Sign in with
Sign up | Sign in

Opinion: 3 Things HP Needs To Do Right Away

By - Source: Tom's Hardware US | B 30 comments

HP's board has done it again. Leo Apotheker was fired, seemingly without much deliberation, from the CEO post. Successor Meg Whitman inherits a half-baked strategy that has HP dangling between a hardware-focused and a software-tailored future.

HP's board did it again: CEO Leo Apotheker was fired, seemingly without much deliberation. Named his successor, former Ebay CEO Meg Whitman inherits a half-baked business strategy that has HP dangling between a hardware-focused and a software-tailored future.

One of Whitman's first official statements was that she has a lot to do at HP. Given the fact HP stock declined by 47 percent during Apotheker's leadership, Whitman may have understated what lies ahead of HP - a monster corporation that can hardly control its growing number of arms and legs. Torn between the sprouts of different business strategies, it is difficult to define what HP is about today. I have some thoughts what Whitman should be doing right away.

1. Remember the HP Way: Reinstall it, and employees will follow you

Hewlett-Packard has had a few CEOs and chairpersons who followed the ‘new broom sweeps clean’ mantra. In 2001, HP began its move into the services business through a merger with Compaq, who had previously acquired Digital Equipment Corporation (DEC)—a major services force. The highly controversial move was pushed through by then CEO Carly Fiorina. While it was common knowledge HP's weakness was a lacking Internet strategy (which Fiorina's predecessor Lew Platt missed completely). Fiorina wanted to change HP’s image from that of a ‘printer company’ into a PC and services giant. She was forced to resign in 2005 over differences with HP's board. Mark Hurd took over in 2005 (after 25 years at NCR) and instituted a rigorous cost-cutting strategy which allowed HP to gain traction again. He resigned in 2010 after an internal investigation (sparked by a sexual harassment claim against Hurd) uncovered expense-account irregularities. Leo Apotheker was appointed CEO of HP in late 2010 and was replaced by Whitman this week due to the board’s reported unhappiness with Apotheker’s execution of HP's business strategy.

Most of HP’s recent CEOs may have made the same mistake of failing to remember the company’s foundation. HP’s foundation is not its printer business, PC business, or its services. It's about the employees and the heritage of William Hewlett and David Packard, whose greatest idea may have been the creation of the HP Way. The HP Way is generally described as the core values of the company's two founders and the art of translating those values into a structure of operating a business by establishing and maintaining a corporate structure and creating business strategies. In that sense, HP has a hidden treasure and opportunity few other companies have, but it is also a trap for newcomers seeking to make HP their own, which simply cannot be. Mark Hurd was possibly the CEO most committed to the HP Way, as he reportedly promoted the heritage of Hewlett and Packard above his own. Whitman will have to reinstate the heritage of the company and its core values and build upon them. HP does not need another new broom that sweeps clean.

2. Invent: Foster creativity and innovation to fix the cracks and lay a new foundation for the HP of 2015.

"Invent" is the little word that HP likes to put below its logo, yet it is innovation which Whitman must focus on. Unfortunately, the true innovation we once expected from a company the size of HP just isn’t there anymore.

I can’t think of any innovation HP is known for these days. In printers, it is difficult to create something beyond LCD displays in color printers. Besides, when was the last time we got excited about a new printer? The current PC market can be frustrating and problematic given its low-margin. However, we know that with hundreds of millions of PCs being sold every year an opportunity for innovation is just waiting to be unlocked. One such opportunity slipped through HP’s fingers in 2006 when newly acquired VoodooPC was killed off. Another chance disappeared when HP completely missed the tablet market despite having all the necessary tools to make it a success, including the advantage of building upon hardware and software no competitor could. In services, HP appears to remain in an eternal second-place behind IBM, fighting for much smaller services portions with smaller services providers. While HP is following the cloud computing trend, it struggles to sell its ideas, which are often just marketing phrases placed atop larger trends. Today, HP's tagline should be "follow" and not "invent".

I know patent filings are a controversial topic these days, but consider the fact HP published just 26 U.S. patent applications over the past 60 days while IBM filed 634 applications. IBM was granted 1299 patents by the USPTO, while HP received only 245.There may be questionable patents in both collections, but the perception is clear that HP needs to do more.

3. Drop Services: Return to your roots, take advantage of HP's brainpower

I admit this is certainly a controversial idea. HP Services are second in revenue to only HP PC sales - $1.2 billion in profits compared to $892 million in net earnings. (Posted by the printing group for Q2 2011.) However, HP is ever more frequently colliding with IBM and getting cut out off from the big deals the company desires. The only way for HP to sustain its services business will be the acquisition of companies such as Autonomy, which will get increasingly expensive.

There are few successful companies in both the consumer and enterprise markets. The enterprise market is occupied by IBM, which would make the choice to go much more effectively after the consumer market an obvious one for HP, thus avoiding compromised budgets and strategies that have to be divided between the two markets. Focusing everything on the consumer market would enable HP to compete with Apple much more effectively, develop products consumers get excited about, and deliver on the company’s innovative promise. It's a big risk, but HP has the resources and the brainpower to turn its traditional business and strength back into the wind.

Discuss
Display all 30 comments.
This thread is closed for comments
Top Comments
  • 18 Hide
    burnley14 , September 29, 2011 2:02 PM
    I have a really great strategy for HP: quit making crappy computers. Step up the quality of your components and build machines to last. After owning a couple HP's and having them completely fall apart, I will never buy another nor recommend one to a friend. Time to change my opinion on your product quality HP.
  • 13 Hide
    back_by_demand , September 29, 2011 2:13 PM
    1. Sell cheap but powerful PCs
    2. Release a Windows tablet
    3. Not spunk billions on Palm only to chuck it in the bin and axe WebOS
  • 13 Hide
    simon_palmer , September 29, 2011 2:03 PM
    You lost me at, "Innovate" is the little word that HP likes to put below its logo.

    The word is Invent NOT Innovate :( 
Other Comments
  • 18 Hide
    burnley14 , September 29, 2011 2:02 PM
    I have a really great strategy for HP: quit making crappy computers. Step up the quality of your components and build machines to last. After owning a couple HP's and having them completely fall apart, I will never buy another nor recommend one to a friend. Time to change my opinion on your product quality HP.
  • 13 Hide
    simon_palmer , September 29, 2011 2:03 PM
    You lost me at, "Innovate" is the little word that HP likes to put below its logo.

    The word is Invent NOT Innovate :( 
  • 13 Hide
    back_by_demand , September 29, 2011 2:13 PM
    1. Sell cheap but powerful PCs
    2. Release a Windows tablet
    3. Not spunk billions on Palm only to chuck it in the bin and axe WebOS
  • 6 Hide
    Anonymous , September 29, 2011 2:15 PM
    I remember a time when HP made the best printers, best PC's out there. Now, they make mostly junk. I can't say they don't innovate, because the little Android tablet on the inkjet printer idea is a pretty nice idea. However, HP inkjet printers no longer use the least amount of ink, though they still have a sharp, vibrant printout, and their computers are just as crappy as Dell's. They need to take the high road, much like Apple, and quit peddling junk. They've ruined their name!
  • 11 Hide
    sunflier , September 29, 2011 2:28 PM
    Quote:
    3 Things HP Needs To Do Right Away

    1. Stop selling PC's with bloatware (yes they all still have crapware)
    2. Bring all Customer Support & manufacturing back to the U.S.
    3. After 1 & 2 market your products better.
  • 7 Hide
    gsxrme , September 29, 2011 2:36 PM
    I agree. We're a local computer shop and HP and Dell keep our doors open with there poorly crafted computers.

    1) Software is bloated to hell.
    2) Laptop cooling is so...... bad and causing so many cooling issues.
    3) Cheap plastic cracks
    4) Hasn't released anything ground breaking new, just a refresh of crappy crap with new CPUs.

    HP reminds me of Emachines before Acer bought out emachines and destroyed the brand.

    I guess we have HP as the new Emachines! Such a pile of #$#%
  • 8 Hide
    yzfr1guy , September 29, 2011 2:47 PM
    My advise for HP: Don't pay a lousy rapper a gazillion dollars for advertising..
  • -2 Hide
    aftcomet , September 29, 2011 2:47 PM
    How about a new logo? That Christmas font had become annoying and looks extremely unprofessional. Consumers want something that looks sleek.
  • 0 Hide
    GreaseMonkey_62 , September 29, 2011 2:57 PM
    HP is big enough they could separate the divisions into semi-autonomous business units. So if services wants to grow they have their own budget, revenue, profit - the same for Consumer Products and etc.
  • 4 Hide
    billybobser , September 29, 2011 3:01 PM
    For computer experts, their pc build options seem to be made by retards.

    Therein lies a problem. (why offer the most super duper intel chip, then compromise it with unknown motherboard and a discreet GPU on a par with intels new on board graphics, no better than dodgy pc builders on ebay, quad core = 3.6x4 = OVER 9000 GIGAHURRTZ)

    Also, advising HP to go after consumers instead of enterprise market seems somewhat foolish.
  • 2 Hide
    Onus , September 29, 2011 3:12 PM
    Don't let the Laserjet's reputation for quality slide. When it counts, people still want to be able to take their printers for granted, not babysit them or replace parts every few weeks or months. Yes, you ARE a printer company; be the best one.
    Tell all the advertisers to take a hike. Bloatware really sucks.
    Your customer service is fast and efficient (I was able to verify warranty coverage on someone ELSE's HP laptop and get a HDD replacement for her in a matter of only 2 days, without jumping through hoops with script-reading "technicians"). Make sure consumers know that.

    Edit: And I agree with the article's #1. People are enthusiastic about joining companies with a solid foundation of meaningful core principles. If you're not that, disillusionment and apathy can set in, and apathy in particular is a killer.
  • 5 Hide
    Anonymous , September 29, 2011 3:55 PM
    As someone who lived through the Hurd regime, as soon as you said "Mark Hurd was possibly the CEO most committed to the HP Way", the rest of the article suddenly lost all credibility. Mark Hurd was a butcher. Sure, he was good at burning all the furniture in order to prop up the short term stock price, but he was a one-trick-pony (the only thing he was good at was cutting costs, and destroying HP's ability to do any meaningful R&D), and he was universally hated by technical/R&D employees for it. Mark's Way was the antithesis of the HP Way.
  • 2 Hide
    belardo , September 29, 2011 4:06 PM
    HP.... can't do anything...
    Does the world actually NEED HP?
  • 0 Hide
    3Ball , September 29, 2011 4:26 PM
    I sure hope they dont listen to your third point as I work for HPES.
  • 1 Hide
    legacy7955 , September 29, 2011 4:31 PM
    Wolfgang plagiarized my posts from other HP stories here! LOL

    I suppose I should be flattered.
  • 0 Hide
    legacy7955 , September 29, 2011 4:35 PM
    Three things.

    1) Focus on quality products, and customer service.
    2) Go back to their roots and remember how Bill and Dave operated the company, the HP way.
    3) The entire board should resign for the good of the company.
  • 1 Hide
    brn_gomes , September 29, 2011 4:42 PM
    Listen to your employees.... Or, in this case your ex-employee, he knows what to do, promote him to CEO or something cause honestly your last CEO was like a fish in a desert.

    http://www.xbitlabs.com/articles/other/display/rahul-sood-interview-2011.html

    Still can't believe you fired this guy.
  • 0 Hide
    back_by_demand , September 29, 2011 5:05 PM
    ZingamThe Windows tablet is the biggest misery! It would sell as hot cakes well even better than Windows Phones 7. Just look for review on Windows tablets. They suck!!! All of them, because of Windows! Forget about Desktop applications on tablets!!!

    Please note I did not say Windows 7 tablet, just Windows tablet.
    Windows 8 will do a storm, certainly a lot better than what it cost them to dump the Touchpad.
  • 4 Hide
    house70 , September 29, 2011 5:06 PM
    simon_palmerYou lost me at, "Innovate" is the little word that HP likes to put below its logo.The word is Invent NOT Innovate

    Cut the guy some slack; he's an Apple expert, not HP.
  • 1 Hide
    HeadScratcher7 , September 29, 2011 5:25 PM
    I'll never buy another HP printer. They make great printers, but their software is the worst. Every time I need to print there's a problem. The printer driver needs to be reinstalled, or it won't see the HP network printer that is visible to the rest of the network and can be pinged. My brother has a Canon printer and I installed the drivers in 5 minutes and was printing. It takes me 30 minutes EVERY TIME I want to print something to an HP printer. And it isn't just the one printer, ITS ALL OF THEM. So maybe if they hire some new software engineers and rewrite all their drivers from scratch then maybe they could get somewhere. Lately I have had more success by installing their barebones drivers and skipping the rest of their software bundle. It also makes driver reinstalls much faster.
Display more comments