Top 5 Reasons Why Meg Whitman Will Fail as HP’s new CEO

Author: Steven Zolman

Yep.  Meg Whitman in as CEO for HP, and Leo Apotheker is out – after only 11 months.  It’s the SEVENTH CEO at HP since 1999.  Don’t worry, she likely won’t be there long, as this is only the latest completely inexplicable move by the HP board; a board most famous for the uncanny ability to snatch defeat from the jaws of victory at nearly every occasion.

Here are five reasons Whitman won’t be able to fix HP:

1. Leo Near Killed HP: Since Leo took over as CEO, the value of HP is down around 50%, and is currently valued as it was in mid-2005.  HP has spent $10s of billions on failed acquisitions, including the most recent example of HP missing the mark (the $11.7B buyout offer for Autonomy)… WHO!?!  HP is now synonymous with everything that is unholy, ugly and wrong in corporate America.  HP is slow, dumb, bloated, lazy, and lost.  It simply has no soul.  With a diminished market value, it is now even being considered as a potential takeover target.  Oracle to buy HP!?  Welcome back Mark Hurd?

2. The HP Board is Insane: I have a lot of respect for Ray Lane, but outside of him, the HP board has been highly dysfunctional at best, and the biggest disaster in corporate America, maybe even corporate earth at worst.  Whitman will never be able to trust that she has the board’s support, even when they explicitly tell her she does.  The HP board’s incompetence will hamper her performance in the one area in which she may actually shine (her knowledge of how to connect with consumers could be a much needed lift to HP’s desktop/laptop, tablet, smartphone, and printer business) and HP’s board will actively undermine any ability she has to lead HP through a transition to a cool company again, by holding secret meetings, cutting back room deals, and staging her public failure and demise.

3. Whitman’s not Hungry enough: Whitman has nothing to prove.  She’s 55, she’s worth over $1B, she was at the helm of eBay during a time of rapid growth, she’s remembered for the very successful $1.5B acquisition of PayPal, and more recently, but probably less famously for her failed campaign for the Governor of California in 2009.  I don’t expect Whitman to translate well to the enterprise class service culture of what HP supposedly wants to be, and I’m having trouble seeing her work 80 hour weeks to muscle this giant into a productive company again.  Frankly, I’m having ‘in over your head’ Carly Fiorina flashbacks.

4. HP is Running Away from Itself: For some reason, HP hates itself, or at least it loves IBM and Apple.  HP is desperately trying to become a services company.  Ever since the acquisition of EDS, HP has had its eyes on becoming IBM.  The former HP CEO and darling of Wall Street, Mark Hurd, actually made some strides towards that goal, and HP overtook IBM as the world’s largest technology company (by revenue).  The growth by acquisition strategy was working to achieve some goals of the company, but behind the scenes, Hurd was slashing R&D budgets, and employees were grumbling.  Bottom line, HP is a printer company.  It makes huge profits on (of all things) INK!  Seemingly, HP can’t decide who it wants to fight.  It desperately wants to be IBM in the enterprise, but it wants to be Apple for consumer products, yet it has constantly been scrapping with Oracle.  With the acquisition of 3Com, HP even started directly competing with and fighting Cisco.  HP needs to find its soul.

5. HP Continues to try to Buy Prosperity: Apparently, HP never actually studied the Apple business case.  In 1997, Apple was dead.  It was Irrelevant.  Then it asked Steve Jobs to come back and really all he did was stop doing stuff that Apple wasn’t any good at.  Jobs was able to focus the company on what it did best, and made it relevant again.  Once Apple became relevant, focused, and purpose driven, it was able to innovate.  HP needs some of that addition by subtraction, but instead, it continues to make 11 figure investments in search of the one more magic piece of the puzzle, but it doesn’t seem to realize that there is no magic, and the puzzle is just a bunch of broken pieces resulting from one massive failure in leadership after another.

Meg, I wish you all the best, I really do.  We root for HP’s success, mostly because our clients could really benefit if HP became great again.  My advice?  Make big, bold, short term moves, find a successor, publicly name him or her, give yourself a timeline for your departure, grow your successor into the role, accomplish your goals, declare victory, and get out before they throw you out.

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One Comment

  1. Edmund Charles says:

    ALL:

    I too wish HP all the best, I bought my first and best pocket calculator back in the 1970s from HP- I loved the RPN logic. HP used to be about serving cutting edge electronics to both consumer and industry/engineering firms. HP lost its way in the 1990s, it lost both the consumers and the industrial markets. The firm is not adaptive enough, nor is it a hub of innovation.

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