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Mark Hurd's Self-Education in the HP Way


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June 20, 2005

Mark Hurd's Self-Education in the HP Way

Peter Burrows

In a story on Hewlett-Packard in the latest issue of the magazine, I mentioned that Mark Hurd has made very few references to HP's proud heritage as he's made the rounds introducing himself to the company's employees. Insiders say his message is all about the need for sharper cost-cutting, thicker margins and more market share--not on the soft topic of rehabilitating HP's once-famous corporate culture.

But if he's not talking about the HP Way, Hurd has reached out to key people from HP's past.

Two sources tell me that Hurd has met with representatives from the David & Lucile Packard Foundation, and the William & Flora Hewlett Foundation--despite the fact that both have vastly reduced their holdings since opposing HP's purchase of Compaq Computer in 2002. Indeed, Hurd has also met with Walter Hewlett, the son of the co-founder who led the historic proxy fight to kill that merger, and who was then kicked off HP's board after he sued to have the results of the shareholder vote overturned. And that's not all. Hurd has also arranged to lunch with three former HP executives--former CEOs John Young and Lew Platt, as well as former chief operating officer Dean Morton--in July.

I haven't been able to interview Hurd, so don't know his reasons for reaching out to these folks--most of whom were personas non grata during the tenure of Carly Fiorina. But it's smart. For starters, they can help him understand what made HP great back in the good old days, and to understand the challenges that led to HP's not-so-great old days in the late 1990s. Platt, for certain, has much guidance to give. While he seemed badly out of step during the Go Go 90s, his reputation is once again on the rise--not just because of the problems his successor, Fiorina, ran into at HP, but because of the key role he's had in the recent resurgence of Boeing, where he is chairman of the board.

Then there's Walter Hewlett. He no longer owns any HP stock and has stayed religiously out of the limelight since nearly defeating the Compaq deal. But Hewlett's arguments resonated with a great many shareholders and employees. Indeed, he argued during the proxy fight that HP shouldn't chase growth at the expense of profits. Instead, he said HP should "Focus and Execute" on its best, most lucrative opportunities. From what we know of Hurd's emerging plan, that same tagline could work for his approach.

Even if Hurd learns nothing from these old-school HPers, reaching out to them is good politics. After that divisive proxy fight, Fiorina talked about wanting to "find common ground" with opponents of her tactics. Not much real progress was made, however.

That's not that surprising, given all the bad blood that was generated. But Hurd is smart to use his clean slate to reestablish torn ties with HP's past. He's going to face daunting challenges in the months and years ahead, that will require difficult decisions. Already, HP retireers are worried about their pensions and other benefits. With such a task at hand, he'll need as many people as possible within the HP community pulling for him.

04:06 PM

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"Focus and execute" implies that HP's strategy is sound. Which it's not. It's a nice way of shifting responsibility down and not up.

Posted by: matt at July 5, 2005 09:53 AM


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