HP’s New CEO Will Stick To the Plan

This has been one chaotic week for Hewlett-Packard.  Over the past few days the company has delivered both positive and negative news, which is making investors’ heads spin like crazy.

They started the week announcing the next TouchPad fire sale, which will be available only to their employees then partnered that with more than 500 workers from the Palm division getting sacked because the webOS is dying.  And to make things worse, the UK division may be affected by the layoffs.

But what started as a rumor turned to reality, with HP replacing CEO Leo Apotheker with Meg Whitman, former eBay CEO.  HP’s their board of directors disagreed with Apotheker’s plans regarding the PC business and webOS, among other things.

Whitman was chosen because she has experience in running a large company, as she was eBay’s CEO for some years.  But analysts are saying that eBay is vastly different from HP and Whitman isn’t right for the job.  An article on Bloomberg features analysts bashing Whitman and her capabilities to run HP.  Chris Whitmore, an analyst at Deutsche Bank AG, says that Whitman will push through with Apotheker’s plan of selling the PC business while Shaw Wu, an analyst at Sterne, Agee & Leach Inc. in San Francisco, stated that Whitman doesn’t have what it takes to turn HP around.

AllThingsD interviewed Whitman and HP Chairman Ray Lane right after the conference call to address the concerns regarding her appointment as CEO, the acquisition of Autonomy and her immediate action for the future of HP.

When asked how her experience as an enterprise buyer help Whitman perform her duties as HP’s new CEO, Whitman answered that what HP needs is management skills, communication skills, and a commitment to executional excellence, which she is excellent at, since those are the things she utilized in her 35 years in the business.  But since she did not spend 35 years in the enterprise business, so she will be relying heavily on Dave Donatelli, Todd Bradley, the senior executives at HP, and Ray Lane, who were at Oracle for many years.

Lane supported Whitman’s statement and added, “I think Meg can go into any enterprise and visit with any CIO or CEO and do really well. So whether it is the technology side or the sales side, I don’t think anyone is giving her enough credit on those fronts. She can do just fine. And then on top of that she has strong operating executives under her who do know the enterprise business. But right now it is the need for leadership of the people, a focus on executing and operating.”

Regarding Autonomy, as to whether they would push for the acquisition and their plan for integration, Whitman shared, “So what we hope to do with Autonomy, and I’m enthusiastic about this acquisition, is take what is fabulous about Autonomy — they have a leading position in the marketplace — and put it through the very powerful HP distribution system. And I think what Mike Lynch is excited about — he is the founder and CEO of Autonomy — is taking this great product and getting it into more people’s hands. And we just need to grow this company as fast as we can, extend our lead and our accumulated experience in this area. So that’s the plan for Autonomy.”

As for the price of Autonomy, Lane said that he wished they could have acquired it at a cheaper price but they have no regrets about it.

When asked about her opinion as to why she was applauded when she became part of HP’s board but criticized when appointed CEO, Whitman simply stated, “I don’t know. There’s always people who have different points of view on things. What I have to do — and I said this on the conference call — is lead this company, make it a great company again and fulfill its destiny as the icon of Silicon Valley and of California, and deliver the results.”

But I think the highlight of the interview was when Whitman was asked what was wrong with HP, she answered, “I think we need crisper communications with all the constituencies. I think on Aug. 18 we confused people. We didn’t mean to that, but we did. And so I think we’ve got some work to do around communicating crisply and cleanly about what we’re about, the moves that we’re making, to employees, customers, shareholders and, frankly, to the press.”

Based on Whitman and Lane’s answers, it seems like they’re sticking with Apotheker’s plan–making changes at this point could create more chaos not only for investors and employees, but also for consumers.  What HP needs now is a strong and consistent leader to turn things around.

As with any organization, communication is still the most important thing in running a company.  If the head of the company doesn’t know how to communicate, as in telling people what’s happening and listening to people’s concerns, the company will not run smoothly.  Now Whitman gets her chance to prove herself.