Can HP Innovate? Yes, When It Comes to Brain Drainsby
Some brain drains occur when a company that’s going through rough times or regime changes loses a few executives and talented engineers. Then there’s what has happened to Hewlett-Packard over the past two years—one of the great brain drains in corporate history, in which the company lost north of 120 of its top executives.
While reporting this week’s cover story on the issues facing HP and its attempt at a comeback, we compiled a list of the departed HP brass and, when possible, found out where the executives had landed. We discovered that the electronics giant has lost about a dozen executives from its C-Suite and had its senior vice president and vice president ranks depleted.
HP has churned through four chief executives in the past two and half years, so some measure of executive turnover is to be expected. CEOs coming in from outside companies want to bring in veterans they trust and get rid of people they believe are underperforming or don’t want to face the challenges ahead. Fair enough.
In HP’s case, though, we see that all these regime changes have sucked layer after layer of experience out of certain divisions. Take the $24.5 billion-per-year printing business. V.J. Joshi, the executive vice president who ran the group for about a decade and turned it into HP’s profit machine, has left. So, too, has Patrick Scaglia, who was the group’s chief technology officer for many years, and Bill DeLacy, who was the senior vice president for printing in Europe, the Middle East, and Africa. Similar stories have played out in other areas, such as software and services.
HP also has lost a huge portion of its internal technology team, including dozens of employees who ended up at a single company—General Motors. The carmaker has hired HP’s former chief information officer, Randy Mott, as well as its former vice president of infrastructure, vice president of information technology, and vice president of business operations. HP has started exploring litigation against GM as a result.
A number of HP’s executives have turned up at Oracle, where the company’s former CEO, Mark Hurd, now serves as co-president. As reported in our story, Hurd is often viewed as a hard-nosed taskmaster. And he most certainly is that. He also seems to command fierce loyalty from his staff. Time and again, Hurd supporters and detractors told me they liked working for him because it felt like they were working for a winner, and they knew they had a good chance at scoring a bonus at the end of the effort. The detractors just tended to feel that Hurd took some things, such as the pressure to sell more stuff with fewer resources, too far.
HP’s rivals have done well during the mass exodus. Dell has picked up onetime HP high-flyer and former M&A chief Marius Haas as its new head of data center products. The services company Computer Sciences has acquired some big names as well.
Has the brain drain stopped? Well, I spotted high-ranking people leaving as recently as November and December of last year. “I am very attuned to the people who have left since I have been here,” says Meg Whitman, HP’s CEO. “The people who have left have been asked to leave.”
Whitman characterizes the current turnover as a “trickle.” She held a meeting soon after she started and laid out the challenges facing the company. When it was time for the meeting’s midmorning break, Whitman told the troops that she would understand if they did not come back after the break and that anyone who was not committed to take on the painful road ahead should leave. “Most people came back from the break,” she says.
HP’s employees have been asked to rally around the idea of bringing the computing giant back to its glory days. “You have to capture peoples’ hearts,” Whitman says. “We are banded together to turn around one of the great companies in the world. I tell them it will be one of the great experiences of your lifetime.”