There’s Something About Larry . . . - A Samurai Warrior in Silicon Valley

By all accounts, Larry Ellison, founder and chief executive of Oracle, is larger than life. He did, after-all, name his company Oracle, a word that means “a shrine consecrated to the worship and consultation of a prophetic god,” or “a person who transmits prophecies from a deity at such a shrine.” Yet clearly there’s more to Larry Ellison than yachts, mansions, fighter jets, and a non-stop ego. While the founders of mega technology companies like Apple, AOL and Cisco have been pushed out by their boards, Ellison has managed to stay on. It seems that even those who disagree with him agree that he is the heart of Oracle, explain Professor Manfred Kets de Vries and Elizabeth Florent-Treacy in this new case study.

by Manfred Kets de Vries, Elizabeth Florent-Treacy,
Last Updated: 23 Jul 2013

He survived the 1998 Sydney-Hobart yacht race, which left six sailors dead, he flies fighter jets over the California desert, he has admitted that a private investigator hired by Oracle rummaged through a pro-Microsoft trade organization’s trash (he called it unsavoury, “certainly from a personal hygiene point [of view],” but perfectly “legal”), and he once ran his 243-foot yacht at top speed past Microsoft co-founder Paul Allen’s yacht, hurtling Allen and his passengers overboard. Larry Ellison knows how to make headlines. But he also knows how to make money. Lots of it.

This enigmatic founder of Oracle, the world’s second-largest software company, is the subject of this fast-reading, highly animated new case by Professor Manfred Kets de Vries, The Raoul de Vitry d’Avancourt Chaired Clinical Professor in Leadership Development and Elizabeth Florent-Treacy, Senior Research Associate. In it the authors look behind the sensational headlines at how Ellison used savvy, timing, good luck, and unbridled ambition to grow Oracle into the second-largest technology firm in the world.

The case starts with his childhood in Chicago’s south side, an area generally described as working class, though he continues to call it a “ghetto.” Though he aspired to medical school (and showed friends a medical school acceptance letter, which one friend said “didn’t look legit; it was very short and had typos”), Ellison dropped out of college shy of a degree. Having shown some skill in computer programming, he headed to California. The year was 1966.

From here the case traces Ellison’s rather un-noteworthy early years in San Francisco, where he held odd technical jobs, married and divorced. A fortuitous position at an audio/video equipment company in Sunnyvale that did work for the federal government introduced him to his future business partner and lifelong confidant, Bob Miner (in fact, Ellison chose him as his boss, having refused to work for his original manager whom Ellison believed “was not technically competent”). Not long afterwards, a series of opportunities landed Ellison, Miner and a third partner, Ed Oates, in a position to commercialise a technology for relational databases (a major innovation from the inflexible hierarchical legacy systems) that IBM had developed but not exploited.

In 1977, Ellison founded Oracle with the humble ambition of completely transforming business functions (ironically, it was the same year Bill Gates and Paul Allen started rival Microsoft). The case continues with a look at Oracle’s early years (contracts with the US Navy and the CIA sparked the initial growth) and Ellison’s myopic obsession to win. His goal to build it better and build it first—with the emphasis on first—was a bold entrepreneurial move. But did they have the goods or was it just “vapourware”? The answer didn’t really matter. The sheer aggressiveness of the sales process and competitor’s missteps resulted in unprecedented growth and market domination.

When growth finally starts to slow (after 10 years of mind-numbing earnings figures), Ellison steps away from the company, devoting his time to women, extreme sports, and an odd obsession with replicating a sixteenth-century Japanese village on his 23-acre California estate.

The authors ask us to consider a series of missteps by Ellison – his departure from the office, the company’s win-at-all-costs motto, which had created a renegade sales force, and his hiring of a CFO who had no prior experience in the position. Was Ellison’s larger-than-life personality to blame for Oracle’s problems or were these just natural growing pains? How does a company balance its founder’s strength and weaknesses? Finally, the authors challenge us to consider what Oracle might be like in a post-Ellison era, asking “Who other than Larry could run this company?”

INSEAD 2002

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