No Rest for Fiorina, Hewlett

 
 
By Jeffrey Burt  |  Posted 2002-03-27
 
 
 

The computer industry has had its share of high-profile battles—mostly, it seems, involving Microsoft and some other vendor that feels that the software giant has wronged it.

But the six-month struggle for the soul of Hewlett-Packard was something different, a campaign that had all the markings of a hotly contested political contest: Two figures on each side the debate with vastly different views of the future; well-financed lobbying of voters through direct contact and the media; increasingly personal attacks as the vote drew nearer; and, at least for one player, the likelihood that a loss would mean leaving the arena and going home. March madness for HP CEO Carly Fiorina.

There were pundits giving their views on the race and poll numbers—in this case, stock prices—being watched. For those of us on the outside looking in on the race for the HP-Compaq merger, it was a lot of fun.

But like most political campaigns, the real work begins when the voting is finally wrapped up. For Fiorina and, to a lesser extent, Walter Hewlett, now that it appears that HP shareholders have approved the $22 billion merger, the toughest challenges lie before them.

Fiorina now must somehow pull off the integration of two massive companies that combined have almost 150,000 employees, hundreds of offices spanning the globe and multiple—and similar—product lines, and do all this without losing too much ground to competitors. She and the 900 or so people working on the integration teams will have to decide which products and services will stay and which will go, which offices to keep open and which to close.

And sometime over the next few months, about 15,000 people will lose their jobs.

And that brings us to another challenge facing Fiorina: repairing the companys relationships with its employees and customers. While HP executives were courting investors and analysts during the lengthy proxy fight, many customers were left wondering what would become of their HP and Compaq investments. In the days surrounding the shareholder votes, many of those customers were still wondering.

And while Fiorina is correct when she says that some of the strain on customers and employees will be lifted when HP is able to publicize its integration plan, its going to take work beyond that to heal the wounds. Some customers have already said they will be moving to other vendors. Others are ready to make the move if they dont like what they see.

Employees in particular seem to feel disenfranchised and worried about the loss of the worker-friendly "HP way." And to some extent, that is where Hewletts work comes in.

The dissident board member fought a furious campaign to persuade shareholders—many of whom are employees—to reject the Compaq deal. He and HP waved around employee surveys that they said supported their views.

Now that the votes are in, Hewlett says he intends to slip back into his old life of relative anonymity, and that he will support whatever the shareholders decide. Thats not a bad idea, but Hewlett must remember that it was he who led the proxy fight against the deal, who helped finance the various surveys and who urged shareholders—again, many of whom are employees—to vote against it.

The deal will be a jolt to the entire HP environment—from employees to customers—and Hewlett should understand that he should play a high-profile role in making the transition from two companies into one, and in easing the inevitable pain of the employees in that transition.

E-mail eWEEK Department Editor Jeffrey Burt

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