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‘Fear and Loathing at HP’ – say internal docs

The falling Fortune of Fiorinaville

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Exclusive Internal documents disclosed to The Register reveal an HP beset by Fear and Loathing; Fear of the sack, and Loathing of what's perceived as Executive Greed.

The revelations of internal strife come as a result of HP's exclusion from Fortune's 100 Best Companies to Work For list. HP has tapped a consultant to try and rectify what employees see as a lack of credibility with management, according to the docs.

When Carly Fiorina took the helm of HP in 1999, the company held the 10th spot on Fortune's annual survey of top corporate cultures. Since 1999, however, HP has slipped down the list every year with the worst setback coming in 2004 as HP failed to make the cut at all. HP appears to have taken the internal criticism to heart by hiring a consultant to review the Fortune results and identify what went wrong.

Fear loves this place

Internal documents show that HP fell short of the 100 Best Average in a number of categories with management's credibility being the most critical area of concern for workers. Just 44 percent of the 250 employees surveyed said they felt HP management would lay people off only as a last resort. This compares to 84 percent of workers on average at the 100 Best companies. The fear factor at HP is understandable given the tens of thousands of layoffs that have occurred since the Compaq acquisition took place in addition to a recent trend of moving US jobs offshore.

HP workers also vented in the 'Respect' portion of the survey. Only 53 percent of HP employees said they enjoyed special and unique benefits compared to 82 percent of employees at the 100 Best companies.

HP was also punished in the 'Fairness' category with only 43 percent of workers saying they thought top management was paid fairly in relation to the rest of the organization. This compares to 66 percent at other companies. In total, HP fell below the average in at least 7 categories, ending up a total of 12 percent below the 100 Best average.

HP's internal analysis notes that other IT heavyweights ranked quite prominently on Fortune's list. Microsoft took the 25th spot, Cisco grabbed the 28th spot, Intel held 46 and IBM ranked at 72. Microsoft and Cisco often do well in these types of surveys with neither company performing massive acquisitions or massive layoffs.

After placing 10th in 1999, HP fell to 43 in 2000 and then 63 in 2001. The company was not eligible in 2002 or 2003 as a result of the Compaq buy.

The New HP Way

The results are clearly painful for HP - a company once celebrated for the "HP Way." Since its founding in 1939 by Bill Hewlett and Dave Packard, HP has largely been hailed as a model of American corporate culture. The two founders are said to have originated the idea of creating an open workspace broken up by small cubicles to encourage communication between workers. Hewlett and Packard also tried to give employees "special and unique" benefits where possible.

"HP offered groundbreaking perks almost from the start," writes Peter Burrows in Backfire, an account of Fiorina's rule at HP. "As of 1941, the company paid an incentive bonus to every employee. Originally tied to hitting production targets, it later became a profit-sharing plan. . . HP extended the program to cover every employee - and this was just a start."

The new HP, however, may be listening to feedback from workers. For example, Fiorina's total pay for 2003 was cut by 38 percent compared to 2002. After missing performance targets in two quarters, Fiorina will have to tough it out on $6.6 million instead of the $10.7 million earned in 2002.

HP is also reworking its board with former Boeing CEO Philip Condit, former Vodafone AirTouch Chairman Sam Ginn and Sinvestor Thomas Perkins stepping down. Some industry watchers have called for HP to bring back Walter Hewlett - son of Bill Hewlett - to the board.

HP appears to have tapped famed contractor Debbe Kennedy for the "how to get back in Fortune's good graces" consultation. She is listed as the author of the report in the property tags. A voicemail message at Kennedy's number says she is an onsite consultant for HP.

The about section of Kennedy's Web site is full of fanciful garble about her consulting work.

"Kennedy's work and leadership influence have contributed to communications solutions for senior management across many corporate functions, marketing, professional services, diversity, women's issues, management development, employee development, human resources, strategic planning and implementation. She knows the leader's journey as you do."

Whatever that means.

Of particular note, is the 1997 HP video by Kennedy called The Best Place: An HP Global Diversity Video.

We're told that this was the precursor to next year's HP feel good story Leave No Body Unburied: Brutalizing Your Workforce in a Globalized World. ®

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