I prepared the above graphic about four weeks ago in anticipation of something like this.
I've been sitting on the sidelines watching today's episode of the HP drama unfold among those who have a good sense of what's going on and those who are clueless. It makes for interesting reading. Bloomberg kicked the ball into play with a strongly worded piece implying that Leo Apotheker's ouster as CEO is a done deal:
Hewlett-Packard Co. (HPQ), facing investor frustration over sales-forecast cuts and jarring strategy shifts, is considering replacing Chief Executive Officer Leo Apotheker, two people familiar with the matter said.
The board may appoint Hewlett-Packard director and former EBay Inc. (EBAY) CEO Meg Whitman as Apotheker’s successor, possibly on an interim basis, said one of the people, who asked not to be named because the plans aren’t public. The board also is reconsidering a proposal to spin off the company’s personal- computer unit, another person said.
Hurd, first and foremost, is an operator and a damn good one. He made a big strategic bet by buying Palm for its touch computing OS—a bet which may or may not have ever panned out, but at least it was a move which recognized the tectonic shift about to happen to the PC industry.
I tried hard not to laugh at that nonsense but heh - have blog, have opinion. Pretty much everyone in between seems to think Apotheker's time is up. For me, the most reasoned responses are coming from Rob Enderle who was quoted in Computerworld:
"Companies in HP's space are required to be extremely stable and reliable," said Enderle. "Changing the CEO spot destroys the image that you can trust the direction presented by the company or the promises of its executives."
HP may be better served by providing a better "backstop" to Apotheker and addressing the leak problem.
"Unfortunately the leaks are driving premature decisions and may be taking this choice away from HP's board," he said.
We've already seen evidence of this when Apotheker's PR voice was shunted off in favor of Marty Homlish handling communications. Fat lot of difference that made.
At SAP TechEd, I met with HP folk and first words on their lips went something like: "Don't ask us about what's going on internally, we don't know and won't say anyway." Clearly the word has gone out but that doesn't stop those inside HP from talking to anyone willing to print up a juicy headline. It has to be people at board level because this is not the kind of thing those further down the food chain would get to hear about in any detail.
I find the whole saga troubling. I can't think of anyone who says Apotheker's appointment was a good one. The reasons don't stack up to me other than the fact he had a bad time when let loose at SAP. Wrong guy, wrong time for which he was not at fault. That responsibility falls squarely on the SAP board. My sense is that the analyst and media communities decided they didn't like Apotheker from the get go and have proceeded to give him a bloody good kicking at every opportunity.
But when you ask the next question: 'Who would have taken the top job at HP?' the conversation suddenly stops. The much admired Ray Lane didn't want it but was prepared to back Apotheker. That now looks like a bet he might live to regret if Apotheker is kicked out.
On the other hand I find it disingenuous that all the voices that were screaming recently for the whole of the HP board to go seem content to let Meg Whiman have a go - if she is approached and accepts.
In all of this there are two facts that everyone seems to have ignored.
In her first year as CEO, Carly Fiorina presided over a share price slump every bit as bad as that we see under Apotheker's leadership. She survived to build what at the time was the largest hardware vendor on the planet.
At the point when Apotheker's predecessor left, the company was at a tipping point where results were only ever likely to go downhill. That was his legacy to HP. One that Apotheker inherited and over which there is little he could do.
Has Apotheker handled subsequent events as well as he might? No. But that doesn't matter if the strategy is sound. So far all I can see people really bitching about is the proposed Autonomy purchase. No-one has presented a convincing argument for any of Apotheker's other moves other than to moan about the timing. Given the sieve like state at HP could he have done any different without having to deal with more whispers?
But times change. If HP responds to a baying media then it really is in trouble. Apotheker can still survive and course correct. But job number one has got to be about plugging the stream of damaging leaks while building a team prepared to do what's right for the company instead of infighting to protect their own fiefdoms. It's simply not possible to run a business based upon ill informed public opinion supported by leaked information that may or may not be part of policy or with teams that are at war with one another. If that means firing more board members then so be it.
In the alternative, Apotheker could save himself a lot of grief and simply hold his hands up and say: enough is enough.
As always with HP, the soap opera will continue as nervous investors look for more short term fixes but without the board having any coherent remedy upon which they can agree for the long term.