Hewlett Packard, Case Study Example

The three most serious problems with Hewlett Packard, based upon the identified case study, are as follows:

• Financial Problems – The acquisition of Compaq computers and the additional integration costs;
• Lack of strategic direction – The strategy was vague, not being implemented properly resulting in a confusing organizational structure;
• Human Resources – Poor people management, lack of incentive scheme causing key executives to leave and problems with recruiting new talented staff.

Financial problems can disrupt good working relationships with the Customers, Creditors, Stakeholders and Shareholders. Good financial stewardship is a sign of a well managed company and the converse also applies.  A lack of strategic direction is the analogy of a ‘ship without a rudder’; hence if nobody understands the mission, goals and objectives of the firm it is essentially going nowhere.  People are the life blood of the firm and it is what makes them unique and distinguishes them from the competition. You need smart talented people for creativity and innovation; this is amplified in high technology firms like HP.

In order to correct each of these problems the new CEO would need to take action in the following areas:

Finance:  Work closely with the firms Accountants and Auditors to gain external representation and analysis on the scale of the problems.  Ensure an appropriate action plan to resolve the issues is drawn up and this must carefully align to the firm’s strategic planning approach.  This also ties in with examination of the Companies remuneration and rewards system and organizational structure. The Company has been severely under-managed so it is important to increase the budget for staff retention and recruitment of more talented Managers.

Strategic planning:  This is an area where the CEO would need professional help and support, in ideal terms from a top flight management consulting firm that understands strategic planning within the context of a leading technology firm.  It is vital that this is accomplished through a structured approach to defining the mission / vision, goals and objectives of the organization.  A preferred approach might be that of the ‘Balanced Scorecard Method’. This approach enables you to take the vision and strategy of the Company and examine this from four distinct perspectives i.e. Customer Relationship, Learning and Growth, Internal business processes and Financial.  As you can observe this model addresses the three identified key weaknesses of the HP organization. It is a very powerful business model in assisting with business transformation and growth. “The balanced scorecard is a strategic planning and management system used to align business activities to the vision and strategy of the organization, improves internal and external communications, and monitor organizational performance against strategic goals.” (Balanced Scorecard Institute, 2010)

Human resources

The CEO needs to impose a different leadership style on the organization that will improve the HR problems. In particular these include – improved remuneration, retention of skills and talent, recruitment of talent, motivation, improved organizational structure particularly in the areas of Senior and middle management.

Leadership style

Hurd fits into this perspective as a transformational leadership style. Hurd is a Transformational leader and identified by the characteristics of a person with vision, a strong sense of purpose and very goal oriented.  He believes that people will follow those who inspire them.  Hence goal attainment is by inspiring your subordinates motivating them by enthusiasm and energy.  Working for these types of leaders can be a great experience as they derive a great deal of passion about their work and genuinely want you to succeed.  Such leaders start with a clear identification of a vision. Hurd believes people can achieve great success when they are inspired and passionate about a vision.  Leaders of this type are quick to exploit the vision by sharing it with their team. Such leaders are often seen to be using mind mapping or brainstorming sessions with their subordinates.  They believe in structured approaches to Problem Solving and Decision Making and often follow a Kepner Tregoe Management style.

Approach to strategy

Hurd originally identified to the old autocratic style of management, as adopted under the previous CEO’s regime. He has modified this to that of a transformational leadership style and this has already started to show improvements. For example within 2 years of his taking office he has seen sales increase by $10 billion and stock prices have rose by 80 per cent. Hurd has stated that HP is a company that is transforming but has not yet transformed.  As such based upon this evidence his transformational style of leadership and strategy seem to be working.  Unfortunately Hurd did not survive “Hurd, 53, resigned as HP’s chairman and CEO on Aug. 6, after a company investigation of a sexual harassment-allegation determined that he violated its standards of business conduct, according to a statement from Hewlett-Packard.” (Milford, 2010)

Works Cited

Balanced Scorecard Institute. (2010). Balanced Scorecard. Retrieved 11 26, 2010, from Balanced Scorecard Institute: http://www.balancedscorecard.org/

Milford, P. (2010, 11 26). Hewlett-Packard Sued in Sealed Cases Over Mark Hurd Departure. Retrieved 11 26, 2010, from Bloomberg: http://www.bloomberg.com/news/2010-11-26/hewlett-packard-sued-by-shareholders-for-information-over-hurd-s-departure.html