Memo to Meg: Top 5 Priorities for Hewlett-Packard's New CEO

  @DavidZie on September 23 2011 9:25 AM
HP Invent logo is pictured in front of Hewlett-Packard international offices in Meyrin near Geneva
A HP Invent logo is pictured in front of Hewlett-Packard international offices in Meyrin near Geneva August 4, 2009. REUTERS

Dear Meg Whitman:

Now that you've been installed as Hewlett-Packard's fifth CEO and president in six years, you're going to have to fill some big footprints left by giants like Bill Hewlett, David Packard and John Young.

Lew Platt, who also rose through the ranks, was also a fine CEO. The more recent folks -- Carly Fiorina, Mark Hurd and Leo Apotheker -- are too fresh for judgment.

You are 55, intelligent and have some fine business background, especially after making eBay grow into a major e-retailer and auction site, which proves you understand business. But do you know computing?

Here are five priorities to set today:

Make sure you understand the HP Way.  Make sure the HP founded in 1938 goes back to the principles of respect, integrity and willingness to accept good ideas from anyone. It also says, We put our customers first in everything we do.

The HP you inherit is different from Lew Platt's company. Instruments are gone with Agilent Technologies. The PC business is now the world's No. 1. There's no more semiconductor business, because that's Avago Technologies.

So make sure you understand what current HP is all about. Not bad for the world's largest computer services business.

Tap the smarts of HP Labs. This has been one of HP's closely held secrets for decades, an R&D department focused on new products and mindful of the HP Way's focus on customers first.

HP Labs, under Joel Birnbaum, a former IBM researcher who ran into a brick wall there, helped make HP a computer powerhouse starting around 20 years ago by devising new chip technologies, making HP a workstation giant and ultimately a great computer company. That profoundly changed the company from an instrument and technical products house.

See what's there now, especially new efforts that have been reported, such as magnetic technologies, new computer packaging techniques, software and other middleware services.

So far in fiscal 2011, HP has spent more than $2.4 billion on R&D. Visit the Labs first!

Rely upon Ray Lane. Because you don't have the computer and software chops Ray Lane has as former president of Oracle, use him as your Executive Chairman. That's a first for HP and recognition that you need help getting up to speed.

Lane was Oracle's president for eight years, a period when founding Chairman Larry Ellison wasn't as interested in daily management as he is now. Lane has a math background and helped leverage Oracle into other software sectors beyond databases. You'd do well to let him be the senior counsel at all times.

Implement a succession plan. One of your company's most embarrassing aspects after Leo Apotheker served only 11 months was that HP didn't seem to have a succession plan. That's a delicate thing to do, but it needs to be done right now.

HP needs some stability, so there ought to be discussion as to who would succeed you if something unexpected happens tomorrow. Texas Instruments had that when CEO Jerry Junkins suffered a fatal heart attack and was immediately succeeded by Tom Engibous.

Maybe HP needs someone else to be president. John Young was president before succeeding Bill Hewlett as CEO in 1978. Try naming another president right away.

Don't trash your predecessor's strategy. Leo Apotheker wasn't given enough time to implement his strategy. The stock declined more than 40 percent.

But as you said, HP still needs to evaluate the spinoff of its PC business, especially if you believe it won't be a moneyspinner, like printers. You also need to determine the future of Web OS because mobile platforms are proliferating.

Maybe you won't bring back the TouchPad but partner with others to license the Web OS, especially because cloud computing is about to mushroom.

Let some of the other directors, especially Ann Livermore, with her years of HP experience, advise on the proper strategy. Don't make up your mind in five minutes.

 

Join the Discussion