Sunday, 15 August 2010

The secret of HP's success

HP is not founded by geniuses such as Bill Gates and Stephen Jobs and
yet it had been very successful and produced many state of the art
equipments. These articles explain why!

Hewlett-Packard's board vs. Mark Hurd: The right decision?
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Hewlett-Packard, the world's biggest PC maker, has been known for its
values, or "the HP Way."
Hewlett-Packard, the world's biggest PC maker, has been known for its
values, or "the HP Way." (Andrew Harrer/bloomberg)

Mark Hurd was forced to step down after Hewlett-Packard's board found
that he had filed inaccurate expense reports to conceal a personal
relationship with a contractor.
Mark Hurd was forced to step down after Hewlett-Packard's board found
that he had filed inaccurate expense reports to conceal a personal
relationship with a contractor. (Associated Press)

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By On Leadership
Sunday, August 15, 2010

Slade Gorton is a former U.S. senator and Washington state attorney
general who also served on the 9/11 Commission.

The Hewlett-Packard directors were faced with a Hobson's choice. They
had one of the most talented and successful chief executives in the
country. They also had a chief executive who had misused company funds
on a questionable personal relationship and in flagrant violation of
an ethics code for which he was responsible. As much as they may have
wished to retain him, it is impossible to see how they could have done
so without severely undercutting his ability to lead and the
corporation's reputation.

Disruptive as his forced resignation may have been, it was the right
course of action and was taken promptly. But to have attempted to deny
him his contractual severance not only would have been vindictive but
would have prolonged the agony and almost certainly resulted in
protracted litigation.

Michael Maccoby is an anthropologist and psychoanalyst globally
recognized as an expert on leadership. He is the author of "The
Leaders We Need: And What Makes Us Follow."

Hewlett-Packard was founded by leaders who built strong bonds of trust
with their employees. The founders, Bill Hewlett and Dave Packard,
articulated and practiced a clear philosophy they called "the HP Way."
Ethics were a given, and disrespect among employees was not tolerated.
To strengthen trust and loyalty, HP did not lay off employees during
business downturns but instead had everyone take time off and a
corresponding cut in salary. Trust and a strong value of excellence
supported a collaborative culture that became a model for Silicon

The HP values have been undermined and frayed by some of the leaders
who followed Bill and Dave. Mark Hurd promised to revitalize the HP
Way. His actions -- hiding expenses to engage in a questionable
relationship-- undermine the trust essential for a company's
sustainable success.

Hurd was widely admired, especially by HP shareholders, for cutting
costs and increasing revenue through acquisitions. However, HP's
future depends on a leadership team that strengthens collaboration and
innovation, that can articulate and practice a version of the HP Way
for a global market.

Katherine Tyler Scott is managing partner of Ki ThoughtBridge, a
leadership consultancy, and the author, most recently, of
"Transforming Leadership: The Episcopal Church of the 21st Century."
She is a board member of the International Leadership Association.
Click here!

From my vantage point, the board has performed its governance role
admirably. Its action was particularly important because it expressed
the character of the company and showed it is living up to the
espoused values the leaders are legally and ethically bound to uphold.
In this tragedy, the chief executive permitted his self-interest to
override the greater interests of HP. The board made its decision
based not on his personal failings but on his betrayal of corporate

The board's response sent a clear message that dishonesty and deceit
will not be accepted at HP. Its decision to allow Hurd to resign and
to keep his contracted severance package was humane. It acknowledged
his record of excellence in his professional performance while
conveying the unacceptability of misuse of funds.

When leaders violate an institution's policies and core values, they
destroy trust -- the glue that holds everything together. If Hurd had
stayed, questions about his truthfulness in other matters would have
been raised and doubts about the character of HP's leader would have
put the reputation of the company at risk. The one thing a board must
preserve is the good reputation of a company. A responsible board
would never squander the good name of the company. In the end, the HP
board chose the company's character over the CEO's competence.

Howard Gardner is the Hobbs Professor of Cognition and Education at
the Harvard Graduate School of Education and senior director of the
Harvard educational research group Project Zero.

In announcing his resignation as chief executive of Hewlett-Packard,
Mark Hurd said: "There were instances in which I did not live up to
the standards and principles of trust, respect, and integrity that I
have espoused at HP and which have guided me throughout my career." I
have no way of knowing who wrote and approved that statement, nor
whether the last phrase is true. But as an observer of how difficult
situations are discussed publicly, I can say that Mark Hurd's
statement is an impressive model.

There is no attempt to wriggle out of the accusations, nor to spread
blame ( for example, on the media). And, importantly, Hurd praises a
company that, even after the death of its founders and the unhappy
tenure of Carly Fiorina, still occupies a privileged niche among major
international corporations. In the past, when someone said that he or
she worked for HP, it meant something special. The speed and manner of
Hurd's resignation increases the likelihood that working for HP will
continue to mean something special. Redeeming that likelihood is the
challenge for the next leadership, thousands of supporting employees
and, especially, the board.

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