BW's Businessperson of the Year

Hewlett-Packard CEO Mark Hurd's single-mindedness is paying off for the tech company in profits that will be hard to beat in 2008

by Louise Lee

Mark Hurd, chief executive officer of the world's largest technology company, doesn't chase the public limelight. He doesn't go to high-profile international business conferences like the upcoming World Economic Forum in Davos, Switzerland. He doesn't flaunt a personal flair or high-flying style. All of Hurd's energy, it seems, is trained completely on one and only one task: leading Hewlett-Packard (HPQ).

That laser focus is paying off. For the fiscal year ended Oct. 31, sales rose 13.7% to $104.3 billion, and earnings jumped 17% to $7.3 billion. Those numbers have translated into sharp gains for investors too: For calendar-year 2007, the Palo Alto (Calif.) company's shares rose 23% to $51.36, compared with a 13% gain for IBM (IBM) and a 2% decline for Dell (DELL). "Businesses at HP that were problematic have been cleaned up," says Roger Kay, president of market researcher Endpoint Technologies Associates. "It shows the whole company is doing well."

No wonder BusinessWeek editors and readers have selected Hurd 2007 Businessperson of the Year. The low-key executive, who has quietly cleaned up a mighty mess at the venerable Silicon Valley bellwether, beat out some big names on our list of top managers, including tech neighbor Steve Jobs and media mogul Rupert Murdoch. While legitimate arguments can be made for many of the names on our list (BusinessWeek.com, 1/2/08), Hurd stands out for his remarkable skill navigating the intensely competitive and complex computer business. During his three-year tenure, HP has become a rare example of a tech company succeeding in the delicate balancing act of selling to both consumers and corporations.

Staying on Track

Hurd, 50, is a classic example of a no-nonsense operator hammering away at a struggling business to get it moving in the right direction again. The marching orders: squeeze out costs and improve efficiency. When Vyomesh Joshi, who leads HP's printer business, told his boss he was moving the entire team that works on black-and-white laser printers from Boise to China, where most of that product's sales potential lies, he got Hurd's enthusiastic approval, recalls Joshi.

Taking a page from Jack Welch's book, HP has become more disciplined and pulled out of businesses where the company isn't the No. 1 or No. 2 player, such as digital cameras. "The really big thing for us is to have built a long-term plan and long-term strategy for the company, and we stayed on track with that," says Hurd.

Indeed, a lot went right for Hurd and HP in 2007. With a 19.6% worldwide share of the PC market, HP stayed firmly at the top of the heap, according to researcher IDC. (Dell, which lost the lead position to HP in 2006, currently has a second-ranked share of 15.2%.) How has HP managed to turn around a business that was hemorrhaging just a few years ago? It embraced a strategy known inside the company as "decommoditization," or, in plain language, casting PCs as more than mere boxes looking just like the next guy's. HP redesigned its machines, infusing them with a slew of features, such as one that lets customers play a DVD or listen to music without booting up the entire machine.

Building a Software Portfolio

HP also worked on the look of its PCs, giving some a glossy black finish meant to blend into the living room or home media room. And it launched celebrity-laden marketing campaign. Consumers have responded. According to research firm TechnoMetrica Market Intelligence, 14% of PC buyers cited HP as their preferred brand, up from 9% a year ago.

Hurd has turned HP's software business around, too. In 2005, the software unit posted an operating loss. The company simply didn't have much of a software portfolio to interest corporate computer buyers. But a string of acquisitions, such as this year's $1.6 billion purchase of Opsware, a developer of software to help companies automate their data centers, helped bulk up the business. In 2007, revenue for the unit grew a healthy 78%, to $2.3 billion, and operating income was $347 million, up from just $85 million a year ago.