Wednesday, October 6, 2010

lucky break

I had a most unusual opportunity this week, serendipity does work. I'd never met Henning Kagermann before, but I was in a session that he moderated at the STS Forum in Kyoto. Afterward, I introduced myself and we began from the Media X relationship at Stanford, for which Ike Nassi and Paul Hoffman at SAP Palo Alto Labs have been stalwart supporters. The D'School at Stanford, with which we work closely, is of course known as the Hasso Plattner Institute. Kagermann and Plattner were the leaders of SAP for many years, Kagermann as Co-CEO from 1998 to 2009. He picked Leo Apotheker as his co-CEO when Plattner stepped into being Chairman, and the two served together for five years.

So, of course, I asked -- "will this guy Apotheker help HP?" His answer was a bit surprising to me. He said ABSOLUTELY, IF THEY'LL LET HIM. He went on to say that the "CEO World" which can mean quite a lot in different circles views HP as a very difficult assignment right now. For three reasons.

First, there is a history of the Board shooting the CEO (he mentioned three, including Lew), and he didn't have any warm fuzzies for the current Board, except he thought Leo A was 'head and shoulders' more mature and stronger than either Fiorina or Hurd when they got the nod. He also had high praise for Ray Lane, but he focused on Apotheker, whom of course he knows a lot.

Second, there is a history of HP employees "thinking they own the place" and being, in his words, "whiners" if asked to change. This is not unlike the Wall Street Journal editor's view, who snottily said "they still believe in The HP Way". Well, Dave and Bill trained a generation to think of it as THEIR COMPANY, so that part is GOOD in my book. I agreed though with Kagermann that this can get carried away, and become an excuse to keep old patterns too rigidly in place even though external conditions have changed drastically. Kagermann's view was that THIS is the tough one, and he said he was hopeful that the company's employees would give Leo A a chance.

Third, he felt that HP had indeed lost considerable momentum in terms of customer perception about the vitality and creativity in their product and service offerings with the administration of the last guy (whose name I've forgotten). This he felt is fixable, especially if the second point can be re-energized. He felt (and said in the session) that ICT is a long ways from mature, that in fact the Cloud Computing metaphor, mobility, and Web 3.0 will make everything we've seen to date look primitive. I happen to agree with him -- so the best very well could be in front of all of us.

Overall, he was very encouraging about Apotheker and his value to HP. He had no specifics re Apotheker's leaving SAP except to say the dynamics of the world meltdown caused a lot of damage and that was mostly to blame. Hummn.

I felt privileged indeed to have him share these perspectives. He has himself retired from SAP, and is Chair of the German Academy of Science and Eng'g (think NSF in America), and also chairman of the EIT KIC ICT directorate of the European Union. Coincidentally, his new CEO in that role is Willem Jonker, our long time Media X partner from Phillips with whom I had dinner two weeks ago in Braunschweig, Germany at the European Research Initiative Council. At that meeting, chaired by Intel, there was precious little positive news or confidence in HP, which both surprised and saddened me. Enough that I didn't blog about it then.


Alex McL said...

Leo A will almost certainly fail to restore HP's momentum and creativity unless he reverses the bulk of Hurd's cost control policies, which seemed to consist mostly of cutting people's pay.

Remember, one third of the present HP workforce are ex-EDS. To a man they loathe the company, not least because of "regrading" which resulted in taking a pay cut over and above the 5% Hurd forced on everyone else. Some project managers I know took a cut of 25%, making 30% overall. They are in financial difficulties, despite having 20 or more years service and working long hours.

Ask them about "the HP way".

chuck said...

Your comments seem right "on target" to me, Alex. I have been strongly impressed by the ex-EDS folk I've met at HP, and they have all shared some version of your views here. This will be a great challenge for Apotheker (as it would be for anyone taking over).

If I were to be snide, I'd say that's why they pay the big bucks for these CEOs -- their real job is to solve these kinds of dilemmas, and put a solid footing for not just this quarter's results, but for the long-term success of the company. And it is unimaginable that having one-third of your company (both men and women) loathe the place can work for the longterm (or even the short term). Thanks for the input!

Fred said...

I agree that the HP Way could be a big impediment to A's success. I worked for a Silicon Valley startup that had gone public in the 80's when it got bought by a large German telecommunications company. People in both companies entered the union with great enthusiasm and energy. Within a few months the relationship began to sour and a year later most of the senior engineering staff, including me, had departed. In spite of best efforts, the differences in culture, management style, and product development processes were too much to overcome. The SV guys were used to a flat management structure, dynamic and adaptable processes, few restrictive practices, and free discussion. The new management was much more rigid and couldn't understand the "whining."

During my time at HP, I enjoyed working in the HP Way which I appreciated as a set of core values, respect, and responsibilities that were the basis of policies, practices and decisions. Many employees translated these values into processes and practices that they valued and viewed as immutable. In a competitive and changing environment, core values must be maintained while adapting to the conditions.

As a retired HP person with friends still at the company, I hope the new CEO leads the company successfully with inspiring leadership.