HP just announced a new CEO, Meg Whitman after ousting Leo Apotheker who served less that a year as CEO. During Leo’s time, HP’s market value went down by 44%. It is hard to believe HP’s market valuation hovers around $50B.
Mark Hurd rescued HP after Carly Fiorina was kicked out by the board. Under her watch, HP made the biggest acquisition (Compaq). Mark cut costs and tightened operations to show better profitability. But innovation for which HP is known from the start, took a back seat. Last year Mark Hurd had to leave for inappropriate conduct. The board quickly appointed Leo Apotheker, a software executive from SAP to lead the company. During last eleven months, much confusion was created. First HP said it will promote the tablet based on Palm’s operating system WebOS. Then 3 months later, the tablet was abandoned. HP also said it will spin-off the PC unit, which caused much confusion to competitor’s delight. Lastly an acquisition of a British software company called Autonomy at highly inflated price of $10B (revenue less than $1B) was heavily criticized by experts. These mis-steps have caused steady decline in revenue and share value. The board was forced to fire Leo Apotheker.
But why Meg Whitman? She joined the HP board after losing to California’s governorship to Jerry Brown. Previously she served as the CEO of eBay, a consumer good exchange company. What makes Meg the right leader for HP at this juncture? She has no enterprise-hardware-software experience. Under Leo, and with the board’s approval, HP has been shifting more towards a software and services company much like IBM and Oracle. It is unclear if Meg Whitman can steer HP towards that goal. Why not Ann Livermore, who served at HP as a senior executive for decades? She definitely understands HP’s core competency and DNA better than any outsider.
Let us watch over next six months if Meg Whitman will be that turn-around leader at HP.