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Hiring CEOs is about chemistry

Ed McCracken is not Steve Jobs, and that distinction is going to make finding a new CEO for Silicon Graphics easier than finding one for Apple, headhunters say.

Ed McCracken is not Steve Jobs.

That distinction is going to make finding a new chief executive for Silicon Graphics (SGI) much easier than finding one for Apple Computer (AAPL), executive headhunters say.

It all comes down to personalities when undergoing transitions at the top, according to recruiting firms. CEOs always have to manage the relationship with the chairman and the board of directors because the board is the boss.

McCracken announced yesterday he is stepping down as CEO but will remain chairman of SGI. Apple has been searching for a CEO since July, with cofounder Steve Jobs serving as interim CEO as well as a member of the company board.

"Let's think about Jobs and McCracken. There is certainly a big gap between them. While Ed has had a tremendous level of influence at SGI, his leadership has been seen as a positive force, and that can't necessarily be said of Steve," said David Mather, a managing director at Christian & Timbers, an executive search firm.

McCracken's decision to give up the CEO role means that he will have less power at the company he has headed for many years. He said yesterday at the company's shareholder meeting in California that he wants what is best for company. That attitude, headhunters say, should ease any tension in the passing of the torch.

Meanwhile, analysts have said that this has been one of the biggest obstacles for Apple. They add Jobs is likely remain the center of attention, which will make it difficult for the incoming CEO to take control of the computer maker.

Many big decisions facing Apple have been made by Jobs in recent months, such as its position on licensing. Those decisions have "boxed in" incoming executives into a certain direction, according to Steve Dube, an analyst with Wasserstein Perella Securities.

However, Lee Tremayne, principal of corporate recruiting firm Tremayne Group, said McCracken staying on as chairman should help in the power shift for the incoming chief executive. "This is becoming more common and should not be viewed as an issue. Having him continue as chairman provides some consistency."

She explained that the best way to make a smooth transition and avoid power struggles between the old and new executives is to make sure each person's duties are adequately and accurately defined.

It is also important for the prospective CEO candidates for SGI to meet with McCracken to ensure that both are comfortable with their respective roles. Having McCracken remain chairman may limit the prospective candidates, though.

Mather said it is unlikely McCracken will renounce his chairmanship, which might limit the kind of CEO the company can recruit. He added that some candidates take the CEO position with its day-to-day activities in order to eventually become chairman, too.

Silicon Graphics, a supplier of workstations, servers, and supercomputers, said board member James McDivitt will head the CEO search. No recruiting firm has been named.

Mather noted any prospective candidate must be able to push the technological talent at SGI in a new direction. The company has been bogged down with sluggish sales in its servers and a growing threat to its bread-and-butter Unix business as Windows NT grabs an increasing share of the market.

"It is highly unlikely that this person will come from some place other than technology," he added.