Companies & Industries

Charlie Rose Talks to Michael S. Malone


What questions do you have about the departure of Hurd?
The biggest question is why. There are several scenarios, and none of them have quite played themselves out yet. Here we have a CEO who supposedly resigns because of misbehavior regarding this actress for whom he apparently dummied up some expense forms. That's the original story we heard. And the reaction is, O.K., you know, that sounds possible. If he committed a crime, then he should go. But he wasn't fired; he's allowed to resign with a severance package worth $40 million or more, which suggests that maybe there isn't a criminal case against him. So why did the board ask him to resign? It appears that nothing was ever consummated with the gal; and secondly, the threat of sexual harassment doesn't seem to be as clear as we thought at first. Finally, if he did bad expense accounting, it seems like he may have only done it once. That's pretty small potatoes to force the resignation of a guy who's just turned your company around.

The second scenario, and this is the one fueling rumors in Silicon Valley, is that the other shoe hasn't dropped, that the board has more information of a deeper criminal nature that hasn't come out yet, and that they allowed Hurd to leave without having to expose all this dirty laundry. Another scenario is that the board is just so scarred and gun-shy after all the scandals of the last six years, starting with Carly Fiorina and the revolt of the employees and the whole going-in-the-garbage-of-reporters scandal, that when faced with a potential additional scandal—and one so deeply against the HP culture—it choked, ran scared, and said, "You got to go," just to try to bury this thing as quickly as possible.

The final scenario is that the board used this moment to get rid of Hurd. For all his incredible success, people are talking about what a bad boss he was. Chuck House, who was kind of the golden boy for 30 years at Hewlett-Packard (HP) and is at Stanford now, called Hurd a thug today in the San Francisco Chronicle's SFGate.com.

Was there any great conflict between Hurd and the board of directors?
Well, you know, there's this huge ambivalence about Hurd, that he's not a nice guy, he's a corporate tough guy. You can ask John Doerr [a partner at Kleiner Perkins Caufield & Byers], has he ever seen Mark Hurd publicly in Silicon Valley? He's sort of the invisible man with his hands around the throat of HP, and the ambivalence comes from the fact that, yeah, nobody really likes him but, by God, he did a hell of a job. He took a dinosaur that was going nowhere and in a serious employee crisis and...made it into the biggest electronics company ever.

What's the impact of his departure?
Short term, I think very little. HP is strongly positioned to get through this economic downturn. Long term, the question is, which way does HP go? Does it stay like this—you know, not a very fun place to work but a real competitor? Or does it go back to the old HP—one big happy family that's innovating in 20 different markets?

Is there any obvious choice to lead this company?
No, you can probably count the candidates in the entire world on both hands. My hope is, for the sake of all those tens of thousands of HP employees, that they find somebody inside who is capable of competing but also understands the culture.

Who is playing the most powerful role in terms of the future of HP?
That's a really hard call. This is a very strange company. What goes on inside the board and the executive offices of HP is kind of invisible to the outside world. It's a strangely spaceless company. In many ways, Cisco (CSCO) is more HP than HP is now.

What do you make of Larry Ellison's public support of Hurd?
Very interesting that Larry would even engage himself in that conversation. I mean Ellison doesn't have the purist history, and Oracle (ORCL) has its own reputation. In fact, when this whole thing broke, I thought to myself, you know, if this had been Oracle, it would have been laughed at. It's sort of de rigueur over there. Maybe Larry took it personally. The one thing about Ellison is he seems very loyal to his close friends.

What happens to Mark Hurd?
It's hard to imagine his image being so tarnished by this apparently minor matter that he's going to be unemployable. He may choose not to work ever again, but I would think he'd be in pretty big demand. If you can take a company like Hewlett-Packard that was just stalled in the water and turn it into a world-beater in just half a decade, that's a hell of a skill.

Watch Charlie Rose on Bloomberg TV weeknights at 8 p.m. and 10 p.m.

Emmy Award-winning journalist Charlie Rose is the host of Charlie Rose, the nightly PBS program.

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