Terry Corbell, The Biz Coach
By Terry Corbell
Business Consultant

Leadership, HR, Marketing Lessons from HP’s Executive Turmoil



Updated May 2, 2014


It’s been quite the roller coaster ride for Hewlett-Packard. Its shares have rebounded significantly — nearly tripled since November 2012.

The rebound was helped by landing a $3.5 billion contract to operate the communication system for the U.S. Navy.

HP reported a net loss of $12.65 billion for the year ending Oct. 31, 2012, but CEO Meg Whitman was given compensation totaling $15.36 million. She was paid $16.52 million in 2011 when HP made a $7.07 billion profit.

hyena realityHP’s long-term credit rating on senior unsecured debt was slashed by Moody’s Investors Service from A3 Baa1 in November 2012.

Cost-cutting didn’t work before as a salient strategy when HP’s competitive position and momentum worsened.

Mark Hurd era

Plus, a 2012 court ruling put former HP CEO Mark Hurd and the company’s problems back in the spotlight.

At issue, were perceived quagmires in leadership, human resources and marketing.

Mr. Hurd was widely credited for HP’s success a few years before. But his forced resignation over a sexual harassment case and inconsistent expense-account reports is the company’s third tumultuous event involving key executives in just five years. Analysts were unimpressed with his lack of vision.

His accuser, Jodie Fisher, a 50-year-old actress and former reality television contestant who was hired has a marketing consultant, introduced him to key customers and kept him company. She said she was sorry he lost his job.

Especially, when a court approved publication of a letter sent by Ms. Fisher’s attorney, Gloria Allred, to Mr. Hurd – the letter detailed his alleged sexual advances toward Ms. Fisher.

For example:

“At times you would behave professionally seemingly ‘getting’ that she was not going to have sex with you,” wrote Ms. Allred. “At other times, not, and you would relentlessly attempt to cajole her into having sex with you.”

Fiorina’s bad merger

The first unsavory HP event, of course, was the 2005 firing of CEO Carly Fiorina following her lack of financial success and her questionable, contentious merger with Compaq resulting in massive layoffs.

Then, there was the 2006 controversy surrounding Patricia Dunn, who as chair of the board, hired firms that used illegal methods to try to stop leaks of proprietary HP information to reporters.

So, it’s not surprising that published reports indicate employees now have huge morale issues long after Mr. Hurd’s tenure.

Ms. Whitman will need substantial leadership skills because HP still has to improve the employee morale and marketplace position.

Certainly, many remaining HP employees feel betrayed. Improving employee morale necessitates a strong internal communications program with empathy and appreciation for the employees’ contributions to the company. Certainly, from the C-suite on down, HP’s HR and training initiatives are being tested.

Missed marketing opportunities

It might seem like a bit of a stretch, but the marketing should tout the rich, storied legacy of the company’s origins in a garage. That’s what occurred to me after being reminded that Americans love an underdog following release of a 2010 study by the Simmons School of Management in Boston.

“Across contexts, cultures, and time periods, underdog narratives have inspired people,” according to the study co-authored by the school’s Jill Avery. “Stories about underdogs are pervasive in sports, politics, religion, literature, and film.”

In using the term, credibility, she implied in an interview with BusinessNewsDaily that trustworthiness and integrity are salient principles to inspire customers to buy.

“Underdog brand biographies contain two important narrative components: a disadvantaged position versus an adversary and passion and determination to beat the odds,” wrote the study’s authors.

In addition to Dr. Avery, the authors include Neeru Paharia and Anat Keinan of Harvard University, and Juliet B. Schor of Boston College.

Underdogs win

They found that the respondents identified with underdog brands and were more likely to buy them.

“The American Dream, the fabled American myth, is built on the stories of underdogs who came to the United States with virtually nothing and pulled themselves up from their bootstraps to achieve success,” wrote the authors.

When the study of products that included the branding term, underdog, they were preferred in 89 percent of the cases by participants. Companies with a humble history are very appealing to consumers.

In fact, as a reward for participating in the study, respondents were given their choice of a chocolate bar. Seventy-one percent chose the underdog candy bar.

Meantime, to be fair — HP makes great products. My firm has had numerous laser printers; both black and white, and color. Some have only lasted a year or two. But two of the most reliable are the discontinued HP LaserJet 4P model printers from the early 1990s. They’ve produced reams upon reams of quality documents without fail. Sadly, they were finally mothballed in 2011 when it the drivers were no longer available for late-model computers.

Let’s hope HP has corrected its leadership program permanently. It’s past time for inspiration and vision for success with customers.

Related link: Are HP’s Board and New CEO Headed in Right Direction?

From the Coach’s Corner, if you have customer loyalty issues, you’re not alone: Bank Woes Provide Lessons for All Companies Seeking Growth.

“Leadership is solving problems. The day soldiers stop bringing you their problems is the day you have stopped leading them. They have either lost confidence that you can help or concluded you do not care. Either case is a failure of leadership.”

-Colin Powell

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry. 

Photo courtesy of hyena reality www.freedigitalphotos.net


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Seattle business consultant Terry Corbell provides high-performance management services and strategies.