Hewlett-Packard loses Mark Hurd

Hewlett-Packard loses Mark Hurd
07/08/2010

HP CEO Mark Hurd resigned on August 6, amid refuted allegations he falsified expenses to cover up a relationship with former actress, Jodie Fisher. In typical Hurd style, it all happened very quickly.

In the interim before Hurd's replacement is announced, CFO Cathie Lesjak became the second female CEO at HP in a decade. (Patty Dunn was Chair before Hurd took over.) She said: "One thing changed in this company on Friday, and that was the CEO left. The rest of the company has not changed."

As we explore in the Summer issue of Professional Outsourcing, Hurd's success - some might say ruthlessness - in slashing costs out of the company, allied with the purchase of EDS has spearheaded HP's emergence as a services giant. Our interview with HP's Craig Wilson explores the fine grain of the company's outsourcing strategy.

But what emerges at the core of that profile is HP's identity crisis. It talked about itself as a services player for years, but now admits it only became one when it bought EDS. It sees itself as a vital alternative to IBM in enterprise services, but it would like to be Apple as well.
That is the HP challenge: how to be seen as a thought leader and an innovator, and not just as 'the alternative to IBM', or 'the alternative to Apple'.

The leader HP chooses must indicate which way it jumps. It could pick a leader to pursue growth - 'big' is what HP is about, and market capitalisation doubled under Hurd. It could pursue someone with the branding vision to sell HP's innovation as well as its history. It could hire an IBM man, or an Apple man - perhaps even a Cisco man - and have done with it. But then there are Intel, Oracle, Microsoft and EMC candidates to consider.

One in-house candidate is Todd Bradley, who leads the company's PC group, but HP's PC unit will not drive long-term growth. That said, HP has a hardware heart and it has prospered by building on that. Another is Ann Livermore, head of HP's enterprise business - remember, HP's track record of promoting women is exemplary - but she was passed over once before. History, as ever, dogs the company.

Despite its solid image, HP has fallen victim to scandal more than once in its recent history. For example, Patty Dunn - Carly Fiorina's replacement as Chair - dragged HP into the 'pretexting' scandal of 2005-6, in which executives were monitored in an effort to stop leaks to reporters.

A long history in business can be a millstone in the world of upstarts such as Google and Facebook, but it also says 'continuity'. That is what the markets want from HP now. But above all, they should demand vision.