California Firms Lost ‘Irreplaceable Assets’
A number of California companies are struggling to fill management gaps after the sudden deaths of key executives and other valued employees in last week’s terrorist attacks.
Cypress-based Work/Life Benefits lost its president, throwing a planned relocation into question. Chatsworth telecommunications company MRV Communications Inc. now must weather the tech storm without its hard-driving chief financial officer. Thousand Oaks biotech giant Amgen Inc. is mourning a beloved researcher who played a critical role in bringing new drugs to market.
There were other losses too: Local business units of aerospace titans Boeing Co. and Raytheon Corp. lost experienced managers and engineers. Tech talent has vanished from Silicon Valley firms including Cisco Systems Inc., Oracle Corp., Sun Microsystems Inc. and Applied Materials Inc.
Just as families are grappling with the tragic loss of their loved ones, so too are companies struggling to adjust to life without valued team members. Experts say these firms face a difficult balancing act in the weeks and months ahead. Management must assure customers that operations continue while avoiding a business-as-usual approach that will alienate grieving co-workers.
“We’re not talking about PCs or typewriters or desks,” said Rob Enderle, an analyst with Santa Clara-based Giga Information Group. “People, by their nature, are irreplaceable assets.”
That sentiment was evident last week at MRV, where dozens of floral wreaths and black ribbon flanked the entrance to company headquarters. The display marked the passing of Edmund Glazer, chief financial officer and vice president of finance. He was among the victims on Los Angeles-bound American Airlines Flight 11 out of Boston, which hit the north tower of New York’s World Trade Center.
Glazer joined the firm in 1994, eventually helping MRV grow from 100 to nearly 2,000 employees. “We worked side by side building the company together,” said Noam Lotan, chief executive of MRV. “He was an incredibly able individual--extremely bright, very capable, with a lot of respect from Wall Street, accountants, analysts and lawyers.”
Like many companies in the telecom industry, MRV has been buffeted over the last year by the sharp downturn in the technology sector. But company leaders say turmoil is nothing compared with the grief of losing an integral member of their team.
“We have been going through very, very tough times,” said Schlomo Margalit, MRV founder and chairman. “But who cares about the money. All we can do now is take care of his family.”
Most companies were reluctant to talk of succession strategies, out of respect for the deceased and their loved ones. Although many large firms have such plans in place, the unexpected death of a key staff member is always a shock to the corporate system, said management expert Warren Bennis. Combine that with the terror and emotion of the largest attack on the United States since Pearl Harbor and there is bound to be a lot of confusion.
“In a time of crisis, the first facts you get are usually fragmented, sporadic or just plain wrong,” said Bennis, a management professor at USC’s Marshall School of Business. “It’s important to bring the right people together as soon as possible to try to gather as many facts as possible.”
At Work/Life Benefits, a subsidiary of French leisure conglomerate Accor, that task was complicated by last week’s air travel ban. Top French managers are expected to arrive at the Cypress office this week to calculate their next move after the death of Christopher C. Newton, president and chief executive of the corporate benefits firm. The 38-year-old was aboard L.A.-bound American Airlines Flight 77 out of Washington, which crashed into the Pentagon.
Newton “was considered a rising star in the Accor constellation,” said Bill Gurzi, director of marketing for the Cypress firm. He described Newton as a hands-off manager who knew how to delegate, which has helped to ensure that operations have continued to run smoothly.
At the same time, Gurzi said, Newton kept the company’s big-picture strategy “pretty close to the vest.” Newton recently had moved his family to northern Virginia, where he was planning to relocate the Cypress headquarters. Gurzi said he and other managers are unaware of the status of the relocation. The lease on their current building expires at the end of October.
“Much of what Chris did he kept to himself,” Gurzi said. “In his attache case he kept his whole world. That attache case went with him.”
Just as neighbors have banded together in the wake of last week’s attacks, affected companies must create a sense of community and common purpose to propel themselves through the tragedy, Bennis said.
At Amgen, an estimated 2,000 workers gathered at the company’s headquarters last week to hear Chief Executive Kevin Sharer pay tribute to researcher Dora Menchaca, a Santa Monica resident who perished aboard Flight 77. Holding a doctorate in epidemiology from UCLA, the 45-year-old Menchaca helped design the lengthy and complicated clinical trials needed to bring medications to market.
It was a position that required a unique blend of a hard-science background, administrative abilities, leadership skills and a good touch with people, said David Goodkin, vice president of clinical research at Amgen. Recently hard at work on a trial of a prostate cancer drug, Menchaca urged all her male co-workers to get screened for the disease.
“The work will continue,” said Goodkin, his voice tightening with emotion, “and we will, of course, find someone to fill in for her. But it will be a difficult pair of shoes to fill.”
On the local campuses of defense giants Raytheon and Boeing, employees also were grappling with the emotional toll of losing colleagues. Raytheon said it lost four employees, including 68-year-old Stanley Hall of Rancho Palos Verdes, director of program management, who was aboard Flight 77. Boeing lost three employees, including two local men on Flight 77: 39-year-old satellite communications engineer Ruben Ornedo of Eagle Rock and Chandler “Chad” Keller, a 29-year-old propulsion engineer at Boeing Satellite Systems in El Segundo.
For Boeing in particular, the horror of watching its own planes used to attack landmarks and kill thousands of people, including its own employees, has been gut-wrenching. But the tragedy is galvanizing workers whose business includes the defense of the nation, said spokesman George Torres.
“A lot of them have taken this as a further motivator to help the government avoid terrorist attacks in the future,” Torres said.
For some California companies, the sheer magnitude of the tragedy is still unfolding.
San Mateo-based Franklin Resources Inc., an investment management firm, is missing 90 workers from its Fiduciary Trust Co. International subsidiary, which was in 2 World Trade Center. Hardest hit among Silicon Valley’s tech firms is Redwood City-based Oracle Corp. The company lost sales account manager Todd Beamer, 32, when United Flight 93 went down in western Pennsylvania. Seven additional Oracle employees, mostly consultants, are still missing in the rubble of the World Trade Center.
Company officials would not comment on what one employee described as “a devastating loss.”
Employees of tech companies often work in tightknit project groups, making sudden losses of team members all the more disruptive, tech analyst Enderle said. But he said the toll of severed personal relationships may have an even bigger impact on those left behind.
Palo Alto-based Sun Microsystems lost veteran software engineering director Philip Rosenzweig of Massachusetts aboard Flight 11. Co-workers remember him as a man whose legacy would be maintained by the many employees he hired and mentored, said Bob Sproull, head of Sun labs in Massachusetts.
“The feeling of loss is of the personal relationship, not his assignment in the company,” Sproull said. “We’ll figure out how to get the work done. It might not be as quick or easy without Phil around. But we’ll go on.”
