Come See The Softer Side Of HP

For those too busy fretting over Y2K calamities and preparing for the inevitablemillennium merry-making to have noticed, HP is showing its softer side these days. HPexecutives, this past fiscal year (which ends next month), have been creating a new HP:One that maintains the inspiration of the HP Way, but not the ritualized thinking that hasrestrained HP's leadership in the Internet Age.

When Lew Platt cleaved Hewlett-Packard into two separate but unequal entities back onMarch 2, 1999, it signified more than just another routine reorganization at thegranddaddy of Silicon Valley companies. To cynics, it probably seemed like just anotherChinese fire drill in the executive suite. It was no drill.

On April 1, Joe Beyers, head of the Internet Software Business Unit (ISBU) announced abold new "E-Services" strategy. Otherwise referred to as "Chapter 2 of theInternet," by HP's management, the e-services thrust is more than a "visionthing." According to Tom Kucharvy, president of Summit Strategies (Boston, Mass.) andHP Professional Advisory Board member, "In essence, HP is making a dramatic bid toreinvent itself -- and the rest of the Internet industry -- with a new business model thatrelies less on hardware revenues." Kucharvy thinks the key lies in capitalizing onthe revenues its service provider partners will generate, using new Internet technologiesfrom HP. "If HP successfully executes this strategy, it will force competitors tomake some very tough decisions."

A NEW BELLEWETHER

Meanwhile, Mr. Platt and the Board have already made one of their toughest decisions bygoing outside the loop of the HP Way and naming an outsider by the name of Carleton(Carly) S. Fiorina as HP's new CEO and President on July 19. As the former president ofLucent Technologies' Global Service Provider Business, Fiorina (according to the HP pressrelease) "dramatically increased its growth rate, rapidly expanded its internationalrevenues and gained market share in every region across every product line."

Fiorina is also credited with "spearheading the planning and execution of Lucent's1996 initial public offering and subsequent spin-off from AT&T, one of the largest andmost successful IPOs ever." And in 1998, Fortune magazine identified her as the mostpowerful woman in American business. It just goes to show you what can be done with aneclectic academic background in medieval history, philosophy and business administration.However, it still remains to be seen if Ms. Fiorina will be able to turn HP's owntop-notch, talent-rich, but otherwise leaden engineering-driven culture, into anorganization that mines Internet gold.

MAKING COMMUNICATIONS WORK

Aiding and abetting Ms. Fiorina's quest will be long-term HP employees Ann Livermore,Duane Zitzner, Antonio Perez and Carolyn Ticknor, all CEOs and presidents of theirrespective divisions: Enterprise Computing Solutions, Computer Products, Inkjet ImagingSolutions and LaserJet Imaging Systems. "Each of us are set up to be the leader inthe ecosystem that we participate in for HP," Ms. Livermore explained to me in anexclusive interview. "Clearly, for my business, the most important linkage inside thecompany is with the Personal Systems Business headed up by Duane Zitzner. Because, betweenthe two of us, we create a [broad] coverage of the computer industry with our range ofsystems."

Now that she's been passed over for the top spot, Ms. Livermore's continued loyalty hasbeen questioned in industry circles. Although clearly disappointed, she thoroughlyunderstands what her contribution is within the new HP. "The first thing that I'mafter is [for] HP to be viewed as the company that is driving the future of computing. Forenterprise computing, the buck stops with me." Good work if you can get it.

And completing the last circuit (so to speak) in its 21st century transformation, thealmost forgotten other half of HP has now been given an identity. Agilent TechnologiesInc. was born on July 28. Developed by Landor Associates (San Francisco, Calif.), who, bythe way, helped to name Lucent Technologies, Agilent is derived from the word"agile." And the new tag line for the 43,000 employees headquartered in PaloAlto: "Innovating the HP Way." Someone got paid for this? At least Wall Streetis eating it up. HP is getting good buzz and "buy" ratings as of this writing.

If all goes according to plan, HP (and Agilent) will continue to weigh in asheavyweights on the high-tech scale. But, they will imminently be companies with a softer,if not quicker touch, as well.