Strategic Missteps Spark Exodus of HTC Executives

by Matt Klassen on May 24, 2013

The rats have officially starting fleeing HTC’s sinking ship, as a torrential exodus of executives has left the Android partner reeling and the tech world asking serious questions about the company’s future. In fact things are apparently so bad at HTC that one fleeing executive took to Twitter, urging his fellow colleagues to likewise depart.

The latest to head for the hills is HTC Asia CEO Lennard Hoornik, who now becomes at least the sixth senior executive to leave the company in the last few weeks. Among the others is product manager Erin Lin, whose fears about the impending self-destruction of HTC motivated him to issue the tweet telling his compatriots to head for the escape pods.

Expectedly, the departure of so much high level leadership has left HTC in a chaotic mess, and it has many in the tech world wondering what sparked the mass exodus. While some point to recent changes instituted by the company’s new CMO Ben Ho, changes that included moving some strategic offices in Seattle back to the company’s headquarters in Taipei, as the reason behind the chaos, the more obvious cause is the spectacular failure of the company’s much ballyhooed HTC First Facebook phone.

The departure of one high level executive is often reason enough to worry, generating at least enough concern that many top businesses develop succession plans to ease the transitional chaos. But to lose an entire team of senior executives… well lets just say there’s no plan for that.

In addition to the aforementioned departures of Hoornik and Lin, over the past few weeks the company has lost chief product officer Kouji Kodera; VP of global communications Jason Gordon; global retail marketing manager Rebecca Rowland, and digital marketing director John Starkweather.

While some analysts remain optimistic that HTC still has plenty of high level talent, including new CMO Ben Ho, others point to Ho’s recent controversial decision to move strategic operations from the company’s offices in Seattle back to company headquarters in Taipei; a move, Michael Morgan, a senior analyst at ABI Research, explains, that may have been prompted by the saturation of the U.S. market and the possibilities of growth now available in China.

This strategic move likely serving as the last straw for the departing executives, the reason behind it seems to be the larger motivating factor: the spectacular failure of the HTC First Facebook phone. Introduced with substantial fanfare in April, the HTC First, as expected, never took hold in the global market, with AT&T already slashing the price of the phone from $99 to $0.99 on a two-year plan, with rumours that AT&T will remove the device from its catalogue completely in the near future.

While the phone never took hold, part of the reason was missteps from company CEO Peter Chou, who apparently insisted the company push forward with the release of the device despite warnings about manufacturing and supply delays…delays that likely hampered sales.

So there you have it: Strategic missteps leading to poor product performance, leading to knee jerk company changes, leading to the mass exodus of company leadership. The question now, of course, becomes, can HTC recover? The answer, likely not. In situations like this approximately one out of ten companies are able to rebuild, and with an unpopular product line and a dearth of the requisite visionary leadership needed to rebuild, this may be the end of the road for HTC.

Now where’s Google when you need them?

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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