HP Kicks Financial Butt


HP's financials are in and, from the top level, the results look very good. I often get comments from large companies that indicate to me management has grown complacent because they blame company size and complexity for lack of growth. HP is large and complex and is showing very strong growth. Granted, it is still recovering somewhat from a previous administration, and to be fair, benefiting a bit by some of the strategic things that administration did, but growth is possible in a large firm.


What made the difference, at least from what I can tell, with HP is a very strong focus on the basics: Holding executives accountable for results and making sure they could be articulate on the fundamentals and building an executive team that was loyal and responsive to the CEO.


In addition, and something IT managers should take to heart, HP is one of the firms going through a major IT system upgrade to bring the company ahead of the once market leader Dell. Dell isn't kicking back either; they have brought in a specialist to move their own infrastructure forward as well. Another company in the space, Lenovo, is well down the path of updating its own IT infrastructure and is already reporting huge benefits in agility, cost control and reduction, and generally better related financial performance.


It is good to see firms who sell technology also become aggressive in its use because, by so doing, they become more intimate with that technology, they are more likely to improve what needs to be improved, and fix what is clearly broken because they see with near equal clarity (due to their own use) as their customers.


What Makes Hurd Different


Mark Hurd, HP's CEO, right now stands out as the right guy in the right place making a huge difference in his company. He isn't focused on the press, he isn't focused on analysts, he isn't focused on stockholders, and he isn't really that focused on customers. He is focused on making HP the best company he can make it and that, in my view, is what a CEO should do. There are others that report to the CEO who should focus on those other groups and, if they are well managed, which apparently is the case at HP, the end result is sustained profitability and growth.


I can't tell you the number of CEOs I see spending time speaking at events, playing golf with customers, or traveling the world while their companies languish -- and they seem to wonder why. The reason is their company lacks direction because, instead of providing direction, they are off doing the CFO's job, the VP of Sales' Job, the PR job, and every job but their own.


Hurd appears to actually be doing the CEO's job and his example should be emulated by other executives wanting to showcase the same result.


Dell Comparison


While Dell's financial report will not yet reflect the changes Michael Dell is implementing in his company, his approach does appear to mirror to some degree Mark Hurd's. Since taking back leadership, he has put into place strong players who can focus on the parts of Dell's business that needed to be protected (logistics) and those that needed work (consumer). If he has made his selections wisely, and the executives appear to have strong backgrounds, Dell should improve as HP has improved though, like HP was after Hurd initially joined, it will probably take a few quarters for these improvements to show up in the financials. Particularly in the case of the consumer market, they need a product refresh and a better sales channel strategy, both of which are expected in the second half of the year.


Lessons Learned


This is a good lesson for all of us. Having a clear idea what your job really is, making sure you get the best help you can get, and executing well are text book ways to ensure the success of an individual, department, division, company and enterprise. Making sure everyone is on board with that level of execution is every employees' shared responsibility, but it is most important with Senior Executive Staff.


If you want your company's financials to improve, perhaps a little less whining, and a little more focus on making sure you and your people are the best they can be, and as focused on what they can and need to do will provide stronger assurances of success.


Carpe diem