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The state of HP, as told by Meg Whitman

Rob Enderle | Oct. 14, 2013
Hewlett-Packard is in the midst of a very public turnaround. This week, CEO Meg Whitman spoke to analysts about it. Her message -- and the way she delivered it -- should inspire HP customers and consumers at large.

Whitman argues that HP's new businesses - both 3Par and Autonomy were acquisitions - are focused on this new opportunity and will see more investment over time than the firm's legacy businesses. The latter will receive some investment, though, so they don't decline prematurely.

And that points to one of HP's biggest problems: Shifting market forces. Intel-based devices are losing ground to ARM-based devices at an alarming rate. Cloud and SAS solutions are rapidly replacing the legacy businesses that form HP's core. Competition is exploding; previous partners such as Intel and Microsoft are becoming competitors, while traditional competitors are tightening their focus. HP has the breadth of resources to face this challenge, but if the firm doesn't focus on execution, it will be overwhelmed.

HP Better at Targeting Customer Segments, Markets

A smart executive frames how he or she will be measured. Whitman is clearly a smart executive, as her talk then moved to how HP should be measured. Customer satisfaction must be at the core of measuring HP's success. HP has missed too many opportunities in the past, she says, and part of her goal is to make sure this problem goes away. Whitman expects her people to be excellent, not just good, and asserts that HP will optimize end-to-end processes and be held to a standard of both timely and excellent products.

The same is true of HP's go-to-market efforts, which have been aligned with customer segments. HP has identified the top 40 country category pairs that deliver the best profit; the firm will focus on these areas, along with its top 15 growth markets. While this sounds like a lot, it's actually far narrower than where HP was.

Whitman didn't pay much attention to core management topics such as cost management and traditional back office systems, other than to bless them as areas of focus. This wasn't surprising. CFOs are generally better suited to address financial topics and, frankly, the audience at this analyst meeting doesn't care much about HP's internal IT purchases.

Overall, this nicely frames how Whitman wants HP to be measured and where she's confident HP can execute. This helps assure that HP is measured in a way that Whitman's efforts are seen as a success. This is critical; applying arbitrary measurements to any employee, let alone the CEO, make success on paper impossible even if one delivers an excellent performance. Setting expectations, at any level, is a best practice.

HP Ready to Drive Change, Whitman Says, Convincingly

Whitman closed by saying that HP is a strong company with a proud heritage and huge opportunities before it. The firm has the right employees, as well as customers who value HP's approach, people and products and stand with the company to assure that HP's turnaround will be successful. By 2016, Whitman sees HP as a leader that's driving exceptional technology change. She has enormous confidence in HP's ability to execute.


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