Eight Critical Factors for Business Success
It is hard not to draw a contrast between HP and most any other technology company this year. This is largely because we are entering an election period, and HP is led by a failed politician, Meg Whitman, and was formerly led by Carly Fiorina, who recently entered the presidential race on the Republican side. I had thought Whitman would be successful given her background, but have been disappointed by her lack of use of the skills that she should have uniquely developed during her prior roles. In short, she either is far less skilled (some argue Whitman has never been successful) than I thought or is basically just phoning in on this job.
Joe Tucci, who still leads the EMC federation of companies, often speaks out on how the U.S. government is making it hard for firms to compete. Many of us in the analyst ranks would vote for him in a second were he to run for the office of the top executive but, so far, he has indicated that he is too smart to do something that stupid. His implication is that were he to win, he would be ineffective in a role that has surprisingly little actual ability to change a government mired in self-dealing, incompetence and a chronic lack of skills.
However, let’s pretend for a moment that Tucci and Whitman were running for president. I want to explain why I feel Tucci would win. This speaks largely to why EMC is held in higher regard than HP by its customers and, as a company, has enjoyed a more consistently successful run without having to heavily rely on repetitive layoffs or excessive cost cutting to maintain an acceptable bottom line.
Analytics and TCE
We saw Obama win the presidency against far more experienced and better connected (not to mention generally richer) challengers due to a massive use of analytics. It is interesting to note that both of my presentations on how Obama won his elections were done at EMC events. Using analytics successfully will likely separate the winners from the losers in the coming elections. It is interesting to note that in Whitman’s failed run for California governor, there was no sign of her using analytics but, had she done so, she likely would have seen her housekeeper as an asset (to gain the Hispanic vote) rather than the liability that single handedly cost her the election.
You don’t see analytics being used at HP for the most part other than as a sales effort, which is likely why it has to rely on stunts like picking up EMC world attendees to get sales prospects as opposed to working off of a targeting report that better identifies customers for their products. EMC, on the other hand, actually holds several patents in using analytics to analyze customers. It knows which are the most loyal, which are in sales cycles, and which prospects are most likely to want to buy an EMC solution. This gives its salesforce a huge competitive advantage and allows the company to improve its NPS (Net Promoter Score) year over year. The organization inside EMC that does this is called Total Customer Experience (TCE) and while it has peers in other firms, its aggressive and early use of analytics was unique in the technology industry, mirroring President Obama’s similar use during both of his elections.
Marketing
Elections are won and lost with marketing. Interestingly, this is one of the things ex-CEO Fiorina knew better than any of her HP CEO predecessors or successors. It is one of the reasons Louis Gerstner was successful at IBM and largely what allowed Apple to dominate its segment and, for a short time, Samsung to bypass Apple. Even Intel was largely defined as a company through the Intel Inside campaign, which stands out as the most successful technology ingredient campaign in history.
Now marketing is also critical in politics. Folks vote based on their perceptions of candidates, because most will never meet them in person. You’d think Whitman would have a huge advantage here, because, as a politician, she should get marketing. Yet she significantly lags the field in terms of corporate marketing, which is a largely invisible function at HP.
At EMC World, the direct and very visible management by its Marketing VP, Jonathan Martin, is evident. He is the MC of the event and Stella Low, head of EMC’s communications unit, is directly hosting press and analysts. The efforts are tightly coordinated, well scripted and nicely executed.
HP, in contrast, seems to be more of a mess. Keynotes often have no content and, in one instance, the CEO of DreamWorks actually did most of Whitman’s keynote address (and he mostly talked about DreamWorks). This is one of the areas where the contrast between the two companies is so troubling, because HP should be better, given Whitman’s experience and legacy, but EMC is clearly out executing it. In fact, I doubt many even know who runs marketing at HP.
Team
A successful campaign needs a strong team and once in office, a strong team is critical. EMC uses a very unique Federation model so it can attract top C-level people to run its various efforts. You’d figure its storage unit, which still forms the core of the company, would be run by a storage expert and it is—David Goulden is an 11-year veteran. Every unit is run by a top player. Most visible are VMware, run by Pat Gelsinger, who was one of the most well-regarded executives in Intel, and Paul Maritz, who was one of the most powerful and well-regarded top executives at Microsoft. All appear loyal to Tucci, but operate their groups much like CEOs would operate independent companies.
HP has been a revolving door of executives in most roles during the relatively short tenure that Whitman has been in office. Lesser known and clearly pulled from lower levels than its EMC counterparts, some executives seem very ill suited to their roles. For instance, Bill Veghte, who ran the Microsoft Vista marketing unit, was put in place to run HP’s enterprise hardware. Despite the Vista effort, he was well regarded but you’d think he would be better at helping HP build a credible software business.
In short, Tucci appears to be playing chess by creating an environment where powerful industry players can be attracted and made productive, while Whitman is playing checkers where random players are “kinged” and then thrown into battle or discarded. In watching both companies, the checkers path doesn’t seem to be working very well. In the end, Tucci, with his Federated company model, has aggressively moved to create an impressively strong team. Whitman doesn’t even appear to be using HP’s comparatively antiquated model well.
Wrapping Up: Use All the Available Tools
I’m struck as I write this with the thought that at an event, EMC’s CMO brought up an executive from NBC/Universal who talked about how EMC was helping it become successful, which contrasts with DreamWorks’ earlier talk for HP, where the guy just talked movies. I’m reminded that recently, DreamWorks has hit on hard times and wonder if that isn’t partially because HP let it down. I’m also watching reports that Fiorina, HP’s ex-CEO, is aggressively using technologies like Periscope for her presidential run. EMC uses the same technology. I wonder if Whitman even knows what Periscope is. I’m also struck by the fact that Whitman had a massive following of folks who voted for her during the California election, but that there has been no effort to turn any of these folks into HP buyers of PCs or anything. At EMC, though, I doubt there is anyone who wouldn’t vote for Tucci, and he has become a far more powerful, almost Steve-Jobs-like part of the EMC sales process.
I think the lesson here is that CEOs who want to win use all of the tools at their disposal—particularly the unique ones—including their own creativity, because they have a passion for the game. CEOs who are simply doing a job, likely because they wanted to be doing something else, don’t even bother to learn which tools they have. EMC and HP are both defined by the passions and capabilities of their CEOs, but while Whitman should actually have more capability given her broader experience, Tucci’s passion for the job trumps her. Go figure.
It goes without saying that if both were running for office, with his level of execution, Tucci would roll over Whitman and likely not even feel the bump. Or, as I argued earlier, had Fiorina stayed at HP, she’d be outperforming Whitman today. That’s something to noodle on this week.
Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm. With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+
