HP Board to Clip Fiorina's Wings, or Force Her to Delegate?
by Timothy Prickett Morgan
Somebody who knows someone on the board of directors at Hewlett-Packard has been talking to the editors of the Wall Street Journal again about what is going on inside HP's board meetings.
The Journal reported only a few weeks ago that, on three occasions, HP's chairman and CEO, Carly Fiorina, and the company's board of directors considered breaking up the new HP (a merger between the old HP, a printing company with an excellent Unix server business, and Compaq, a company with an excellent PC and X86 server business). Having considered it, both the board and Fiorina decided against the move, believing that the united HP is a stronger contender for consumer and commercial IT dollars than a company divided by product lines (with, say, PCs and printers in one company and everything else in another) or by market segment (one company for consumer products and another for commercial products).
Now the Journal is reporting that the HP board members met January 12 through 15 and discussed a number of things, particularly their concern that, over the years, HP's numbers have been a bit rocky. While it is true the HP-Compaq merger occurred just as the dot-com bubble had burst and an IT recession crunched the market, Wall Street and investors don't care about excuses, and they reward consistency and profits as much as they reward vision. It has not been easy for Fiorina to steer HP as quickly and as surely as she might like. IBM likes to gloat about how tough it has been for HP, but IBMers have short memories, having suffered pain just like this a decade ago. And unlike IBM, HP does not have vast legacy hardware and software businesses--and a services unit that really feeds off of these two--to make up half of its sales each year.
In any event, HP's board seems concerned by the exodus of talent from the company, which we have chronicled over the years, and it also, if the Journal report is true, seems to be worried that Fiorina is involved in all of the small decisions in the day-to-day running of HP. To that end, HP's board has apparently decided that Ann Livermore, who heads HP's vast Technology and Services Group, Vyomesh Joshi, who has just been put in charge of a merged PC and printer unit, and Shane Robison, the company's chief technology officer, should be given a bit more autonomy. HP has also apparently asked Thomas Perkins, of venture capitalist Kleiner Perkins Caufield & Byers, to rejoin HP's board of directors, which will be up for election in mid-March.