Remembering Lew Plattby
We've been getting lots of nice comments from Hewlett Packard employees past and present today, about a tribute we posted this morning to former HP CEO Lew Platt, who died unexpectedly last week. It got me looking through notes of past interviews with Lew, which got me thinking about why people like Lew tend to be under-appreciated in our business culture. All too often, it's because peoples' reps are based on how they are perceived, rather than on reality. And Lew, unlike many of his rivals and colleagues during the late 1990s, was a stickler when it came to focusing on reality.
One example involves Lew's efforts to coldly look at the question of how fast big tech companies can grow. He started in the middle of HP's incredible sales jag in the mid-1990s, when other mega-tech companies (with the notable exception of IBM) were happily neglecting to tell growth-infatuated investors that the party couldn't continue indefinitely. Lew, however, took every opportunity to warn analysts that HP's 20%-plus growth was a temporary phenomonon; otherwise, HP's sales would exceed the GNP of Europe before too long!
And as HP approached $40 billion in sales, Platt commissioned a research project to get a fact-based sense of the limits of hyper-growth. The results were downright morbid. Not a single manufacturing company in American business history had ever crossed that milestone without running into a growth stall that led to huge layoffs, a huge drop in valuation, and a permanent change in the company's growth prospects. Rather than ignore the warnings, the study was one of the factors that led Platt to spin-off HP's original test & measurement equipment businesses in 1999, to create Agilent Technologies. The takeaway: rather than the stodgy, behind-the-times executive he is often desribed to have been, Platt was actually ahead of the curve on this one.
There's another reason people like Platt are at a disadvantage. It is this: people with his if-you-can't-say-something-nice-don't-say-anything-at-all approach to personal integrity tend not to do a very good job of defending themselves against unfair charges, which are frequent in our highly-politicized business culture.
Consider what happened to Platt during HP's 2002 proxy fight to win approval of the Compaq merger. From the time former HP director Walter Hewlett commenced the battle for shareholder support to kill the deal in late 2001, Platt had decided to keep his head down and not express his views publicly. He did, however, agree to meet with Hewlett that February--in large part because Hewlett wanted to get Platt's thoughts about what would happen if the merger was somehow stopped. In particular, Hewlett was concerned that some or all of HP's directors and top executives would leave the company--a rumor the company's handlers were boldly, if anonymously, propagating as a way to strike fear into the hearts of investors.
In the meeting, say my sources, Platt told Hewlett not to worry; there were too many people at HP that cared too deeply about the company to leave just like that. But if they did, would Platt help fill the void, Hewlett asked? Yes, Platt said, but only temporarily and not because he coveted any role. "I love HP, and if there's something I can do to help, I'll do it," he told Hewlett, according to sources. Mostly, he wanted to focus on the new 30-plus-acre vineyard he and his wife Joan were creating near Bodega Bay.
But his efforts to stay out of the picture were not successful. While he told me he never broke his vow not to take a proactive role--that is, he never called up any investors to offer his opinion--he and some colleagues did agree to meet with a handful of big investors who requesed his input.
When HP's handlers got wind of this, Platt's good name was unfairly dragged into the mud. For starters, a story was fed to the media--including yours truly--that Hewlett had offered Platt the chance to return to HP as CEO or chairperson, and that this is what Platt was gunning for. The idea was to rile investors who had a bad taste in their mouth from the final years of Platt's tenure at HP. Worse, the story was leaked at time when Platt was on vacation in Southeast Asia, and unreachable. Returning to hear how his agenda had been so cynically mischaracterized, he was furious, says sources--and saddened about how his HP could resort to such tactics.
As was his MO, Platt didn't fire back, or start throwing mud of his own. Instead, he suffered the slight with dignity. Yet it did bother him--not so much in relation to his own reputation, but what such tactics were doing to HP's once-unsullied rep for taking the high road. "There’s a lot of duck and cover going on in the place these days," he said in August, 2002. "It’s all about spin these days, and not enough truth.”
Fortunately, Platt had come to feel HP was veering back to the values that made it great.