Lane Believes HPs Future Should Be Laid Out by Its CEO

By Chris Preimesberger  |  Posted 2012-04-04

HP Chairman Lane Says HP Will Look More Often to Startups for Innovation

CUPERTINO, Calif. --€” In a rare personal appearance before an outside-Hewlett-Packard audience, Executive Chairman Ray Lane on April 3 addressed a conference consisting of several-dozen entrepreneurs, analysts and journalists about the current state of the company, among other topics.

Lane, 64, a former president of Oracle and executive at IBM, offered some perspectives on several topics, including new CEO Meg Whitman, former CEO Leo Apotheker and high-level strategies the company will take in the future.

Lane spoke at AlwaysOn Network's OnDemand 2012, which was held at HP's soon-to-be-demolished Executive Business Center (EBC). This was one of the last events to be held at the EBC before new property owner Apple tears down the 1960s-era campus and builds its new dream headquarters starting this fall.

When queried by conference host and AO Network CEO Tony Perkins, Lane (pictured) opted not to go into detail about the short but controversial 11-month tenure of CEO Leo Apotheker, who was replaced last September by former eBay CEO and 2010 California gubernatorial candidate Meg Whitman, who was already on the HP board of directors.

Calls Apotheker 'a Great Leader'

"I'd rather not comment on that. I respect Leo. I've known him for 20 years. I think he's a great leader. But Silicon Valley is a fast-moving environment, and it just wasn't a fit," Lane said.

Apotheker, who came to HP from German enterprise software maker SAP with great fanfare in September 2010, was fired because of "his poor execution and a lack of leadership," a source told The Wall Street Journal at the time.

On Apotheker's watch, HP announced it was going to either shutter, sell or spin off its $40 billion-per-year Personal Systems Group that makes laptops, desktop and mobile computers; kill its webOS hardware division that made smartphones and tablets; and cut back the webOS software group drastically. The PSG decision has since been rescinded.

Lane, who came to HP's board shortly after Apotheker arrived in 2010, was a key factor in bringing Whitman to the board in January 2011, two months after she lost the election for California governor to former Gov. Jerry Brown.

"I provoked her [Whitman] into doing this [CEO job], and I'm so glad we did. She's a great leader," Lane said. "When she came in, she said, 'Would you help me?' I said, 'What does that mean? I am here to help you.' She said, 'No, I need you to take a slice of time and help me, because you know a lot about software and services. You know the enterprise better than I know the enterprise. It seems like it could be a good team.'

"I talked to my partners [at Kleiner Perkins Caufield & Byers] and they didn't like the idea, but I said, 'You know what, this is a really good idea. I will do whatever will support Meg.' Whether it's 10 percent or 30 percent of my time€”I gave her a cap. I said I'll do anything you ask me to do, but I'll also provide some advice you didn't ask for as well. And I think it's worked out well."

Lane Believes HPs Future Should Be Laid Out by Its CEO

Regarding a high-level view of HP's strategy, Lane said the future direction of any company should be laid out by its CEO.

"Meg has done that in bits and pieces. At the [recent] shareholder meeting, she laid out quite a comprehensive plan at a very high level, and during 2012, she will do more of this," Lane said. "She basically will be taking this to the right communities€”the shareholders, the analysts.  She should be doing this; I don't think I should be doing it.

"I'm not going to front-run her; that would be a poor thing to do for a partner."

Why HP Will Look More to Outside for Innovation

Regarding future product and services innovation, Lane said that the company would be looking more often to the entrepreneurial community for ideas and guidance in 2012 and in the years to come.

"Big companies, by and large, don't keep their ear to the ground as well as they should," Lane said. "They think they do. This happens in all industries. Innovation doesn't happen at GM, for instance. They're not listening to all the innovation in the supply chain; that's where it all happens. They're thinking about the car of the future without talking to the suppliers who know how to build the car of the future.

"There is a big community of startups here in the valley that want to talk to HP. They want to have a dialog, and they aren't afraid of HP stealing its IP. The marriage of great technology that's protected by IP and the velocity at which a startup moves, combined with the scale that HP can provide, is something that we are trying to be better at."

In the past, conversations and possible partnerships like these tended to get lost in the bureaucracy of HP, Lane said.

"You can't take away the scale of HP. It's 320,000 employees and $130 billion in revenue," Lane said. Not to mention more than 100,000 contractors and business partners.

"A year from now, I'd like some feedback. We'll never be the company that, if you hit the ball at us, we'll hit it right back at you. We're too big. But we should be responsive, we should determine if new technology fits, and is it synergistic with what we're trying to do," Lane said.

"One thing I will tell you: We're not going to try and do everything. We're not going to try and cover the landscape. We're going to work through younger companies, smaller companies. [That] is going to be a better way of operating."

A Few Notes on the HP Campus Move

Apple bought HP's 98-acre Cupertino campus in November 2010 for about $300 million. It is located directly north of the current 35-acre Apple campus; the two sites are divided by State Highway 280 and are only a few miles west of San Jose, Calif.

HP, which is building a new EBC on its original Palo Alto campus about 8 miles away, will vacate the Cupertino location, which has housed not only the EBC but also part of the company's personal computer division and other research and development groups.

Chris Preimesberger is eWEEK's Editor for Features and Analysis. Twitter: @editingwhiz

Cupertino, Calif., April 3, 2012: AO Network CEO Tony Perkins (center) takes a question from the audience for HP Executive Chairman Ray Lane (right). The misspelling of "Evolution" in the slide behind them brought some smiles. (Photo courtesy of Jean-Baptiste Su of L'Expansion.)

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