Wednesday, February 09, 2005

HP's Culture Overthrows Carly

At every level of our lives, our values and beliefs define who we are and how we act. As we are social beings shaped by geography and the traditions into which we are born and to which we are drawn, it is no surprise that Carly Fiorina lost her battle to remake HP. She fought hard to change the HP Way with a mega merger and bold restructurings. The more kind and compassionate culture of founders Bill and David smarted at the assaults. The Compaq values simply didn't cut it. The brash outsider who outwitted Walter Hewlett over the HP-Compaq merger and who shortly thereafter stopped talking about the HP culture finally succumbed to the DNA of HP.

Carly started out in a difficult place. CEOs who are outsiders do not fare nearly as well as insiders, contrary to common belief (see Charan's article in HBR February 2005). They don't know the culture. They are often brought in to shake things up. Trouble is they still have to deal with human beings who not only have a great deal of expertise, they have feelings and are proud. Any new CEO has to tread carefully to connect with the workforce and the history of the organization. Too much change cannot easily be absorbed when people are trying to get the product out the door. Radical change that flies in the face of tradition, especially one that has served a company well, is a dangerous path to pursue.

David Packard, an iron-willed yet gentle leader and Bill Hewlett a friendly dreamer together forged a workplace where people felt cared for and encouraged to rise to great heights of accomplishment. In today's insecure world, it is just that kind of workplace that thrives. Collins and Porras made the point quite clearly in "Built to Last". "Core values are an organization's essential and enduring tenets, not to be compromised for financial gain or short-term expediency". They found that builders of visionary companies focus on creating "a ticking clock" rather than hitting a market just right".

The HP clock lives on. Charisma is highly over-rated.

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