Posted on 05/21/2002 9:52:49 AM PDT by spald
The H-P-Compaq Mess Isn't All Carly's Doing
By MICHAEL MALONE
As part of its campaign to woo shareholding employees to its proposed merger with Compaq, Hewlett-Packard management put together a glossy road show. A high point of the extravaganza was the appearance of Richard Hackborn, H-P board member, former chairman and company hero, who solemnly announced that "unless this has the full commitment of employees it's not going to work."
The vote, as we know, passed thanks to some last-minute wheeling and dealing with institutional investors by H-P CEO Carly Fiorina. But H-P management not only didn't get the near-unanimity it was seeking, it didn't even get a majority of H-P employees. In what was certainly the single most important decision in the company's 65-year history, the CEO couldn't get half of the company's employees to support her.
That's not much of a mandate for a company about to embark on one of the largest and most difficult mergers in American business history. We can only wonder how many anti-merger activist heads will roll in the forthcoming round of 15,000 layoffs.
Hewlett-Packard is exhausted. In the last year it has bled away thousands of employees, smeared one of its own board members (and son of a co-founder) with vicious ad hominem attacks, watched Wall Street give a thumbs down to the merger and seen its own employees hold a protest rally at the polling place.
Worst of all, Ms. Fiorina has destroyed the H-P Way, the most celebrated of all management philosophies. This bottom-up/trust people attitude was the main reason most people worked for H-P instead of casting their lot in the riskier, but potentially more rewarding, world of Silicon Valley just outside.
Ms. Fiorina has replaced this rich culture with ... well, nothing really, except a few empty symbols like the Packard garage, and a half-baked Jack Welch philosophy of periodically shooting underperformers. CEOs all over Silicon Valley must have spit out their lattes when they read that Ms. Fiorina spends a whole half day each month in the labs. So much for H-P innovating its way out of this mess.
Now Ms. Fiorina is asking H-P to undertake the assimilation of Compaq, an even more dysfunctional company. It is a task that, even on a smaller scale, has destroyed companies that actually had good morale and a competent CEO.
In a wiser world, Ms. Fiorina would have been fired soon after Wall Street sneered; or at least when it became obvious that the merger was more popular with H-P's competitors than with its own employees. But then, the closest most H-P employees have ever been to Ms. Fiorina is watching one of her videos.
It's easy to blame this whole disaster on the hapless Carly. She is a classic bad boss for our time: brilliant enough to dazzle the old men on the board of directors and the young technicians at the brokerage firms -- but devoid of the imagination, humility and empathy that are the hallmarks of true leaders. Bill Hewlett and Dave Packard used to sit with everybody on a bench in the cafeteria.
But then, Ms. Fiorina was hired to be a torpedo aimed at a becalmed H-P. When Hewlett-Packard sinks, as it likely will, she will go down with it, her reputation destroyed. But of greater importance now is to ask: who shot that torpedo?
The bizarre answer is that it was H-P's greatest hero, Richard Hackborn. It was Mr. Hackborn who passed over a generation of young H-P executives, including the redoubtable Ann Livermore, to go outside -- to Lucent, of all places -- to find his candidate. It was Mr. Hackborn who extolled Ms. Fiorina's qualities before the board, and who stood behind her the last two years as she dismantled the H-P Way, alienated employees, and embarked on the disastrous merger with Compaq.
Hidden behind his Teflon reputation as the Company Savior, Dick Hackborn has quietly become H-P's Alcibiades: the beloved leader who peevishly betrayed those who entrusted their lives to him.
Mr. Hackborn is best known for two acts -- one moment when he showed great leadership and one when he declined it. The first was Mr. Hackborn's brilliant career at H-P Boise, where, as the company's leading maverick, he launched the firm into the printer business, a stroke of brilliance. The second was when Hewlett and Packard, facing retirement, searched within H-P for a new CEO to lead the company into the future. Not surprisingly, Mr. Hackborn was offered the job and turned them down. He preferred Boise to the hot seat in Palo Alto.
After such an extraordinary decision, most people would have left the company. Silicon Valley is, in fact, filled with ex-H-Pers (including myself) who esteem the H-P Way but couldn't live under it. But Mr. Hackborn once again did the unexpected -- he stayed at H-P, becoming the most senior possible corporate maverick: chairman of the board.
That's when he brought in Ms. Fiorina. One reason the board accepted her as CEO was the belief that Mr. Hackborn would act as a check on Ms. Fiorina's personality. Instead, he stepped down, handing over the keys to the most complex corporate culture on the planet to a newcomer constitutionally incapable of understanding it.
Once more Mr. Hackborn spurned the hot seat. Only this time he left H-P with an unchecked, unfit chief executive under whose management the company will almost certainly fail. But, as his words to the retirees show, Dick Hackborn already knows that.
--Mr. Malone, editor-at-large of Forbes ASAP, is author of "The Valley of Heart's Delight" (John Wiley & Sons, 2002).
Updated May 21, 2002 9:51 a.m. EDT
PERHAPS this consolidation, plus Linux (if it ever becomes useful to the average user), will make the hardware guys more resistant to being run over by Mr. Gates and Co. What's Bill going to do, make his own PCs (don't put it past him).
One thing that gets lost in the "Let's hate Carly" chanting is that, prior to Carly, HP had changed from a nuts & bolts technical company run by buttoned-down, common sense based engineers to a company where the management embraced every New Age, West Coast management cliche imaginable. Corporate decisions weren't being made by executives, but rather by "teams" made up of employees from all levels of the corporation.
It seems clear -- to me, an outsider -- that the anti-Carly hatred isn't hatred built on anything rational. It's typical "Oh, oh, back to the real world" hatred of an attempt to bring reality back to yet another stupid corporate adventure into "Employees Rule" corporate socialism...
Mark W.
FRegards,
PrairieDawg
Take a close look at the Xbox. It is a cheap PC of sorts. I haven't seen one with a 1024i TV hooked up, but he owns WebTV and Xbox so he *is* already selling "postPC" computers. 3 million of them so far. (PS2 has sold 30 million, he has a way to go to hit his desired position of #1). It has DSL capability built in, he's launching a private network for them this week. He's still ahead of the next curve. Amazing.
It's a shame. I always like playing with my Wang, too.
I interacted with them until about a year ago and didn't get this feel. I was always impressed by the professionalism of the people I dealt with, good solid engineers and managers. I would have described them as "plodding" not "socialist". Some of what you describe may have taken place though.
In any case lets stipulate that HP was off track, I think they were. The question is "is Carley moving it in the right direction". The only reasonable answer is: No. Stock, products, employee retention, customer satisfaction, the street ... every indicator is bad.
Maybe they did need to be shaken up or changed, but the changes she has put forward have not worked and the company is far, far worse off than it was. It may not be recoverable. I think the board should fire her soon as a good will gesture to everyone who is still hoping they pull through. She has made herself too much of the issue for the company to prosper under her leadership. Sad, but she must go.
Give me a break. You want a company as solid and good and run for decades by Ward-Cleaver-looking Purdue and MIT mofos with pocket protectors, to all of a sudden, be run by a girl? Right.
I have used HP stuff in the lab, at home, in the operating room, and by the computer, for years. It was good stuff, very thoughtfully engineered and made, and carefully presented in its documentation.
This girl couldn't program my HP-48G calculator, let alone some of the more complex HP devices.
And just to be hip and PC they let a cool girl run the company.
And, BTW, a dumbass girl who knows no technology, and who probably went to some ridiculous 1980s business school where they taught that the only meaningful thing companies and executives could do was merge.
The name Carly, by itself, should have disqualified her as a flaky product of the fad-loving, thought-vacuum, boomer culture.
All I can say is, hey HP:!! Smooth move, Ex-Lax!
Ever hear of Lucent Technologies?. They hate Carly there as well. In 3-5 years, HP will look like Lucent.
---max
PC's are peanuts. Too make any kind of money selling them, you have to sell a ton of 'em. They are a high volume, low margin commodity.
---max
I've always been an HP printers user. If the company really goes down the tubes, I don't seen how the printers can escape the mess. Not unless they are spun off early to other, competent management, and I doubt if that is likely. When the rank and file are disgruntled, and money is short, and jobs are at stake, quality is bound to suffer in every area. Too bad.
Carly is clueless.
I remember the days as a young nerd when I use to lust after their amazing calculators....oops, did I just say that out loud?
I hope you're joking. But I really don't think you are. It is long past time to get these whores out of the business world.
Carly has a bachelors degree in medieval history. Doesn't that count for SOMETHING?
I hope you're joking. But I really don't think you are. It is long past time to get these whores out of the business world.
Unfortunatly Mr. Taco wasn't joking. She has a degree in medival history (from Stanford I think) and an MBA from U. Maryland. I guess she can now "lop off some heads" like she read about during college.
Regards,
PrairieDawg
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