Thursday, January 24, 2013

Ten Most Hated?

Wow!  Affirmation of a disaster appeared this week in the Wall Street Journal re HP.  Two stories, the first about the legal machinations of HP vs. the previous owners of Autonomy, HP's ill-fated acquisition to get into the Business Analytics space under CEO Apotheker's regime.  

The second, written for 24/7 Wall Street by Douglas A. McIntyre and Michael B. Sauter on January 9, 2013, listed HP as the 10th most hated company in America.  The article said, among other things, that: 
The case against Hewlett-Packard is devastating. According to the ACSI, HP was the second worst-ranked personal computer brand in 2012. HP may also be the most mismanaged major company in the U.S., which gives shareholders a reason to turn on it as well. Five years ago, the company had annual net income of more than $8 billion. In the 12 months ending in October, HP lost $12.6 billion. The company shares are down more than 40% in the past year. Further complicating matters is HP’s acquisition in October 2011 of British data company Autonomy, which is now under investigation for fraud for misrepresenting its value. HP may have lost billions in the deal. Last year, in an attempt to restructure and stop the bleeding, the company laid off 27,000 employees, more than double any other company in 2012. Employee research firm Glassdoor reports that HP is also disliked by its employees.

This report would enrage the founders if they were still alive -- almost the worst indictment of all that they believed in and stood for.  And it isn't like we haven't heard this for some time now, tracing back all the way to the meltdown under Fiorina with the proposed Compaq merger in 2002.  Lessee, from January 2005 to January 2013, the CEO list includes Fiorina, Wayman*, Hurd, Lesjak*, Apotheker, Lane*, and Whitman.  Hard to expect much stability or consistency with that much turmoil, right?

But such reports are always composed from a particular point of view, in this case the Shareholder view primarily.  And yes, HP shares have not fared well in this decade -- but neither have Microsoft, Intel, or Cisco and no one is putting them on the Ten Most Hated list.  As for layoffs, those other three have suffered similar situations, and similar numbers frankly, in the past two years.

So I went to Glassdoor, as the article indicates, and guess what?  I took thirty companies -- the Ten Most Hated (starting with JC Penney, Dish Network, and T-Miobile) and then ten high-tech outfits (Cisco, Intel, Microsoft, Oracle, IBM, Dell, Qualcomm....) and some others (Boeing, P&G, Johnson and Johnson, Xerox...) -- and compared the ratings for "Employee Ratings" of the company, and of the CEO.  HP was 2.8 out of 5.0 for the company, rated by 5,174 employees, and 80% approval for Meg Whitman as CEO (from 1,178 employees).  The 2.8 rating was in the bottom quartile of the thirty companies I picked somewhat randomly; the 80% for the CEO though was in the top third of the list.

Last time I looked at Glassdoor, Hurd was ranked very near the bottom -- if there had been a list of Most Hated CEOs, he was the clear winner for the Fortune 100 while running HP with his savage brand of tyranny.  Shareholders loved him.  Employees hated him.  He killed the HP Way, no question about it, and while he was at it, killed the creativity that was the hallmark.  Guess why HP is stuck?

Here's another paradox of "vantage point".  The highest two ratings for CEO in the list of thirty were Mark Zuckerberg at Facebook (97% approval by his employees, and 4.6 out of 5.0 for the company) and Tim Cook at Apple (95% approval for Cook, and 3.9 for the company).  Larry Page at Google gets 95% approval, and his company earns a 4.1 rating.  Yet Facebook is rated the #4 Most Hated company on the WSJ list, and after yesterday's "dismal" earnings report by Apple and the 35% meltdown of their lofty stock price from last September, who knows how soon Apple will make that list.

What's the takeaway?  I think it is simple:  "What have you done for me lately?" drives most ratings.  Judged that way, HP certainly has a lot of room for improvement.  But if employee morale and belief in a CEO is any indicator, HP is going in the right direction.  Consider Antonio Perez, who used to run HP Printing, as CEO at Kodak today getting a 23% approval from his folk, or the Danaher company (owners of Agilent's chief competitors Tektronix and Fluke) with 2.4 and 40% approval ratings.

Should we consider a follow-on book to "The HP Phenomenon"?  Maybe it could be called (as a parody of Jim Collins' Good to Great) "From Great to Gone: Who Killed 'em?"

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