Well cover the major problems first and then talk about who is needed to address them.
Mark Hurd exceeded Carly Fiorina on most positive metrics but what we havent really talked about is that he also exceeded her in negative ones (it is worth reading Chuck House's blog for background). Well talk about two here and the first is employee loyalty.
While Hurds own compensation went up significantly -- particularly with regard performance bonuses -- the employees who did the actual work saw theirs fall as profit sharing was eliminated and salaries were reduced. In sum, the employees paid out of their own pockets so their CEO could have even more money and this clearly didnt sit well with the troops. Evidently over 60% indicated they would leave if given the opportunity, which is a bad milestone for a company that historically attracted employees because it was safer than higher paying alternatives.
This disloyalty, as the market recovers, has turned HP from a company where headhunters had difficulties to one of the biggest pools of available talent.
Cisco went into servers and Oracle bought Sun, taking two of the most powerful partners that HP had. And with Oracle went one of their advantages against IBM, putting these folks in the liability column. On the PC side the moves were even more frightening as historic parts suppliers Acer and Asus emerged as surprisingly fast-growing PC OEMs. And Lenovo, after acquiring IBMs PC business and dealing with a few issues of its own, also increased in power dramatically.
Dell slid to number two but largely because they bet too heavily on business and not entirely because of HPs efforts. Even Microsoft, who had been a strong partner, has moved more into the competitive ranks as a result of HPs purchase of Palm.
Under Carly Fiorina HP was long on vision but short on execution, under Hurd HP was long on execution but short on vision. This suggests that like IBM, HP needs more than one person covering the top job to cover both vision and execution for the company. A strong CEO with vision with a strong COO underneath them who has their back and helps keep them from doing stupid things.
In addition, in both people there likely needs to be a strong ethic of taking care of the employees, because no matter how capable the folks at the top are, a company with hundreds of thousands of employees cant be run without the strong help of those employees in peace, let alone in war. This time the selection should be made to ensure the employees arent given short shrift.
But one other skill likely needs to be in the top ranks and that is the ability to compete in Europe and Asia where many of HPs future competitive battles will be fought. China is growing to be a massive market and one that likely will need the top executives focus if US centric HP is to be successful there.
So HPs board doesnt just need one person, they need a team to fight an increasing number of battles, keep the wars from proliferating, and to turn HP back into a place where employees supported their executives rather than were frightened of them. No one person can do that job as Gerstner, Fiorina, and Hurd have demonstrated. All eyes are now on Mark Andreessen and HPs board. IBM in the 90s demonstrated that this can be done and HP is in better shape than IBM was. The question now is will it.
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