So Hewlett-Packard’s board is deciding whether or not to fire its CEO Leo Apotheker and replace him with an HP director, a former U.S. Senate candidate in California, and, most importantly, former eBay CEO Meg Whitman as an interim leader.
In other words, it’s all over except for what type of compensation package Apotheker will get from HP and whether Whitman, or someone else, will take over as CEO.
My question is this: Can you fire HP’s board of directors?
That seems to be a page out of the George Steinbrenner School of (Mis) Management – make knee-jerk decisions and second-guess the manager you’ve hired to run the business.
This group, for the past decade, has reacted to just about every tech and financial fad, picking the wrong CEOs or second-guessing them, and not providing the long-term vision needed to provide reliable, long-term profitability and growth.
No, I am not an apologist for Apotheker or an HP stockholder. (Since he took over Nov. 1, HP’s stock is down 44 percent, according to a Bloomberg report.)
He caused his own problems, most recently in August, when within weeks of introducing its first tablet with much hoopla, HP said it was going to pull the plug on its TouchPad tablets and its WebOS phones based on its $1.2 billion purchase of Palm last April. And HP has decided to spin off or sell its personal systems group, the PC operation, which has a leading market share. Apotheker announced on the same day HP is buying Autonomy, an enterprise software company for more than $10 billion in cash, and which supposedly yields a low return on investment for that price.
Apotheker didn’t make those decisions out of a vacuum. The board approved them, in part probably believing headlines that the PC business is dead and who wants to compete with Apple anyway?
Now that most of those decisions have been panned by investors, Wall Street and industry observers, and its stock tanked, it wants to fire its CEO. Again.
Bloomberg points out that a new CEO would be HP’s seventh since 1999 when Carly Fiorina took over from Lewis Platt. At least it hasn’t rehired a fired CEO, like Steinbrenner did in rehiring Billy Martin to manage the Yankees time after time.
(Remember the Yankees under Steinbrenner began to win championships under his ownership in two spurts, when he was suspended from baseball twice by the Commissioner. Left to his own devices, chaos reigned supreme.)
I’m not especially a fan of Fiorina, but she was raked over the coals by HP’s board and longtime HP insiders for her purchase of Compaq in 2002. But take a look at our story from 2005 when Fiorina was discarded and the related financial from the last quarter she led HP. What was wrong with those numbers?
Word was she was canned because Wall Street – which was throwing money at companies running red ink but had a “potential” for future growth – thought HP should grow faster. She also didn’t kiss the rings of certain board members or members of the Hewlett and/or Packard families, and probably didn’t adhere to the HP Way.
After Fiorina there was an interim CEO, Mark Hurd, who was effective but resigned due to alleged inappropriate behavior with a female contractor.
Another interim CEO followed, and then Apotheke. Plus in 2006 HP investigated journalists and certain board members to find out who was leaking info to the media.
That last item smacks of something out of Watergate. The whole mess sounds like it could make a good mini-series or reality show, which would be funny if it wasn’t so sad.
On the CE front the word from well-connected TWICE sources indicate that when a new CEO is named, probably Whitman, HP will reverse its decision to jettison the PC business and stay in the tablet business, meaning it will keep WebOs.
That would be a little good news, but it is only the beginning.
What HP and its board need to do is find a CEO who is a visionary – maybe someone from within the company – who knows and believes in the technologies, products and people who will be given the autonomy to make strategic, long-term decisions based on the marketplace. And not based on the latest tech or financial fads.
HP’s co-founders Bill Hewlett and Dave Packard were visionaries, but they are long gone. HP is still a fine company and has a great brand and history and should be able to attract a top-flight CEO with their founders’ entrepreneurial spirit.