Memo to Meg Whitman: 4 Tips for Tackling HP

Dear Meg:

Becoming CEO of Hewlett-Packard is almost as big a deal as being Governor of California (your previous aspiration) — and just as political.

As the joke goes, should your friends offer you congratulations or condolences? There's no time for either. You must get right to work. Here are four things you're up against, followed by four tips that every newly-anointed leader should heed. First, the issues:

HP's once-admired culture is gone, gone, gone. HP always had great people and still does. But HP is no longer a values-driven, family-like, innovation-oriented company that inspires commitment. It's a safe bet that resumes are already in play.

HP Invent is an empty slogan. R&D has been starved at HP for years, and it will be hard to pull enough irons out of the fire to propel organic growth. A technology company without strong internal innovation capabilities is a company on the verge of disappearing.

HP is a decade behind IBM in business model change. Compared to HP's situation, IBM's transformation was a walk in the park. IBM's shift to software and services occurred in the 1990s. The PC division was sold in 2005. IBM traded being the biggest for being consistently high performing. I studied IBM and HP (and your former company, eBay) for my 2001 book, Evolve. By then IBM had successfully completed a major transformation and was headed for Web 2.0 and smooth succession to a new CEO in 2002, while continuing an innovation thrust that included grid technologies, cloud computing, and supercomputing. HP, though strong, was often out-hustled by Sun in getting new solutions to customers — and even Sun couldn't survive independently in a consolidating industry. Back then, HP was about to swallow Compaq, which still had indigestion over its own acquisition of DEC, and HP would come to rely on the commoditizing PC segment that IBM was getting ready to shed.

HP is not feisty and entrepreneurial. HP is huge, old, and sick from the dizziness of recent strategic lurches. You joined eBay when it was a startup whose people had known only growth and needed managerial smarts. HP is at the other end of life. It struggled through an expense control era of cost-cutting under former CEO Mark Hurd. Leo Apotheker, your immediate predecessor, reverted to his SAP comfort zone and chased a software acquisition. The lesson: You can't rely on your eBay experience and Silicon Valley contacts to pull you through.

You must restore calm and consistency while figuring out how to focus the business, knowing that there is skepticism about whether you will be another revolving door CEO. You're saying you'll find financial fixes now, bold strategy in December. But your treatment of people will make or break your tenure.

Here are four tips for the people side:

1. Surround yourself with a really strong team at the top and showcase them. Put other people forward, especially current HP executives who know more than you do about the technology and markets. Everyone knows you're strong, but they'll wonder whether you're another Carly Fiorina, HP's CEO a decade ago. Unfair or not, two women will always be lumped together and compared (as you saw in the recent California elections). Fiorina began to lose internal support when she appeared in HP TV ads. Show the world that you put the institution first.

2. Identify the best performers and get their commitment to stick with the company. Meet personally with people identified as the best talent in each unit. By listening to them and giving them a role in changes, you can win them over and slow the stampede to the door. Convening large events to enlist strong performers in the planning process can also get people committed to action.

3. Get the best advisers. Strengthen the board and develop a kitchen cabinet. HP needs to broaden perspectives beyond technology to learn from other giants, many of them customers. Now is also the time for tapping smart people externally who ask good questions; former Procter & Gamble CEO A.G. Lafley used the late Peter Drucker. Board composition is a priority; analysts have faulted the HP board for the current mess. Carol Bartz, who was inelegantly fired from Yahoo, called her board "doofuses." Make sure you have a board you respect and vice versa.

4. Set short-term achievable goals, and keep your promises. If decisions are uncertain, use certainty of process to say when you'll communicate what to whom. Work with business unit heads to identify quick wins that will restore confidence and keep people engaged. People will be on your side if they see a path to their own success.

You lost the Governor's race, but don't think that now it's back to business. You're still campaigning for votes — this time from HP's people whose support you need to lead the company.

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