Emulex’s Jim McCluney, Broadcom’s Scott McGregor, Epicor’s Thomas Kelly and Conexant’s Scott Mercer.

Natural Shift

It’s part of a natural shift as the companies grow from startups to more mature, stable players, industry watchers say.

“A lot of the new folks have experience running companies all over the globe,” said Gary Augusta, chief executive at Aliso Viejo-based Octane, a trade group that promotes entrepreneurs. “They have different perspectives and backgrounds at larger companies that are not startups. There are very different skill sets to run more mature types of companies.”

Such has been the case for Broadcom.

Chief Executive McGregor represents the chipmaker’s new era.

The former Royal Philips Electronics NV executive came to Broadcom in 2005, after the company saw accounting issues. He’s brought big-company professionalism to Broadcom, which has four times the yearly revenue of what it had during the era of cofounders Samueli and Henry Nicholas, who left as chief executive in 2003.

McGregor has little of the flash or large personas of the company’s founders. But Wall Street doesn’t seem to mind.

“Broadcom with Samueli and Nicholas was a different company than it is today,” Cody Acree, managing director with Stifel Nicolaus & Co., said in an earlier interview. “It carried a different momentum and feel.”

Clashes

Some transitions aren’t always as smooth.

QLogic’s Desai, who’s headed the company for nearly 15 years, is on the hunt for a successor after his first pick didn’t work out.

A little more than a year ago, he hired Jeff Benck, an IBM Corp. veteran as a future replacement.

Things were rosy for about nine months, until Benck stepped down abruptly in March over a big sticking point,when he’d become chief executive.

There may have been some disagreement about the timeline of the succession plan that was put in place by Desai at the board’s request.

Benck was hand-picked last year by Desai after a search that lasted more than a year.

He took on the everyday tasks of running the business and managed manufacturing, product development, sales and marketing. Desai was set to remain chief executive for a time and then stay on as chairman focusing on overall strategy and managing customer relationships.

For now, Desai is back in the driver’s seat.

The topic of succession is set to resurface on the board’s agenda in the coming months, he said.

“I think we are just settling down with what we are doing right now,” he said. “I’m fully engaged currently in the business and on the board. We will figure it out in the next few months.”

One thing he’d change about the botched changeover with Benck: He said he’d push for “a quicker transition than what we had planned before.”

Benck ended up taking a post last month at QLogic’s rival Emulex.

Newport Beach chipmaker Conexant saw its own executive shake-up this year.

Chairman Decker is on his second stab at retirement after he tried to step back some years ago.

He used to run the company when it was a chip arm of Rockwell International Corp. and led its spinoff in 1999.

After stepping down once, he was brought back in 2005 to fix a botched combination with New Jersey’s Globespan Virata Inc.

Last year, Conexant hired Dan Artusi, a veteran of Motorola Inc.’s chip arm, who stayed for about nine months as chief executive.

He’s said to have been ousted by the board in April after clashes with directors over the pace and scope of a big restructuring effort.

Now the job is in the hands of Mercer, who’s been on Conexant’s board for five years. His background is more in finance. He’s had stints at some big names, including Western Digital Corp., Dell, TeraLogic Inc. and LSI Logic Corp.

Differences

It’s obvious tech’s new guard is distinct from the old group.

“We are different,” Desai said. “If you look at me, or Dwight (Decker) or Broad-com’s founders, we probably have a more technical background.”

Other members of the old guard had the drive to run a fledgling tech company in an unproven market.

“We were more like a startup company,” Desai said. “In my case and that of Paul (Folino) and the Broadcom guys, it worked out well, because we did a pretty good job of running the companies for a number of years.”

Some members of the new guard cut their chops at big name companies, including Dell Inc., Apple Inc. and Philips Electronics.

That’s where they honed their sales, marketing and day-to-day operations knowledge.

“Running organizations with several thousands of employees is different than running one that it is in a growth stage,” Octane’s Augusta said. “In the early days you are prerevenue and you are trying to get a product out. In later stages, leaders have to be good salesmen and have to foster intimacy with their customers in order to nurture and grow the company. That’s part of this group’s background.”

Technology is an industry that’s ripe for change, said Gil Amelio, who runs Newport Beach’s Jazz Technologies Inc. and its chip plant arm, Jazz Semiconductor Inc.

Jazz Semiconductor is set to be bought by an Israeli chipmaker, but Amelio plans to keep plugging away there through the transition.

“In terms of the new generation of guys, they are coming in behind the founders and bringing more modern thinking, more useful skills and having a different perspective on the world than the people who came before,” he said. “I think it’s refreshing.”

Amelio takes the long view.

“We all stand on the shoulders of the giants who came before us,” he said. “To the extent we do that, we build something that’s enduring.”