Ann Livermore is HP's Best Choice for CEO

Rob Enderle

Hewlett-Packard's past two CEOs have been outsiders. It was a company in financial trouble struggling for relevance the first time and struggling for financial stability the second. This time the company's financials are rock solid, but it has been gutted by two overly aggressive CEOs who seemed to trade their own economic perks against their employees' incomes.


So while the company is working well financially, though clearly under broad "blood in the water" attack by both IBM and Oracle, the human engine underneath is at risk. Many employees have indicated they will leave for greener pastures if given any real motivation. No-poaching agreements in the Silicon Valley are being eliminated, opening up all types of opportunities for headhunters and creating exposures that HP can ill afford. It needs to retain key talent from expensive acquisitions including 3Par, Palm, and EDS to justify their acquisition cost.


In other words, in this round, HP needs not someone who will shake the company up-it has been through nearly a decade of that-but someone who will stabilize it and make it a safe place to work again. There are a number of internal candidates, and Ann Livermore may be the best of the bunch.


Safe Place to Work


Historically, one of HP's benefits was that people viewed it as safer than the many startups that litter Silicon Valley. While those that have yet to have families and gain deep responsibilities find startups exciting, those who have children-especially those trying to put kids through college-are under substantial pressure to lower risks to their income. These people gravitated to HP and were willing to take lower income potential in exchange for less risk of losing that income.


Over the past 10 years, HP has undergone an unprecedented number of layoffs, along with salary and benefits cuts. This has changed the company's image from a safe place to work to one that is anything but. The lack of profit sharing and relatively steady stock performance hasn't created the kind of economic advantages that often offset this kind of high-level risk, nor can it really because that would blow out HP's employment cost.


This leaves the post-Mark Hurd HP as both an unsafe place to work and one that lacks the financial incentives that make this lack of safety palatable in startups.


In Praise of the HP Employee


One thing I should stop and point out is that throughout these massive layoffs, the remaining HP employees continued to do a fabulous job. Under heavy pressure to complete jobs done with far more people previously, after having their salaries and benefits cut, and watching their CEO get ever richer as a result of their efforts, they continued to perform at unusual levels of competence and capability.


This is like watching a team that is performing miracles despite a really bad coach. You begin to wonder what these people could do if they had someone who looked out for their well-being and whom they believed would have their back, as opposed to someone looking for another vein from which to suck more blood.

Livermore May be Perfect


I'm reading a book that I think every manager could read. It has the misleading name "The Man who Lied to his Laptop" by sociologist Clifford Nass (the guy who fixed then killed Clippy). It highlights a massive amount of research that is going into man-machine interfaces. Here's an side discovery: If two near-identical twin executives were also identical in skills but different in gender, we would perceive the man as being more technical and the woman as more nurturing. This research involved computer testing with identical computers where the only difference was the gender of the computerized voice. This would suggest that while a woman might be better at employee retention, she would need substantially greater internal support because many men and women would not accept her leadership without it. Evidently in Germany it is even worse; male drivers there won't accept directions from a GPS system with a female voice, according to the book.


This may speak to one of the main reasons that Carly Fiorina and Patty Dunn failed at HP. Neither alone as outsiders could get the support she needed to be successful, and neither played the nurturing role. Had Fiorina been given a strong No. 2 and better protected her employees or had Dunn avoided the non-executive chairman role, which granted responsibility but not authority, both likely would have been successful.


Livermore, as an HP insider, has deep support from the most powerful organization in the company and is seen as one of the best executives at HP to work for. In other words, she has what these other two women lacked, including a tendency to play to the strengths of the perceptions around her rather than fight them. Unlike many failed female executives, Livermore hasn't tried to be the better man, but the better woman. That could play very well to what HP needs. It has had two executives who over-used the stick; now it needs someone who is better with a carrot.


Wrapping Up: Oracle World


I place the odds against Livermore, though, because HP has a predominately male board and most of those challenging her for the top spot are male as well. However, she has an unusual opportunity at Oracle World to define or mitigate the battle with Oracle and her place in it. Her unit is on the front line of this war.


It is nearly unprecedented for a top executive from a company at war with another company to speak at a user conference put on by the adversary. Media representatives I've spoken with are looking forward to her talk more than Ellison and Hurd's mutual lovefest. In this one talk she has the opportunity to define herself as a true contender for HP's top spot. HP's employees deserve someone of Livermore's focus, intelligence and loyalty. They've had two executives that focused on themselves and worked against the interests of employees. Now it is time for HP to get someone who is focused on making HP not only great, but a great place to work.


SideNote: Crisis Management Talk Wednesday


Just a heads-up: I'm sharing a coffee talk with Dave Eckert and SageCircle on managing analysts during a crisis (HPs firing of Mark Hurd was the trigger) at 8 a.m.Pacific time. There's information here if you want to attend. It's free.

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