Much has been appropriately written about Carly Fiorina and the problems at
HP, which she certainly contributed to generously.  However, Carly was
really just the symptom (and messenger from the Board of Directors), not
the root cause of HP's woes.  Carly was an out of control change agent that
accelerated the process of HP losing its (HP) way.

Carly promoted herself at HP as though she was a special brand name or
product line that needed to become recognized in every household.  In fact,
she became so involved with her own self promotion that she had little time
to focus on the companys problems day to day.

The real seeds of destruction were sown years ago when members to the BOD
were selected over the last 15 years or so.  New board members were not
properly taught the HP Way and made to understand the nature of Hewlett-
Packard and what made it successful.  To whatever extent they were exposed
to this philosophy, they obviously did not embrace it.  Most of them came
from typical corporate cultures that had no such philosophy.  Shareholder
value was their primary focus, closely followed by concern for market share
position.  The HP Way rejects this short-sighted, short term thinking,
particularly in an industry that demands constant innovation, such as is
supposed to be implied by the phrase: HP Invent.  This resulted in a group
of directors that thought that the HP Way was a problem inhibiting the
company and therfore it needed to be dropped.  Furthermore, they decided
that the best way to do this was to bring in an outsider with little
understanding of the company or the industry it was in.  Well the board got
what it sought, big time change to the point that the elements of what made
the company tick were lost.  In short, they broke it, like a kid with a new
toy.

HP didn't need violent change; it needed steady hands on management with a
strategic vision of where to lead it and a stabilizing philosophy.
Instead, they focused on being #1 in market share (even buying another
company to do it - which lasted only briefly), instilling fear into every
employee for their job, selling me-too products largely developed by other
companies or organizations (mostly software, but some hardware too).  They
lost touch with their customers, as well as their employees.  They
destroyed brand loyalty by causing even long time customers to question
HP's committment to whole product lines, not just individual products.
They obsessed about competitors such as Dell and IBM and thought they were
capable of competing with them, when in reality they were no longer
equipped to compete with either.

It is my expectation that HP's board still does not understand all this and
will once again bring in some outsider with instructions to shake up the
company some more, perhaps by carving it up and selling or spinning off
pieces to satisfy Wall Street mentality.  This is not what HP needs.

"Hiring a well-known outsider to lead a company is a crutch boards use when
they have failed to develop leadership within the company and plan for
succession, said Susan Schultz, CEO of the Board Institute, a Web-based
assessment tool for boards.  Shultz, like many who have studied leadership,
argues that a company is best off finding a CEO from within the company."

The abrupt dismissal of Carly indicates that the BOD failed and is hastily
trying to put together some sort of salvage operation.  But the trouble is
that the same thinking seems to be around as it was 6 years ago.  An HP
that can't grow its own management is deeply, if not fatally, flawed.

Probably the most fascinating thing about what has happened to HP (at least
to me) is how the loss of control of the BOD could have such devastating
results on a previously successful and well managed company.  HP used to be
an icon for good management held up for inspection in business schools.
Today, sadly, it is only an example of failed leadership.

I ran across the following article while doing some unrelated research.  It
captures the essence of the HP I knew when I worked there and shows what it
was, compared to what it has become, better than anything I have seen
recently.  This article was published around 1998 in the Stanford
Magazine.  It is very enlightening and even though it pre-dates todays
problems, it seems to forecast them well.

http://makeashorterlink.com/?F2B82277A

John Wolff

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