Management Turnover as Change Agent

Friday, October 1, 2010

HP Selection of New CEO Slammed by Analysts and Market

Yesterday’s long awaited announcement on who would replace Mark Hurd as Hewlett Packard’s HPQ (NYSE) CEO went down with a thud. The selection of Leo Apotheker, a former short lived CEO of SAP, was not hailed by the market nor many analysts. I am on the other side of the fence on this appointment. I think HP’s board has come up with a surprisingly excellent choice.While ApotheLeo Apotheker, New HP CEOker was not very successful while CEO at SAP he faced a great deal of opposition within the organization and more than likely learned what he would need to do to be successful a second time around. SAP’s culture did not fit his needs for change. He should be able to make more change at HP than he was able to accomplish at SAP.

HP’s board appears to have gone strategic in its appointment. Its decision to go outside the firm for its selection should in the long run work out. Apotheker has the right background to help HP move into the software side of the industry in a big way without seriously jeopardizing its current bread and butter businesses. Who knows he might even move to go for an acquisition of SAP or some kind of alliance. If he can manage to keep many of the key players currently at HP and work with them to get the firm’s overall strategy right, he has a great chance at being very successful. He is a strategic thinker and he understands technology.

Shareholders and investors need to give him time to get up to speed. Stay tuned this latest selection may turn out to be a really winner despite the conventional wisdom. One year stock performance of Hewlett Packard

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