Tuesday, November 03, 2015

To meet and part - the "HP" way of life

They've done it again. The high lords of HP have decided to split the company in two and the divorce has reached an amicable(??) situation. I've most of my fondest memories of my career and personal life in HP, a place where I've spent more than half of my small career. From what I've observed the company as an employee and also as an eager follower, the management, irrespective of the so many chopping and changing at the top level, always favour the "7 stones" games approach, when it comes to structuring the company. They go on a shopping spree of purchasing every company in their sight only to de-cluster based on the whims and fancy of the Lordship (wo)manning the board.

When i joined, they were on the cusp of completing probably the most controversial and criticized deal of the industry - the ill famed HP-COMPAQ merger. Co-incidentally my first project was around the AGILENT spin off from HP. I've no inputs to offer on debate of whether it was a success are not. But what was fascinating was that, at the time of merger, COMPAQ was already pregnant with so many other buy-outs. They had acquired Digital Corp.. and were a sizeable population to say the least. Since our (HP) applications had to be overhauled to accommodate erstwhile COMPAQians, all those projects that swarmed over us where the corporate equivalent of the happenings post the fall of Berlin wall. Such was the appetite for acquisition that they went on to buy 3COM, Palm and 3PAR all three in a relatively short span. The running joke was except for IBM, everything else would be @HP (@HP being the name of the HP intranet). While the hullabaloo over the merger was subsiding, came the next big thing - EDS acquisition. Needless to say, EDS had its harem full at the time of merger with Mphasis (who will go on to have a forever on-off relation with the parent company) which had already acquired TATA AIG for a princely deal. Within matter of two mergers the employee population swelled to an all time high of 300 K people!!!

Now that the Good Meg is steering the ship, HP is trying to rewind the clock with its recent split into HP enterprises and HP inc. The 100 billion dollar behemoth is "mitosis"ing into two entities and should hopefully stop at that. In all probability, they are setting the deck up for grabs by some money bags who are out to reset the corporate monopoly (if you read Larry in between the words your Oracle couldn't be far from truth).

What does all this buying and selling does for an end customer? Does his printer still works decently? does the tech support and post sales support fix all the product glitches on time? does the news of new product features and benefits of any discount reach them early? does the pre-sales team of the combined erstwhile competitors work well in unison? Will they manage synergy, having been at each others throat for better part of their careers, shouting hoarse about how one product is better over the other? End of it all, as a customer do they really have a choice? Do companies innovate more when independent ? Can a really good merger be that one balm that soothes all by incorporating the best of both features and still be a reliable product? Almost no merger starts green on the balance sheet and takes time to shed red. After scrapping all those hundreds and thousands of man hours spent on data conversions and business process re-engineering's and corporate system make overs and implementing zillions of solutions, to think that its all nothing more than a mere change in number on the share value, can't help but wonder if its all really worth moving the company out from the garage at all.

From "Management by Objectives" to "Management by wandering around" the HP way has seen it all. It may not have been an express way to super profitdom. But sure has won the hearts of many an employee who are still proud to have been associated with that great company.


Ramesh said...

I suppose you'll vote for Carly Fiorina for President !!

Yes, all the hectic M&A activity does not add much either to shareholder value , and definitely not to the customer. Much of this is corporate ego and a lot instigated by investment bankers. More than half of the M&A deals fail.

gils said...

Either her or Hillary :) just for the heck of watching uncle Sam go aunty ;)) whoever comes be it Carly or Hillary.. I doubt if they would survive onto second term if at all they won