Anyone authoring a perspective on the topic of Meg Whitman’s appointment as CEO of HP is faced with a dilemma: observe the obvious wins and losses of her career and repeat what has been said hundreds (if not thousands) of times, speculate wildly about what she will mean to HP’s direction, value and viability, or explore an alternative viewpoint at the risk of being mocked by a fickle and less than patient community of analysts and readers hungry for the next corporate misstep.
Gabe Cole, who leads the Telwares IT Transformation Practice, addressed all three angles when he stated “A colleague put it best when he said HP is a tremendously tormented company. Fundamentally, there is conflict between high volume lines that provide short-term financial boosts (such as printers, desktops, notebooks, etc.), and focusing on more valuable enterprise and services plays. Both of the previous CEOs tried to break that cycle and failed as a result of different personal “flaws”…Hurd violated board standards and Apotheker was aloof and failed to build a team. It is safe to say that neither won the favor of the board. This is likely the endgame for HP.”
HP is heavily woven into the computing fabric of leading organizations, and has been driving advances in consumer PC, storage and cloud computing markets for years. Through their announced acquisition of Autonomy, economics aside, we know they directionally understand the services market going forward and the value of a big data play in staying competitive with rivals. This is not a business that will unwind overnight. That said, large enterprises are increasingly risk-averse and looking to source their next-generation network and computing strategies with a primary partner – the public soap opera that is HP over the past several years, along with a 49% drop in stock price, will not bolster enterprise confidence that HP is the partner of choice.
“Meg Whitman and Ray Lane must take decisive action in the first 90 days to shake up the board and management if HP is to survive as an independent company. Incremental smoothing will no longer suffice as HP needs to redefine and focus on its corporate soul which somehow it lost along the way” added Cole.
To that end, communications to both employees and the public has been challenging for HP and has played a major role in the turbulence related to the organization. It’s been a disastrous combination of messaging from leadership to customers and employees in stark contrast to very public actions. Customers are left to discern what the truth is concerning strategic intent, and for employees how it will ultimately affect them personally and professionally. Even Meg Whitman’s first memo to the organization, undoubtedly aimed at creating some sense of reassurance and stability, misfired. The text was riddled with references to “we”, meaning Meg and Executive Chairman Ray Lane. Based on that intonation, there will be questions about who is in charge – and everyone is left to question just how viable the organization will be. In both cases HP erodes what is ultimately most valuable in the open market: trust and credibility.
Despite the public drama and speculation, the announcement of Meg Whitman could prove to be a positive turning point for HP. Whitman has a number of hits under her belt, including growing eBay into a powerhouse organization of over $8B and successfully purchasing PayPal. She brings with her the confidence of Silicon Valley, and the (mandated) support of her Board and Executive Chairman. Her roots in consumer businesses might also be the alternate perspective required to reinvent the companies vision and overhaul lines of business.
Enterprises should not erase HP as a potential supplier, but should apply a heavy dose of “wait and see” for the next few months. HP needs to quickly rebuild its stock price and regain credibility through crisp actions from Whitman, or risk being sold off in parts. If Whitman is not successful, there is no reason for any business to take on all that uncertainty when there are other, perfectly viable partners available.
Posted by Michael V 
