News Analysis: Mark Hurd is out as Hewlett-Packard's CEO, and now the company needs to rebuild. But how will his departure affect HP's ability to stay atop the PC market?
In a shocking development on Aug. 6, Hewlett Packard announced that its CEO,
Mark Hurd, had left HP over investigative findings
that he had violated HP's standards of
business conduct. The investigation was launched after claims of sexual
harassment were made by a former HP contractor. Hurd was quick to point out
that the investigation made it clear to him that he would have difficulty being
"an effective leader at HP." The company made its chief financial
officer, Cathie Lesjak, interim CEO.
departure from HP could spell trouble for the venerable company. Although
it is enjoying success, much of that is due to Hurd's leadership. And with its
Palm plans still in their infancy, it's not unreasonable to question whether
the company's next leader will have the same vision as Hurd. Simply put, there
are some major question marks at HP, and the longer they remain unresolved, the
more it will hurt the tech company.
Here, eWEEK takes a look at how Hurd's departure will hurt HP.
1. It's an investment game
Make no mistake: The goal of any major tech company is to maximize
shareholder value. The only way to do that is to reduce expenses, increase
revenues and ultimately
see profits soar.
When a CEO who has
done as good a job as Hurd leaves, shareholders tend to get worried. And when
that happens, they usually start selling off shares for fear of the next CEO
ruining things. Everything might be fine in the beginning, but the longer it
takes HP to overcome the hurdle of Hurd's departure, the harder it will be to
2. Hurd turned things around
Let's not forget that Mark Hurd was integral to the success of HP over the last
five years. When Hurd took over from Carly Fiorina, HP was a shadow of its
former self. Just about everything was going poorly for the company. Hurd
worked hard to give the company a new vision. He also revamped its computing
division to give it a better focus. He made HP an unbridled success: the
world's top PC manufacturer, as well as a major player in the enterprise. Now
that he's gone, stakeholders need to start hoping that someone else can
maintain that same level of success.
3. What will become of Palm?
When HP acquired Palm earlier in 2010 for $1.2 billion, there was
speculation as to how it would help the company. With Hurd at the helm, most
folks believed that he would capitalize on Palm's past success and generally
improve HP's software portfolio through the use of WebOS. But now Hurd is gone,
and the key decision maker that decided Palm's fate isn't there to lead it into
the next decade. Will the new leader utilize WebOS and revamp the Palm product
line? Will HP lose its way in the mobile market? Without Hurd, the latter
possibility seems more likely than ever.
4. Acer's opportunity
As Acer continues its trek to become the world's top PC maker, maybe Hurd's
departure is exactly what the company needed to finally take that crown. For a
while now, HP has been able to keep Acer at bay, mainly through its ability to
attract corporate customers. But with Hurd out and HP in confusion, Acer can take
advantage of the situation. With the right strategies and a focus on value, Acer
might not have much trouble taking over the PC business.
5. Tech strategists are needed
When HP announced that its CFO was taking over the company until a suitable
replacement for Hurd could be found, some who follow the tech world cringed.
Lesjak might be a financial wizard, but Hurd's value to HP was his ability to
see the tech space for what it is and capitalize. As a CFO, it's unlikely that
Lesjak has that ability. The longer HP takes to find a replacement who has the
kind of understanding of the industry that Hurd had, the worse it will be for
the PC maker. CFOs are great, but they
aren't ideal in the CEO's chair
-especially in the tech industry.