Lenovo's Shakeup Surprise

Gifts aren't the only surprises for us in December anymore. Just like Clark Griswald's shock at receiving a Jelly of the Month club membership as a bonus in the movie "Christmas Vacation," Lenovo is starting its own tradition by announcing big news around the holidays. Last year, it was the acquisition of IBM's ThinkPad division. This year, it's a changing of the guard in the CEO office.

Lenovo, the Asian tiger bent on dominating the PC market, is replacing IBM layover CEO Stephen Ward with a Dell veteran whose track record touts double-digit growth. Ward's departure comes as a surprise. By all previous accounts, he was a guiding force in the merger of the Chinese manufacturer and IBM's former division. Lenovo's $1.25 billion purchase of the ThinkPad brand was no small deal; it also came with roughly 10,000 IBM employees--Ward among them. And Ward was seen as the perfect leader for the new company, given his 26 years at IBM, many of which were in key roles in the Personal Computing Division.

But, as Lenovo states, the company was looking for talented people to help bring it to the next level. William J. Amelio Jr. seemed the logical choice.

"[Chairman Yang] Yuanqing and I have spent a lot of time thinking about this. Bringing in Bill Amelio is a great move. Lenovo is an incredible company, and I have great confidence in its future success," Ward said in a statement.

Whether Ward was asked to resign or left on his own accord is immaterial. His departure signals big changes behind the scenes of a company that has high ambitions to capture the leadership in global PCs and notebooks. Some analysts are now predicting instability in the company's middle management, which could hamper growth efforts.

Amelio most recently served as Dell's president of Asia-Pacific and Japan. At this Far East post, Amelio was responsible for rapidly growing Dell's market share. His selection comes as no surprise, given that emerging markets--Brazil, Russia, India and China--are key to Lenovo's global growth strategy.

"I am very excited to lead this ground-breaking global enterprise," said Amelio in a statement. "Lenovo provides me a unique chance to draw on the skills I have developed in every component of my career. Lenovo has a solid foundation in place and enormous opportunities, and I look forward to working with Yuanqing and the entire team to continue the drive to enhance profitable growth."

Amelio's pedigree may give Lenovo partners reason for pause--a direct-sales guy in charge of the rising star in the not-so-sleepy notebook/PC market. While heading Dell's AsiaPac operation, he often touted Dell's direct-sales model as a means for both controlling costs and penetrating new markets. For instance, in 2003, his strategy drove up Dell's Asia sales by 10 percent and unit shipments in China by 67 percent.

Lenovo is assuring its partners of its commitment to the channel. Since the merger and announcement of its lofty growth plans, Lenovo has often referred to the channel as instrumental in its plans. While the company claims it has retained thousands of former IBM partners, it has yet to define its channel strategy. That makes partners nervous and skeptical.

Lenovo is racing against the clock. A year has nearly passed on its licensing of the IBM ThinkPad logo, which is a necessity for retaining market share and leveraging the IBM legacy for growth. Lenovo had a lot of momentum following its ThinkPad acquisition. Now it needs to recapture that energy--and engage the channel--if it hopes to topple rivals Hewlett-Packard and Amelio's former masters at Dell.