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