HP's Lane on why Apotheker had to go

HP's Lane on why Apotheker had to go

Summary: Although HP's conference call to introduce Meg Whitman as CEO revolved around her capabilities, a lot of Ray Lane's time was throwing Leo Apotheker under the bus.


HP executive chairman Ray Lane said the board had to make a leadership change because the company habitually missed financial targets, botched communications, lost credibility with Wall Street and couldn't rally HP's 320,000 employees.

While much of HP's conference call to introduce Meg Whitman as CEO revolved around her capabilities, a lot of Lane's time was spent on explaining why former CEO Leo Apotheker had to go. Lane went through a series of explanations. Here's a look at why Lane and the board arrived at the Apotheker decision.

More: HP CEO Whitman: PC spin-off still in play, Autonomy deal too

Apotheker couldn't run a large company. Lane said:

HP was searching for a new CEO last fall, and ultimately hired Leo Apotheker. The company had been jolted by the departure of its prior CEO. At the time, the company was executing well and the board sought a candidate who could develop a strategic vision for the future. For years prior, the company had cut costs to the point where it sacrificed innovation. In order to grow, HP needed to make strategic investments and innovation is part of the fabric of this iconic company that could no longer be set aside. Leo was tasked with developing the vision for HP. We credit him with having made important contributions on that dimension and supporting the company's future.

That set-up led to the Apotheker couldn't hit targets line. Lane added:

It became increasingly clear that we needed new leadership to focus on operating our business is more effectively to meet the challenges of today's environment and I learned it most vividly by talking to a lot of you (Wall Street analysts) the day after our announcements when you focused on operational execution more than anything else. Specifically, the board believes that the job of our CEO requires additional attributes to successfully execute in the company's strategic evolution. Now, this includes having the leadership abilities to deliver improved execution and financial performance.

Overall, Lane focused on three primary reasons why Apotheker had to go:

Apotheker couldn't form an executive team. Lane said:

This is a company that requires an executive team to be on the same page. I would spend time here or at board meetings or whatever the occasion was and we didn't see an executive team working on the same page or working together.

Apotheker couldn't execute. Lane said:

(Apotheker lacked the) ability to get down deep into the businesses and understand the dynamics that were going on the businesses, and that could land us on a quarter ahead of expectations.

Communications were botched. Lane referred to HP's announcement that it would buy Autonomy, spin off the PC unit and ditch the TouchPad and said:

I think we struggled in the August 18 announcement, and when we communicated to our constituents, customers, press, investors, with clear, concise communications.

Topics: Legal, CXO, Enterprise Software, Hewlett-Packard

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  • Because Meg was board...

    And needed something new to do and we figured she can't do any worse than the guy we currently have.
    • That's about it

      @Bruizer What BS. All of this could have been said when Apotheker was named.
      • This Lane guy talks nonsene; he is the one who had to be ousted; I mean, ..

        @otaddy: ... seriously, Apotheker could not run big company? Did this Lane guy heard of SAP AG, tens of billion dollar scale giant?

        What a cheap excuse. Apotheker made right decisions, saving HP of billions of losses that were initiated by the media/Wall Street darling Mark Hurd, and the only actual reason why he was ousted is that the board and this pathetic, cheap-shot Lane needed a PR sacrifice.
      • DeRSSS, the author made that statement that

        [i]Apotheker couldn???t run a large company[/i], not Mr. Lane.

        He actually credits him with [i]We credit him with having made important contributions on that dimension and supporting the company???s future[/i]

        I believe the author is reading what he wishes to from the statements.
        Tim Cook
    • RE: HP's Lane on why Apotheker had to go


      Huh? He lasted a year at SAP and was ran out of town. He almost destroyed HP in his short tenure.
      • so why did the board hire him?

        @MichaelWells They didnt check his references?
  • RE: HP's Lane on why Apotheker had to go

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  • RE: HP's Lane on why Apotheker had to go

    "For years prior, the company had cut costs to the point where it sacrificed innovation."
    Sadly, too many American companies (and many throughout the world) make the decision to cut R & D, staff, etc... to keep investors happy short term. In the long run, the investors lose out as the value of their stock plummets even further. Examples are : HP, RIM, Nokia, Palm...
  • RE: HP's Lane on why Apotheker had to go

    It seems that the HP board didn't read their own management book that was written in the late 1960s/early 1970s. Or, perhaps they did.
  • RE: HP's Lane on why Apotheker had to go

    320,000 workers & NO money coming in! Expect more job-cuts real soon. These guys don't have a clue what they're doing! 3 CEO's in a year!?! The board of this company is dumping all of the hiring decisions on the person "they" hired! Crazy! If possible, HP needs to dump their entire board, then make a clear & definitive decision whether they're in the hardware/software business or just the service/IT business. They need to do this quickly, they're losing mindshare by the day.
  • @otaddy

    I was not defending the board; I was dismissing your defense of him.
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