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» VIEW ALL POSTS Aug 9 2010   11:59AM GMT

HP CEO transition: Media hand-wringing and internal HP morale



Posted by: Shamus McGillicuddy
Tags:
Cisco
HP 3com acquisition
HP Cisco battle
HP Networking
HP ProCurve
Networking
scandal

When something like the Mark Hurd scandal happens, we in the media spend a lot of time quoting pundits about what impact the event could have on the markets we cover. For instance, ITWorld Canada quotes Rick Sturm, CEO of Enterprise Management Associates, about how Hurd’s departure could throw a wrench in the integration of 3Com into the company.

If [HP] brings in someone who says, ‘I’m not so sure [3Com] was a smart idea,’ they could have a few bumps in the road.

That’s for sure. Of course, given the amount of money laid out this year for the 3Com deal and the Palm acquisition, I think the board of directors will want to hire a new CEO who is committed to making those investments work. At the same time, a new CEO will probably be more willing to cut his losses with an acquisition that isn’t working if said acquisition didn’t happen on his watch.

So the board will probably hire a CEO who will commit to HP Networking’s 3Com/H3C/TippingPoint integration at least for a few years. But what about the rest of the company?

Over at CTOEdge, Mike Vizard pointed out that HP employees were suffering from low morale even before this Hurd scandal hit. He points to Glassdoor.com, a site where employees rate their CEOs and review what it’s like to work at their companies. HP has a Glassdoor rating of 2.4 on a scale of 1 to 5, based on 1,353 ratings. Hurd has an approval rating of just 34%. Employees tell the site that executives focus too much on numbers.

HP has enjoyed a lot of success under Hurd’s leadership. It has solidified its position as the #2 enterprise networking vendor, grown its share of server sales and made a lot of money on services with its EDS acquisition. But whispers of poor morale combined with this dramatic loss of its CEO certainly justifies some hand-wringing — by the media and by HP customers — especially since Cisco is being so aggressive in competing directly with it on networking and servers. As Vizard asks in his CTOEdge column: “Can an HP that is already pretty divided internally come together to drive the innovations needed to compete across a range of business segments that to one degree or another are under siege?”

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