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Post Leadership
Posted at 01:25 PM ET, 09/29/2011

Meg Whitman: Governing the state of HP


As Meg Whitman takes over as the new CEO of HP, she faces an enormous number of challenges. (POOL - REUTERS)
Meg Whitman does not shy away from hard jobs. After all, this is a woman who famously spent $140 million of her own money only to lose out on the chance to run a state that had, and continues to cope with, one of the biggest budget crises in recent memory.

But she may have won an even tougher job in agreeing to be CEO of HP. In her new role, she’ll face strategic questions from customers, dealings with a board not known for running things smoothly, challenges rebuilding the employee culture at one of Silicon Valley’s most storied companies, not to mention angry investors. The Wall Street Journal is reporting Thursday that HP has hired Goldman Sachs to help it ward off any possible activist investor pressure as the company’s stock reels following questions about strategy and performance.

Let’s consider each of these separately to get a sense of the enormous challenges she faces. Earlier this month, corporate chief information officers were reportedly shying away from big HP purchases following the news that the company planned to exit the PC business. “It appears they’re lost right now,” one CIO told the WSJ. Whitman will need to move quickly to both clarify the company’s strategy and then reassure its customers that they’re committed to it. Under current circumstances, they’re likely to want an audience with the top, making pressure on Whitman’s time even greater.

Employees will need similar reassurances. After years of dealing with the celebrity leanings of Carly Fiorina, the cost-cutting of Mark Hurd, and the confused direction of Leo Apotheker, this bastion of engineering talent will need a certain dose of TLC. External surveys found employees’ confidence in the job Apotheker was doing plummeted. While Whitman may have spent eight months on the board, that’s hardly enough time to ingratiate herself as an insider. Leadership expert Rosabeth Moss Kanter suggests that Whitman surround herself with insiders who will show she puts the institution first, rather than herself; this is also the best way for her to really get to know the culture and where the biggest problems lie.

Her relationship with the board could be even more complex. Making the transition to someone whose job is now at the mercy of a group of people who were her equals will be a tricky one to make. Navigating how best to divide up the job of running the company with a seasoned executive chairman, Ray Lane, could certainly create some bumps in the road. And finding a way to distinguish her performance from that of a board whose actions have drawn fire will require Whitman to call upon all those political skills she planned to put to work as governor. Until the board’s reputation is restored with investors, her own moves will be extra scrutinized, too.

Most of all, she’ll have to prove herself with investors. I can’t think of many CEOs who’ve started a job recently with greater skepticism. She should have been an interim choice while the board did a complete search, some investors say. Her background is with consumer-facing businesses, while much of HP caters to businesses. And she doesn’t know the hardware industry, other analysts have complained.

To fight that criticism, Whitman will have to score some big wins—and quickly. If the company goes forward with its exit of the PC business, it will need to be executed flawlessly. The strategy will need to be clarified in short order—and win the support of some key investors and customers. Most of all, she’ll need to prove herself not only adept at reigniting the HP culture, but also at truly understanding the industry she’s working. With a herculean job like that on her hands, it’s hard to know whether governing the state of California or the state of HP would have been a harder job.

More from On Leadership:

Next up, Meg Whitman?

If Washington had a Klout score, what would it be?

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By  |  01:25 PM ET, 09/29/2011

 
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