What HP Must Do Now For CIOs

The decline of the HP Way turned off employees. Now HP must clarify its strategy to worried enterprise customers.
As I was working last week on an InformationWeek research report on service-oriented IT, I reviewed a survey comment from an HP enterprise architect. In a nutshell, he's not feelin' the love from this crazy organization they call Hewlett-Packard. And I don't think customers are feeling the love either.

HP has abandoned the TouchPad tablet and its WebOS strategy. Check. It's also exploring "strategic alternatives for its Personal Systems Group," corporate doublespeak for, "Run away screaming from the low-margin PC business." Check. HP had better have a sound enterprise strategy or there won't be much left.

Disgruntled employees are at every company, to be sure, and I generally dismiss them unless I have a sample greater than one or two. Problem is, most of the folks I talk with who have worked for HP over the last few years are anything but, well, "gruntled." From sales to project management to enterprise architecture to engineering, they all agree: HP ain't what it was. And as an enterprise customer of HP, I'm troubled by that.

HP used to be what my business school profs called a "Theory Y" company. As a starry-eyed young IT worker 15 or 20 years ago, I listened in rapture as HP workers I met at Interop described "The HP Way," an environment where work was as natural as play.

It was just as compelling to me as Daniel Pink's book "Drive" is to people today. Pink describes the science that proves we live in a world where intrinsic motivation trumps extrinsic every time. That is, money matters, but not as much as doing cool stuff and having some autonomy. That's the type of environment I hear about when I talk with Apple employees. It's the environment of innovation and problem solving.

At some point at HP, fiscal motivation started to rule the day, more of what my profs would have called "Theory X." There wasn't much talk about the HP Way anymore. Employees I met were more like working wounded. It was kind of like if Tim Cook, Steve Jobs' successor, killed off "insanely great."

HP has been a major equipment supplier to enterprise IT, even if it has been in relatively minor or second-tier areas. It owns printers. It provides great value with switches. Frankly, HP was doing a decent job at many things. But these recent announcements have created the same type of uncertainty and stress for its customers that I've heard from employees.

During one lively debate on a private CIO forum I subscribe to, one CIO insisted that HP's Personal Systems Group "will be a going concern, whether it's part of HP or a spinoff. They're not dropping out of the PC business." But another participant wasn't so sure: "Be careful about predictions; I said the exact same thing about Gateway's Business Division, right before they sold it to MPC, who in turn immediately filed for bankruptcy and left us hanging with no support, parts, or warranty."

HP appears to have lost its way. What kind of company creates uncertainty in a marketplace where it still has customers that want to buy from it? HP needs leadership that can create a coherent, compelling roadmap for those customers. Listen, I've written before that the reign of fat PCs is drawing to a close, so I'm more sympathetic than most to the concept of HP exiting the PC business. Maybe it's a good move in the long term. But it doesn't appear that HP is presenting its customers with other options. That's the problem.

The bottom line for me is that if HP is going to kill off "non- core businesses," it will have to regain some of its HP Way. This is an opportunity for freshman CEO Leo Apotheker to start creating the kind of work environment that leads to innovation and the next great thing. The kind of environment that allowed Steve Jobs to kill the floppy drive and the optical drive and still be able to sell customers meaningful options. But what exactly is the overall plan?

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Rob Preston wrote last week that HP must decide who it wants to be. Exactly. A clear vision from the CEO will do a massively important thing: It will remove uncertainty, which destroys both employee innovation and customer trust.

I'll be attending and presenting at the InformationWeek 500 conference, Sept. 11 to 13, where editorial director Fritz Nelson will interview Leo Apotheker onstage. I'm looking forward to asking Apotheker about his vision for HP, and when things are going to look a bit more certain.

Jonathan Feldman is a contributing editor for InformationWeek and director of IT services for a rapidly growing city in North Carolina. Write to him at [email protected] or at @_jfeldman.

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