HP's Secret to Recovery May Lie in Its Printing Division

Rob Enderle

These days, we often spend our time on HP's drama particularly when it comes to its executive office, board or PC Division. The firm is actually 1 or 2 in most of the markets it occupies and it is massively profitable, but because of this drama we seem to treat it as if it were on its last legs. This showcases the power of perception: Right now, it doesn't really matter how good HP is doing, what matters is how the company is perceived. The one division that HP has that literally manufactures ink is its Printing Division and perhaps it is there the company should look to change the perception of HP.


I spent some time last week at this division and here is some of what I learned.


One of the presentations that HP showcased was of General Mills and how it had used HP's information management tools out of the Imaging and Printing Group (IPG) to enable workgroups to collaborate. It used this as a core of a transformational exercise that eliminated or reformed a cubicle-based environment to one that more closely mirrored next-generation companies like Google - an environment that facilitates collaboration, agility and change. According to the General Mills speaker, it was the technology from IPG that made this possible. You wouldn't think that something as simple as allowing groups to easily find and print from any device to any printer and not be tied to their initial working groups would have that big of an impact but, according to General Mills, it did.

As I watched the General Mills video, I was reminded of the video of Conan O'Brien when he went to Intel and saw the Intel cubicle farm. Shortly after this, Intel ripped out the very farm he had seen and transformed the floor into a flexible working environment similar to what you'd see at Google. Intel since has appeared more agile. The complaints about Intel working conditions appear to have declined and that firm is ranked 5th in the best engineering places to work, and is well head of its closest competitor. HP ranks a respectable 12th, but IBM is 2nd and Google is 1st. Rankings are here.


We think of printing as being a legacy business largely because we tie it to paper and paper is rapidly being replaced by tablets and eBooks. However, just as quickly, printing is replacing other technologies like painting and the use of natural materials. For instance, HP is leading in printing custom wall coverings, printing custom flooring and printing car wraps. Now, granted in 20 or 30 years, wall coverings in particular could become active displays, but at one time wall paper was far more popular than it is today and largely because it conveyed a higher degree of personalization. With printing, you can create images that go on all six (including the floor and ceiling) surfaces of the home and replace custom paint on cars. The materials are increasingly latex-based as well, so they are environmentally friendly and you can imagine a time where a designer might design your walls with graduated colors to imply depth or to make it look like you have a view of everything from a seascape to the sands of Mars.

Car wraps could eventually replace paint on cars, allowing a dealership to address any color, including custom striping and full on flame, and because this is a plastic product it will better resist chipping in parking lots and from those damn stones on the highway. You can also change the color of your car - which currently costs about $12K to do right - for well under $1,000, which could do wonders for the used-car market.

In short, were this properly funded by HP, this could transform home, business and automotive design segments, providing vastly more creativity and helping assure HP's long successful future - not to mention it would do wonders for the firm's visibility and brand.

HP's iPod: The Envy Printer

HP has the iPod of printers: the Envy Printer. This printer both showcases the division's strength and weakness. With one exception, this is the printer Apple would have built had Apple stayed in printing. (Printing was one of the businesses Steve Jobs shut down when he returned to the company). This printer is the most popular in Apple stores today. It is both simple and elegant, but its one shortcoming is it neither looks like an HP Envy laptop nor an Apple product in terms of colors and materials. Both of those products are mostly silver metal today. However, in HP, this division is the one that has the product that is the closest to what Apple builds and Apple is the most successful technology company currently in the market. Its design language looks like something out of the late '90's consumer market, and the full name, Envy100 e-All-in-One, is pure, old HP, but the concept is solid 2010's Apple.

Printer Oasis: Adding Employee Touch

What I think is an interesting difference between Apple and most other companies is Steve Jobs made sure his employees were always on the latest and greatest Apple technology and that each and every one was an Apple billboard. While they weren't allowed to talk about what they were doing or even mention that they worked for Apple, they could and are seen using Apple's products. This has two advantages: They become personal advocates for Apple technology and they get to know the products that their company sells.

Companies like HP generally don't do the same thing with their employees who are often seen using branded products that are years out of date. In IPG, part of the problem is most of the printers, particularly the ones that print large-scale projects, aren't appropriate for employees anyway. So HP has implemented something they call a "Printing Oasis." This is a place where employees can use a variety of products to print everything from family photos from HP's retail printers to massive posters and wall coverings from their industrial products. They even check out digital cameras and provide workstations so these employees can capture and edit the images they are going to produce.

Each employee is given $150 a month to spend and, as a result, they able to touch the products their division makes and become better advocates for them.

Wrapping Up: IPG-From Legacy to Revolutionary

The problem with HP in general is that it is largely viewed as a firm that is aging badly and whose executive management has been out of control. However, under the covers, there are other stories and if HP can make them visible, it can dramatically change its image and restore the company's luster.


IPG has a number of aspects, including the massive gains (I didn't talk about) it has made in the industrial printing market, which could be used to help in this transition. But more than that, as General Mills showcased, it has some of the core tools to transform HP from the doddering old fool of a company that folks now see, to the vibrant company that HP could become once more, particularly given that HP's reality is something in between.


In the end, this is a showcase of how perceptions rule and inside HP there are the growing seeds of an amazing new company. Meg Whitman, who just visited the division, likely found those seeds and we are now waiting to see if she can once again build a successful company from them.

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