Can the Returning CEO Turnaround the Crisis at Hammerhead?

Abstract

Hammerhead Systems (HS) evolved from the incubator stage inside a venture capitalist (VC) firm. HS was founded in 2002 as a data-switching firm with a niche in the telecommunications (telecom) industry. With the promise of quick success, the co-founders secured startup funding from VCs and hired industry savvy management and talented engineers, without company success. After 16 months from starting HS, CEO/co-founder Keil was replaced because the Board of Directors believed a different type of CEO was needed. As the initial product moved toward the production stage under the second President/CEO, the telecom industry trends changed. A third CEO was hired in 2004; however, he was unable to increase the customer base and sustain strategic partnerships. In 2008, this CEO resigned and HS Board brought back Keil as President/CEO of Hammerhead Systems to recoup the $100 million VC investment spent by the prior two CEOs and reverse the downward direction.