Share The Pain
Another Legendary Company
Hewlett Packard has a long and distinguished history. Like IBM, they have been known for some of the brightest engineering minds in the industry and have gained a reputation as being one of the most stable, reliable companies around. They have made a few missteps in the past, but for the most part, they have held up very well indeed. That is until recently.
HP has always been an amazing company. Anyone familiar with the story will tell you that they have been a model corporate citizen that is revered by their employees and the communities they affect. The company was started by some very pragmatic and thoughtful people, and their way of doing business within the company would become so legendary, it resulted in a book called ďThe HP WayĒ by Dave Packard. It really stands out as a guidebook of things to do right. They treated their employees as mature adults, gave them the freedom to explore new ideas and the respect to act upon them. They focused on taking good care of their employees with excellent benefits, flexible work hours and profit-sharing so they could benefit directly from the successes of the company.
They have always grown slowly and stayed focused, in large part because they had always promoted intelligent, long-term employees from within. Because those employees understood and believed in the traditions of Hewlett Packard, continuity was assured, and the workforce remained focused and driven to succeed the right way, from the inside out. Sure, they had made purchases of companies before, but only when the purchase would add to HP in a way that did not diminish its culture and conflict with their vision and well-understood goals. When they made measuring devices for the military, they sought to branch into such devices for the medical field as well, a complementary market that supplemented their existing infrastructure. From all accounts, it was a massive success. When they wanted to find a way to output the information from their measuring devices, they purchased a company that would later be the foundation for their plotter division. Every acquisition seemed to be rooted in intelligence, with a clear and obvious understanding that the joinings were of a nature that complemented their existing infrastructure without much, if any, redundancy. The philosophy was sound and served HP well for all of the years it has been in existence.
A Fork In The Road
Here we sit in 2002 and HP is facing a very serious problem. In 1992, HP promoted another long-timer, Lew Platt, who had served with the company since 1966, to the position of President and CEO. He continued the legacy for some time, and did well during the tumultuous decade. But it was toward the end of the 1990ís that things seem to have started going wrong. Iím not sure if the cause of the shift was pressure from the board of directors or not, but towards the end of his reign, Mr. Platt seemed to lose focus and direction. Co-Founder Dave Packard had recently passed away and HP had become one of the 30 stocks that comprise the Dow Jones Industrial Average.
In 1999, the HP board of directors took charge and decided to spin-off part of HP into a new company. Agilent would take with it the medical, chemical, measurement and component business, meaning that for the first time HP would be without the foundation that helped start the company. At the same time, they board replaced Mr. Platt with an outsider, Carly Fiorina.
She had never been an HP employee and had no sense of what the HP Way was all about. Instead, she came from the world of telecommunications, which tended to be a reactionary, fly by the seat of your pants kind of industry. AT&T had not been a stable company since deregulation, and Lucent, well, what can you say about Lucent? Paper Giant with an appetite to grow through acquisition maybe? They have already spun off a part of themselves even though they are only 5 years old, a move that does not seem to have inspired much confidence. So, the curious and ill-conceived hiring of Fiorina seemed a horrible fit at the time, and sure enough, this fateful decision has been causing headaches ever since.