A CEO, in announcing 4th quarter
for patience after describing the operational challenges and other internal
problems that contributed to a significant year-over-year decline in
that weak consumer demand and supply shortages contributed to lost revenues
years of underinvestment in systems and procedures that made these problems
the company needed to reduce costs to free up money for investing in growth
the company turn-around would be a 2-5 year journey
the company was not as effective as it needed to be in matching supply with
the company needs to be better turning orders into products faster than its
that, while the company is “world class” in terms of buying components, the
company is not sure if it is world class in terms of an end-to-end supply
This could be
any company struggling in tough economic times. But, this is not the news of
just any company. This is HP — a $120 billion, Fortune 11 company. The CEO is
Meg Whitman, formerly CEO of eBay.
HP is a Dow 30
company, one of the companies included in the Dow Jones Industrial Average
number we hear about every day. The DJIA is the barometer of companies traded on
the New York Stock Exchange. We expect a Dow 30 company to be amongst “the best
of the best.” Now we know that is not always so.
While I am all
for transparency from corporations, Meg Whitman’s revelations are a bit
mind-boggling. Let us look at some history.
Whitman replaced Leo Apotheker, the “SAP guy,” who led the company very clumsily
for a bit more than one year (2010-2011). Many of us wondered at the time why on
earth the HP Board hired him. Meg has only been in her present role for about 6
Apotheker’s predecessor was Mark Hurd who had a tenure of about 5 years
(2005-2010). I characterize Mark Hurd’s tenure as “focused on business
Hurd’s predecessor was Carly Fiorina who led the company for about 6 years
(1999-2005). I characterize Carly’s tenure as being about “growth through
Mark Hurd would
have been a better COO for HP than he was CEO. His focus was business execution,
cutting costs, and wringing every scintilla of profit he could from HP products.
When he was terminated by the HP Board for a seemingly minor issue, I personally
believed that the HP Board had been looking for an excuse to get rid of him.
A CEO has to do
a lot of things well including creating strategy and driving innovation.
Innovation was virtually non-existent during Hurd’s tenure. And, Hurd did not
create and deliver a compelling strategy. Add to this the fact that Hurd was
intently disliked by the vast majority of HP employees and you have a very dark
period at HP, just like the Carly Fiorina period.
To hear Meg
talk about issues 1 through 8 above is to acknowledge that, not only did Hurd
fail to create a compelling strategy and drive innovation, he failed to provide
enduring, sustainable, value-laden change in the fundamentals of how HP does
And, now that
HP is trying to recover from wounds, some inflicted by the global economy and
supply chain woes but many more that were self-inflicted, HP must now go through
a period of significant reinvention that Meg says could take 2-5 years. If it
takes that long, will anyone care when this is finally complete?
I often ask
people to name one game-changing innovation that has come out of HP in the past
decade. I am at a loss to think of anything and no one I have asked can come up
with a definitive answer. That is just not right.
Yet, look at
what Apple has achieved in the past decade: game-changing innovation after
game-changing innovation. Look at the market valuation, the stock price, the
excitement Apple has created. The folks at HP and Apple breathe the same air —
they are neighbors. But, look at the profound difference in results.
HP used to be
known as a premium brand. Whatever business HP was in, it was the Rolls Royce in
that category. No more. HP has taken on the characteristics of a zombie, a
company that just goes through the motions. No innovation. No compelling
strategy. No excitement. No enthusiasm. No passion. And, problems galore on top
of all of this.
HP has done
what a lot of companies have been doing for the past 3 years: hunkered down
trying to ride out the economic downturn focused only on reducing costs while
searching for sales. HP has paid a huge price for this. And, so have other
companies that have adopted similar positions.
I wish HP, the
HP leadership team, employees, partners and shareholders well on their journey
of renewal. Meg Whitman had the courage to accept this challenge — I am sure
there are times when she wonders what she was thinking when she stepped into
this role a few months ago.
The last decade
at HP has been really difficult and, very likely, not much fun. We need HP to
succeed and thrive as a company. No one wins if HP loses; we all lose.
My wife read
this piece aloud to my 89-year old mother-in-law. Her reaction on hearing this
is, “Maybe this will get them going and they will snap out of it!” For someone
who would not consider herself a business person, I say that she nailed it.
are you taking to make sure you do not create a zombie company? There is no time
like the present to tackle those issues that you know are going to hurt you as
the economy continues its rebound. Just ask HP.
Gardner, has held senior management positions in Product Development,
Manufacturing, Sales, Marketing, Customer Service and
Product Management. He joined Tandem Computers in 1979 where
he was responsible for Corporate Documentation Standards for
Tandem's highly configurable and expandable computer
systems. In 1983, he designed and implemented a
Configuration Guide for Dialogic Systems instituting a
process that greatly simplified a complex, modular product
such that the field sales organization and international OEM
customers could easily define their order requirements. This
methodology satisfied the product definition needs of sales,
marketing, engineering, manufacturing, customer service and
finance. David founded his consulting practice in 1991. He
is a graduate of San Jose State University (BA) and Santa
Clara University (MBA). David is a member of the Society for
the Advancement of Consulting (SAC) and has been Board
Approved in the Area of Configurable Product & Services
Strategy and Implementation. In 2010, he was inducted in the
Million Dollar Consultant® Hall of Fame. Out of
over 1,000 consultants who have completed Alan Weiss’s
mentoring program, only 26 have been inducted into the Hall of
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