Tuesday, August 10, 2010

Holy mackerel

The e-mails were flying fast between 2:07pm and 2:09pm last Friday afternoon. I arrived home from a visit to the Palo Alto Medical Foundation at 2:21pm, unaware that HP had just announced that Mark Hurd had just resigned. The e-mails were from a varied lot -- KGO/TV who had never ever tried to call me before; reporters for Business Week, CNBC, etc with whom I'd met once or twice in previous years; friends and colleagues from HP today and "the old HP".

Sexual harassment that didn't happen?

A few mis-stated expense reports, that "totalled" somewhere between $1,000 and $20,000? This turned out (missed by nearly all the columnists) to be for EACH ONE. The 2008 10K report says Hurd was re-imbursed $79,814 in tax "True-ups" for the estimated $243,000 in "personal meals" that he ate on behalf of HP. This was in the midst of the three years cited with "his girl friend" -- sounds like a little more money than the initial reports.

All bogus, in my view. This guy was a thug, nicknamed Mark Turd by ex-HPites who worked directly for him -- stories that have circulated in the Valley for three years. He raped HP employees (figuratively, without violating the sexual conduct code at HP) by eliminating the sixty-five year concept of profit sharing, preferring to move to obscene bonuses for himself and his five top minions -- a mere $113 million payout for them in a year he chopped everyone else's pay by 5% plus profit-sharing. These were raises for some of the five people by as much as 400% -- a tidy uptick.

He was profane, a bully, autocratic, threatening, demeaning, vindictive, and rude. Blogs over the weekend by current employees said "Hooray, the tyrant is gone!" I couldn't contain my glee on the 11pm news -- best news for HP in a very long time!

The Voice of the Workplace, HP's thirty-five year historic 'measure' of employee feelings (done every five years) showed in April an astonishing finding -- more than two-thirds of HP's employees would quit tomorrow if they had an equivalent job offer. Not a raise, not a promotion, simply an alternative. That number never used to be in double digits. Other companies in the Valley have reported an amazing rate of HP resumes being submitted; one large company saying, "we didn't know they had that many people working there".

There's lots more to "worry about", and it is easy to imagine that the HP Board was worrying about all of them, but didn't know where to "pin the blame". This "non-sexual" harassment was simply a convenient foil...

24 comments:

David W. said...

Let's look at the facts so far:

* Hurd and Fisher both claim that no sexual relations were involved. Probably true.
* HP investigated and found no evidence of sexual harassment. Probably true.
* Fisher filed sexual harassment charges against Hurd.
* Hurd has made an out of court settlement with Fisher.

Here's my take. Hurd hired Fisher to do meet and greets. Then, would take her out for dinner. When Hurd asked to make their relationship more intimate, Fisher said no. Then, her contract with H.P. was canceled.

She sued claiming her contract was canceled because she fended off Hurd's sexual advancements. H.P investigated. She's suing and is an ex-contractor, so H.P. can't get her testimony. Instead, Hurd is questioned, denied any connection, thus no evidence.

However, that doesn't mean there is absolutely no evidence. H.P. couldn't find any talking to Hurd. H.P. then insisted Hurd resign. H.P. makes a statement they can't find sexual harassment (true), Hurd and Fisher claim they didn't have a sexual relationship (true), and Hurd decides to settle out of court.

Interesting if the amount is per-incident instead of the total.

otiswild said...

Well, to be fair, in this economy, I'm sure there are plenty of folks at lots of companies who are looking to jump at the earliest opportunities, thanks to "productivity gains" driven by layoffs and the workload being distributed among fewer folks remaining..

Douglas Stetner said...

The bastard still walks away with millions more in payouts :(

notfollowingthehurd said...

Wow you nailed it on the head, Friday afternoon was great news for HP.

Mark Hurd, or Darth Turd as we called him, was running the company into the ground. You can read about some of the theories I have over at my FUMH Blog

I hope all the dirty details come out and Mark has to set his big ego aside and apologize

Alonso said...

A long time ago, I used to be extremely fond of HP. I am an engineer and HP engineering was visible in its products. I still have two old HP calculators from the 1980's, and a Deskjet 500, built like a tank.

But, as I said, that was quite some time ago. Even before Hurd, Carly did a lot of damage. I am an IT guy responsible for some 220 users in a company that has about 10,000 around the world. We now buy Dell, but up to about three years ago bought HP for a year or so. Before then, IBM.

The old Thinkpads still work, including the AC Adapters. The HP laptops are falling like flies, even though they are newer. And I am talking about supposedly robust business, not consumer models.

It really is a shame. I dobut HP has significant engineering capability at this point. The laptops are only one example. If HP still, somehow, has decent engineering, then it still won't help because a Board that can hire Fiorina or Hurd cannot be expected to do better now than then.

Who fires the board?

Ice Piq said...

VERY interesting. This makes much more sense if it is multiple instances of fudging the expense reports, and it does a great deal to explain that odd, odd compensation disclosure from 2008.

Mr. Hurd was a menace. Please continue the excellent work. I will be following your feed. HP was great once, and may be great again. This may be the opportunity it needed.

Steve Spencer said...

What someone should be asking is, "What is the makeup of the board for this company and why haven't they been given the boot?"

The reason is that HP has had a history of hiring pompous, self-serving, moronic idiots to the helm.

Remember Carly Fiorina, who's pompous comments about outsourcing, plus total mis-management helped drive HP out of contention in the marketplace? Don't think that's true? As a person who was responsible for making recommendations for purchases in our company, I held off for 10 years from giving HP even one thin dime of our modest capital expenditure budget, simply because of her outsourcing comments.

That the board has yet another black eye in the form of a CEO, should give stockholders pause for a house cleaning.

Joe said...

Hurd and Fisher both claim that no sexual relations were involved.

Clinton said, "I never had sex with that woman."

But, Clinton didn't pay Monica hundreds of thousands of dollars. If he had, I'll bet we would have had both of them denying that sexula relations were involved.

Ergo, Clinton's mistake, no cash.

Tony said...

As a former 17-year employee of HP/Agilent, I was delighted to discover this blog (having been directed here from John Gruber's "Daring Fireball" site). I remember Chuck House giving a talk many years ago at the former HP Panacom Division in Canada. As it turned out, my final HP employment was at Colorado Springs Division, Mr. House's old stomping ground.

Although it appears that Ms. Fiorina and Mr. Hurd have done their damndest to ruin Hewlett-Packard Company, I'm wondering if the HP Way still survives at Agilent. I know that the company has had tough times since 2000 (which is when I left), with major layoffs and the divestiture of several product lines. I'd be interested to hear any insights into the employee morale at Agilent Technologies.

Thanks,

Tony

Christian Forthomme said...

Outstanding analysis Chuck. I was looking for an insider perspective on this whole situation at HP and your comments provide the context and expertise I needed.

chuck said...

First, thanks for the outpouring of input for all of you. This is a key time in the evolution of what once was such an admired and admirable company for all of its objectives, not just profits. Packard always said -- customers, employees, community, and shareholders equally mattered, with the key being "CONTRIBUTION". That has been abridged so severely that it is painful, and even this week, the shareholder hue and cry sickens me (even though I am one) for its single-minded focus. Andy Grove's article in Biz Week a few weeks ago chastised American CEOs for their short-sighted profit-only views. I agree with him!

chuck said...

Re Christian's comments, thanks! But I'm hardly an insider, having left many years ago (admittedly a 29 year veteran then). But we did put serious time into the book research, and in particular interviewed about 150 folk from many parts of HP for more than 2 hours of recorded material, and another 500 folk for shorter sessions. Since the book manuscript was finished circa mid-2008, it is amazing to us how many have sought us out, to "share new input". So, in a sense, we've become a bit of a lightning rod for collecting material not found too easily

chuck said...

Tony, re Agilent, what I can say is that we've had numerous meetings with folk there, and the mood is somber for how hard the business climate is, but there is little of the "fear and intimidation" feeling that pervades HP. I did a blog re one more benefit being removed at Agilent (see Sept 2, 2009 post), which was poorly received, but that's the most negative we've heard.

Incidentally, maybe not so incidently, it is EASY to find "old HP-type people" all over the place in both companies. Both are still "genetically" the old HP

Steve said...

I just want to thank you Chuck. I started HP as my first major job out of college at the tender age if 25 in awe of the ideals of HP I turned down Lucas Films, IBM, and si many others for the privilege. Now a 30+ Year veteran still at HP I have felt like one if only a few survivors that still tout the values of emotional and intellectual equity we were taught by people like yourself in the " good old days". None of us made any claims that the company had not begun to take it's success for granted and in many ways become Fat and arrogant. Still I think since 1999 the CEOs selected have torn into the very fabric of Bill and Daves core values and I would love to see this healed before I leave what have mostly been the best years of my life. It's the dedication of people like yourself that help keep the ideas of Old HP alive. I am so grateful for your efforts.

Steve said...

Sorry about the typos Chuck. I posted from my phone..
I guess that serves me right for being in a hurry..
Warm Regards;
Steve

Vision67 said...

Hi Chuck,

Miss ya man! Why is the BOD so incompetent in selecting CEOs? Remember the HP way? We had the 10 objectives. Profit was #1 but it was not the only thing. A company that has 2/3 of its employees wanting to quit cannot be a strong company. I wish you were the new CEO.

chuck said...

No, no, no... not me for CEO. That is a BIG job, takes a lot of talent as well as a host of specific traits that seem to have been overlooked for some choices.

But thanks for the vote of confidence!

Mark said...

Before HP, Mark Hurd was at NCR. “Those that do not learn from history are doomed to repeat.” HP's boards of directors were in tune with Hurd's legacy at NCR. What I am suggesting is the board of directors brought in Hurd, knowing he could do what they intended. Not good news for the “worker bee’s”! As you can see Hurd has been well rewarded at the successful completion of his tasks. The employees of both NCR and HP may have long memories but the general population has barely taken notice. Well sort of anyway…. NCR stock has suffered greatly since Hurd’s departure. Maybe the share holders should read their perspectives and vote the board of directors out. And consider joining a union!

Mark said...

Before HP, Mark Hurd was at NCR. “Those that do not learn from history are doomed to repeat.” HP's boards of directors were in tune with Hurd's legacy at NCR. What I am suggesting is the board of directors brought in Hurd, knowing he could do what they intended. Not good news for the “worker bee’s”! As you can see Hurd has been well rewarded at the successful completion of his tasks. The employees of both NCR and HP may have long memories but the general population has barely taken notice. Well sort of anyway…. NCR stock has suffered greatly since Hurd’s departure. Maybe the share holders should read their perspectives and vote the board of directors out. And consider joining a union!

Douglas Stetner said...

Well, I don't agree with the union sentiment, but I did see Paul Stern do about the same thing to Nortel years ago. That followed by basically crooked or incompetent CEOs meant that Nortel could not recover. I do hope that HP does not go the same way, as that is not good for anyone (Except the CEOs that always walk away with millions).

JD said...

I have the "priviledge" to have been a peer of Mark Hurd when he was NCR System 3000 product marketing director in the USDPG (US Data Processing Group) of NCR and I was in charge of the same in Europe! He was arrogant, liked to have people around him to laugh about his idiot jokes...etc.
His only asset was to play golf at the same golf clud in Dayton as the succesion of NCR CEOs.
If you look at his education background, you'll notice he did not find enough intelligence (or work capability?)to study beyond a bachelor at a texan "red neck" college.

I happen to have worked later at HP then Agilent and was puzzled when he was first chosen as CEO of NCR and even more when he was proposed by headhunters to become HP's CEO. NCR had a revenue of $6B in the late 80s and had still the same 15 years later...when HP or IBM grew by 2 digit numbers
I am not surpised by the latest HP' employees' survey: he was already hated at NCR...

chuck said...

Re Hurd's NCR career, it was surprising to me to learn about the apparently large problem he had with employees slashing his tires at work, and the need for a fulltime bodyguard at his home. Was that the NCR Way?

George said...

Hopefully the citizens of California will find out about the damage that Carly did to HP and decide not to elect her as their US Senator. Wouldn't that be a hoot. She could run a state into the ground.

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