If Mark Hurd wants to turn HP around he should stay out of the limelight and focus on operational efficiency, experts said Wednesday following the former NCR president’s appointment to the top job at one of the world’s largest computer
manufacturers.
Hurd, 48, arrived at HP headquarters in Palo Alto, Calif., Tuesday night and will officially take over from interim chief executive Bill Wayman on Friday. He replaces Carly Fiorina, who ended a controversial six-year reign at HP that culminated in her resignation over a dispute with the firm’s board of directors.
Hurd spent 25 years at NCR, including a stint managing its data warehousing spin-off, Teradata. In a teleconference announcing his appointment, HP board chairwoman Patricia Dunn said that the company was impressed by Hurd’s straightforward manner and his track record of developing internal talent while reaching out to the company for new skills. Although NCR is smaller than HP, it is a complex organization with many divisions, Dunn said, and Hurd will bring key competencies to the role.
“Like the board, Mark is very much a fan of metrics,” she said. “We like the idea of establishing a set of key performance indicators that one can monitor on the road to success.”
While he called HP an icon of Silicon Valley, Hurd said the company has not been living up to its potential, and that he would be spending the next few months talking to customers and partners to assess its shortcomings.
“This company was founded in 1938. Companies that have that much history have tremendous assets in that legacy. They also come with some baggage,” he said. “The trick is to leverage the benefits of the legacy – the history of customer relationships, the history of competing and serving customers in multiple markets.”
Industry watchers said Hurd should avoid Fiorina’s high-profile style of managing HP, which was marked by highly public battles with the board over its merger with Compaq Computer in 2002 and rumoured demands that the company should split off its imaging and printing business. Fiorina was also a fixture of the IT trade show circuit, making numerous keynote speeches throughout the year.
Hurd is only the second outsider to run HP, which can create high expectations within organizations that are slow to change, said Ron Burke, professor of strategic management and sociology at York University’s Schulich School of Business.
“Waiting for the right inspirational leader to come around is not going to work. That inspiration may never happen, and you may die in the process of waiting,” he said. “It’s the competence of the CEO in his or her ability to understand the company, the context and its people.”
Lou Agosta, lead industry analyst for data warehousing at Cambridge, Mass.-based Forrester Research, said Hurd became known as an expert salesman and efficient cost-cutter while running Teradata, which should make him well prepared for his role at HP.
“Mark is a very well-grounded guy in that regard, in contrast to Carly, who was something of a celebrity CEO jet-setter. Mark is a good speaker, but I would expect him to stay home minding the shop,” he said. “Some of Mark’s critics might say he’s boring. I would say that HP could use a little boredom.”
Joel Baum, a professional of organizational sociology at the Universtiy of Toronto’s Rotman School of Business, agreed.
“In some cases, they don’t need someone to be this magic, charismatic figure,” he said.
“He obviously has the advantage of following a person who left under a cloud. He’ll look better by comparison.”
Hurd said he wouldn’t take a blanket approach to managing HP’s operations or likely pursue any drastic strategies, at least initially.
“When you have a blended company as we do, you have different dynamics in each one of those businesses – different competitors, market opportunities, value propositions, and channels of distribution,” he said. “Those all bring different SG&A (selling, general and administrative expenses) models, gross margin opportunities.”
Even though NCR is a smaller firm, Agosta said Hurd’s experience is “scaleable” to an industry giant like HP.
“I think he was chosen because NCR’s products are very diverse – parallel database, point of sale products in retail and other types of appliances or computing machinery,” he said. “That’s a diverse mix, as is Hewlett-Packard’s mix of products.”
Having the board’s support will be critical, Baum said, if Burke wants to make any serious long-term changes at HP. Burke said the increased involvement of directors is a healthy sign.
“It will result in better decision-making,” he said. “The difficulty is with family members, because unlike independent board members, they have their unique take on legacy and the way things were in the good old days.”
Hurd said he was confident he had the support – and the autonomy – that he needs.
“I received no preconditions of the board that, ‘You have to do this,’ or, ‘You have to do that,’” he said. “It was a collaborative dialogue. I don’t think we would close our mind to any strategy that would improve the company in the long run.”
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