Ex-Board Member Says HP Is Committing 'Corporate Suicide'

theodp writes "If Apple's looking for a seamless transition, advises the NYT's James B. Stewart, it definitely shouldn't look to Hewlett Packard. In the year after HP CEO Mark Hurd was told to hit-the-road-Jack, HP — led by new CEO Leo Apotheker — has embarked on a stunning shift in strategy that has left many baffled and resulted in HP's fall from Wall Street grace (its stock declined 49%). The apparent new focus on going head-to-head with SAP (Apotheker's former employer) and Oracle (Hurd's new employer) in enterprise software while ignoring the company's traditional strengths, said a software exec, is 'as if Alan Mulally left Boeing to join Ford as CEO, and announced six months later that Ford would be making airplanes.' Former HP Director Tom Perkins said, 'I didn't know there was such a thing as corporate suicide, but now we know that there is.'"

Comments

Deja vu

[Anonymous Coward]

Nokia, anyone?

Re:Deja vu

[Opportunist]

Yeah, they should have stayed with making rubber boots. Heck, they should have stayed with making Paper.

Re:Deja vu

[alen]

they were screwed long before the current CEO took over. making feature phones and geek phones when apple and android are taking over is not a recipe for success

Re:Deja vu

[jhoegl]

Kind of,

HP has had so many leaders within the past 10 years that they have no idea what assets they have.
Hell, HP bought a company that was a start up for the cloud idea back in... 2006 I think. They did nothing with it.
Now they are scrambling to fix it up, and the offering wont be that great if current middle management has its way.
HP lacks direction because quite simply HP hasnt had anyone worth a damn at the helm, leading to assets that they bought in the past to stagnate.

HPs problem is literally itself.

Their management style needs to change, middle management needs to be cleaned out and those that are smarter need to rise up.
Until then, this company will bleed money, sell off divisions, and end up as small as it was back in 1995.
If HP sells its printer lines, then you know they are in trouble.

Re:Deja vu

[sortius_nod]

The problems started when Fiorina, maybe even before that with the Compaq merger. They really haven't been able to do anything other than sell large volume servers since. No major projects really have come to fruition. Everything seems to turn into a clusterfuck for HP every time they swap CEOs.

I remember a number of years ago a documentary on Silicon Valley where an ex-HP engineer said "HP's slogan is 'Invent', we stopped doing that years ago". I think that statement pretty much sums up HP.

Re:Deja vu

[SmurfButcher Bob]

HP's issue really started with the destruction of their R&D. Remember the days when you'd walk into a lab, and all the nice freq counters and 'scopes and muxers all had HP stickers on em?

Right or wrong, they dropped that stuff like a bad habit and eradicated any aspect of HP's "think tank" culture. Granted, I'm certain that all five of their high-tech customers have missed them - but that signaled the shift toward The Cult of Printer Ink.

Re:Deja vu

[Anonymous Coward]

It's easy to increase short term profits after slashing R&D.

Re:Deja vu

[Colonel Korn]

While the old guard hated her, she put the company in a position to be profitable again.

It is looking like firing Carly was an awful idea. Like it or not, she had the company moving in a direction, and they were making plenty of money.They had kicked dell out of the corporate laptop business ( the end of the market that makes money ) and were starting to do the same with corporate desktops. They were making money, lots of it. And they have been chasing their tail since. They will soon spin out into two or three companies, the software services one will crash and burn. The profitable sector will be the one stamping their name on calculators and printers designed and made in China.

She killed their golden egg laying gooses in every department. Sure, cutting costs led to some short term profit but she simply erased the majority of HP's long term prospects. It's hard to believe she didn't know she was trading the future for a few years of profit.

Re:Deja vu

[swordgeek]

No. Sorry, but no.

Carly put the company in a position to be profitable again--in the short term. She killed off R&D, she killed off the long-term projects and plans, and she turned the company into a "PC and printer" maker. That's all they do anymore. Nobody cares about the odd bit of HP-UX gear they sell (and would kill off, if the US government would let them), they spun off the scientific instrumentation into a new company (thank god!), and now they can't even enter the generic consumer product market anymore.

Fiorina destroyed the company, Hurd kept driving it towards the cliff.

Gave up too quickly

[yog]

Shouldn't HP have at least tried to make a go of their WebOs tablet before giving up so quickly? They can't possibly have recouped the investment costs of purchasing Palm, etc.

It's not as though personal computers are going away any time soon. Corporations still need desktop workstations, albeit more in the direction of thin Internet portal devices than the heavily loaded computers of the past.

HP should come out with a world class ultra lightweight laptop to compete with the MacBook Air, with a touch screen and very long battery life. They should come out with an innovative line of consumer and business PCs with touch screen monitors, tiny form factor similar to Mac Mini, remotely flashable, all the bells and whistles. And they should built on their handheld base, come out with some state of the art handsets and tablets to round out their portfolio.

Software services is all very well, but there are plenty of competitors in that space and HP will not be having a picnic. Why did they buy compaq and Palm to begin with? Methinks the current board has taken leave of their senses.

Re:Gave up too quickly

[NoNonAlphaCharsHere]

HP looks at the way IBM dumped the (cutthroat margin) PC and laptop market and survives on consulting and big iron and fantasizes that they can do the same. The days when HP could produce ANY world-class widget ended when they stopped being an instrument company at heart, probably in Lou Platt's day, but certainly by the end of the Evil Queen's reign. By then, they'd lost (or gotten rid of) all their top engineering talent, and were no longer one of "the top 10 places to work in the world". The Compaq, later (attempted) PWC and finally (completed) EDS and Palm deals are just the fenceposts along the way of HP losing its soul.

Re:Gave up too quickly

[Ecuador]

I was looking at ebay over the weekend and the Touchpad 16GB auctions were all closing at around $250-$270 - and we are talking about 1 auction closing per minute!
So, this means that they could have sold the Touchpad at around $300 (more for the 32GB version) and still sell-out in a few days. This would have been at a loss of R&D, as the cost of making them is astimated at around $315 & $330 for the 16GB and 32GB versions.
Now, after selling out in a few days they would have a big installed WebOS base, so maybe the app store would take off.
But nooo, they HAVE to sell their tablet at least $400, even though they are trying to enter late in a market dominated by Apple. And when they obviously can't do that, they simply give the tablets away and call it quits!
Now THAT is corporate suicide and yet it stands second to Nokia's recent "FU developers - we take back our promises, BTW we are just another windows phone maker now".

Re:Gave up too quickly

[sortius_nod]

I really don't think you can compare HP's aimlessness and IBMs ruthlessness. IBM actually probably did the smartest thing they could "fuck it, if you want the consumer end of the market China, you can have it".

Meanwhile HP dumps what could have actually lifted them out of the doldrums and focuses on an already overcrowded market. Not exactly the smartest thing to do.

Going up against SAP & Oracle is not as easy as it seems. Oracle isn't just Oracle, people forget this. Oracle is the base of a huge chunk of database systems (think... well... SAP & Maximo [IBM]).

Re:Gave up too quickly

[Grizzley9]

HP should come out with a world class ultra lightweight laptop to compete with the MacBook Air, with a touch screen and very long battery life. They should come out with an innovative line of consumer and business PCs with touch screen monitors, tiny form factor similar to Mac Mini, remotely flashable, all the bells and whistles.

So instead of innovating, they should copy Apple. Got it. Seems other companies are in trouble for doing just that and getting trounced. They're not going to make any impact by continuing to play catch up with 2nd rate devices and services. Each of these big companies have a large budget for R&D, adding on obvious things is not the best use of those resources.

Re:Gave up too quickly

[mickwd]

I'd love to know whether there's something about the tech industry that makes it susceptible to this level of mismanagement, as so many tech companies seem to have been badly mismanaged over the years.

Bill Gates, Steve Jobs and Andy Grove at Intel (and perhaps Lou Gerstner turning around IBM) stand out amongst the rest as inspired CEOs, even if some of their business practises have left a little to be desired at times. But so many other once-dominant-in-their-field companies have just seemed to crash and burn.

Maybe I'm wrong and all other industries suffer from the same level of management problems - it's just that the technology industry is the one I'm most familiar with.

Re:Gave up too quickly

[vlm]

HP should ...

They should ...

And they should ...

They can't. All the "do-ers" "makers" whatever you want to call them, were downsized years (decades?) ago to boost stock proce. Nothing left. The death of the company is the endgame of that strategy.

They'd have to start over, and try to hire back all the people they fired, at a higher pay rate because once burned twice shy, etc. Frankly your average startup would be a better place to work, so they're going to have severe issues just getting to personnel to even try what you suggest.

Its much more like a "corporate zombie apocalypse", not a "corporate suicide", although both have the same end result and some similar symptoms. What happens to a corporation when most, but not quite all, of the brains are scooped out for short term gain? Look at HP.

Methinks the current board has taken leave of their senses.

The were driven into the dirt a long time ago. The options are rapidly narrowing as the end approaches. In that situation, where failure is almost certain, random thrashing around probably won't help, but then again it appears to be "doing something" and "being proactive" both of which are important for individual resumes for their next job, and who knows, maybe a 1 in a million shot will pay off after all. HP may yet survive, despite its own best efforts. Probably not, but stranger things have happened.

Personally I'd like the test equipment spinoff to buy the trademarked name back. Id like to see a new line of "HP" spectrum analyzers or "HP" scopes. HP had a beyond spectacular reputation for test equipment years ago, I don't know if their recent PC and printer operations and legendary mis-management style have tarnished it beyond value, but it used to be a great name. The test equipment spinoff, eh, who even remembers their name.

Re:Gave up too quickly

[Merk42]

Yes any time a competitor to Microsoft fails, it MUST be because they were bribed, not because of poor sales and/or business decisions. I guess when Microsoft Kin failed it must have been because they bribed themselves.

Also, HP isn't just getting out of WebOS, it's getting out of selling PCs. It is the #1 seller of Windows based PCs. So why the hell would Microsoft bribe them to stop doing that?

Re:Gave up too quickly

[Anonymous Coward]

The people you mention were engineers and technologists, not bean counters. I guess that's the difference.

Re:Gave up too quickly

[Monkey-Man2000]

HP has a history of horrible CEOs, but you'll notice the key difference is that all three of your examples were co-founders of their respective companies. They actually cared for the company to succeed in the long-term as their legacy and not JUST line their pockets with money, watch the company burn, and skip on to their next CXO job. It seems in the tech-industry, once management is brought in from outside the founders of the company it will inevitably tank (see Sun, etc.) -- IBM being a significant exception. We'll see about Apple now...

Re:Gave up too quickly

[jonwil]

HPs problem is that IBM pretty much INVENTED the idea of the computer as something a company would buy (as opposed to something used by governments and universities) and have been at the "software and big iron and servers" game since before HP even started selling computers.

HP competing with IBM (or even SAP or Oracle) in that space would be like Toyota trying to compete with Boeing or Airbus in the Jet airliner business.

HP should keep doing the things its good at doing and that includes offering a full package to companies that lets them buy all their computing needs from the one vendor, everything from a big iron server to the CEOs fancy laptop to the fully networked printer/scanner/copier in the copy room.
HP even makes the network hardware (switches, routers etc) to make it all talk to each other.

Offer things other PC vendors arent doing.

How about a commodity desktop PC designed specifically to reduce power usage (lots of big companies would like saving money on their power bills).

What HP SHOULD do is to get out of the bottom of the market. Get out of selling consumer desktops and laptops aimed at home users and focus on the business customers. Or if it does need to stay in the home market, it could use the Compaq brand for low-end crap and the HP brand for the business-class hardware.

More to the point, stop doing crap like chipping your ink cartridges. Sell printers at realistic prices instead of relying on ink sales to subsidize printer costs and sell ink at prices that reflect the cost of production.

Most of all, TALK to the big business who buy large amounts of computer hardware and kit and find out what THEY want from HP.

Re:Gave up too quickly

[DavidTC]

Maybe I'm wrong and all other industries suffer from the same level of management problems - it's just that the technology industry is the one I'm most familiar with.

You are. This sort of shortsighted next-quarter-stock-prices chasing happens in all industry. It's a fairly obvious flaw of how a stock market distorts the free market....stockholders are the bosses, and at some point it because easier to make money by bumping up the stock price for two months and selling their stock to new unsuspecting people, than to actually get paid any dividends from the profits of the company.

In other words, the American economy operates by trading intangible assets from one person to another and hoping that they make worse guesses than you in selecting what and when to buy, instead of actually paying people to take $X worth of goods, put in $Y worth of labor, and selling to customers for $X+$Y+profit.

Re:Gave up too quickly

[Creepy]

EDS was bleeding money when HP bought them, and had spun off profitable divisions to keep their stock from going junk. The remaining company was a services company that had lost major contracts like Onstar. Palm also had been bleeding money and losing marketshare, as well, as they lost big time in the move from PDA to Blackberry and smart phones. HP wanted to move out of the low profit PC market and into the high profit services company like IBM did, but buying failing services companies is probably not the way to do that, unless you're just building staff. The road to successful services based companies is littered with corpses that tried to keep alive their services division at the cost of everything else like Control Data, and Unisys would have joined them if it wasn't for the GIF patent, but they're well on their way now, outsourcing services jobs to India... I don't think services is a market you can really buy your way in to, especially buying failing companies that had lost major services contracts. Also as much as I despise SAP for HR, I don't think you'll ever dethrone SAP from HR departments because HR is a career for sadists that like to make their customers (employees) use the most difficult, obtuse tools because they make nice pie charts.

Also Autonomy... ugh. It is a decent product, but they have been rubbing their customers the wrong way, increasingly demanding more money (I don't have access to financials, but corporate makes it sound like extortion). We have multiple teams working on integrating alternatives to Autonomy, so if they aren't careful, they'll soon be kicked to the curb by at least one major customer. I think the major reason HP bought Autonomy was EDS was heavily invested in their search technology.

Re:Gave up too quickly

[Artifakt]

That's a market assumption for regular economics, You're basically saying that the customer can always enforce their determination. Macro-economics is, in some small part, just about what happens when they customer decision causes them to lose power to further enforce the market.
          Let's take a largeish example. Suppose a lot of customers think it's worth $26.37 for a copy of the 'Professor Y and the Y-men fight Gyroscopo' DVD. The company bet that it would sell 40 million copies in the first pressing, and it does (Whooo!!!) Year after year, the customers think, in large enough numbers, that the series is worth purchasing. Sales stay good. But, an increasing number of those customers are stretching their credit cards to the max, and getting into financial modes where they really need to go back and put more money aside for a rainy day, pay the car insurance, put aside more for little Billy's college, and so on. Eventually, a bunch of customers simply don't have the extra in their entertainment budget to buy Y Men 27 by the 40 millions. These people may still feel 26 dollars is a fair price, but they aren't customers any more, because they just don't have 26 dollars in the entertainment part of their budget. To make them customers again, the DVD maker needs to charge only $17.28, at which point the customers may be thinking, "This is a real bargain, way better than fair. With food prices skyrocketing and gas totally beyond my social class, this is a real steal!!", but it's still what the company has to charge if they want to get 40 million sales again. The customer can think that the high food and gasoline prices are what's unfair, but they are practical necessities. The slack is in things that are optional. The customer has an opinion about what's fair, but it may not match the market forces - when it doesn't, the market forces compel the customer's vote even by, if necessary, stopping him from being a customer at all.
            Apple could be overcharging, if the people who think the Apple premium is fair find themselves faced with other financial choices that take them out of potential customer status, and the people who buy the cheaper options increasingly attribute still having discretionary cash available to having made 'smarter' choices in the past.

Re:Gave up too quickly

[gtall]

There's an easy answer to that, there's no profit in making PCs. Margins in that business are particularly low (Apple excluded). So the board of directors looks at the capital invested in making PCs and the return on investment and decides they can do better elsewhere. I don't think going into software is the answer for them, not because of the return on investment (which is supposed to be good) but rather HP has no experience in that area. A CEO from a software house doesn't make them experienced, he was probably the dullest knife in SAP's drawer. Going up against Oracle won't be easy, Uncle Larry plays dirty so unless they are willing to get really slimy, he'll have them covered in pig s--t before they'll recognize any significant return.

Re:Gave up too quickly

[Solandri]

It's a good lesson to any CEO thinking that engineering R&D generates very little return on investment, and so can be safely cut to reduce costs. HP cut R&D in favor of what it thought was directly driving their revenue - sales, manufacturing, and marketing. They're now learning that such a move limits their products to low-end easy-to-replicate low-margin items. R&D is what allows you to make and sell high-end high-profit hard-to-duplicate products. Heck, even their much-maligned inkjet printer ink business was spawned by HP R&D playing with microscopic resistors to create tiny bubbles in fluids. As it stands now, Intel probably makes more money selling a single high-end CPU than HP makes selling a dozen PCs.

IBM did the same

[foniksonik]

I'm not saying this was a great idea or that the execution was ideal but there is precedent. IBM long known as a hardware company shifted to software and services in a fairly short period of time and seems to be doing quite well at it. If this new CEO has a vision and a strategy behind it HP could end up better off.

I was personally looking forward to more WebOS devices though.

Re:IBM did the same

[fuzzyfuzzyfungus]

I am fond of webOS(application base is tiny; but the interface is actually quite well thought out. The "cards" work quite well. Hell, maybe team Google will pick up their smoldering remains at the firesale and polish up the 'chromebooks' with some of the UI touches...)

As for the IBM analogy, though, HP has a hard road ahead of it. IBM has always made hardware; but they've always had a software/support/consulting arm extracting its pound of flesh along with the hardware, from back when their job was to customize the Hollerith card reader for your application up the the present 'enterprise database middleware yadda yadda' stuff. They did ditch their desktop/laptop business, and they will, if asked, sell you some bare servers, dell style, for just cost+warranty; but they have always been a combined hardware/services entity. HP, by contrast, is more of a pure hardware/engineering shop that has been bleeding actual engineering talent for a while now.

Re:IBM did the same

[Hatta]

IBM always had good software to support their hardware. HP ships 344mb printer drivers.

Re:IBM did the same

[Jawnn]

mod parent up - underrated. The comment is concise and insightful - pointing out HP's wholesale abandonment of engineering excellence. Me? I think it started over twenty years ago, when they realized that they could adopt the "free razors" marketing strategy for their line of ink jet printers. Profitable? Sure, but not the kind of thing that stands up as a market gets crowded.

Re:IBM did the same

[Waffle Iron]

Hmm... that sounds like a a good value to me.

When I choose HP, I'm getting more printer driver for my dollar.

Re:IBM did the same

[Baikala]

About 10 years ago a couple of Alpha servers (Tru64 Unix) and EMA storage in a cluster arrangement was as fast and as stable you can get below the mainframe category (thanks to DEC VAX multiprocessor and shared memory technologies). The natural evolution of the alphas never came out of HP because of their infatuation with Intel Itanium processors, and see how that affair ended up.

Re:IBM did the same

[dido]

All of this thanks primarily to one executive in HP and later SGI in the mid-late nineties: Rick Belluzzo. He got a plum position at Microsoft in 2002 to reward him for his efforts in destroying HP-UX, IRIX, PA-RISC, and MIPS in favor of NT and Itanium at both companies. As an aside, the parallel to today's Nokia and Stephen Elop are unmissable, I think.

Ford Trimotor

[Jafafa Hots]

n/t

(No this is not a fricken defense of HP, I could give a shit if HP shoots itself in the head.)

Re:Ford Trimotor

[asylumx]

Yup, Ford has made planes before... it wouldn't be THAT surprising if they wanted to break back in to that business. Not to mention, engine manufacturers often make aircraft engines, too...

Disgruntled Former Employee?

[NoobixCube]

Oh yeah? Well my NEXT company is like TOTALLY gonna crush you guys! You'll be living in cardboard boxes by the time I'm through with you! (Commence mad zealous scheme to try and use another company to crush SAP)

Re:Disgruntled Former Employee?

[somersault]

How do you know that it wasn't the board that wanted to move in this direction, and so head-hunted the guy from SAP specifically because he had good experience in the software sector?

HP is looking for a defining product

[Opportunist]

HP used to mean printers in the minds of many people. That time faded. Today, they're at best one of the many printer manufacturers, no longer the ones defining standards and leading the way. Servers/Computers? They sure dropped that ball too. Dell is where people go for ready-made computers today.

So what's left for HP? HP is a company looking for a market, I'd guess. Every time I see something like this, I can't help but wonder whether their costs are just too high to compete with another player in the field and are now looking for a market that they can either corner or where the competition charges even more outrageous prices. And looking at how they try to muscle into the markets of SAP and Oracle, I'd say it's the latter.

Re:HP is looking for a defining product

[OzPeter]

HP used to mean printers in the minds of many people. That time faded.

In my mind HP will always be remembered as being the one of the best test equipment manufacturers, followed closely by calculators. A company that was by engineers, for engineers.

Re:HP is looking for a defining product

[bhodikhan]

The best part of HP is their instrumentation business. This was spun off as Agilent. They still stand out in the market and are very competitive. Too bad HP forgot to keep innovating.

Re:HP is looking for a defining product

[Anne Thwacks]

HP used to mean printers in the minds of many people.

Then they had to pay for an ink cartridge, and the word "ripoff" came to mind..

Trying to be like Steve?

[Jack Kolesar]

So, I guess this is what happens when you have a CEO with the 100% of the EGO/CONTROL issues as Steve Jobs yet 0% of the VISION. Seems too bad for HP.

Not _sui_cide - destruction by external party

[blind biker]

It's time we start acknowledging that CEOs of publicly traded companies don't give a shit about the companies they are supposed to lead. They got into positions thanks to buddy networks and golf course chats. These people are supremely capable at social manipulation and lining their own pockets.

Why, is the HP CEO in any way going to feel the sting if he leaves a smoldering corpse of a company behind him? Is he not going to get paid? Scrap that: is he not going to get handsomely paid + bonuses + golden parachute? So why the fuck wouldn't he blow up HP? The guy is getting paid in either case, so why not get on with his psychopathy and have fun with wanton destruction of other people's lives?

Re:Not _sui_cide - destruction by external party

[dkleinsc]

To add more evidence to this, consider how well Carly Fiorina has been treated in the press. When she was running for public office, all the press was on how she was a successful businesswoman who knew how to make an organization successful, despite all the evidence that the opposite was true.

Re:Not _sui_cide - destruction by external party

[ducomputergeek]

Say what you will about Apple and Steve Jobs, but at least Jobs gave a damn about the products his company made.

Re:Not _sui_cide - destruction by external party

[Archangel Michael]

THERE is the real story in all of this. ONE company's CEO wants the "best" products, the other doesn't want products at all. What is funny is that Apple once didn't want to make great products, and ended up getting its lunch handed to them from a start up called PowerComputing. HP is going the way of old Apple, and they may need to bring back someone fanatical about its products.

On a side note, I'm glad HP has lost almost half its value since they made the announcement. Maybe the board will fire the guy and put one of its engineers at the top.

I want what HP is smoking...

[fuzzyfuzzyfungus]

I've heard that their Big Serious Expensive has its points; but every interaction with HP software that I've had down at the "commodity x86s and their peripherals" level has filled me with an unquenchable desire for bloody vengeance upon every last persons responsible for it.

Their winCE thin clients have had timekeeping bugs in certain models(that engineering kindly verified and then decided not to fix...) Their linux ones have glaring security deficiencies that they wouldn't even acknowledge our bug reports about(Hypothetically, if you were adding a diagnostic page that allowed the user of a 'kiosk' system to use ping to verify connectivity, would you implement it by giving them a freeform text field and then prepending 'ping' to whatever they entered and dumping it straight to the shell without any sanitization? Well, the input "$IP_ADDRESS && xterm" certainly suggests that HP did... For extra credit, the 'kiosk' program was running under a passwordless account on the sudoers list...)

The firmware of their network printers has been a mess for years, and their printer drivers(even for the workgroup networked printers with PCL/Postscript, let's not even talk about the direct-attached inkjet shit) actually seems to be getting worse as time goes on. Servers and workstations are ok, largely by virtue of being more or less stock intel or AMD kit, with drivers provided by people who don't utterly suck.

I know that hardware's margins don't keep the Wall street boys happy; but what sort of insanity could convince HP that they are a software company?

WebOS - Try Samsung

[QuasiSteve]

I was personally looking forward to more WebOS devices though.

Well, reportedly, Samsung is still interested in WebOS. Where before they were interested in licensing it off of HP ( http://www.engadget.com/2011/06/29/hp-confirms-its-in-talks-about-licensing-webos-samsung-tipped/ ), they may now just grab it outright.. even if only as a precautionary move to the recent Google-buys-Motorola move ( http://www.slashgear.com/samsung-webos-rumors-reignite-amid-ex-hp-pc-vp-grab-29174760/ ).

Personally I'm not sure why they'd be doing that. They're going strong with Android - which, while heavily Google-influenced, is under governance of the OHA - while on their lower-end systems they've got their own OS already - Bada.

Though if there's any chance of WebOS going forward, Samsung would be a good place to start. Them or Huawei, perhaps. Not seeing HTC being interested.

Mulally example not great...

[Richard_at_work]

Considering that Mulally launched one of the most bodged development programs at Boeing, the 787. Not only did this program reach in the direction of considerably technical improvement over current generation products, it did it with a design and build methodology that Boeing had never tried before.

This irresponsible cock up by the board, headed by Mulally, drove the 787 to be over three years late for EIS, with huge problems yet to rectify, and Boeing billions of dollars worse off.

Mulally has a lot of great achievements, but the world would see him completely differently if he had remained at Boeing to see out even the first few years of the 787 debacle. Instead, he bailed early on and now is remembered for the positive work he has done at Ford.

Re:Mulally example not great...

[Richard_at_work]

The problem is, Boeings level of risk on the 787 was not merely high, it was "hey, lets go sky diving but you know what would be fun? Throwing the parachutes out first and chasing them!" levels of risk.

They were fantastically successful on the 777 project, so much so that they beat all expectations on it. But the 777 largely used the same design and production methodologies as the 767 (although the 777 was the first airliner to be CAD designed, it was still largely using the same design techniques as the 767) and thus only the design of the aircraft was a risk factor. And that paid off.

With the 787, Boeing went for a full composite fuselage, something that had up until then only been done on low production rate regional and business jet aircraft. They also went for electrically drive hydraulics, HVAC and other systems rather than conventional bleed air powered systems. They also went for fully composite wings, another first. Engine pylons and support systems designed to support a quick swap of engines between two totally different engine manufacturers - again, another first (reengining an aircraft from one manufacturers engines to anothers is a several day job on other airframes - Boeing wanted it down to the same time as a normal engine swap).

All of that on its own would have constituted a high risk project. Several of the things noted above have thrown up their own problems in manufacturing, which have needed solutions. Several of the things above have resulted in multi month delays. Thats what happens when you have a high risk project.

But Boeing didn't stop there - they parceled out the design to third parties. Which involved having several disparate design teams working together across teh globe, in many different languages.

Boeing still didn't stop there. They also completely changed the production process. Large sub assemblies built across the globe by risk sharing partners and flown to Boeings final assembly line. Never done that before, the largest structure preassembled on the 777 was a few sheets of aluminium and everything else was done on one assembly line. Now Boeing had twenty assembly lines across the globe to manage and sort out.

And they did all of this so they could parcel out the risk - reduce their own risk. Only that didn't work... Boeing ended up with tens of billions of dollars in "unforseen" expenditure, including having to buy the assembly lines of several of its partners, and bringing most of the design for the 787-9 variant back in house. Ending up with 4 unsellable airframes in their inventory that they had to write off. Billions of dollars in compensation payments. And an inventory backlog that analysts put in the hundreds of billions of dollars...

Not to mention that its just recently come to light that most of the first 300 or so airframes were ordered at prices near to $70Million each, and they will cost Boeing around $180Million each to build and deliver. Thats the way to make money...

This wasn't just a high risk program, it was an "all or nothing" fantasy leap into the unknown. And Mulally got out well before it started to show.

Oh, and its nice of you to bring up the 747, but that ship has sailed - the 747-400 ended production a few years ago, and the 747-8 (the latest variant) won't make any money with its current order book.

I have no problem with Boeing innovating, but you don't have to innovate *everything* in the damn business at the same time - its sheer stupidity to change things like the design methodology and the production methodology when you are already taking huge risks on the product itself. Mulallys board wanted a complete change in the way Boeing CA worked, and thats what they pushed for when they launched the 787. And it didn't pay off.

With Boeing trying desperately to remove as much risk behind the 787 as possible, by moving so much of the design and build process back in house, is anything I am saying really that wrong?

memristors was to be that product

[bzipitidoo]

Or so I thought when I heard HP was mass producing memristors. Memory that was far denser, faster, and longer lived than current flash memory technologies. It was so good, memristor based memory products would also replace DRAM and SRAM, and we'd finally have computers that would not forget everything when the power was cut. Was that just so much talk and vaporware?

Re:They're looking to the future.

[somersault]

The whole "cloud computing" fad hasn't helped the demand for hardware, either.

It's amazing how all of these new cloud hosting services are magicking their hardware out of the clouds..

Re:Perhaps hardware outsourcing doesn't work

[RogerWilco]

I think it just means that they have no clue how Apple is doing it.

Ford DID make airplanes

[scharkalvin]

"'as if Alan Mulally left Boeing to join Ford as CEO, and announced six months later that Ford would be making airplanes."

You realize that Ford DID make airplanes a long time ago. Not only that but they were GOOD at it.

Re:Ford DID make airplanes

[theVarangian]

You realize that Ford DID make airplanes a long time ago. Not only that but they were GOOD at it.

Actually all Ford did was buy up a company that had shamelessly copied much of the technology behind what became the Ford Trimotor from Junkers Flugzeugbau AG in Germany (the same kind of intellectual property borrowing the US is now complaining that China does). One could almost say the Ford Trimotor was a Fokker F.VII made with Junkers' methods. In fact the Fokker F.VII and the Ford Trimotor look so much alike people often confuse photographs of the two even though the two aircraft used completely different construction methods. Mind you the Ford was easily the superior design... thanks in no small measure to Prof. Junkers. Ford's significant contribution was not their designs, it was the way they applied Ford's assembly line techniques to aircraft production making their prices highly competitive which was one of the reasons why Junkers never managed to get much of a foothold on the US market. Ford later contributed hugely to the 18.000 plus B.24 bombers made during the war.

CEO background

[Kupfernigk]

What do you expect? How on Earth did HP come to appoint a CEO from a software-only company that has probably never seen an end user customer in his life? It isn't as if Ford appointed a CEO from Boeing; it is as if they appointed a CEO from a fleet leasing company. The result; a decision announced in haste that was bound to deprecate HP as a brand. Apotheker seems to have forgotten - or did not know - that today's phone buyer may be tomorrow's CIO.

Yes, the could have sold the tablets at a small loss. And, since the Pre 2 phone sells happily in its unlocked state at around $200 in the UK, they could have sold off the Pre 3 for maybe a little more. Legally in the EU they must support the things, so they might as well do it properly. But no...

I happen to like phones with portrait format and keyboards. Some people do. I'm now having to look at the BB Torch 9810 for a next phone. It doesn't look to be as good or as convenient as the Pre 3. OK the screen is smaller that an iPhone's, the processor is slower than on a Samsung. But the actual operation as a phone/messaging device is that much nicer than either. Some people prefer, say, the Prius to an Audi or a BMW. HP just never bothered to find its market and then market to it. Yet if there was a company that could have taken on RIM, it was HP.

Re:CEO background

[bws111]

On the other hand, when IBM was in deep trouble in the early 90's it brought in a CEO with no tech background at all. He came from RJR/Nabisco (cigarettes and food). At the time, IBM was in the process of being split up into smaller companies, and he put a stop to that.

Re:CEO background

[catchblue22]

Watching HP change from an innovator and creator of truly innovative products into a marketing flagship has been disappointing. They spun off their truly innovative activities to Agilent, and instead sought to become largely a brand-name stamped on generic low quality computers that could have been made by any number of competitors. In my opinion this is a result of adopting business school ideology in the management of the company. The MBA type managers had very little actual knowledge of technology. They wanted to maximize profit while minimizing costs, leveraging existing assets to provide the highest rate of return. Creating truly innovative products was seen as too expensive and not profitable enough. The managers likely didn't see the benefits in true innovation, the way it percolates throughout a company. Now HP is a shell of its former self. It is sad to see a formerly great organization reduced to this.

WSJ Piles On: How to Kill HP in a Year

[theodp]

H-P's One-Year Plan (WSJ): Let's say you were given a year to kill Hewlett-Packard. Here's how you do it.

Re:RPN calculators

[Culture20]

"With RPN, your parents can't understand what you're calculating!"

Accepting applications?

[failedlogic]

I went on the HP careers website. I typed in CEO and executive and there does not appear to be a job opening at the moment. Strange, I think, since many other employer websites are always accepting applications.

I don't have experience as a manager or executive. Over the years though, I have owned several HP last printers, a desktop and a laptop. This is probably more HP merchandise than all previous CEOs combined have ever purchased. So I know a bit about the company's products.

I'm not after the multi-million dollar salary - $900,000 ought to be good enough and I think it is survivable in this economy. I'll work as hard as I can for 6 hours a day. Between lunch and coffee breaks, I think this is about the most I can honestly commit. As additional compensation, I'll settle for Apple, Oracle and IBM stock options instead of HP's.

If HP really wants to re-invent themselves

[WindBourne]

they would move the production back to America and focus on INNOVATION. It is easy enough to do. However, HP no longer does that. Right now, the only major American company that is into innovation is Apple and google. The reason is that we have allowed too many MBAs to run companies. If you notice, neither Apple nor Google has MBA's running them. Sadly, Apple's new CEO IS an MBA, and he will probably destroy them.