Hewlett-Packard is in the news a lot lately. The company has made a few truly horrific moves in the last 2+ years. Here’s my 2 cents worth on what went wrong and how to fix it.
[I’m not going to rehash the historical events at HP. If you want to read a good summary of recent missteps, check out this Reuters article, “Insight: How a desperate HP suspended disbelief for Autonomy deal“.]
HP was (and in my opinion still is) a great company with even greater potential. Unfortunately, they’ve fallen into a classic, big-company quagmire. When you mix a hard-driving CEO with a slow, lumbering culture, you have a train wreck in progress.
HP has gone through three CEOs since 2010: Mark Hurd had a reputation as a cost cutter and replaced Carly Fiorina; Leo Apotheker was thought to be a software strategist and came from SAP; and current CEO Meg Whitman made eBay a household name. Each CEO change resulted in drastic strategy changes.
It seems that each strategy focused on acquisitions and spin-offs rather than internal growth. The most notable acquisitions were Compaq (2002), EDS (2008), Palm (2010) and Autonomy (2011). At one point, HP wanted to spin off its PC business despite being the largest PC manufacturer in the world. Go figure!
The Real Problem
It appears that HP’s strategies were flawed but I have to dispute that conclusion. The flaw was not in the strategies. The flaw was, and continues to be, in the culture. You can have the world’s best strategy but if you have a culture that is resistant to change and risk-averse, forget about it!
Many successful enterprise CEOs have strong personalities — all of the recent HP CEOs clearly do. They make quick decisions and have little patience. Conversely, many enterprise company cultures are deeply deliberate and willingly restrained. Does that sound like a formula for success to you?
Why is it that enterprise CEOs often buy companies to drive revenue growth rather than change the culture of the organization to grow the business? Because it’s much easier to buy a company than it is to change culture. Unfortunately for them, buying a company often demands cultural changes to make the combination work. Catch 22, right?
Okay, Meg Whitman, here are my suggestions for getting HP back into rapid growth mode in no particular order.
- Redefine your competitive advantages. They won’t last long anyway. Whatever competitive advantages you have today will be gone tomorrow.
- Find a way to extract new ideas and ingrain them into the business. Empower everyone to contribute ideas. Act on them — fast!
- Reward prudent risk-takers, even if they fail. Encourage them, to try again. Streamline the multiple approval layers and sign-offs.
- Eliminate narrowly defined personnel titles. Leverage everyone’s strengths regardless of title or seniority. People must fill multiple roles.
- Put the real power in the hands of product groups and centers of excellence. Fire the bureaucrats and those who add complexity.
- Inform your subject matter experts that they are obsolete. They better develop new areas of expertise or they’re gone.
- Practice social engineering. Offer continuous feedback and positive reinforcement. Trash those annual reviews. They’re useless.
- Convert your best customers into partners. Find out what they need and sell it to them. Turn them into advocates.
- Connect with your suppliers and outsourcing partners. Leverage them highly. Have internal and external providers compete for business.
- Standardize. Reduce duplication and redundancy … and … make it quick and easy to change the standards — often.
I know it’s easy for me to write this stuff and hard for you to actually do it. I get that. If you don’t like my ideas, do something else. Just do something. The business is dying while you weigh your options. The longer you take to decide, the fewer options you’ll have.