=DJ Fiorina Has Won -2: Execs Must Show 'Who's In Charge'
Other observers said the waiting surrounding the merger battle might not have had only a negative effect.
Steven Kaplan, a professor of finance at the University of Chicago Graduate School of Business, said the hundreds of Hewlett-Packard and Compaq workers who have been working on integration plans in a "clean room" may have used the extra time productively, allowing the companies to have even clearer plans when they begin their integration.
Experts say Fiorina must now unite Hewlett-Packard's employees behind the merger. There have been many signs of discontent, from the booing of Fiorina at the shareholder meeting to vote on the merger to the leaking of sensitive corporate memos and even a voice mail.
John Whitney, a management professor at Columbia University's business school, said Fiorina must create a "marching song" - a visible goal that's achievable and will give employees an early victory to rally around.
At the same time, Whitney said Fiorina must assert from the outset who's in charge.
"When she finds people who are not willing to play the game, they need to be terminated immediately, as harsh as it sounds," Whitney said. "They can put a lot of venom in the organization."
Hewlett-Packard has already established a tough image on that score. It publicly announced it had fired an employee for leaking a memo and said it would work hard to track down others who do so.
Another challenge will be merging two distinct corporate cultures, one West Coast, the other Texas-centered, said Shebly Seyrafi, an analyst at A.G. Edwards & Sons.
Experts agree that management must quickly set up clear chains of command and decide which products will stay and which will go.
In the end, all of this planning is aimed at delivering results.
Wendy Abramowitz, an analyst at Argus Research, noted that management has set ambitious goals for the combined company. Among them are annual cost savings of $2.5 billion by midyear 2004, to be achieved in part by cutting 15,000 jobs. Another goal is earnings growth of 13% within a year of the merger's consummation.
If the merged company doesn't deliver on such goals, many investors could show little patience, Abramowitz said, noting that Hewlett-Packard's shareholder vote was extremely close.
-By Ross Snel, Dow Jones Newswires; 201-938-5285; ross.snel@dowjones.com
(END) DOW JONES NEWS 05-01-02
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