IT Weekly Middle East Newsletter 10th April 2005

Congratulations on getting the HP job. It just goes to show you don’t need to be high-profile or well-known in the general business world to get the chief executive officer post at a US$80billion company.

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By  Peter Branton Published  April 10, 2005

Memo to Mark Hurd|~||~||~|Congratulations on getting the HP job. It just goes to show you don’t need to be high-profile or well-known in the general business world to get the chief executive officer post at a US$80billion company. You just need to demonstrate that you can get results. Oh, and impress a board that has just kicked out a high-profile, well-known CEO who didn’t get those results. And then keep getting results. Did anyone mention the importance of getting results to you yet? You’ve probably settled in at your new job by now and I’m sure your colleagues have helped you out, shown you where the water cooler is and where to get stationary, all that kind of thing. They’ve probably given you some helpful suggestions as to how to get on as well: spin off the printer business perhaps. Vyomesh Joshi, who’s running that business right now must have been particularly helpful. Strange how people snigger when you say how great it is he’s around to help you settle in. By now you may have noticed some differences between this job and your last one at NCR. For instance, people know you’re doing this one. For another thing, you started off on a good basis as CEO of NCR because you had over 20 years of experience with the company and had done a great job turning around the company’s Teradata business unit. You managed that so well, people were willing to give you a shot at the top job. But even running all of NCR doesn’t quite compare to being number one at HP, and there are some people out there who wonder if you’re up to the challenge. So far, the HP board doesn’t seem to agree with them, they’ve made it plain they consider you the right man for the job. It certainly isn’t because they were rejected by other, more glamorous, candidates. You were appointed less than two months after Carly Fiorina was shown the door, which is a fairly fast turnaround — usually a CEO search takes a lot longer. Wall Street seems more than willing to give you a little slack as well, the news that you’d joined HP boosted its share price 10% (sadly the reverse effect held for your former employers: NCR stock fell 15% last week). Since Fiorina’s failure to deliver shareholder value was cited as key to her removal, this is a very encouraging start. “Just what the doctor ordered: a turnaround specialist,” is how analysts at J.P. Morgan greeted your appointment. But bear in mind that Fiorina was herself feted when she joined HP, don’t get over-confident would seem to be the best advice. Also bare in mind a recent survey from consulting firm Booz Allen Hamilton, which showed that outsider CEOs are typically less successful than insiders when it comes to generating returns for shareholders. Which may be why Fortune 1000 companies consistently choose head bosses from within their own ranks over newbies by two to one. Still, you seem to have made a solid start. You’ve told everybody its too soon to be ruling anything out, strategy-wise, and that you want to give yourself time to settle in before you start making those big decisions. What would be good though is maybe if you started communicating to your customers what it is you intend to do. Analysts and industry watchers have stirred up fears of increased costs for many users as you look to turnaround a low-margin hardware business. While Wall Street and the board at HP will judge you on results, bear in mind that long-term it will be your customers that help you deliver them. ||**||

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