Former CMP Exec Could Be The Right Guy To Run Computer Associates

With the resignation of chairman and CEO Sanjay Kumar last week, hopefully investigators will see CA's willingness to cooperate and will resist the kind of actions that led to the indictment of the Arthur Andersen Co. That company, of course, was eventually driven into bankruptcy, resulting in the layoffs of thousands of innocent workers.

In case you haven't been following the situation at CA, federal prosecutors have obtained guilty pleas from several former CA executives, including its previous CFO, as part of an accounting fraud investigation in which the company is alleged to have kept its books open beyond the close of the quarter in order to record additional revenue.

Under pressure that he could eventually face criminal charges himself and responding to the need by the board to prevent such a possibility from endangering the company, Kumar stepped down. Kumar not only held the chairman and CEO titles, he also left no heir apparent. Now CA's board may have to look outside to fill those roles.

I've spouted in numerous columns that no company should put multiple titles under one individual. Unfortunately, the practice is anything but uncommon, and this is just one illustration of why it should not be allowed.

Ken Cron, a CA board member since 2002, and the former president of CMP Media, the parent company of CRN, is under consideration for the interim CEO job and reportedly has been offered the position. Cron, who was the first publisher of CRN and later became the president and driving force behind CMP's publishing success before it was sold five years ago, has since taken an Internet company public and more recently served as CEO of Vivendi Universal Games.

Lewis Ranieri, a CA board member and former vice chairman of Salomon Brothers, has already assumed the chairman position. But CA needs a day-to-day leader. As someone who worked around Cron for 10 years, there is no doubt in my mind that he understands the technology market and has the experience, drive and passion to make a difference. He is a solid manager with a knack to not only motivate but push employees to drive the business forward. His outsider status would also help settle concerns on the part of the U.S. attorney that the company is making necessary changes.

It is critical for CA to settle any issues with the government quickly, at least to the extent that it satisfies regulators it would not be in anyone's interest to file charges against the company. When Andersen went under, the pain was largely contained to the employees who lost their jobs. But Andersen had no products that needed support or on which other firms run their business. CA has untold numbers of customers that would be affected.

The good news is that CA is in very good shape beyond this mess and an executive like Cron would have a great deal to work with. Kumar may have had too much control and didn't do a good enough job of preparing for a successor, but he has done a very good job of positioning the company.

To his credit, the product lineup is solid. The company's decision to move away from a heavily focused direct-sales approach to one that leverages the channel more forcefully is gaining traction.

CA is a well-positioned company that needs to fix its management structure, hire some top-quality people, settle the government's concerns and get on with it. Cron would be the right guy for the job, even if only on a temporary basis.

Make something happen. I can be reached at (516) 562-7812 or via e-mail at [email protected].