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Friday, 23 September 2011 03:09

Can Meg Whitman Fix HP?

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Can Meg Whitman Fix HP?

Meg Whitman has a little bit of work ahead of her. (Photo: Justin Sullivan/ Getty Images)

Meg Whitman stepped into the HP spotlight Thursday, taking over as CEO in a whirlwind shift that saw former boss Leo Apotheker ousted in less than a year, with his ambitious and controversial plans to remake the company barely off the ground. But, amid clear signs of disarray and even panic, many eyes have remained steadily fixed on the board of directors, which arguably orchestrated the mess in the first place then turned to one of its own in a bid to end the crisis.

“HP’s had a bumpy road with CEOs but part of the issue isn’t the CEO, it’s the Board,” said Forrester principal analyst Frank Gillett. “This is a leadership and a perception problem. Wall Street traders are hyperventilating, just like the technology press, yet none of HP’s businesses are actually in deep crisis. The board has fired the last three CEOs in the last ten years. Now they chose to name one of their own versus going outside.”

The postmortem on the maligned outgoing Apotheker, from his decision to shutdown the barely launched TouchPad tablet to angling for a PC business spin-off to his $10.3 billion acquisition of analytics software provider Automony will take some time to put in full perspective. Since the board has indicated that Whitman’s tenure is not on an interim basis, the immediate question becomes how she fits into the faltering giant.

“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,” said Ray Lane in a conference call announcing Whitman’s appointment, where he was also announced as executive chairman.

On the call, Whitman said that she planned to keep HP moving in the directions set by Apotheker in seeking new options for webOS and that HP is still considering a spin-off for the PC division. But she added that she would step back and evaluate the overall strategy.

Whitman ran eBay from 1998 until March of 2008 when she departed under the controversy of having generously paid $2.5 billion for Skype and being unable to shift the company’s heading from auction to e-commerce business, a la Amazon.com. During her tenure, eBay’s annual revenue grew from $86 million to $7.7 billion.

Two years later, she ran as the Republican candidate for governor of California, where despite famously spending $144 million of her own money, she lost to Jerry Brown by eleven percentage points.

In January of 2011, Whitman joined HP’s board of directors, and then in March she became an advisor to Kleiner Perkins Caufield & Byers.

Observers point out that Whitman’s experience at eBay, a consumer-based e-commerce platform, and in politics may not have prepared her  to run a giant tech conglomerate, by some measures the world’s largest, with independent and complex operating divisions from PCs to printers to enterprise hardware and services — all different businesses with different goals, models, and margins.

Communication will also likely be a key requirement of the job, in assuaging employees and calming Wall Street — a talent that is not Whitman’s strong suit. On the gubernatorial campaign trail, she often came across as stiff in her speeches and over-rehearsed in her conversations.

Her initial communication to staff came in a less than inspiring email.

“We believe that HP matters. It matters to Silicon Valley, California, the United States and the world,” she said “We will maintain and build upon our proud and deep-rooted legacy. We understand the strength of this company, and we know we have the right tools and the talented people to achieve our goals and execute our strategy.”

As a board member, Whitman has had almost a year to review, ask insider questions and learn the mechanics, and the critical issues of each division of HP. Unlike Apotheker, who came over from SAP, she takes the business reins with a running start.

When she and the board figure that out, HP will have to hope Whitman communicates – clearly – what exactly it is.

“She needs to add some excitement,” said Michael Crom, a consultant with with workplace efficiency advisory Dale Carnegie Training.

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