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Microsoft’s Peggy Johnson joins Magic Leap

Johnson replaces embattled founder Rony Abovitz as CEO

Posted: By Kathleen Maher 07.27.20
Peggy Johnson takes the controls of Magic Leap. (Source: Peggy Johnson’s Twitter profile)

 

Magic Leap is a company that stirs passion—good and bad. The company was among the many companies that appeared over the last decade with the promise of enabling AR using lightfield technology. The company was a high-flyer with attitude attracting billions in investment, and spending millions for publicity while never revealing much of anything until the doors fell off. The company finally unveiled a headset for $2000 that did not significantly improve on the AR technology being offered by less-well funded competitors, most of which have disappeared.

This is the kind of behavior that invites a furious backlash. And the company got the full brunt when it announced early on in the pandemic that it was laying off employees and CEO Rony Abovitz would be stepping down. The company blamed the pandemic for its troubles, which elicited howls of indignation from disappointed AR fans.

As it turns out, Magic Leap is too big to disappear. The company has announced the appointment of former Microsoft EVP Peggy Johnson to take over the role of CEO effective August 1. At Microsoft, she was in charge of business development and that is definitely what Magic Leap needs a lot of.

The press release says Johnson oversaw the development, collaboration, and growth of Microsoft’s relationships with external partners and enterprises. Before Microsoft, Johnson spent 24 years at Qualcomm in roles across engineering, sales, marketing, and business development. She is also on the BOD of investment management company BlackRock. In other words, her experience goes beyond biz dev and includes engineering and management.

Magic Leap’s early investors include Google, Qualcomm, Andreessen Horowitz, and Kleiner Perkins among others.

In an interview with the New York Times, Johnson said she believes spatial technology is approaching in inflection point that will be accelerated by the pandemic, which is forcing people to work remotely and travel less.

Upon the announcement of Johnson’s new job, her former boss Microsoft CEO Satya Nadella thanked Johnson for her leadership and partnership and significantly highlighted her role in inspiring women in technology fields and also praised her ability to “connect people, drive consensus, and forge relationships.” Just the sort of thing a company like Magic Leap needs at this stage of its history. Someone who believes in the technology and will support employees, the ones that are still there.

What do we think?

These days, every time we read about Magic Leap, we’re surprised they’re still alive but you can’t just raise billions of dollars and walk away, and investors sure won’t let the company drive itself into oblivion with the same tactics it has already employed. It’s heartening to see Johnson take on this challenge.

In addition to its problems with its technology and the way, it has marketed its technology the company has had to negotiate its way through a high profile sexual harassment case, which is unfortunately not unusual for the tech industry. The case was settled and Magic Leap denied the accusation but accusations of fostering a toxic workplace persist in social media, the company sued its director of global security Todd Fell in 2018 for extortion, the CFO Scott Henry left in 2019 after the company hocked its patents to Morgan Stanley. Clearly, this is a company that is crying out for a little management.

Peggy Johnson does seem like just the sort of CEO the company needs. Not only in terms of her expertise in deal-making and forging relationships but also as an engineer who worked directly with customers at Qualcomm. Her Wikipedia profile notes that part of her job as an engineer at Qualcomm was to help customers better understand the company’s technology.

However, as I was reading up on this deal, I saw that the writers of the New York Times story about Johnson, Erin Griffith, and Karen Weise, invoked the “glass cliff” phenomenon defined by Michelle K. Ryan and Alexander Haslam of the University of Exeter, United Kingdom, in 2005, who suggested that during times of crises women may be able to snag leadership roles for jobs that seem doomed to failure. Their work suggested that women may be more likely to break through the glass ceiling but they’re vulnerable to falling off or being pushed off the glass cliff.

The article mentioned Linda Kozlowski from Etsy and Evernote who took on meal kit company Blue Apron and Jill Soltau from Jo-Ann Stores who tried to turn around J.C. Penney. A 2018 article in Fast Company by Lydia Dishman cited more high profile cases in the tech world including Carly Fiorina at HP, Zoe Cruz of Morgan Stanley, and Diane Green of VMWare. The same thing happens to men and women of color.

The studies find that these unlucky leaders are often replaced by white men so the world can go on spinning on its axis once again. In other words, a brief bout of thinking out of the box might actually just be a way of building a better box.

God knows, if the theory holds any water, these hard days are a likely time for new people to get a shot at the brass ring and regardless of the motives for putting them there, many will hang on like Ginni Rometty at IBM, Indra Nooyi formerly at PepsiCo, and Merck CEO Kenneth C. Frazier who is currently only one of three black men running Fortune 500 companies.

By any estimation, taking the helm at Magic Leap is a risky proposition and that glass cliff is looming, but it is time for new rules.