Friday, August 13, 2010

Money over Morals - Bizzare lawsuit Against HP

Hewlett-Packard is in the news again, but for the wrong reasons. Back in 2005, Carly Fiorina, the then-CEO of the technology giant was unceremoniously dumped, due to differences in policy making. Enters Mark Hurd, the non-nonsense goal-getter operations guru who prefers a low-key low-profile management style. Thankfully, the company turns around strongly. The way Hurd manages to integrate EDS into the company appears less problematic compared to the tumultuous HP-Compaq merger under Fiorina. Unfortunately, Hurd ends up leaving the company too under dire circumstances. The media says that Hurd was asked to leave. HP is now looking for a new CEO. Today I read about a lawsuit filed against the HP Board of Directors for causing a US9 billion drop in market capitalization. I ask, "Is this real?" Is this a "Money more important than morals" mentality at play?

Frankly, I am embarrassed by this lawsuit. The speed in which Hurd has resigned is in itself credible.
  • Hurd admits to wrongdoing, and sees no more moral authority to lead. Isn't that good leadership?
  • The Board of Directors has been fair to Hurd by giving him the severance package due. In fact, they have been gracious to downgrade the accusations to a breach in Standards of Business Conduct, rather than sexual harassment which is criminal. For this, I think the BOD has done an excellent balancing act. This to me is professionalism, given the circumstances. There is no point for HP to prosecute Hurd any more, as long as the former CEO learns his mistake.
The HP Shareholder who sues the BOD causes me to question: "Is money more important than morals?" Don't get me wrong. I am not speaking on a platform of moral superiority. I am talking about doing the right thing, under the circumstances. Is the right thing according to the shareholder (Brockton Contributory Retirement System) in terms of money? Are they saying that HP BOD is wrong to quickly ask for the resignation of Hurd? Is it more significant for this shareholder to wait for the right time according to money dynamics? If instead, the HP BOD waits and does not take immediate action, would they not be sending a wrong message instead?

The HP Way: How Bill Hewlett and I Built Our Company (Collins Business Essentials)As an ex-employee of HP, I still look highly on the top management there. From Bill Hewlett to David Packard; John Young to Lew Platt, and to some extent Carly Fiorina, HP has always been blessed with strong leadership with credible leaders. By and large, I think they have generally been fair. While making money is important, the venerable HP Way is still one of the best standards in the industry. I think back fondly to the days where the HP Way was meticulously practiced. Unfortunately, I can testify that after Lew Platt, the HP Way was never really the same. This is why many ex-colleagues of mine have said that after the departure and deaths of the two founders, Dave and Bill, the HP Way has been diminishing throughout the company. Some even say that it is forever gone.

This latest episode encourages me because of the prompt action of the BOD to sack Hurd. It is leadership at its best. Decisive. Firm. Considerate of most, if not all parties. At the highest level, moral credibility is a non-negotiable. Do not let money matters cloud out any judgment on moral authority. Better to suffer short-term than to let the problem rot and decay long term. Concentrate on not only what works but the kind of workers the company has. I quote what Hurd himself said:

“It would be difficult for me to continue as an effective leader at HP and I believe this is the only decision the board and I could make at this time,” Hurd, 53, said in a statement. “I want to stress that this in no way reflects on the operating performance or financial integrity of HP.” (Businessweek)
Kudos HP. May you get a good leader soon.


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