HP Needs an Outsider at the Helm

 
 
By David Coursey  |  Posted 2005-02-09 Email Print this article Print
 
 
 
 
 
 
 

Opinion: Whoever takes over after Carly Fiorina should be capable of shaking things up. The likely task at hand will be selling the company or breaking it up.

Isnt it great to see a CEO get fired? I mean, if it can happen to you and me, why should the highest-paid executives be immune to a stinging rebuke for nonperformance, as apparently happened to Hewlett Packards Carly Fiorina.
Click here to read more about Fiorinas resignation.
Most of the time, boards dont fire CEOs because of the implied admission that the executive shouldnt have been hired in the first place. Also, the top echelon of corporate America is such a clubby place with so many interlocking relationships that there is a strong incentive to make nice. I know nothing about this—a phrase you wont often read in one of my columns—but Id be surprised if the firing was HPs idea, given what Ive just said. Fiorina is known as something of a showboat, so I wouldnt be surprised if it eventually came down to, "If you want me to go, youll have to fire me!" Thus, Carly goes down in a blaze of glory and when things dont improve under the next CEO, her reputation is restored. A quiet resignation just wouldnt do, so weve had a noisy one.
Of course, for Fiorina, getting fired is more like a lottery win than a trip to the unemployment office. She walks away with a $21 million severance package—a nice days wage for cleaning out her desk. But did she screw up? Did she deserve to go? The 2002 Compaq acquisition certainly was not a cure-all for HPs ills. It isnt possible to know what would have happened to HP otherwise, but I am not sure it could have been worse than what has taken place. If theres a winner in the deal, its Compaq, which might have been forced it sell itself to Dell at a fire-sale price had HP not come along first. Its sad, but HP has been the loser in almost every change that has taken place in how technology is bought and sold. The company was always something of an also-ran, but when margins were high you could make that fly. Today, HP is behind Dell in the server and desktop business, behind EMC in storage and behind IBM in services. HPs only "solid" business is printing and imaging, and thats certainly not the goldmine it used to be. Click here to read about HPs decision to merge its printing and PC business units. Whoever takes over after Carly should be an outsider capable of shaking things up, though perhaps not as violently as Ms. Fiorina did. I am still not wild about the Compaq acquisition, but I like the idea of bringing former Compaq Chairman and CEO Michael Capellas back from CEO exile at MCI to replace Fiorina. Id also like to propose the ultimate dark horse candidate for HP CEO: Mark Cuban, owner of the Dallas Mavericks basketball team. This was suggested by my friend Tom King, who worked with Cuban in his pre-billionaire days. Back then—before Broadcast.com and its top-of-the-market acquisition by Yahoo—Cuban ran a systems integration company in Dallas called Microsolutions. I think Cuban was even an HP reseller. Cuban is just enough of a wild man to shake things up at HP (in a positive way, of course). Maybe its time for a successful professional sports franchise owner to take over a troubled computer company. You may think thats silly, but we have twice elected a former Major League Baseball owner as President. The likely task at hand for HPs new CEO will be selling the company or breaking it up. HP should keep imaging and sell-off everything else. HP might also spin the server, storage, and server business units into new standalone companies. I think its possible that after a rough transition one or more of these could become a success. (My strong advice to Michael Dell is to continue your successful conservatism and just walk away when HP comes knocking. Dont even buy the server business.) Its too early to tell if Carly Fiorina did HP any favors, but Im not sure she did the company any harm, either. HP was and remains a company thats had a hard time reinventing itself in a very unfriendly competitive and business climate. My hope is that HP will take drastic steps to keep its successful imaging business going, even if that means selling off everything else. Check out eWEEK.coms for the latest news in desktop and notebook computing.
 
 
 
 
One of technology's most recognized bylines, David Coursey is Special Correspondent for eWeek.com, where he writes a daily Blog (blog.ziffdavis.com/coursey) and twice-weekly column. He is also Editor/Publisher of the Technology Insights newsletter and President of DCC, Inc., a professional services and consulting firm.

Former Executive Editor of ZDNet AnchorDesk, Coursey has also been Executive Producer of a number of industry conferences, including DEMO, Showcase, and Digital Living Room. Coursey's columns have been quoted by both Bill Gates and Steve Jobs and he has appeared on ABC News Nightline, CNN, CBS News, and other broadcasts as an expert on computing and the Internet. He has also written for InfoWorld, USA Today, PC World, Computerworld, and a number of other publications. His Web site is www.coursey.com.
 
 
 
 
 
 
 

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