What IBM Had That HP Doesn’t
Transformations are difficult things. And shifting from a product technology focus to a services focus is no different. In fact, it may be one of the toughest business challenges a company can face. IBM learned this as it moved from a leading product-centric company (PCC) in the technology space to a leading services-centric company (SCC).
HP would appear to have all of the drivers for success in this transition. The company owns what is likely the broadest portfolio of technology businesses in the industry and has deep management ranks. Furthermore, HP led some of the earliest forays into the services business, including the acquisition of EDS, and has built an industry-leading brand that is highly regarded by the IT community.
However, as the rather turbulent changes of the last two CEO’s demonstrate (Mark Hurd and now Leo Apotheker), HP does not have one thing that IBM had when it began its transition. The solid backing, vision and support provided by a board that understands the changes the company needs to make. This includes giving the CEO the support and cover they need to make this transition.
If you study IBM’s transition under visionary CEO Lou Gerstner, one of the striking factors is the amount of unanimity and support given to the CEO by IBM’s board. While IBM’s transition looks brilliant, and painless, today, in reality it was tumultuous and controversial at the time. All one has to do is to look at popular business magazine covers which depicted IBM as a dinosaur. Or read the articles indicating that the popular opinion was that Gerstner needed to break up IBM to drive shareholder value, not turn it around through transformation. Or, look at the major employee change that took place; IBM turned-over one half of its 400,000 person work force during this transition. That certainly created some heat for Gerstner.
But through all of this, the IBM board covered Gerstner’s back. They stood behind him and were vocal in providing unwavering support. If HP is ever going to successfully navigate the transition to a services led company, this type of board support is required. Many wonder whether Meg Whitman can succeed in bringing HP to greater heights, but the real question is whether HP’s board will now provide all the support needed for the long awaited transformation of the company?
Connect
