Meg Whitman and HP: Most Likely to Succeed: Page 2

After a run of unsuccessful CEOs, Meg Whitman appears poised to greatly boost HP’s fortunes.
Posted December 14, 2011
By

Rob Enderle


(Page 2 of 2)

Her background at Proctor and Gamble should help her better manage HP’s massive number of brands and excessive number of products. Her most visible effort was to take the crippled Palm organization and place it directly under her control in an effort to personally rebuild it. This was likely the only thing that could possibly recover that critically damaged asset and eventually restore its value. This is consistent with a brand strategy background. You’d eventually expect to see her deal with the redundant Compaq brand and lines and the excessive number of products in several HP divisions.

HP’s image needs rebuilding and one of the things you learn at Disney is how to effectively manage image. Walt had a concept of on-stage and off-stage and that as long as you were in view or on the clock you were on-stage. This is something that Mark Hurd clearly didn’t understand or he would have retained his job.

Part of this training is the importance of marketing and image management which is even more powerful than that at Proctor and Gamble and she will likely pull on this background strongly as she rebuilds HP’s image and turns the company back into one known more for its products and philanthropic work than the latest scandal. In particular, from Disney would be the clear knowledge never to cross certain lines and make a mistake like the one that got HP in trouble for Pretexting, or identity theft.

Hasbro teaches the importance of children and these customers form HP’s seed corn. The iPod was largely driven by kids who initially wanted it. Consumer products have languished a bit under prior administrations. Carly Fiorina was tricked into giving up HP’s iPod competitor in order to get closer to Steve Jobs and that ended badly. HP bought Voodoo PC, a PC Gaming company, and killed it. HP’s efforts with its Palm Tablet, the Touchpad, were catastrophically inept, nearly wiping out that $1.2B asset.

Whitman’s experience at Hasbro should prevent her from repeating these mistakes and to better see the potential for what may be HP’s iPod opportunity. The WebOS, played right, could become HP’s iPod and the skill for seeing that opportunity likely would come more from her time at Hasbro than Disney. To be clear, the next iPod might be a platform and not an individual product and there is precedence for this with Windows.

Finally, HP is an umbrella company, which means the CEO is mostly a super investor serving as operational proxy for the board. Each of HP’s divisions is a company in and of itself. This requires some deep asset management skills and here Whitman’s stint at Bain & Company becomes important.

One of the leading advisors to large scale companies on management and Bain is also considered to be one of the most prestigious in this critical (to an umbrella company like HP) field. Whitman’s time there should have helped her develop the skills and contacts necessary to step into various different businesses and quickly assess what needs to be done.

Wrapping Up

HP was left crippled by a series of CEOs who initially were unable to act, eventually were excessively focused on their own advancement to HP’s detriment, and finally lacked the necessary competence to run the company. This left a bureaucratic nightmare of poor marketing, critically low R&D, record low employee loyalty, redundant products, and the seemingly monthly scandals or information leaks.

This will benefit from a set of skills she acquired by working at Bain on large scale corporate management, Disney on image and the importance of marketing and R&D, Proctor and Gamble for brand and product management, Hasbro on the importance of children as customers, and eBay on how to transition a company back into a global powerhouse. Whitman may represent the closest thing to a perfect positive storm in executive leadership who arrives at the right place at the right time in HP’s history.

We top this all with Whitman’s experience in politics where you learn to carry a message, see the bigger picture, and can fend off attackers who fight dirty. Particularly against Oracle, this last skill may be unmatched and uniquely valuable.

Progress so far has largely been positive to date. Palm has been stabilized and now is viable again; HP is the premier vendor for Microsoft’s Office 365 effort, suggesting that this relationship is improving; and HP has reaffirmed their PC unit. This amount of progress so soon does suggest she hit the ground running but that there is still much of the job to do.

In the end the question shouldn’t be whether Whitman is right to run HP but why she wasn’t hired much sooner.


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Tags: HP, Meg Whitman


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