By Sudarshana Banerjee
Hewlett Packard (HP) announced that its board of directors has appointed Meg Whitman as president and chief executive officer. In addition, Ray Lane has moved from non-executive chairman to executive chairman of the board. The HP board also intends to appoint a lead independent director, the company said. You can find the official release of the company here.
First Carly Fiorina, then Mark Hurd, now Leo Apothekar. HP has ousted three CEOs in rapid succession, starting with Fiorina in 2005. Hurd was sacked out of the blue for apparent ethical wrongdoings. Apothekar was flown in from Europe, and then let go in just under a year. And if you have read ‘Tough Choices’, Fiorina’s autobiography, you know how her firing went down (here’s a hint: not very well). All in all, you may be forgiven for thinking something may be rotten in the state of HP’s board.
Apothekar’s reign at HP has not been either very successful or very pleasant. In the eleven months or so he was with the company, Apothekar was involved in a legal turmoil with Oracle for alleged past lapses (then when he was CEO of SAP), and he could not come up or follow through with a coherent corporate strategy and roadmap. Lane had then blamed it on decisions taken by Hurd, and defended Apothekar. (He himself was a managing partner at Kleiner Perkins Caufield & Byers, before he became HP chairman in September 2010). Whether Hurd was to blame, or Apothekar, or bad judgement, or reasons unknown, the company’s stock price has fallen over 45 per cent within the last one year, and neither the blame nor the solution has so far been fixed.
The final nail in the coffin may have been HP’s latest announcements, a series of seemingly impulsive and often contradictory statements, that left shareholders and analysts bewildered, and HP the target of a subsequent lawsuit for misleading shareholders. The company announced it will be spinning off its PC division, declared it was buying Autonomy for $10.3B (paying way above what was perceived to be its shelf price), said it was shelving its WebOS (which earlier it had said was a key part of the company), then corrected itself and said, well, it will shelf WebOS, but sell just one last batch of tablet devices first.
A new CEO was clearly called for. HP was obviously not Apothekar’s cup of tea. His former company SAP was into software solutions, and Apothekar probably tried to turn HP into a pure solutions company, something he would be comfortable managing perhaps; but you do not change a multibillion company to suit the CEO, usually it is the other way round.
The question now is, will Meg Whitman be able to do what Apothekar could so publicly not? The jury is still out on that one. First things first. Okay, so the HP board decided they need a new CEO. Did they need someone within the next two days? For a company the size of HP, hiring a CEO should take days if not a few months of deliberation. Whitman has been associated with the consumer side of things, and now she is in charge of a diverse company with a very strong enterprise focus. And the fate of the company, and its shareholders rest on how fast a learner one woman is.
On the plus side, Whitman is perceived as someone who can deliver the goods. After all, she did take up eBay as a $4M company, and turn it into a $8B corporate giant with 15,000 employees. She also has a strong political pull, even though she lost in the gubernatorial elections in California last year (She reportedly invested $140M of her personal fortune in her campaign). This new appointment probably marks the end of her political career in the near term; even though if you read her statement on the appointment it sounds more like a political cry, than something a CEO might say.
The company’s stock hit a six-year low on the day of her appointment.
Ray Lane (executive chairman, HP): We are fortunate to have someone of Meg Whitman’s caliber and experience step up to lead HP. We are at a critical moment and we need renewed leadership to successfully implement our strategy and take advantage of the market opportunities ahead. Meg is a technology visionary with a proven track record of execution. She is a strong communicator who is customer focused with deep leadership capabilities. Furthermore, as a member of HP’s board of directors for the past eight months, Meg has a solid understanding of our products and markets
Meg Whitman (president and CEO, HP): I am honored and excited to lead HP. I believe HP matters – it matters to Silicon Valley, California, the country and the world.
Sudarshana Banerjee is consulting editor with techtaffy.com. She can be reached at [email protected].