Wednesday, 9 November 2011

Decision Making The HP Way

Twists and turns, U-turns and reversals - there seems to be nothing very logical about the machinations of HP's decision making. Part of this is that it has had more CEOs than the average pub has managers in a 5 year period. Part of it is that it's board and staff don't seem to be able to convince themselves of which is the right way forward. So business becomes a series of jerky movements forward followed by rapid turns and reversals.

Having retracted the decision on selling the PSG business, the new CEO, Meg Whitman, is now contemplating the decision to ditch WebOS. Not many months ago, WebOS was seen as a key component in HP's future. Having bought Palm for $1.2bn, HP's foray into the tablet market was to be the first step in a whole new direction for the company with WebOS at the heart of it. Then came the tablet fiasco. No sooner did it debut was it pulled from production and HP's future as shops fire-sold the devices with paradoxically great success. Many WebOS employees have been fired and it was only a matter of time before the whole disaster was brought to a close.

Then Whitman recently announced that WebOS had a new life. There was a potential that it could be repackaged and sold as a bunch of assets at least - for some fraction of the original outlay in good old HP fire-sale fashion, but at least some pennies would roll back in. So Whitman has bought herself some time to decide on all this.

But perhaps what was behind this bizarre form of decision-making, apparently made at an employee meeting, was that HP were testing the water. It seems that management by leaking information uncontrollably has its advantages. By leaking this information then HP can gauge the response of the markets to its plans. Better still, some buyer might emerge in response. It's taking, 'Running it up the flagpole and see who salutes' to the extreme.

This follows announcements by two senior HP VPs in recent weeks - one said that WebOs would continue to evolve, be updated and supported while another did not rule out WebOS having some role in HP PSG's future. Neither comment would have sat well with the deporting employees.

It actually is quite comical in some respects but very serious in another. The comedy value is that senior executives hardly seem lined up on the WebOS thinking making the whole saga look like an episode from the Keystone Kops while the serious part is that HP's underlying strategy seems to be non-existent.

For all his undoubted bad points, at least Apotheker had a plan. He had some kind of vision. Clearly it wasn't to many people's liking and the execution was an outright disaster but he had some semblance of an idea that the PSG business was going to hold the company back in the future by mixing low margin, bucket shop products with high margin software and service. IBM has shown how making those tough decisions can create a different and rosy future.

Give the new CEO time to bed, I hear you say. That's a good point but so far the cohesive thinking of executives and decision making has been at all angles. Let's just say that so far the messages are not good.

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