Saturday, September 25, 2010

Hart governance "disease" Hewlett-Packard

Stormy from a year ago, revenue this year, the first challenge, Mark. Hurd HP hand how the magic of what changes?

HP Global CEO Carly times all the office equipment in, Mark. Hurd era HP quietly changing. Over the past year, if only from the California Office of decorative HP Global CEO changes, you can not see this famous company which is in change.

June 21, San Jose, California, sunny, industry analysts from around the world excitedly gathered here. When Mark. Hurd (Mark.Hurd), who rarely show their faces in the HP Global CEO took vigorous speech to Taiwan. No rhetoric and inspiring strategy, but on the number of industry analysts interested in doing the serious note, write "simplify," "reduce costs" These words may seem boring.

5 at the end of this year, investors in the stock price of HP from June 2005 to 22.38 U.S. dollars to 32 U.S. dollars pushing for more than 11 months, up nearly 50%. HP's first quarter 2006 revenue of 22.7 billion U.S. dollars, second quarter revenue of 22.6 billion. Analysts expect fiscal year 2006 (2005 11 1st - October 31, 2006), Hewlett-Packard's revenue will reach 91 billion U.S. dollars, while Big Blue IBM for the sale of 11 billion U.S. dollars turnover of PC business 2006 will only reach 90.5 billion U.S. dollars. "Business Week," the author said, countervailing, IT giant will usher in a new maximum, it is HP.

However, in the year and a half ago, HP shares have been declining (from July 1999 to February 2005, the stock has shrunk 63%), the proposed sale of PC business, separating the voices of the printer business continued, star female CEO Carly whirlwind forced to resign. For a time, the world's second largest IT company Hewlett-Packard in a precarious position.

April 2005, from NCR's unsung Mark. Hurd took over Hewlett-Packard Global CEO of Sceptre, compared to glamorous predecessor Carly, Mark. Hurd stable has had some "boring." However, heavy flow management, the HP of the business is recovering, even compared to analysts Hurd IBM back from the brink of death and the location of IT King Gerstner. Well, Mark. Hart will lead the historical peak HP rushed it?

Accountability and Execution

"You tell me, if this is done, who should I pinch the neck?" A year ago, Mark. Hart's visit to China when listening to the reports, asked a senior Chinese.

Time really do not know, "pinch" Who's neck. Carly the era of the matrix management structure, this popular architecture has many advantages, such as improving the capacity of the sector in coordination, but equally obvious defects, including multiple leading cause is unclear, the responsibility to promote each other. Hewlett-Packard from the formation of a concentrated expression in the sales department, established in 2004 is responsible for HP's enterprise customers (including SMEs) in the sales department (CSG), is responsible for TSG, PSG, IPG three major product groups-business sales, personal consumption customer is still by the (IPG) is responsible. This "one face to face customer" model looks very nice, actually operate has many drawbacks.

As the sales and product responsibilities between the departments did not completely clearly defined organizational structure that has a high coordination costs. Each needs to make a decision in several departments within the company to meet to discuss the final who also Zuobulezhu, customers complain about slow response. Moreover, if a problem occurs, the parties

Pass the buck to each other face, can not find people to come and wrench.

"You know, with a lot of people talk, to discuss decisions are tired of." Mark. Hurd on June 21 analyst meeting to explain the reasons for HP's restructuring.

July 19, 2005, spent a few months after about the status of HP, Mark. Hart poked a sword. Announced the layoff of 10%, to just merge near IPG and PSG, which is separate to the original cross-platform business sales - Business and Public Utilities Group (CSG) 1 涓?than sales directly into the enterprise computing and professional services Group (TSG), Imaging and Printing Group (IPG) and information products and business channels Group (PSG) of three independent business groups, which greatly increase the business unit leading the company's control of power resources.

Mark. Hart's effort to reduce complexity and simplify the company's operations to customers from the market and more recently, while decision-making to customers and markets from the nearest person. June 20, 2006, HP further subtraction and decentralization, announced the closure of global operations (global operations unit), and the department of logistics and procurement functions to the three business groups (IPG, PSG, TSG) in. After adjustment, the three major business groups across the board in fulfilling its business, the commitment to supply chain management, procurement, logistics, logistics, order management and customer relationship management functions, including a wide range.

"HP's goal is to improve efficiency and reduce level. Previous products, consulting services and other departments have reported to me, now they can be reported to the local general manager of the decision. The original and the bottom I have too many levels of employees, now only two. "Mark. Hurd said.

Mark. Hart's goals achieved to some extent, the right to make the decentralization of business units to become flexible, faster decision-making. HP's Ann Livermore, executive vice president, said the usefulness of cost of sales over the past decided to open a few weeks of the meeting, and now I just call department staff to sit down and discuss a simple decision can be.

While decentralization is a clear responsibility. "Accountability system" began to HP to implement, some people accountable for results. Ann Livermore, said the accountability system can be in the financial statements and decision-making to see its benefits, responsibilities obvious, we all departments accountable for results. "You done well, is going up; do well, new ones who do." HP China, said a high-level "accountability system" introduced to Carly stop the execution once the problem has been a degree of resolve.

If Carly Compaq merger four years ago, to expand the scale of HP is a huge gamble, then continue with the Hart bet to some extent. He did not sell the PC sector, or spinning off the printer, "bigger and stronger" and Carly strategy does not change, only thing ---- Mark Hurd to strengthen the implementation.

One just from Hewlett-Packard China, returning to high-level Asia-Pacific office, said Carly era is constantly making plans and strategies, followed by the old strategy of throwing in the drawer again in limbo, the new program has come in constantly. Instead, Hart is holding a program that, hey, guys, continue to implement this.

Cost, cost, or cost

HP PSG Group second quarter of 2006 increased 10%, operating profit was 248 million U.S. dollars, accounting for 3.6% of revenue, significantly more than last year 147 million U.S. dollars of operating profit (2.3% of total revenue). In fact, due to price wars, HP's PC products, prices have been declining. Prices down and profits up forming an interesting contrast, the only explanation is that HP is a good control of costs.

HP estimates fiscal 2006 revenue of 91 billion U.S. dollars, expected profit of 80 million, most of which cost control cost savings. "HP is also the cost of 83 billion U.S. dollars, can be plenty of room for the operation." Mark Hurd not meet the current cost situation.

Mark Hurd is a cost-control expert. Able to stand out from the many candidates to become the global HP CEO, the board saw in it the execution and cost control capabilities. After taking office, hired Mark Hurd in his old acquaintance ---- NCR former Dell CIO Randy Mott as Hewlett-Packard's CIO. Mott action very soon, in-house information technology, the HP's internal IT this year lost over 500 projects, saving 200 million U.S. dollars in expenses, but still HP's internal information systems to provide the best information available to the company staff, to ensure business growth on the demand for information.

May 18, 2006, HP announced a global integrated into 85 data centers in Atlanta, Houston, Austin's six main sites. These three cities have two sites in each city, an area of 50,000 square feet, 15 miles away. The site will be used to support HP's own server and storage infrastructure. Data center consolidation, as HP saved billions of dollars in IT spending.

Organizational structure in July last year, after adjustment, HP cut by 1.5 million people. Hart hopes the 2006 fiscal year the company to save 900 million to 10.5 million cost. These cuts in Europe have been challenged, and that contrary to "as important as employees and profits," the Huipuzhidao, but Mark Hurd said HP's new position also needs people who still recruit people.

HP hopes to become the best consulting services company, but by the end of 2005 Mark Hurd, HP's consulting services to slow down or even give up some of HP's consulting services orders. Already received orders for consulting services, HP and the customer to re-discuss, if consensus to do it, or give up. Mark Hurd said, should pay attention to costs, not additional staff, but to reduce staff, more standardized. Cost of cost should be reasonable, then scale to win. HP's consulting services this year only 1% -2% business growth.

Hurd, the original brand advertising "HP +" no longer appears. Brand advertising in the media to reduce the volume. Some analysts said that Hart had the money to go to product sector and promotion of the client.

HP and even save money in real estate. HP is a real estate big, some small companies, including HP's acquisition of its office space, put the focus on office space, and then release a number of small, decentralized offices, from real estate to save money, make money to promote the company's development.

"On the one hand to spend money to promote business growth, while reducing costs money." Said Mark Hurd, business growth, cost control, asset, financial and personnel in these three areas constitute the Mark Hurd's "Golden Triangle." "If the revenues and costs both at the same time to increase, decrease in profit is not normal."

Mark Hurd promised not to reduce the cost of R & D last year, HP spent about 35 billion dollars to research and development, which accounts for 4% of annual revenue, a figure caught in its rival IBM (around 6%) and Dell (only 1%) between.

Cost-effective control, making HP's earnings margins increased substantially. Wall Street investors and analysts are very satisfied with the doer, not indiscreet remarks on HP's business.

Hart's "shortsighted" and challenges

Mark Hurd does not like exposure to the spotlight, took office more than a year, few interviews with the media, "HP does not need a 15-minute news broke." Mark is also not as good at inspiring Carly. Many analysts in the face of the meeting, Mark Hurd always the case at the end: "We still have a lot of difficult things to do."

But his partner said Ann Livermore, often with partner Mark has a very good meeting, and at the party to the partners were very excited, very inspiring.

Mark greatly on the customer's attention more than his predecessor. HP senior vice president of sales Dave Booth said, "When there are urgent needs of customers, I will pick up the phone call the office directly to Mark, if he is not, and customers together, he will immediately stop working with my hands together to find ways. important is that I can find him, and not through other channels. Mark is our chief sales officer. "

June 24, Mark led a global high-level visit to China on June 29 quietly leave Beijing. In addition to essential public appearances, the mark most of the time spent sitting together with the Chinese team is very careful and detailed analysis of every detail and see the situation in China, business operation, and what there is still more growth, the possibility of obtaining a greater market share and so on. "We said to grow so much this year, Mark will ask can not have more growth?" Zhuangzheng Song senior vice president of HP China, said in an interview.

Currently, HP's revenue, 65% came from outside North America market. China and Brazil, Russia, India (BRIC) are kept as "BRIC." IT market growth in these countries faster than the United States, expects the global analyst conference, HP China President Sun Zhenyao and head of the other three countries presented their respective areas of jurisdiction with the situation. According to Sun Zhenyao introduced since last year, HP's revenue growth rate in China was 20%, the next two years, China may become world's second largest after the U.S. IT market.

In the eyes of Ann Livermore, Mark is very concerned about the results and the actual figures to win. "He's very realistic, more concerned about the present and near future, thinking about how the strategy is a step forward, uncertain long-term goals too." Mark Hewlett-Packard staff to China, after the speech, an ordinary employee about his impression of the mark.

Carly is the dream of 90% and 10% in operations, Hurd is just the opposite. As former IBM CEO Lou Gerstner, like Hart that "vision" and strategy elements required in the company came in last. He believes the biggest challenge now is how to implement a thorough strategy to achieve goals. Some analysts believe that the best is Carly (good at developing strategies) and the Hart of the advantages (good execution) can be combined.

Mark HP's business is moving toward recovery under the adjustment. TSG group led by Ann Livermore profit situation is better. Had a little "virtual" AE strategy (Adaptive Enterprise strategy), is gradually compacted. Over the past two years, HP 11 management software company, has acquired a number of regional service company, enhance the Adaptive Enterprise strategy. Last year in April, Todd Bradley, palmOne charge from HP's PC business. Over the past year, PC greatly enhanced the profitability of the business. Vyomesh Joshi helm IPG (imaging and printing group) is to print from the printer business services business.

HP's product line is the longest IT companies, from high-end services and servers, PC products to the printer product, but compared to IBM to focus on high value-added enterprise applications market, HP's business is difficult to generalize. HP's next to go where, to be like GE company? Hart did not give us answers. Perhaps he should consider that this is not a current problem.


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