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Topic: Banking

HP on 2012 focus: Shareholders (nope, not customers)

Summary: Customers are the lifeblood of every company. The company that focuses on things other than its customers shouldn't be surprised when they start going away.

James Kendrick

By for Mobile News |

A statement by HP CEO Meg Whitman during today's financial conference call drove home why the company seems to be floundering in regards to its direction. During the Q&A session after presenting the numbers, Whitman made this statement that jumped out at me:

"In 2012 we are focused on share price and shareholder value."

Did you see the word "customer" in that focus statement? Nope, and that is why HP seems to lack direction given its recent bizarre decisions. No one is putting the customer first, the source of all of that revenue. The group wanting to believe that HP is taking care of them. The group that can switch to products of another company at the drop of a hat. That is rather telling.

Topics: Banking, Hewlett-Packard

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18 comments
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  • RE: HP on 2012 focus: Shareholders (nope, not customers)

    You'd think they would learn a lesson from Dell on that kind of thing!
    minimage
    Reply Vote

  • RE: HP on 2012 focus: Shareholders (nope, not customers)

    I don't mean this to be a disingenous question, but can you consider shareholders to be customers?
    NoIcon
    Reply Vote

    • RE: HP on 2012 focus: Shareholders (nope, not customers)

      @NoIcon
      No.
      Also, "shareholders" are usually an excuse for the high priced executives to loot the company.
      Bill4
      Reply Vote

    • RE: HP on 2012 focus: Shareholders (nope, not customers)

      @NoIcon No. It's not this simple, but shareholders do not, by their position as owners of your company stock, buy your products and create the cash flows that manifest the business activities that result in your profits. They do, on the other hand, enable the "commonly agreed upon" value of >your stock< to be supported at some multiple of the company's earnings. In short, attention to the one (customers) will ultimately produce the others (shareholders).
      b4ugo
      Reply Vote

    • RE: HP on 2012 focus: Shareholders (nope, not customers)

      @NoIcon

      No. I can be a shareholder of a company and use none of it's products.

      But shareholders should [b] never[/b] be the focus of a company. Focus on the customers and they will make the brand valuable. Then that value will attract shareholders. Look at Apple. They don't care as much for the shareholders as customers and they are, what, the most valuable company?
      itguy10
      Reply Vote

  • If a company has no customers,

    they have no shareholders. If the company does not make a profit, they have no shareholders. If they have no shareholders, the company shrinks. If the company shrinks, it begins to become irrelevant and uncompetitive. Then the company goes out of business. I won't invest (own) in such a company.

    Apple has far fewer and happier customers than HP. They also have very happy owners. Obviously there is a happy medium. HP can and should strive for the same balance so they can attract more owners and continue to grow. I hope they succeed. I have eyed their stock, but I'm not yet convinced to buy a piece of it.
    People
    Reply Vote

    • It was not always that way

      @People
      [i]Apple has far fewer and happier customers than HP. They also have very happy owners[/i]

      It was only until recently did that happen, but now the test will be whether they can continue to please both.

      Should Appl'es stock price drop or level off, sharholders will not be happy. They are in it for profits, not happy customers.
      :|
      Tim Cook
      Reply Vote

      • RE: HP on 2012 focus: Shareholders (nope, not customers)

        @Mister Spock So unhappy customers = higher profits?
        thetwonkey
        Reply Vote

      • RE: HP on 2012 focus: Shareholders (nope, not customers)

        @Mister Spock

        Make customers happy and they will make profits for the company. Pi$$ off customers and they will shop elsewhere and profits will fall. Hence unhappy shareholders.
        itguy10
        Reply Vote

    • RE: HP on 2012 focus: Shareholders (nope, not customers)

      @People Good eye. it may be a bargain, and it may be wasted money. Kind of like Powerball
      dalspartan
      Reply Vote

  • RE: HP on 2012 focus: Shareholders (nope, not customers)

    I think is a typical statement and a mindset from a large number of executives in this era. The customers and the employees ("the company") are now lined up behind the stockholders. In a significant number of cases, the stockholders are in it for the short term profit and could not care less about what happens in the longer term.
    WileyLeaper
    Reply Vote

  • Sure but at least

    they are more honest than other companies which supposedly care about customers but in reality only care about their shareholders, and sometimes way more than HP.
    The premium example is the favorite of media and of bloggers which would sell its products at a much lower price if it really cares about customers.
    timiteh
    Reply Vote

    • RE: HP on 2012 focus: Shareholders (nope, not customers)

      @timiteh
      If the customers are willing to pay why would they sell products at a lower price. Sounds like a backward strategy to me. Any company should sell at what the market will bear. All price cutting in the computer industry has done is led to few companies that sell millions of computers and struggle to make a profit. Glad you're not running that "favourite of the media" company.
      A Grain of Salt
      Reply Vote

  • RE: HP on 2012 focus: Shareholders (nope, not customers)

    A "focus on shareholder value" rather than long-term sustainability is the reason U.S. corporations are in so much trouble. Left unsaid in these sorts of announcements is the self-serving nature of the plan. When a CEO, whose compenation package probably includes a big chunk of company stock and options, announces that their goal is "shareholder value" what they're really saying is that their goal is personal enrichment.<br><br>When a post-mortem is run on the sad remains of a once towering U.S. economy, the Coroner's report will ascribe the patient's death to a culture in which corporate CEO's were able to leverage their companies' long term sustainability in exchange for salaries and bonuses that allowed them to retire fabulously wealthy in just a few short years.<br><br>We should be paying CEO's $300,000 a year, not $30,000,000. The CEO who's making $300,000 a year will do his darndest to ensure that the comapny stays in business for the long-run, because every three years he's making a million dollars. The CEO who's pulling in $30,000,000 a year could care less if the company folds after three years, because even in that case he's walking away with nearly one hundred million in the bank.
    dsf3g
    Reply Vote

  • RE: HP on 2012 focus: Shareholders (nope, not customers)

    This is the very reason my business partners and I decided we would not go public under and circumstances and would not otherwise take investments from anyone outside of ourselves. Not venture capitalists, not angel investors, nobody. The minute you do, you are at their beck and call. Investors nowadays fit the same description as the CEOs mentioned in a previous post. They don't want to make a few thousand a year for the next 30 years off of a company. They want to make a quick million or twenty and get out. That tosses any long term goals right out the window. Bad for the customers, bad for the company.
    crimsonxt@...
    Reply Vote

  • RE: HP on 2012 focus: Shareholders (nope, not customers)

    From Mark Cuban's blog...

    1. The Great Lie of Wall Street.

    Every CEO tells the same great white lie. It is at the heart of every communication. It is at the heart of every financial decision. It is, at it???s very base, the reason why you all are in the 99pct and they are in the 1pct. The Lie ?

    Great CEO White Lie = ???We are acting in the best interests of shareholders.???

    read the whole post here:

    http://blogmaverick.com/2011/10/14/
    Mike Burch
    Reply Vote

    • RE: HP on 2012 focus: Shareholders (nope, not customers)

      @Mike Burch -Cuban is a genius who is typically ignorant of economics. He made a lot of money, and like Buffet, that doesn't qualify him to run an economy at all. Many companies layoff employees because the work just isn't there, and the profit to pay them with isn't there. Which is unlike taxes, which, when the government runs out of money, they just steal more. Imagine the economy if there were 15% more money, not printed worthless paper, put into it. The economic boom would cause the hiring of the 16% (real unemployed not just the government don't make me look bad numbers). Works every time it's tried, the economy fails every time the prescription is ignored.
      dalspartan
      Reply Vote

  • RE: HP on 2012 focus: Shareholders (nope, not customers)

    They need to focus on the shareholders (the owners who risk their money) for a while, and repay them for the billions (!) wasted on the Palm purchase and their recent ventures.
    Once the shareholders aren't getting ready to roast the board, they can then again turn their focus, if they really can have some, to the customers, and develop great new products.
    HP is a leader in touchscreen technology, for crying out loud, they got it working with Vista! Maybe Meg can settle down an ADD company and get them back on track, cutting out the corporate BS.
    dalspartan
    Reply Vote
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