By Lynn Berstein, ECG Inc
Most people outside of the tech industry and Wall Street have not been following the story of Carly Fiorina (right) during her tenure at Hewlett Packard. Most people don’t really care. You should. HP is one of those few companies that can effect the entire industry. HP until recently, was always in the top 10 companies as a great work environment.
Most of you know HP as the printer company. Over the years, HP has become synonymous with printers, like Hershey’s and chocolate. However, you may not realize HP produces a great deal more than printers (and plotters – those huge printers that use 36″ and 42″ rolls of paper). They have excellent servers and workstations. notebooks, tablets, monitors, projectors, handheld devices, Ipod, tvs, Ipaqs, cd and dvds, fax machines and multifunction units (fax/copier/scanner), scanners, digital cameras and special printers for the cameras, software, storage, networking, business IT services , and of course all the supplies you could possibly require for their products.
Recommended reading: look at http://www.hp.com/hpinfo/abouthp/histnfacts/ for HP’s timeline and history. You’ll find lots of interesting information, such as the first customer was Disney.
HP is one of the largest corporations in the US. Revenue for four quarters ending October 2004 totaled $79.9 billion dollars. From the beginning, HP had an unusual corporate culture. Bill Hewlett and Dave Packard were known to walk through the offices talking with staff members, knowing many on a first name basis. HP was built on good engineering and good, reliable products. The company was the brand. Like old money, no one individual was publicized, only products and services, mostly keeping in the background, dependable and always with great class.
In 1999, the Board chose Carly Fiorina as the new CEO, formerly of Lucent Technologies. Her style was very different than anyone previously at HP. Carly Fiorina was in the headlines on a regular basis. She tried to make herself the brand, as in flashy new money. She had many disagreements with the Board, some of which were very public and ended in court.
Every good CEO has a vision for the company. Carly Fiorina had a vision too. Unfortunately, her vision was not in sync with the Board’s vision, nor could she really execute it. She started to take the company in a new direction, rather than leverage assets. The merger with Compaq in my opinion did nothing for HP, and less for the public. There was now one less company for competition. Many of their product lines overlapped, and resulted in layoffs previously unheard of at HP.
Under Carly Fiorina, profits went down and the stock price dropped to less than half prior to her reign.
The fighting between the Board and CEO ended last week with the dismissal of the CEO. HP is now in the process of looking for a replacement, with an interim CEO, Robert Weyman, presently a VP and CFO.
What does this mean to you? Nothing you think? The Board must be very careful in choosing a new CEO, and it must be done as quickly as possible. Rumors are flying around the industry as to who will be the next CEO. Whoever is named CEO, must have a vision that fits with the HP way, and restores confidence on Wall Street. The CEO must also provide the stability and high standards we are all accustomed to at HP. The vision must include expanding Research and Development, and global services. Presently, HP has a larger global services staff than IBM.
HP needs to go back to its roots as a great engineering company, with the services to match. The result will be continued new and improved products, services where required, a better profit margin, and higher prices on Wall Street.
Personally, I wish HP all the best future success. I have great confidence in the company to do the right thing.
Disclosure: ECG Consulting (http://ecg-incc.com) is an authorized HP reseller.
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