Close on the heels of Sundar Pichai taking over as Chief Executive Officer of Alphabet Inc. and its subsidiary Google, comes the news of two more Indian Americans being appointed as CEOs of high-powered multinational companies: Arvind Krishna has been tapped to be the new boss of IBM (International Business Machines Corp.), while Sandeep Mathrani has been pulled in to better the fortunes of WeWork.
The duo of Krishna and Mathrani join an elite list of other Indian American corporate honchos who have over the years carved a name for themselves in the global arena, and put a spotlight on the brilliance of Indian-origin top corporate executives.
While Pichai is a recent entrant, Indian Americans like Raj Gupta, Ramani Ayer, Rakesh Gangwal, and Indra Nooyi were the ones who initially carved a name for themselves in the 1990s and early 2000s, after being picked for a top job in a multinational company, based in America.
Gupta served as the Chairman and CEO of Rohm & Haas; Ayer served as the CEO and Chairman of The Hartford Financial Services Group, Inc.; and Gangwal was the president and CEO of the US Airways Group. Indra Nooyi created a sensation when she became the first Indian American woman to be made CEO, after being named for the job by PepsiCo. She retired recently.
Other illustrious personalities, in no particular order, followed steadily, to run some of the best known companies globally: Vikram Pandit (Citigroup), Vivek Sankaran (Albertsons), Sanjay Mehrotra (Micron Technology), Ajaypal Singh Banga (MasterCard), Shantanu Narayan (Adobe Inc.), Dinesh Paliwal (Harman International Industries); Satya Narayana Nadella (Microsoft), Rajeev Suri (Nokia), Punit Renjen (Deloitte), Vasant “Vas” Narasimhan (Novartis), Ivan Manuel Menezes (Diageo), Niraj S. Shah (Wayfair), George Kurian (NetApp), and Nikesh Arora (Palo Alto Networks), among others.
Now, the spotlight is on Krishna and Mathrani.
IBM’s Ginni Rometty, the first woman chief executive of the tech pioneer, will be replaced in April by the head of its fast-growing cloud business, Arvind Krishna, reported Reuters.
While the leadership change was largely expected, Wall Street analysts were surprised by the timing and the choice of Krishna as the CEO.
“We believe the frontrunners in most investors’ minds had been either Jim Whitehurst (former CEO of Red Hat) or former CFO Martin Schroeter,” said Bernstein analyst Toni Sacconaghi.
Here are some facts about the CEO-to-be Krishna, who has spent nearly three decades with the Big Blue.
– Krishna has an undergraduate degree from the Indian Institute of Technology, Kanpur, India, and a Ph.D. from the University of Illinois at Urbana-Champaign.
– He is IBM’s 10th chief executive in the company’s 108-year-old history.
– Krishna started his career in IBM’s Watson Research in December 1990 and was part of the team until July 2009, according to his LinkedIn profile https://www.linkedin.com/in/arvindkrishna.
– In 2013, he was named general manager of IBM Systems and Technology Group’s development and manufacturing organization, responsible for developing and engineering advanced semiconductor materials.
– Krishna is known as the “principal architect” of IBM’s biggest acquisition ever, Red Hat, which the company bought for $34 billion last year.
– In an interview with Business Insider in August last year, he said the hybrid cloud market could be worth about $1.2 trillion in aggregate in the future.
– In an interview with CNN Money this week, he has predicted the commercial availability of quantum computers within this decade. It is “no longer science fiction”, he said.
Sandeep Mathrani knows what it’s like to lead a company out of trouble.
His former employer General Growth Properties had been flattened by the Great Recession. GGP, the second-biggest owner of shopping malls in the United States, named Mathrani as chief executive officer in 2011 as it was emerging from the biggest real estate bankruptcy in U.S. history, reported Bloomberg.
Six years later, Mathrani sold the business to Brookfield Property Partners in a deal valued at about $15 billion. The project won him a reputation as a corporate turnaround artist. “I’ve had plenty of opportunities and plenty of luck,” he said last year during an acceptance speech for a real estate industry award.
That luck will surely be tested in his new job at WeWork. The troubled co-working company appointed Mathrani, 57, as CEO on Saturday. He’ll report to Marcelo Claure, the executive chairman at WeWork and operating chief at SoftBank Group, WeWork’s majority owner. In a statement, Claure praised Mathrani’s “turnaround expertise.”
Mathrani is a fixture in the clubby world of commercial real estate, but he also has some experience working with startups. At Brookfield, he led an investment in Industrious, a WeWork rival. “While real estate is full of some very dry, very conservative characters, Sandeep is very much not that,” said Jamie Hodari, co-founder and CEO of Industrious. “If WeWork wanted to bring in someone with serious real estate chops but who was a little closer to the WeWork spirit, he seems to fit that bill.”
However, WeWork poses a very different challenge from the shopping center business. Adam Neumann, its larger-than-life co-founder, started WeWork in 2010 to rent trendy office spaces to companies and freelancers. He pitched it as a hybrid real estate and technology business, a “physical social network.”
Investors bought into Neumann’s vision, giving him billions of dollars and mostly unchecked authority to set up offices around the world. SoftBank, a Japanese technology conglomerate, was the biggest believer and drove the valuation of the business up to $47 billion.
But when it tried to take the parent company We Co. public last year, the plan quickly crumbled under scrutiny from Wall Street. WeWork was spending far more than it was generating in revenue and had a litany of apparent conflicts of interest with Neumann, who received loans from WeWork as it paid him rent on buildings he owned. WeWork pulled the IPO in September and agreed to sever ties with Neumann, netting him an exit package worth more than $1 billion. SoftBank said it would rescue the company by arranging about $9.5 billion in financing.
The appointment of Mathrani has parallels to the situation at another unicorn startup once beset by crisis. Uber Technologies, which also counts SoftBank as its largest shareholder, replaced its controversial co-founder with Dara Khosrowshahi in 2017. Khosrowshahi, an Iranian immigrant who rose to the top job at online travel provider Expedia Group, was asked to tame Uber’s raucous workplace culture and its boom-or-bust financial model. Both CEOs were respected in their fields but largely unknown outside. And both had solid reputations as business operators capable of increasing profit at a steady pace and earning accolades from public investors.
Mathrani was born into a wealthy family in India. In the early 1980s, his father sent him to the prestigious British boarding school Eton, but he soon left to attend public high school in suburban Philadelphia as an exchange student, Mathrani recounted during the 2019 awards ceremony speech. By age 20, he had earned engineering and business degrees from Stevens Institute of Technology, whose campus in Hoboken, New Jersey, overlooks the New York City skyline.
His first foray into real estate came when he made $20,000 from flipping an apartment he’d bought for $55,000 two years earlier. For a young engineer, that was a lot of money, Mathrani said in the speech. “Wow, I made 20 grand, hallelujah,” he recalled thinking at the time. “Real estate is a good business!”
Mathrani said he applied for whatever real estate jobs he could find. He was hired as a mall designer and began rising through the ranks. In 1994, he went to Forest City Ratner, the development company owned at the time by real estate titan and former Brooklyn Nets owner Bruce Ratner, who would become one of Mathrani’s mentors, according to Women’s Wear Daily. In 2002, Mathrani joined Vornado Realty Trust, the largest owner of real estate in New York City, where he ran the company’s retail division.
Eight years later, the call came to lead GGP. There, Mathrani had to overcome the aftershocks of the recession, a retail industry in decline and the sharp rise of Amazon. Mathrani focused on high-end properties and courted internet-native brands such as Warby Parker and Tesla to his malls. He was rewarded by becoming one of the highest-paid executives in real estate.
In broadcast interviews and speeches, Mathrani is soft-spoken and understated. For the speech last year, he wore a plain suit, patterned tie and rimless glasses, his hair slightly out of place, looking the part of a college professor. He spoke about his fortune in life and finding success in America.
In a statement, Mathrani said WeWork “has redefined how people and companies approach work with an innovative platform.” Under Mathrani, WeWork will refocus on office rentals and walk away from passion projects started by Neumann. It has sold business units and other holdings, including a large stake in female-focused co-working startup The Wing. WeWork also said it would terminate about 2,400 jobs.
Staff morale at WeWork is low, and it’ll likely take years to get the company’s finances in order. A recent business plan set a target for positive cash flow by 2023. It could take even longer to change the company’s image in the minds of public investors, reported Bloomberg.
Mathrani’s role at WeWork is designed to complement Claure, a longtime telecommunications executive who was abruptly thrust into the WeWork debacle a few months ago when he was named chairman. Claure recently tweeted a photo of an inspirational message that he said reminded him of his first few days learning the real estate industry. The message read: “Be brave enough to suck at something new.”