Since the consensus view seems to be that Hewlett Packard will today replace CEO Leo Apotheker with board member Meg Whitman, let’s just assume that’s what will happen. Now I’ll explain why it is a bad idea.
Oh getting rid of Leo (or not hiring him in the first place) is a fine idea. Leo didn’t fit the culture or the industry and he arrived with way too much baggage from SAP. Hiring Apotheker was an example of the HP board trying to get ahead of the Mark Hurd scandal by making what it hoped would be a brilliant hire in Apotheker that would silence Wall Street criticism. The problem with that last sentence is the word hoped: hiring Apotheker was actually a giant crap shoot and the HP board of that time wasn’t smart enough to even know that.
I’ve been inside these efforts to make corporate lemonade and they aren’t pretty. You are suddenly without a key leader because of a scandal or because some other outfit hired out from under you and the urge is to pay anything for an alternative name player you can announce over the weekend to make it appear like the guy/gal who is gone was actually fired. The problem with this is the person you hire over the weekend arrives overpaid, their ego over-stoked, and without any proper vetting. It hardly ever works out well.
So good riddance Leo. But if by some chance you manage to keep your job today, let’s have lunch, okay guy? I’ll buy.
The question that follows, then, is HP doing the same thing all over again by hiring Meg Whitman? Is this another stupid move to look more accomplished than the board actually is?
I find it interesting that yesterday’s stories had Whitman being hired on an interim basis, while today we’re told she’s the real deal, the long term savior of HP. Frankly, it feels to me a lot like when Gil Amelio took over as CEO of Apple following the firing of
John Sculley Mike Spindler. Like Gil, Meg has a pretty good track record. Like Gil, she is coming from the board. Like Gil, she’s the only person on the board who wants the job. But also like Gil was at Apple, I think Meg Whitman is ill-suited for the challenges of running HP.
Meg Whitman is an extremely smart person, which shows in her ability to drive for the top job in less than a year on the board, hip-checking Leo as I described it back in February. Meg wants (and feels she deserves) her chance to fail. But my fear is that’s exactly what will happen — she’ll fail, or at best muddle along a la Carol Bartz at Yahoo.
I believe this for two reasons: 1) Whitman will have little to no support from inside the company executive ranks, and; 2) she has simply never run a company of this type before.
Leo suffered from the first problem. Talented HP executives were passed over to hire Apotheker. Pissed-off, they weren’t going to go out of their way to help Leo. Well it’s about to happen all over again. So Whitman can either lead a company possibly opposed to her or she can clean house and get a new bunch of lieutenants who will be beholden to her but who also won’t immediately know what they are doing in their new jobs. Neither possibility is a good formula for hitting the ground running.
The usual trend in these situations is to buy loyalty by giving the passed-over managers new contracts with increased incentives. That’s what happened when Leo came in. So it’s about to happen again? Probably. And when/if Whitman fails a year or two down the road it will happen again — again. That’s a loyalty disincentive.
But the biggest problem here is just that Meg Whitman has given me no solid evidence that she’d even do a good job as HP CEO.
Here’s testimony from an old hand at eBay who is in a position to know: “I have my doubts. Meg is very good as a driver of quantitatively-inclined operators, when she is armed with a strong business model atop a scalable vision (to quote her about her own work at eBay: “monkeys could run this train”). She is no monkey, but I don’t think she is a visionary, at least she isn’t known to be one. And vision (and the ability to sell that vision to both the board and rank and file) is what HP needs desperately right now.”
So just to really shake things up, here’s my recommendation for HP: 1) promote Meg Whitman to executive chairman of the board and get her coming to work every day; 2) appoint a committee to take its time and find a world-class CEO ideally suited for taking HP back to greatness, and; 3) appoint as interim CEO my friend Brian Utley.
Yes, Brian Utley.