Free Advice for the Next HP CEO
Heres some advice for the next CEO to sit in the chair at the HP "innovation garage." Im sure youre going to get a lot of consultants willing to provide advice about what to do next, but they will be on a retainer basis. The advice here is free and provided by CIOs and technology directors I contacted, asking them what advice they would give to HP now that the company is looking for a new boss, following Carly Fiorinas recent resignation. I agreed to provide them with confidentiality so they wouldnt get a bunch of sales calls, and I asked them to concentrate solely on HPs enterprise business.
"I would suggest that HP reconsider being all things to all people," said the director of IT at a fast-growing medical devices company. "HP needs to differentiate itself to its enterprise customers by providing flexible, scalable, secure and cost-effective products in product categories where it will be the market leader and help their bottom line. HP originally had a reputation for engineering excellence but was slow-moving in a market where the product life cycle changes frequently. Carly took a 180-degree course change that helped move the slow-moving culture forward but created a me-too technology company." Lets see if I can summarize that comment: Create a focused company.
A CIO at one of the largest health care companies in the country had a similar suggestion. "Structure HP so that the organization can focus on the enterprise and data center business, ensuring innovation and product quality for institutional customers. The consumer business is quite different than the enterprise business. The PC business is quite different from the printer business, but today these two businesses are combined in such a way that it is hard to determine accountability." When I asked him to summarize his suggestions, he responded, "If the strategy is to sell more high-end enterprise hardware and services, then align the structure to that strategy." To summarize: Create a more focused company.
And, finally, I asked a CIO at a large government agency what advice he has for HP. "Go back to your roots," he responded. "Engineering quality still counts, and this is especially true in the enterprise space, where we need to keep the systems running." In summary: Create a more focused company around traditional core strengths.
Mastering the ability to focus, and thereby benefiting from the power that yields, is one of the most underrated strengths that companies need to develop. Being able to focus in a world of countless diversions is also the one capability that consistently puts companies and executives in the winners circle. Over the years, Michael Dell had opportunities to focus on other businesses. Dell did not get distracted from the goal of getting computers into the hands of customers in the most efficient mannerand now his company is on its way to being worth $80 billion. IBM continues to divest itself of diversions and become more powerful in the enterprise space. Google could have focused on many areas beyond search but didnt, and now the company defines the market it is in.
Another issue surrounding focus has to do with product strengths. HP continued to focus on imaging and printer products when no one seemed to really care about those products. Now the business of selling ink is the companys most profitable operation. In the ink business, the company needs to keep distancing itself from all the companies that want ink revenues. But going head-to-head with Dell in computers and IBM in services is a challenge. The goal for HP must be to focus on where the market leaders are vulnerable. For example, customers want AMD Opteron-based servers, but Dell remains tied to Intel. HPs embrace of Opteron for servers has created a very favorable response. That embrace leverages the companys engineering strengths, competitors weaknesses and customer needs. And that type of focus is exactly what I am looking fora perspective that I believe is shared by the CIOs and technology directors I contacted. Thats the end of free advice for filling the chair in HPs innovation garage.
Editor in Chief Eric Lundquist can be reached at email@example.com.
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