Carly’s HP Implosion

 

Hewlett-Packard (HP) is imploding. I covered many of the reasons in my book on branding for CEOs.

Meg Whitman, HP’s current CEO, announced that she will terminate 30K employees, 10% of its workforce, to save $2.7B annually.

Most of the departing 30,000 staffers will come from HP’s IT-outsourcing business — a remnant of the exorbitantly priced $13.9B acquisition of EDS in 2008. It turns out that IT outsourcing is a shrinking industry. Oops.

Whitman has been trying to patch a tangled amalgam of disparate parts, but she’ll fail: HP is a classical conglomerate, empirically proven to underperform in the marketplace. Bolting together billion-dollar companies can jack up revenues, but not necessarily value.
 
Path of Unmanageable Doom

What happened? I’ll give you a perspective that you’ll likely read nowhere else.

Carly Fiorina, Republican presidential candidate, became CEO of HP in July 1999. Shortly after arriving in the C-suite, she rebranded the company, to invoke its startup roots, by inaugurating the “HP Invent” campaign. This branding decision ultimately put HP on a path of unmanageable doom.
 

 
Imagine driving to work at HP every day, passing this odd sign. You would ask yourself, Invent what? For whom? What’s the goal here?

Invent is what research labs do — not solutions companies. Fiorina tweaked HP’s DNA, so that the behemoth became a brandless company about nothing.

When a company’s products and technologies trump its brand, as I’ve written ad nauseam, one can draw two simple conclusions: it has no brand; it will operate under a cloud of chaos and anarchy. That is the state of HP today.

Branding is not just for customers, investors, and reporters; it’s also for employees. If your troops don’t know why their employer exists, they’ll make lots of random, stupid, egotistical decisions — or none at all.
 
Parting Advice to CEOs

Continue to laugh at or dismiss the importance of branding — that it’s your #1 priority — and you’ll become HP: an absolute disaster, casting about for a purpose. You’ll piss off your investors, turn off your customers, and lay off your employees.

Prepare for your implosion.
 
POSTSCRIPT #1: How Steve Jobs Tricked Carly Fiorina at HP with the iPod

 

About the Author

Marc Rudov is a branding advisor to CEOs,
producer of MarcRudovTV, and author of the book,
Be Unique or Be Ignored: The CEO’s Guide to Branding.

 

© 2015 Marc H. Rudov. All Rights Reserved.

 

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