Did Hewlett-Packard overreact on Hurd's Fishergate?
Dell, Intel and high-tech's ski lodges
Posted in Management, 10th August 2010 10:02 GMT
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IBM opportunity?
Even if you wanted to argue that Hurd should have kept his job, revving the cost-cutting chainsaw and companion woodchipper near the cubicles and factory lines where HP employees work, I don't think you can argue that Hurd should have had the president, CEO, and chairman titles inclusive. It's not that HP's bench is too shallow or too old, as you might argue is the case at IBM. It is just that it is a bad idea to put that much power in one person except at critical times.
With the health of Steve Jobs open to question, Apple has similarly unclear succession issues, with Jobs being CEO and chairman. Oracle is smarter about this, with a chairman (Jeff Henley), a CEO (company co-founder Larry Ellison) and two co-presidents (Charles Phillips and Safra Catz), spreading out the jobs and making succession a little more clear. IBM has Sam Palmisano in the three top roles and getting closer to retirement, and it is not obvious who might take over, as El Reg has discussed in recent weeks.
So who's potentially in the frame to lead HP?
Ironically, it could turn out that Steve Mills, who has just taken over IBM's converged software and systems group, who could emerge as a front-runner from the outside to run the company.
Mills, who is 58, has run IBM's software group since it was formed in 1995 out of some disparate software businesses. He has a mainframe hardware background and, for whatever it is worth, can talk technology better than any of the other current top execs at IBM, including Palmisano.
IBM surely doesn't want to lose Mills, but at his age, unless IBM does something differently, Mills cannot run IBM because he is only a year younger than Palmisano, who is 59. IBM CEOs have tended to retire at 60, but sometimes hang around as chairman for a year or two after the new CEO is chosen.
I happen to think the IBM reorganization in July that saw four executives, including Mills, get more power was less about succession and more about Palmisano deciding to stay on as well as the other executives as a younger and deeper bench is cultivated to run IBM beyond 2015.
Which means unless HP is willing to shell out some serious bags of cash, Mills is going to stay put.
I don't think that John Joyce, IBM's former CFO who is on the HP board and who ran IBM's services business aground and eventually lost his job is in the running for the top job at HP, as has been suggested.
There's talk about Ned Hooper, chief strategy officer at Cisco Systems, possibly being on the short list, but at 41, Hooper seems a bit green for the job. Cisco chief technology officer Padmarasee Warrior, who has been mentioned as a possible contender, might turn out to be a fine CEO in the long run, but I suspect we will find that out when and if she takes over Cisco after incumbent CEO John Chambers retires.
As El Reg explained elsewhere, Ann Livermore, who runs HP's $54bn enterprise business unit (meaning everything that is not a printer or a PC), would be an obvious top contender for the CEO job. But then again, she was passed over when Fiorina was brought in from Lucent Technologies in 1999 and one more time when Hurd got the job.
David Donatelli, who works for Livermore running HP's enterprise server, storage and networking group, only joined HP last April and seems too new for the job, but he could be a president to Livermore's CEO. Ditto for Vyomesh Joshi, who runs HP's imaging and printer group profit center, and Todd Bradley, who runs personal systems, could also be presidents if HP decides to break the top jobs back up again. Bradley has only been at HP for three years, and was the CEO at Palm before that.
To save face, it would not be at all surprising to see HP anointed a new chairman, pick a top HP insider as CEO, and give the president post to another HPer.
Then, of course, there's the wildcard possibility. How about making Scott McNealy, co-founder of Sun Microsystems and once its CEO and chairman, chairman of the HP board? That ought to liven things up a bit. And Livermore can get on with the job she is capable of, which is running HP. At least until Oracle and HP merge, giving Larry Ellison a real hardware business and the CEO post at HP. ®
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COMMENTS
Golden handshake
"This would have been less disruptive and would not have cost as much as the $40m to $50m in payouts that Hurd will be due with his golden handshake."
Or they could have treated him like any low-level manager who got caught stealing in order to try to nail a booth babe - personal belongings in a cardboard box, and escorted out the door by security.
Crafty?
I'm still far from convinced that this wasn't some big elaborate way for Hurd to escape before the house of cards falls down.
His one plan since day 1 has been "how many people can we fire today?". Now this type of strategy pays off really well. At first.
But eventually you cut too far, and everything comes crashing down.
He's taken his bonuses and now he's being paid off before his reputation as a one-trick pony is revealed.
Outcomes matter..........................
While the fact that he went in response to expenses disscrepancies and a seedy, failed sexual daliance might make us smile and enjoy his humiliation, to the majority of HP staff it doesn't really matter why Hurd was pushed out. The fact that he has gone is good enough.
Yesterday we were told that the payout he received was to ease a rapid separation. That does stick in the throat for a workforce that has earned less year on year since Hurd arrived while Executive compensation went up by over 200%.
Hurd was a one trick pony. The workforce hated him, even the sycophants that did well under him could see that. This may well be just an excuse to get rid of him. But that doesn't matter. What does matter is that they need to force a proper separation of the President, CEO & Chairman's roles and get some sense of governance of the CEO back into HP.
A bit of innovation by investment rather than acquisition and some proper investment in OnShore resource wouldn't hurt either. That rules Livermore out for a start.
Steve Mills may be a sensible way to go. At least he'll understand that boxes and ink are pretty much generic so the customer goes for the cheapest with support. Hurd, in his arrogance, spent a fortune on EDS and then stripped it of morale, talent and ability. Mills, as a software man, might just have the nouse to do something to fix that blindingly idiotic error.
He was pushed.....
Just ask corporate customers what they think of HP these days.... it will become obvious that something had gone horribly awry at HP and why Hurd was probably pushed out, with much hast by the board of directors. Over the past 5 years all HP customers saw were cost cutting, retrenchments, office closures and an inability to execute. IBM must have thought Hurd was the best thing since sliced bread... all they had to do was sit and wait as HP's customers came knocking at their door.
In time HP will probably recover from their 2nd bad CEO in a row, but hopefully the era of a one trick pony has ended and real leadership will appear. If not HP will indeed land up being nothing more than a division of Oracle Corporation or split up into various individual companies!!!
Building sites in nice places same as fudging expenses?
I disagree. I am an alumnus of the Northern Colorado sites. You can recruit REALLY smart, hard working employees to places like that. Easy commuting, inexpensive housing, great recreation relatively nearby (2-4 hrs drive), very good schools in collage towns. If this were just about fudging expenses, why not just attend "customer visits" to Lockheed-Martin or the other big businesses in Denver? And Denver is closer to the big ski resorts than Loveland or Ft. Collins.
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