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HP and its CEO woes

In the ongoing saga that is the HP boardroom, the latest gossip is that a new CEO is likely to come soon and be one of the company's own.

It's good to see that on one front, at least, the board has come to its senses. After years of management intrigue from outside leaders, whether the overreaching by Carly Fiorina or the expense account imbroglio of recently departed Mark Hurd, the grandfather of Silicon Valley desperately needs one of its own in charge. Not only does the company need to show that it can still produce good leaders; it needs some continuity in its culture, strategy and leadership after too much turmoil at the top.

But at the same time, there's something about the news that doesn't make sense. If indeed the board is planning to name an insider, why didn't they do so on August 6, when it ousted Mark Hurd?

I've written before about the wide gaps in succession planning at HP. But the news today only further confirms that the board was behind on its plan.

The board may think that hiring a recruiter to examine potential outside candidates as well as current executives makes it look like it's taking a thorough approach to finding the best CEO. We searched far and wide, it can argue, turning over every rock both inside and outside the company for the best person to lead HP.

That may cover their hides in any future shareholder claim against the company. But it does little to bolster investors' confidence that the company has a leader-in-waiting for whenever the next disaster strikes.

In fact, the move to conduct a broad search beyond HP's doors almost seems like a red herring, one designed to hide the board's ill-prepared succession plan. HP was performing very well under Mark Hurd--the company grew to become the largest computer maker by revenue and Hurd's operations savvy made him a darling of Wall Street. If the strategy was working, and operations were sound, there should be a smooth transition to the next leader on deck if the current one is ousted for something as irrelevant to HP's business as a relationship with a marketing contractor and expense account irregularities.

HP desperately needs a CEO who is not only a strong operator, but who knows the company's legendary culture and can provide some continuity after a tumultuous few years. HP veterans like Ann Livermore could provide that in spades. The board would be wise to install her or one of her internal peers in Hurd's old job. As they say, late is better than never.

Read more by Jena McGregor:

Nokia's leadership overhaul

Elizabeth Warren's appointment: The pitfalls of compromise

By Jena McGregor

 |  September 20, 2010; 10:50 AM ET |  Category:  Change management , Culture , Succession planning Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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Just what HP culture do you have in mind? Would that be Compaq Computer, DEC, EDS, or one of the other remnants of major companies that have been folded into HP? Unless the board has chosen to leak its intentions, the gossip within the company is not likely to have much value. Very few people in the company will ever have any real idea of what its board and its CEO are doing. CEO's who are company founders like Steve Jobs, Larry Ellison, and Bill Gates can make a very large difference in a company's performance. But the far more common case with large companies is uncertainty. There is no objective evidence about how good the chief executive really is or about what if anything his or her decisions really contribute to the company's performance. With the diversity of HP, there is no chance that a CEO whether from the inside or not will really understand the different cultures of its components. The only certainty about HP is that it is facing a world that is different from its past. There is not much chance that anyone really understands the potential for different CEO candidates to help HP realize this future. There is even less chance that anyone will really be able to evaluate how much the chosen CEO actually contributes to it.

Posted by: dnjake | September 21, 2010 11:11 AM

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