Eckhard Pfeiffer

Eckhard Pfeiffer (born August 20, 1941, in Lauban, Germany [now Lubań, Poland]) is a businessman of German ancestry, who served as president and CEO of Compaq from 1991 to 1999. He was named as one of Time "Cyber Elite Top 50" for 1998.

Personal life Pfeiffer's father was a prisoner of war during World War II, while Pfeiffer and his mother fled the advancing Soviet troops.

He graduated from Kaufmännische Berufsschule in 1963, and later received his MBA from Southern Methodist University, Dallas, Texas.

He is a fan of fast cars and has owned a Porsche 911 Turbo and a 1962 roadster version of the Mercedes-Benz 300 SL.

Compaq Pfeiffer joined Texas Instruments as a financial controller in Munich after graduation, and later became head of the company's European marketing division.

When Michael S. Swavely retired as president of Compaq's North American division on July 12, 1991, Pfeiffer was named to succeed him. Pfeiffer also received the title of Chief Operating Officer.

Ascension to CEO Pfeiffer became president and CEO of Compaq in 1991, as a result of a boardroom coup led by board chairman Ben Rosen that forced co-founder Rod Canion to resign as president and CEO. Canion had allowed competitors such as Dell Computer, AST Research, and Gateway 2000 to undercut Compaq with cheaper offerings, that led to a $71 million loss for that quarter, Compaq's first loss as a company. An analyst stated that "Compaq has made a lot of tactical errors in the last year and a half. They were trend-setters; now they are lagging".

Rosen and Canion had disagreed about how to counter the cheaper Asian PC imports, as Canion wanted Compaq to build lower cost PCs in-house, while Rosen believed that Compaq needed to buy standard components from suppliers and reach the market faster. While Canion developed an 18-month plan to create a line of low-priced computers, Rosen sent his own Compaq engineering team to Comdex without Canion's knowledge and discovered that a low-priced PC could be made in half the time and at lower cost than Canion's initiative. In addition, it was believed that Canion's consensus-style management slowed the company's ability to react in the market, whereas Pfeiffer's autocratic style would be suited to price and product competition. Rosen initiated a 14-hour board meeting, and the directors also interviewed Pfeiffer for several hours without Canion's knowledge. At the conclusion, the board was unanimous in picking Pfeiffer over Canion.

Market dominance Under Pfeiffer's tenure as chief executive, Compaq entered the retail computer market with the Presario which made them one of the first manufacturers in the mid-1990s to market a sub-$1000 PC. In order to maintain the prices it wanted, Compaq became the first first-tier computer manufacturer to utilize CPUs from AMD and Cyrix. The two price wars resulting from Compaq's actions ultimately drove numerous competitors from the market, such as Packard Bell, and by 1994 Compaq had overtaken Apple Computer and even surpassed I.B.M. as the top PC manufacturer. Compaq's inventory and gross margins were better than that of its rivals which enabled it wage the price wars.

Management shuffle In 1996, despite record sales and profits at Compaq, Pfeiffer initiated a major management shakeup in the senior ranks. Pfeiffer's vision was to move Compaq beyond its main business of manufacturing retail PCs and into the more lucrative business services and solutions that IBM did well at. Earl Mason, hired from Inland Steel effective in May 1996, immediately made an impact as the new CFO. Under Mason's guidance, Compaq utilized its assets more efficiently instead of focusing just on income and profits, which increased Compaq's cash from $700 million to nearly $5 billion in one year. Also Compaq's return on invested capital (after-tax operating profit divided by operating assets) has doubled to 50 percent from 25 percent in that period. This acquisition made Compaq, at the time, the world's second largest computer maker in the world in terms of revenue behind I.B.M.

Ouster By summer 1998, Compaq was suffering from product-quality problems. Pfeiffer also refused to develop a potential successor, rebuffing Rosen's suggestion to recruit a few executives to create the position of Compaq president. The board complained that Pfeiffer was too removed from management and the troops, as he surrounded himself with a "clique" of Chief Financial Officer Earl Mason, Senior Vice-president John Rose, and Human Resources Chief Hans Gutsch. Rosen suggested that the accelerating change brought about by the Internet had overtaken Compaq's management team, saying "As a company engaged in transforming its industry for the Internet era, we must have the organizational flexibility necessary to move at Internet speed." In a statement, Pfeiffer said "Compaq has come a long way since I joined the company in 1983" and "under Ben's guidance, I know this company will realize its potential." Rosen's priority was to have Compaq catchup as an E-commerce competitor, and he also moved to streamline operations and reduce the indecision that plagued the company.

Aftermath Rosen assumed the capacity of interim CEO and began "cleaning house", as shortly afterward many of Pfeiffer's top executives resigned or were pushed out, including John Rando, Earl Mason, and John Rose. Rando, senior vice president and general manager of Compaq Services, had been said to be the heir-apparent to Pfeiffer. His division had performed strongly as it had sales of $1.6 billion for the first quarter compared to $113 million in 1998, which met expectations and was anticipated to post accelerated and profitable growth going forward. CFO Mason, who had previously been offered the job of chief executive of a company outside the personal computer industry, informed Compaq's board that he accepted the offer. Rose, head of Compaq's Enterprise Computing group, was reportedly upset that he was not considered for the CEO vacancy; his division reportedly accounted for one third of Compaq's revenues and likely the largest part of its profits.

Pfeiffer's permanent replacement was Michael Capellas, who had been serving as Compaq's CIO. Immediately after Pfeiffer's ouster, Capellas was elevated to interim chief operating officer by Rosen, Capellas was able to restore some of the luster lost in the latter part of the Pfeiffer era and he repaired the relationship with Microsoft which had deteriorated under his predecessor's tenure, but the company still struggled against lower-cost competitors such as Dell who took over the top spot of PC manufacturer from Compaq in 2001.

Post-Compaq activities Pfeiffer was one of the founders of Accoona, an Internet search engine provider, and has been its chairman since December 2004.

Pfeiffer serves on the boards of several major corporations including Ericsson, and DirecTV.