21 Oct With Carly gone, new HP CEO reveals plans
Orlando, Fla. – HP will “double down” its investments and focus on excellence in three areas: creating solutions, creating demand for those solutions, and servicing those solutions, said Mark Hurd, Hewlett-Packard President and CEO, before an audience of thousands of IT professionals at the annual Gartner Symposium/ITxpo last week.
Hurd, who was appointed CEO in March, less than two months after Carly Fiorina was ousted, responded on stage to questions by Gartner analysts Carl Claunch and Leslie Fiering. Borrowing the gambling term “Doubling Down,” Hurd said he would increase investments in areas where the company has traditionally been strong. “We have $14.5 billion in cash. We’ll be making $35 billion to $40 billion of bets on technology during the next three years,” said Hurd. “We’re going to double down in markets where we want to lead.”
Hurd, who spent 25 years at NCR, epitomizes the well-grounded CEO. He was dressed in a dark suit, button-down collar, and regimented red and blue tie, in stark contrast to Carly Fiorina, his diamond-studded, smooth talking predecessor. Hurd, hired to improve HP operations and realign its sales force, says he focuses on his customers and use performance metrics to evaluate HP’s progress.
“I am not the guy to give you entertaining quips!” he said. “We need to let our actions do our talking,” he said.
The company will concentrate more on enterprise systems management and storage, he said. As an example, he’s abandoned the Fiorina strategy of reselling Apple Computer iPod digital audio players. “The way I look at it, the iPod was not an interesting excursion,” he said. “Taking a product and stamping our logo on it and shipping it to the market, including in some cases taping $10 bills to them, isn’t good for us. That didn’t make sense.”
“We are buying in places we want to invest, like Peregrine. We are going to continue to do that,” Hurd added. HP is also looking to align itself with companies and technologies that are “adjacent” to its core strengths.
Hurd also responded to pre-recorded video questions from conference attendees, who asked about HP’s weaknesses in account management and future directions. HP understands that “our biggest issue,” he said, “is ourselves.”
With a force of 16,600 in sales, account management is a legitimate complaint, he said. “We’re trying to get better at it. We need to be the best sales force in the industry.”
The new CEO said he wants to make sure that his sales force is fully deployed and aligned in front of the customer. He said it might take four to five years, involve a great deal of training and be filled with performance milestones.
“We need to understand customers better, cross-sell them, and win their satisfaction,” Hurd said.
When asked by Garter analysts what will HP look like five years from now, Hurd responded, “It depends on who’s the CEO!” Drawing a laugh from the audience, he added, “I hope you find us as a company that’s very focused on what I’ve just described.”
When asked about his predecessor’s style of management, Hurd sais, “I am not a supporter of matrix management. We’ve had a lot of people who had to touch decisions in the company. We are not going to put people on top of people. We need to get clarity and responsibility.
“A super structure that reports to the CEO is the ultimate in matrix management as was in the past. I cannot come up with a model that eliminates collaboration. The customer is what drives our company,” he added.
Will HP exit printers?
The Gartner analysts asked Hurd if HP will exit certain markets like PCs, or spin off its printer group. No, Hurd emphasized. HP’s printer business is strong and well-run, he said, and the number of printed pages is going up.
Besides, he joked, “If there is anything I didn’t want to continue in, I wouldn’t bring it up here. But thanks for your concern.”
Hurd wants to see HP do a better job of mining and serving its customer base. HP’s goal is to deliver solutions on time, with price competitive products and services, and deliver what it says it will deliver. Hurd repeatedly said that he would study performance metrics throughout the organization to monitor progress to make improvements.
R&D is key to success
HP has a reputation for investing heavily in research and development and Hurd desires to better leverage the company’s investments.
“How do you measure [the value of] research? I don’t know. We’re working off-roadmap. The things you work on are trends. How far can we push virtualization? What would it take for us to innovate over the next seven, eight, nine years? We’ll leave some percentage on the floor, but if we can bring even 20%-25% of that to market, it will be huge,” Hurd said.
The Gartner analysts asked Hurd about the state of HP storage and management product lines. “The storage business had been on a decline,” says Hurd. “Our objective is to put more energy back in it. We’re very committed to it. [It’s a] a very key focus area.”
Fiering pointed out the plethora of management software in the HP portfolio and nine quarters of losses in the group. “We’ll fix the financials, and be a leader in management software,” says Hurd. “It [the capabilities] will get broader over the next five years.”
When asked how he would avoid making HP seem like a “me too” company in relation to IBM and Dell, Hurd responded, “I don’t know about those ‘me too’ comments. Those are mostly clever quips from press people, but that’s not reality. I don’t know who we would be ‘me too’ to. We’re a better company in some core areas than those other companies. Technology will be the differentiation. We are a tech company, and we will stay focused on that,” he said.