Wednesday, February 09, 2005

The Board and Carly

I am happy to hear this news that Hewlett-Packard has finally gotten rid of its controversial CEO Carly Fiorina. She was a celebrity CEO that led HP down a very adventurous path in the last six years and almost destroyed HP's culture. I personally had friends who quit due to some of her management changes. Remember HP is the first company in Palo Alto that started the Silicon Valley.Nevertheless she is still regarded as the most powerful woman in the business today.

First off "The HP Way", which was the guiding philosopy that borderlined on religion for some, helped keep employees glued together. She apparently has tried to alter it to some unrealised corporate advantage. For example her act of cutting down 6000 jobs in a company which has never heard of a layoff. This definitely brought down the morale of the employees in a bleak economy. Her process oriented ways to change the geekiness of the company was probably a castalyst for all the good ones to leave.In fact if you look at HP's core competency, "The HP Way" is way at the top, just like Mercedes' core competency is its heritage.

People do give her credit for taking Lucent public, but we all know now what a mess Lucent is now. Of course it is difficult to untangle her involvement because the market was booming and Telecom was leading the way for that then.It would be unfair to hold this against her, so we
'll let bygones be bygones.

Next the Compaq Merger. The scion of HP was because he opposed the merger whereas Ms.Fiorina actually is credited to be the Mastermind of the merger. Guess which side the Board listened to.Fine. Now what? HP is gonna take Dell on its home turf? We know how good the competition is in that business.(Hint : IBM recently sold off its PC division to Lenovo of China). To beat Dell, you need to be producing a higher than Dell quality for lower than Dell price which was definitely not HP.

Next she tried to position HP as a e-services company among other things.In short she tried to take on competition from both the low end PC maker to high end enterprise service providers.
I am a witness to the process of IBM edging out HP at our client's location despite some very good solutions.The only reason HP could maintain some figures were due to its leadership in Printers.

Om Malik has an interesting opinion, in that the entire board should be booted because they were the very ones who threw out her predeccesor and supported her.The reason his opinion counts is because of this prophetic open letter addressed to her in 2002.


Vidhi said...

it was good to read this...ur knowledge abt these companies is high!

Paddy said...

Thanks for dropping by "V".
Not that high, its just out of some inetrest I kept following certain events.