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HP's Twin Problems: New Strategy and New Management

In HP's (HPQ) last earnings call, CEO Léo Apotheker said that big strategic change was coming. And no wonder, as business was in the process of a major slide. What Apotheker didn't say was that big personnel changes were coming, as well. More bigwigs are leaving the company, according to a Bloomberg story.

Maybe they were booted out or perhaps they're bailing to avoid what they think will be a corporate train wreck. But whether ordered or not -- or even necessary or not -- the departures mean that HP has an even bigger problem on its hands. A big strategic shift is tough. So is cleaning house. Doing both while trying to improve morale and operational execution? Good luck.

The three outward bound executives whose names surfaced over the weekend are Marius Haas, Tom Iannotti, and Gary Budzinski:

Haas, who led Hewlett-Packard's computer networking business, is departing for private-equity firm KKR & Co., said two people, who asked not to be identified because the job change is confidential. Iannotti, who was in charge of enterprise services, is retiring, while Budzinski, who headed computer maintenance services, is leaving, two people said.

The executives follow Tom Hogan, the former head of business-computing sales, in exiting as Hewlett-Packard faces a drop in demand for personal computers and narrowing margins in services.

So, a total of four in a short amount of time. From the description, it sounds like a mix of some being pushed out and some running for cover. That's hardly surprising when a company plans massive changes.

However, changing bodies in chairs is not enough to fix HP. Employees are already spooked over business at the company for at least the last few years. As of last year, two-thirds of them would have quit the next day for an equivalent job offer. Last summer, HP had the lowest employee approval rating of all major tech companies in a non-scientific poll at company rating site Glassdoor.

If Apotheker rid the company of a few hated managers, the action might have a positive influence. But HP's problem runs deep and, so far, its actions to correct things have been a joke:

HP wants to fix strategy. How nice. How about fixing a culture that let a once fine company slide into a muddy ditch? Until the company corrects that foundation, nothing else it does will really matter.


Image: Flickr user Elsie esq., CC 2.0.
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