How Trust and Relevance Can Restore HP’s Reputation

By | September 23, 2011

If you are planning to rob a bank, don’t ask anyone from HP to drive your getaway car…that company leaks live a sieve.  In what may be the worst kept secret in America (including no fewer than three articles in the New York Times about the rumor yesterday), HP has named Meg Whitman as its 4th CEO in six years.   Thanks to those articles, they already know what the concerns are about Whitman – she has no turnaround experience, her background is in consumer tech, she’s built a company – not fixed a company, eBay was a simple, straightforward business – HP is a complex, multi-business company.

All three of her predecessors have been fired.  How can Whitman avoid that fate? Give the communications leadership a seat at the strategy table.   Sources say the board supported the company’s strategy, but didn’t have confidence that leadership could communicate it effectively (aka “sell it” to stakeholders).  It doesn’t get clearer than that.

Whitman’s first communication to employees was a miss.  In that e-mail, HP failed to define any specific course of action, the board didn’t address the perceived shortcomings of Whitman or provide a compelling rationale for her selection, and contradicted themselves calling Leo Apotheker’s “resignation” his decision, then later classifying it as a difficult decision for the board.

How can effective communications help Whitman, and HP succeed?

  1. Building Internal trust — HP needs a culture change. Reportedly each business is a fiefdom, jockeying for control.  This is one explanation for the leak du jour (or multiple leaks du jour) at HP.  When confidential information is constantly reported in the news, that’s a clear indicator of a trust problem…employees don’t trust leadership to tell them what they need to know – which is only exacerbated when they’ve read about something all day and then get communication from the Company.
  2. Creating external relevance — HP’s needs to be more relevant. They’ve got no real skin in the game in the tablet wars (even though they had one of the first tablet PCs out there, albeit a different take on tablet than the wildly popular touchpad tablets like the iPad and the Galaxy).  The reputational boost they enjoyed from the photo printer wave is long gone. Right now, the most interesting thing about them is the board level drama and the leadership revolving door.
  3. Establishing credibility – stakeholders need to see HP define a course, establish interim benchmarks of success and then deliver. It’s simple and old fashioned, but it works.  Thus far, Whitman has defined her course as “stay the course” – including proceeding with an acquisition that reportedly played a role in Apotheker’s ouster.   It’s hard to say if that is a meaningful validation of the strategy, or a belief that the same old thing, with some Celebrity CEO pixie dust thrown in, will make it more palatable to stakeholders.
  4. Re-define success, at least for the short term. Specifically, stop defining success solely by share price.  The turbulence and tumultuousness of the capital markets, especially these days, can hardly be considered the benchmark of success.  I’d start with the ability to preserve confidential information as a sign of confidence in leadership and the company’s direction internally.  Build customer relationships…and ultimately sales.  Innovate and bring the right products to market – and grow market share.  Provide stability and predictability for your stakeholders.   The share price will follow.
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