How Relevant is HPs legacy in todays competitive technology driven

environment?

Were the changes initiated by Fiorina justified?

-- To evaluate HPs legacy in todays technology driven environment, we have to first understand
the legacy of Hewlett Packard left by its founders, William Hewlett and David Packard.

William and David, electrical engineering graduates from Stanford laid the humble foundations of
the giant we know today as HP, in a small garage in Paulo Alto. As the company grew, they
developed a unique management style know as The HP Way, which included a core ideology
where there was a deep respect for the individual, commitment and dedication to building top
quality and reliable products, for welfare and advancement of human community. The basic tenets
of The HP Way were:

We have trust and respect for individuals.
We focus on a high level of achievement and contribution.
We conduct our business with uncompromising integrity.
We achieve our common objectives through teamwork.
We encourage flexibility and innovation

Let us examine each of the tenets for its worth and its relevance in todays technology driven
environment.

We have trust and respect for individuals HPs founders believed that given the right tools and
support everyone would do a good job. HP attracts the best of talent and that we should believe in
our people and ability.
Even in todays technology driven environment, especially in technology companies, it is of
paramount importance to draw and retain the best of the talent in the industry. This would happen
only if the employees feel respected and an integral asset of the company and not someone who can
be shrugged off at difficult times. Before Fiorina, low performers in the company were given a time
frame of one year to improve themselves. Fiorina felt it necessary to lay off the undeforming staff
immediately. While her move, at a time when the company was struggling to keep the cash register
ringing, is a matter of debate, but it degraded employee moral and she soon lost the respect of the
employees.
In todays cutthroat environment, this tenet still holds value. Technology giants of today like Google
and Apple are laying more and more emphasis on building employee relationships and boosting
employee morale. Human capital has become the most revered asset for the companies.

We focus on a high level of achievement and contribution HP is a very customer centric
company. To achieve this HP employees have to strive to deliver the best performing products and
services to their customers. Customers look for better performance, reliability and long lasting
value from HPs products. Every HP employee has to keep innovating and find new ways to deliver
on these fronts.
This relevance of this tenet is increasing day by day. The competition has become fierce. If the
company cannot deliver the best of the products and services, it can perish in no time. Look at what
has happened with Nokia and Blackberry, once the stalwarts of the mobile industry, they have all
but lost out to the competition because they failed to deliver the very best of products.

We conduct our business with uncompromising integrity HPs brand value stemmed from its
image as an ethical organization. HPs stakeholders; shareholders and customers, believed in the
organizations practices and products. It is imperative that external stakeholders in an organization
do not feel betrayed at any time. It takes an organization years to build an ethical reputation. All HP
employees must adhere to the highest standards of honesty and integrity.
This tenet is even more important in todays time when the corporate world is rocked by scandals
and faltering standards of corporate governance day after day. Customers are becoming more and
more sensitive to issues of unethical practices employed by the organizations.

We achieve our common objectives through teamwork HPs commitment is to focus on
achievements through teamwork rather than individual ability. HP works as a worldwide team for
delivering better products and solutions for its customers. The HP family is all in together in the
companys success and failures.
This tenet tires to project HPs image as a giant team spanning continents. This strategy helps the
company to mitigate confusion in the customers mind and helps in delivering a unified solution
rather than individual units promoting their own products. As was the case with HP when Fiorina
took over as CEO. At that time the company was operating as 83 different units, often competing
against each other. Fiorinas strategy to unify the company and project the brand HP was a strategy
in the right direction. All though, this strategy should be applied when the company is highly
fragmented, but it is otherwise wise to project successful business lines as separated entities
(which Fiorina failed to do with HPs printer business line). Application of this tenet is not time
withstanding but it should rather be a company specific approach.


We encourage flexibility and innovation Delivering innovative products to enhance customer
experience is the heart of HPs strategy. The practice of devoting 10% of an employees time to his
or her own project, at Google, is not an innovation. HP had such a policy much earlier, when people
were encouraged to devote, after lunch hours on Friday, towards their own projects.
Nobody can argue with the relevance of innovation in todays market. HP lost its innovative ability
mid way. While HP had been at the forefront of innovation up until the mid 1990s, it lost its way
after that. When Fiorina took over the reins of the company in 1999, she focused more on
advertising and marketing blitz, while innovation took a backseat. While it was important to
showcase the brand and its ability, but the marketing campaign had to backed by constant
innovation.

So, most of the tenets of HPs legacy were relevant then and are still relevant in todays competitive
technology driven environment, some even more than before.

If HPs strategy was relevant then, then why did Fiorina steer the company in a different direction?
We must remember the reason why Fiorina was brought onboard, it was because of her sales and
marketing expertise. When Fiorina took over as HPs CEO in 1999, HP was struggling with the
image of a boring organization, which made expensive hardware and couldnt catapult itself with
the Internet boom. Fiorina was brought over to change the face of the company with her charisma
and marketing blitz. While the intent of HPs board was noble and well thought of, what they forgot
to take into consideration was that Fiorinas values did not match with those of HPs. Fiorina tried
to change the core values of the company, which did not go down well with the stakeholders. While
some of Fiorinas strategies like unifying the brand, were steps in the right direction, what spelled
the doom for her and the company was that she tried to break away from HPs core value. Changes
initiated by Fiorina were justified only if they would have been inline with the companys core
values.

She shattered the trust between HPs employees and management, which had nurtured a loyal
workforce for the company. She decimated the team culture at HP, never the one to accept the
blame; she fired other high-ranking executives. She would feature on the companys advertisements
and news publications, she would go jet hopping to meet worlds dignitaries while the employees
were laid off. She forgot that her employees are her biggest asset and not just pawns in her vision of
HP.
Another of her shortcoming was, going on a merger and acquisition spree rather than focusing on
the innovation HP was known for. Her acquisition of Compaq, did not yield the desired results. Also,
her public spat with Walter Hewlett on this, did not bore well for the company. Through the acquisition
Fiorina wanted to gain increased revenue from the low margin computer business, drifting away from
HPs strategy to focus on profits rather than on revenue.

Appointment of Carly Fiona as HPs CEO in 1999 was not the smartest decision made by HPs board.
Carly Fiorinas era at HP saw a remarkable shift in the companys culture and marked the end of
The HP Way of doing things at the company.