hp focus

Mark Hurd, could he be America’s most toxic CEO?

I read a post titled The Campaign against Mark Hurd, a somewhat tongue in cheek article, with serious undertones, and I was thinking just that.

If you′ve read my previous two articles on HP Pay Cuts and HP′s contribution to the GFC, you′ll know I′m no fan of Mark Hurd, though you′d think there would be any number of CEOs who exhibited the worst kind of unbridled greed, a lack of compassion, or concern for others over the last year, who would qualify for the title.

I think that Mark Hurd, in all the noise associated with the Global Financial Crisis, has been flying under the radar. One of my main concerns with him is his seemingly deft application of spin (a careful and contrived manipulation of the truth), which probably comes hand and hand with the job, but it shouldn′t.

Why single out Mark Hurd? Why bother to write about this at all, and what gives us the right anyway?

It goes beyond HP, or any previous experience I had with the company, it′s actually an issue that seems endemic in corporate America today, the deliberate undermining of middle and working class standards of living and getting paid obscene amounts to do it. We could, and probably should be singling out more CEO′s for the same treatment. We have a powerful force for change in Social Media. For the first time in history, that I know of anyway, we have a two way means of communication that is independent of the news media, who are hopelessly compromised by their corporate owners (Mark Hurd is on the board of Directors at News Corp. what does that tell you?), giving us control of the message, at least for the time being. We should use it.

I am a Capitalist, but I don′t believe that capitalism implies the complete absence of altruism, there′s more than enough wealth to go around. Prosperity begets prosperity, especially when it comes to employees. As a business owner I believe I have a responsibility to contribute jobs, and the ensuing prosperity that comes with them, to our society. I think what we currently know as Capitalism, where it′s only about returning ever increasing profits to shareholders at all costs, is unsustainable, wrong, and is probably called something else.

The founding fathers of HP, Bill Hewlett and Dave Packard, from all accounts, had an altruistic view of Capitalism, which brings me to the point of the post. The HP way.

A full discussion of the HP Way is beyond the scope of this post, you can read all about it in the book titled; The HP Way: How Bill Hewlett and I Built Our Company, however it as been said that the pair′s greatest innovation was managerial, not technical ¹ , the HP Way was an egalitarian, decentralized, form of management that had, as it′s core foundation, the idea that employee′s brainpower was HP′s most important resource.

Hewlett and Packard backed up this philosophy with pioneering practices such as company wide productivity bonuses, profit sharing, share ownership plans, tuition assistance, flexible work hours and job sharing, matched contributions to 401k (superannuation) plans, and more. At the peak in early 2000 HP′s share price was almost $80, the company was regarded as one of the best places to work, and the company bonus plan was paying lucrative bonuses. Granted that was the end of the IT boom at the time, but the HP Way had seen the company through previous tough times without being discarded.

You don′t have to look far today to know that the HP of today is a disappointing contrast to the HP of Bill and Dave. See HP by HP Employees it′s a good place to start, and there′s plenty more to back that up.

The HP of today is characterized by;

• A centralized, autocratic management where Mark Hurd is the CEO and Chairman of the Board of Directors, so he, for all intents and purposes, reports to himself.
• Ten′s of thousands of jobs lost (conservative estimate would be 40-60,000) or moved to developing countries, consequently undermining the very brainpower (and I′m talking about the accumulated skill and experience that these people had, not the capability of people in developing countries) that Hewlett and Packard valued so highly, not to mention completely compromising support quality by replacing skilled and experienced Customer facing people with Support personnel who know nothing more than to follow a flow chart, and who loose the plot the moment something doesn′t follow the script.
• An alleged environment of fear and intimidation – apparent in many of the comments from my previous post.
• Has disappeared completely off the Fortune Magazine top 100 companies to work for list.
• Savage slashing of wages and benefits at a time when the company is highly profitable and HP executive remuneration is not only excessive, but rising.
• Unpaid sales commissions due to an inaccurate tracking system, which raises doubts about other reported numbers.
• A vague and uninspiring strategy for the future that seems focused on competing for market share in niches that are already saturated and being undermined by emerging technologies not invented by HP.

What happened to the HP Way?

I′m not asking the question because I have some sentimental attachment to the "good old days" of Bill and Dave, I′m asking the question because it′s stated quite clearly here on the HP corporate website under Business Ethics;

The values that Bill Hewlett and Dave Packard established nearly 70 years ago are as relevant today as they′ve ever been.

Are they?

It′s not an isolated statement. Mark Hurd stated, in his opening (and I presume sworn) remarks during the Congress′ investigation into the pretexting scandal at Hewlett–Packard in the early days of his tenure, and while the rest of the HP board was scurrying to assert their 5th amendment rights to silence;

Our culture, our core, which we call the H-P Way, remains strong and ethical

Does it?

A full .pdf transcript of his remarks is available here. ² The question is; can you take this Guy on his word?

HP overall product quality and service, meanwhile, are regularly leaving consumers infuriated. PCWorld magazine, after surveying 44,000 readers, earlier this month rated Hewlett–Packard dead last among 10 computer makers, on reliability and service for laptops, dead last for printers, and next to dead last for desktops.

How can HP revenues and profits be rising in the midst of so much consumer angst? Easy. To be "successful" in Corporate America today, a CEO doesn′t have to run a company that delivers quality at reasonable prices. Today’s most "successful" CEOs can take a far less demanding approach to "growing" their companies. They can simply gobble up other companies.

Contemporary top execs acquire these other enterprises, usually by taking on huge quantities of corporate debt, and then claim the revenues of these other enterprises as their own. Instant success.

To pay off the subsequent debt, and keep their bottom lines sweet, these CEOs then lop off "redundant" workers in their newly merged operations. This merge–and–purge cycle, predictably enough, creates chaos in the workplace, and more frustration for consumers.

As Hewlett Packard CEO, Mark Hurd has wheeled and dealed his way to 31 mergers in just 46 months on the job…

Too Much, Weekly, Jan. 26 2009

Does that sound familiar to you? Is that what′s become of the HP Way?

I think Mark Hurd has swapped "Invent" for "Illusion", he′s quoted somewhere as saying "vision without execution is fantasy" I would suggest that execution without vision, is short term thinking fueled by greed.

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