07 August 2010

A Great Brand Is Brought Low

The newswires have been humming all day with the revelation that technology giant HP's CEO Mark Hurd has been forced to resign on the back of a sexual harassment probe and his falsifying expense reports to conceal his relationship with a female marketing contractor.

As a shareowner, I'm disgruntled. HP's stock is down almost 10% from its Friday close. While investors blink from the realization that the departing CEO's shenanigans have wiped about US$9 billion in value off the company's books, it looks as though he is still going to make off with a multi-million dollar severance package.

As an ex-employee, I'm devastated.  I used to work for a great company that traded on the strength of a culture reflecting the values of legendary founders Bill Hewlett and Dave Packard -- and the morale of a 150,000-strong workforce that believed in the HP Way. (During my stint with the company, 90% of us once voluntarily agreed to take a pay cut in order to stave off otherwise inevitable layoffs.) Today -- judging by the vitriol obviously written by insiders and which passes for comments at the end of the news stories -- that esprit de crops is long gone from the ranks of a gripeforce gutted by wave after wave of reorganization and the seeming inequity of it all.

Finally, as a student of strong brands, I'm discouraged. A brand is a fragile, porous entity.  It can be punctured by all manner of barbs -- some from within, some from the outside. The result is the same: a leaky bucket oozing goodwill and equity built up over the years. Make too many holes, and soon the brand will be running on empty.

Of the world's top 100 global brands in the year 2000, only eight would have appeared on a similar list, if one had been prepared, in 1900. A great brand can't just have a scintillating decade before fading from the social consciousness; it needs to run the full race, and finish well.

HP is too strong a brand to keel over and die just like that, but it has taken a body blow. Whether it'll recover and finish well, will depend on the people of HP -- all 304,000 of them.  The twin peaks of history and destiny loom over their shoulders.  I pray they'll respond.


JoKAR said...


Interesting cooler chat with another ex-HP employee this morning. Unfortunately, thrust of conversation about 'he's been dumped for sexual harassment' when the reality is that SOBC is what has forced Mark Hurd's hand.

And I think a lot of people miss the importance of this. Mark Hurd was a keen advocate of the HP Standards of Business Conduct - and it has proved robust enough to topple the man at the very top of the organisation.

That's actually a strong positive for me - although like you I am disappointed to see the departure of an inspirational leader. But the fact that HP can and is still prepared to enforce SOBC to such a degree is demonstration that business ethics are alive and well - and kicking!

Other undeniable fact is that love it or hate it - once you have been part of it you cannot leave HP behind! (And for us who have given a little part of our soul (and sweat) to the company it remains an important part of our lives - HP stock apart!!!)

dshaw said...

@JoKAR: Good take on the vitality of SOBC within HP. I wouldn't necessarily call Mark Hurd "an inspirational leader" ... he was inspiring perhaps to Wall Street, and to investors, but I reckon he didn't quite endear himself to the HP workforce in general.

What they now need is a Mark Fiorina kinda leader ... someone who can marry vision with operational chops. (And right now, I'd skew it slightly towards the vision end of the continuum.)

Thanks for the dialogue. Appreciate your engagement.