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david-sims_1's picture

Did employee resentment catch up with HP's Mark Hurd?

Was there more to Mark Hurd's exit from HP last week than the claims of sexual harassment and expense code improprieties? In his Talking Business column in Friday's New York Times, Joe Nocera digs deeper into the reasons for the decision by HP's board to send their CEO packing. Hurd led a remarkable turnaround at what became the world's biggest computer company under his stewardship, making HP what Fortune write Adam Lashinsky called "the benchmark for efficiency in an industry known more for its whiz-bang appeal than its operational excellence.”  So why was the board quick to end his tenure?

Nocera suggests that, in addition to bad feelings dating back to HP's pretexting scandal in 2006 (when it pursued corporate leaks with excessive zeal), Hurd's lack of support from those he managed may have contributed to his downfall. He writes,

"Then there were the company’s employees. The consensus in Silicon Valley is that Mr. Hurd was despised at H.P., not just by the rank and file, but even by H.P.’s top executives. ... 'He was a cost-cutter who indulged himself,' was one description I heard. His combined compensation for just his last two years was more than $72 million — a number that absolutely outraged employees since their jobs were the ones being cut."

Nocera finds a former HP engineer, now running a research program across the street at Stanford University, who said Hurd was “incredibly rude and demeaning" and that he relied on "the fear factor."

The column raises many questions, not the least of which is whether having an imperious leader is sometimes worth it. After all, HP's turnaround was real -- and not completely expected after its sputtering inefficiency under its previous CEO. Hurd apparently made few friends with his excessive cost cutting and what looks like a tendency to shield his own income from the economies he imposed on the rest of the organization. I'd like to think that a warmer, fuzzier boss could have pulled off the same trick without alienating the rest of the workforce. But I'm not sure he or she could have.

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richard-melrose's picture
   
 

David Sims' Mark Hurd post closed with: "I'd like to think that a warmer, fuzzier boss could have pulled off the same trick without alienating the rest of the workforce. But I'm not sure he or she could have."

From my perspective, "warmer, fuzzier boss" totally misses the point.  An authentic leader with a clear enterprise purpose would have done better, both short term and long term.  From the HP employee posts that I have seen, Mark Hurd was competing for the "Chainsaw Al Trophy".  He certainly didn't do anything to improve "access to, and retention, of key talent"  which 97% of CEOs regard as the #1 source of competitive advantage in "sustaining growth over the long term" (PriceWaterhouseCoopers).

HP's lines of business depend on knowledge workers.  An authentic leader would have been expanding knowledge work content and knowledge worker productivity to drive health and value creation, instead of offshoring as many jobs as possible.  No company has ever cost reduced itself into greatness.  Note, too, that Mark Hurd never got the HP stock price back to where it was in 2000 ($66.28 on Jan 3, 2000).

For some time to come, HP will pay for the Hurd regime (e.g. employment brand) and for its BoD's laughable succession-planning performance.  Maybe this time, somehow, HP will get an authentic leader.

Dick Melrose
r.melrose@vision21.us