McKessonHBOC is relying on two young McKesson execs acting as a two-person CEO office to drive the integration of distribution and information businesses into a company able to link each episode of care from first patient contact to prescription dispensing.

The two co-CEOs are being charged with stabilizing the company's image in the wake of seven senior executive departures stemming from reporting irregularities associated with the Jan. 13 merger.

John Hammergren, 40, will have the top responsibility for operations as CEO in charge of the company's two main businesses: supply management and information technology.

David Mahoney, 44, assumes the responsibility for restoring the financial credibility of the firm and maintaining a strategic focus in the rapidly diversifying drug distribution business. Mahoney will carry the title of CEO for financial, strategic and other staff functions.

Both execs have assumed high positions within McKesson after relatively short periods with the company. Hammergren was recruited into the firm from the med/surg business three and half years ago. Mahoney has more experience within McKesson as a nine-year veteran of the business.

Mahoney has held a high-visibility position in recent years, serving as president of pharmaceutical services with responsibility for all manufacturer relationships, product procurement and retail marketing. With a McKinsey consulting and Harvard MBA background, Mahoney also has the pedigree to help reassure the financial community that has knocked 50% off the company's stock price since reporting the irregularities.

McKesson has a veteran from the hospital information systems business from within the HBOC group to take charge of that segment. Graham King, 57, has extensive experience in the business but was new to HBOC at the time of the merger.

King was CEO of Chicago-based U.S. Servis at the time of its acquisition by HBOC in December 1998. King also previously ran Shared Medical Systems.

Four ex-HBOC officers were dismissed for cause: President and CEO Albert Bergonzi, CFO and Controller David Held, Senior VP and General Counsel Jay Lapine, and Senior VP and Head of Enterprise Sales Michael Smeraski.

Former HBOC Senior VP-Enterprise Services David Schenk remains with McKessonHBOC. Schenk was put in charge of a special five-person "affiliation team" to work on leveraging customer relationships of the two firms.

To assure immediate oversight of the bifurcated CEO office and add perspective from longer experience, the McKessonHBOC board is setting up a special four-person committee of senior advisors headed by former McKesson CEO Alan Seelenfreund, 62. The ex-McKesson chairman also will serve as non-executive board chairman, replacing Chairman Charles McCall, who was dismissed. McCall was CEO of HBOC prior to its merger with McKesson.

Also serving on the committee are two directors from the former McKesson board: Tully Friedman (56, chairman of Friedman Fleischer & Lowe) and Carl Reichardt (66, retired chairman of Wells Fargo). One former HBOC director, Gerald Mayo (chairman of Midland Financial Services), will serve on the group.

The displaced McKesson management includes President and CEO Mark Pulido and Exec VP/Chief Financial Officer Richard Hawkins. The CFO post will temporarily be filled by Senior VP-Controller Heidi Yodowitz, who has been with McKesson for nine years.

Pulido, who came to McKesson from Sandoz where he was chief operating officer and chairman for a year and a half, presided over a three-year period of major changes at McKesson. The Pulido management absorbed FoxMeyer from bankruptcy, purchased General Medical in med/surg, navigated a stand-still when Cardinal sought to merge with Bergen, and expanded ancillary service offerings.

After those changes and the HBOC merger, McKesson appears to need a period of close attention from the top to internal organization and functioning. That type of internal focus has not been a recent option for wholesaler CEOs during the heated consolidation and diversification race.

The two-headed CEO may be a way to address the competing inside and outside demands on management attention.

McKesson Splits CEO Into Operations & Strategy: Hammergren & Mahoney

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