Meg Whitman's ledger: Is she up to running HP?

Meg Whitman's ledger: Is she up to running HP?

Summary: HP has to decide whether its recent issues are about the leadership or its plan to ditch PCs and bolster software and services.

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Meg Whitman is allegedly a top pick to be HP's next CEO, but the to-do list is massive and it's unclear whether swapping leaders will make that much of a difference. The larger questions revolve around whether HP has a board of directors problem, a leadership issue or a questionable master plan---assuming it still has one. Perhaps it's all of the above.

The to-do list for Whitman goes like this:

  1. Decide what to do with the PC business. Should it stay or go?
  2. Determine if HP's software strategy is correct and figure out if Autonomy is the right fit.
  3. Fix the services business and move it to higher margin deals.
  4. Figure out whether HP pulled the plug on the TouchPad too early.
  5. Define HP.

But those aforementioned items are just the short-term items for HP. In the longer run, HP has to decide whether its recent issues are about the leadership---Leo Apotheker wasn't up to snuff---or its plan to ditch PCs and bolster software and services. HP's board met Wednesday, but didn't pull the trigger on Apotheker. However, that vote of no confidence has already damaged HP and Apotheker. The company looks rudderless.

Also: Will ousting Apotheker at HP make any difference? CNET: HP is having an identity crisis HP reportedly pondering Whitman for Apotheker CEO swap Techmeme

Assuming HP's plan revolves around cloud computing, services, software and integrated systems, it's worth asking whether Whitman is up to the task. Some analysts already question whether Whitman is the right candidate.

Collins Stewart analyst Louis Miscioscia said in a research note:

Whitman has not run a company the size of HP, nor one focused on the enterprise, both of which are concerns that are made more important by the fact that HP is in need of a turnaround in many lines of business, not just a new strategic direction.

Here's a look at the Whitman ledger:

Running a large organization. Whitman grew eBay from just a pup to a massive business. The growth and scale of eBay in the glory days was impressive. Under new leadership, eBay has reinvented itself courtesy of the PayPal acquisition. However, HP has annual revenue north of $100 billion. There are only a few leaders that can manage that scale.

Familiarity with HP. Whitman recently joined HP's board and should know the problems intimately. At the very least, Whitman knows the strategy and theoretically was on board with it.

Hardware know-how. There's nothing in Whitman's experience that indicates that she can pitch servers, know the roadmaps or figure out what HP's ultimate strategy should be. Then again, Apotheker wasn't a hardware guy either.

Software strategy. Whitman knows Web and e-commerce software and scaling an enterprise via her eBay experience. Apotheker knew applications via SAP. The larger question is whether HP's strategy for software makes sense going forward. Was Whitman in favor of the Autonomy acquisition? It's possible. Under Whitman's tenure eBay bought Skype in a deal that didn't quite work out as planned.

Services. Whitman should know the consulting business since she was a consultant at Bain. You could argue that HP's last two CEOs---Mark Hurd and Leo Apotheker---didn't get the high touch strategic nature of consulting. The biggest issue is that it will take years to get HP services running at a strategic level.

Branding. Whitman's experience at Disney, Hasbro and Procter & Gamble indicates that she will know a lot more about branding than her predecessors.

Managing expectations. One of HP's biggest problems is that it can't manage expectations. Hurd could, but he's the only CEO in recent history that could pull all the levers to please Wall Street. Whitman should be a vast improvement over Apotheker, who managed to deliver earnings conference call debacles in his short tenure.

Related:

HP reportedly pondering Whitman for Apotheker CEO swap

Around the network:

Topics: CXO, Hewlett-Packard, IT Employment

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15 comments
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  • RE: Meg Whitman's ledger: Is she up to running HP?

    Not a chance - HP needs a turnaround specialist - anyone can manage growth, it's managing multiple failures that takes real talent.
    dahowlett
  • RE: Meg Whitman's ledger: Is she up to running HP?

    Microsoft should sponsor them a new CEO too.
    DreyerSmit
  • How many American PC makers are left?

    HP's PC reputation is still good. It's still a good brand. Why get rid of it, when once you do, it's not a reversible decision? Patience is lacking, when short term stock turn arounds are the obsessive goal.

    If Apple behaved this way, then they wouldn't have persevered with their long term strategies through their down times, to be come the success they are today.
    voltrarian
  • RE: Meg Whitman's ledger: Is she up to running HP?

    Sounds great to the uninformed, but she will not be successful in the long run. No connections to the industry - web based eBay is a very different animal then the monolithic HP.<br><br>Go with Bradley if you want any sort of chance. Revamp the board, reduced the bloated head count in management. Establish some KPIs that are measured and set some goals for rewarding the employees.
    BoiseDJF
  • Maybe the problem is political...

    First Carly Fiorina and now Meg Whitman?

    These guys don't seem to learn.

    At least Whitman has had some actual real world business success rather than the golden path to the rim of the volcano that let fellow failed GOP politician Firona (prior to her disastrous political career) to the top of HP and, seemingly inevitably, to her eventual firing.
    ks2problema
  • The problem is worse than you think

    Fiorina was vociferously opposed by the founders, the Hewletts and Packards. Who fought long and hard to defeat her rise to CEO. The Board and the proxy battle they lost, coupled with Fiorina's incompetence and wiretapping /surveillance of Board members (and the 40% drop in value of the corporation) left HP staggered. <br><br>In the wake of the Mark Hurd scandal, the subsequent board shakeup and addition of four new board members since January 2011 (including Whitman) we are looking at a major company in dire need of emergency care - or, a coroner. Meg Whitman is that coroner. <br><br>She has none of the requisite experience or skill to manage a manufacturing company. She is a virtual world baby where the rules were being written, largely, by people like Whitman. What is needed is a manager in the mold of a Lee Iacocca - an expert in manufacturing.<br><br>In days of saner fiscal policy, there would be no Fiorinas, Hurds or Whitmans. If Whitman takes the lead, HP's days left in business are even shorter than the dire position that they face today.
    Grolaw
    • Good points

      @Grolaw - This is the difference between entrenched and involved Boards. HP should have either grabbed someone from Apple, who knows how to evaluate and understand customers, or looked for someone from a company like Ford or NuCor, who've had experience in "recreating" their entire business.
      JoeBob_z
    • RE: Meg Whitman's ledger: Is she up to running HP?

      @Grolaw ... My only problem is that HP's with the exception of Hurd, has only picked losers. Leo was damaged goods from SAP. Meg got fired and took her case to social media. HP need to hire from within.

      One last thing. The next CEO should hire a damn good supply side manager. The world's largest computer maker should be able to maximize the parts market like Apple does. Then kill Apple on price. All of the pieces are in place. HP just needs a good helmsman.
      vince7@...
  • Whitman can't spell Customer Service

    Whether consumer or B-to-B, HP is a service business, and Whitman didn'
    t do that at ebay. Quite the contrary, her entire business model was f**k the customer, they're on their own. She might be able to make some hard-nosed business decisions and refocus HP, but she is not the person to run HP for the long haul.
    JoeBob_z
  • RE: Meg Whitman's ledger: Is she up to running HP?

    What's the deal with the gender discrimination. Why does it have to be a woman again. And oh, by the way, eBay's business was already running pretty much the same way before she took over, so saying she "grew eBay from just a pup to a massive business" isn't saying much. All they had to do was sit back and relax, and the growth was viral.
    DaveMorris
  • RE: Meg Whitman's ledger: Is she up to running HP?

    Wow! For once all the comments are right on the money. Whitman? What a joke. Thank providence that she lost in the Governor's race. As another commenter pointed out, under Whitman, eBay's customer service is horrid (and PayPal's is a thousand times worse than eBay's). No, Whitman was just fortunate to be at the helm of the best positioned startup when the concept of online auctions took hold. She was just competent enough to not eff it up, and that's being generous with her. I still think eBay could do a lot better if it would change some of its policies put in place under Whitman.
    public@...
  • RE: Meg Whitman's ledger: Is she up to running HP?

    The onlything she ever did well at eBay was profiting from taking them public. She got her billion dollar payday so quickly after taking the helm, that you can't really say she did anything to deserve the windfall.
    ceverett@...
  • RE: Meg Whitman's ledger: Is she up to running HP?

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  • RE: Meg Whitman's ledger: Is she up to running HP?

    She actually ran ebay into the ground before she left by artificially inflating stock values so she could get her millions. She moved ebay's primary business to investments and not any sort of technology business. It seems HP is just looking for a name....or a scape goat.
    bytor_tp@...
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