Meg Whitman could land CEO role in HP soap opera
Anyone stuck for a new soap opera -- perhaps something like Dallas but with smaller shoulderpads -- could certainly find inspiration in the upper echelons of Hewlett-Packard, the founding company of Silicon Valley. Those who have already been entertained by the Carly Fiorina saga and the ousting of Mark Hurd might now be looking forward to a new mini-series where Meg Whitman replaces the current boss Léo Apotheker.
According to reports from Bloomberg (HP Board Said to Weigh Ousting Apotheker as CEO) and the Wall Street Journal's All Things D (Former eBay CEO Meg Whitman Being Considered for HP CEO Job to Replace Apotheker), HP's board is thinking about replacing Apotheker after only 11 months in the job. Whitman could take over, if only on a temporary basis.
The knives have been out for Apotheker because HP's share price has (roughly) halved since Hurd resigned following a no-sex-it's-expenses-scandal involving B-movie actress Jodie Fisher (see Actress revealed in HP's 'sexual harassment' scandal). Apotheker's case has not been helped by the TouchPad tablet debacle -- the machine was rapidly withdrawn and stocks jobbed off at fire-sale prices -- and by plans to buy Autonomy for an eye-watering $10 billion.
Apotheker also damaged HP's market-leading PC business by saying the board was going to consider selling it off, or hiving it off as a separate company. This admission was greatly appreciated by, among others, Michael Dell.
Apotheker used to run the SAP enterprise software company and it's not exactly a secret that HP would prefer to pocket large profits from serving large corporations than from fighting it out in the low-margin PC market. And it didn't take much effort to arrive at this strategy because Lou Gerstner did exactly the same thing at IBM in the 1990s -- though IBM didn't actually sell its PC business until after Gerstner had left.
The real problem is that Apotheker seems to be having problems executing this all-too-obvious strategy.
Bloomberg's story points out that Apotheker's "tenure at Hewlett-Packard barely outlasted his 10-month stint as CEO of SAP. He resigned in February 2010 after an attempted price increase during the recession that rankled consumers and a clash with German unions on plans to cut jobs. He presided over the company’s first revenue decline since 2003 as customers delayed software purchases."
Whether Meg Whitman will prove a suitable replacement is an interesting question. She was certainly successful in building eBay's business, though it's not clear if these skills would come in useful running the world's largest IT company (by annual turnover). There's probably not much scope for increasing sales of Itanium-based mainframe-class servers either with bids opening at $1 or attractive Buy It Now prices.
While Whitman might be an excellent strategist and a great negotiator, eBay watchers may well think she paid too much for Skype, failed to deliver on the strategic benefits, then disposed of it before Microsoft could come along and pay well over the odds for it. (In my view, the idea that eBay sellers might want to talk to eBay buyers over Skype was always bizarre.)
Other than that, Whitman is best known for running for governor in California last year, and losing badly. (See CNN's How Meg Whitman spent a fortune -- and lost)
In sum, Whitman sounds like a good candidate to continue the work of her predecessors, though it will be an almighty challenge to join Fiorina on the Condé Nast Portfolio list as one of The 20 Worst American CEOs of All Time.
If any bookmakers read this, it would be interesting to see the odds for Whitman against Carol Bartz (recently removed from Yahoo), Ann Livermore and Dolly Parton.
Livermore is probably disqualified because she actually understands and has run HP's $57 billion enterprise business, but Parton might be a good outside bet.