HP must be doing something right

If you gave someone a representative sample of news stories about HP over the past five years and asked them to define the HP Way, what would they say?

Adjectives such as dysfunctional, defensive and controversial would almost certainly figure. Hardly the ideals of trust, integrity and teamwork laid out by Messrs Hewlett and Packard as they emerged from their shed.

For its critics, HP is a company in crisis, beset by a divided boardroom and accused of unethical business practices. But earlier this month, the company overtook Dell to become the world’s leading PC supplier – only by a few decimal places of market share, admittedly, but an important milestone nevertheless.

To complete the picture, former chief executive Carly Fiorina, the architect of the acquisition of Compaq in 2001, is back in the headlines too, promoting her memoirs and revealing more of the boardroom backbiting that resulted in her departure.

Does any of this matter to IT directors? If PC sales are anything to go by, apparently not. HP has become the perfect example of the mismatch between investors and customers in IT. What matters is product quality, innovation, and customer service, all long-term issues upon which IT leaders can build a technology strategy. Share price is important, of course, but how many IT leaders base their decisions on the stock market? Not many.

Fiorina claims the Compaq buy is finally paying off, and that HP is seeing the benefits of her long-term vision. Her critics, of whom there are many, point to the 50 per cent drop in HP’s share price during her tenure, although they omit the fact that much of that was during the post-9/11, post-dot com crash, when technology stocks suffered across the board.

Much of the criticism of Fiorina, even now, smacks of a cosy, male-dominated business world that resented a successful woman in its midst. At worst, it verges on misogyny. She made mistakes for sure, and her successor Mark Hurd has put his fingerprints on the supplier’s strategy, but Fiorina was right to see that HP needed to change.

The Compaq purchase was always a long-term play, designed to lay the foundation for the company HP would become in 10 years, not in one, two, or even five. There was inevitably going to be pain along the way. You cannot deny the importance and influence of Wall Street, but the critical audience has to be the customers, and the positive message for HP is that they seem to be buying.

What do you think? Email us at feedback@computing.co.uk

Further reading:

HP beats Dell on global PC shipments

California files charges against former HP chairman