Dear Lynn, please disregard the telemarketing "follies" and just cast your vote
on the merits of the merger to CPQ and HWP. And speaking of HWP, here are
some deep reasons FOR the merger from the HWP long time executive and
a board member...
votethehpway.com
Dick Hackborn
"on the merger"
The reason I feel this merger is important for employees is because nobody in my past 40 years association with HP has ever been happy for very
long working in an organization that's not a market success. And I think the combination of HP and Compaq will allow us to bring in to some of our
very important businesses the critical mass and the experience and the expertise from several different viewpoints that we really can reach
world-class status.
Back about three years ago I identified six what I call "mega" issues. And the reason I call them mega issues is if we didn't solve them, our future
would be a good deal dimmer than if we did solve them. So they were really, to me, big issues.
The first one had to do with the lack of earnings in our computer systems business. And perhaps even more bothersome definitely was that I
didn't feel we were at critical mass to support the multiple operating systems that we had to support.
The second mega issue had to do with our transitioning to a business model in our PC business that would allow us to compete against the new
direct marketing models, of course the most obvious is Dell. Subsequently it became clear we had HP employees that were really working hard to
do that but we would turn those programs on, we'd turn them off, we'd turn them on and turn them off - so we were really losing ground to Dell.
The third area that was a big mega issue for me was the fact that we were not investing in new business initiatives in our printing and imaging
business and the reason we weren't is that since those businesses were earning most of the profits of the company, that was necessary to cover
the lack of performance in some other areas.
The fourth area that was of concern to me was that we had a very confused selling situation, particularly in what I would call the large and
enterprise accounts. We had multiple sales forces calling on these accounts, confusing our customers. At the same time these sales forces weren't
empowered or accountable to aggressively pursue sales in a profitable manner.
The fifth area that concerned me had to do with the whole Internet revolution and all of its implications and I felt we were behind other key
companies in this area, not only our products but even benefiting from Internet technology and infrastructures in the way we operated our
company internally.
Finally the last area that concerned me, the last mega issue, was that we were on a rising tide in the late 1990s --in other words, one that raises
all ships. But underneath that, in HP, we had a number of our businesses with cost structures that if we hit a down-turn would prove to be a very
unprofitable situation.
Now, a lot of progress has been made in the last two years on those mega issues and I'm very proud of what HP people have accomplished, but
we're not there yet. We've still got a ways to go.
So my understanding of the HP-Compaq merger is we can expedite the resolution of some of these issues, particularly the one that has to do with
critical mass in our systems area, particularly with getting quicker to a cost effective, direct marketing model in our PC business, and particularly
with respect to being able to capitalize more on the Internet and where it's going. Between the two companies we have some good programs and I
think if we put them together we're going to be a bigger force in terms of the Internet world. But there's something else about the merger that I
think is even more important than all those things. I think it gives us the opportunity to develop some more effective business organizations.
And I don't see us getting there any other way. We've looked at it from a number of different angles. Could we do more inside, could we do
something with some other company, and nothing comes across as clearly as this merger with Compaq.
"on the hp way"
When we introduced the laser printers we came under some very severe criticism from internal executives in HP who said "this is not an HP way of
business." They said "your R&D percentage is only 2%; in typical HP businesses it's 8." If you can believe people arguing today that your R&D
should be more. They said we are not making any contribution, we were totally dependent upon an outside company -- Canon in this case. They
said we shouldn't have done our interfaces to go with PCs, that we should have done them to go with HP systems because that's what was
important. And they were very concerned about the business model. This was a business model they had never seen before. Fairly low gross
margins, however it also had very low administrative expenses so net, the profit was very good.
In this case, both Dave Packard and Bill Hewlett talked with me about this, because I was really concerned, I didn't want to be known as running a
non-HP way of business.
They loved the business.
And I think today people should reflect on this because if we did not have their support you can imagine an hp without any printer business and
behind in terms of open, industry-standard networking. I mean it would just be an entirely different company, and probably not nearly as great a
company. And the main point of all of that is that I don't think that people should predict what Dave and Bill would do in today's business
environment because frankly we will never know.
They were the ones who said 'well I know we did this way in the past, but shouldn't we take a fresh look at this.' Or 'look what's happening
outside, shouldn't we be more aware of this?' And so they, at least in my case, my personal experience is they were always pushing me to do
things in new ways if the old ways weren't working. If the old ways were working, that's great. So I find this unbelievable today, that people are
saying well, we should go back to the way Dave and Bill managed the company, because I don't think they really understood the way Dave and
Bill managed the company. I think they have some rigid idea of the way the company operated in the 1980s or the 1970s and they feel that that's
the way Dave and Bill would operate it today and all I can say is, from my own personal experiences, they really are wrong. I think they would be
out there pushing changes as much as they have in the past.
"on change"
With or without the merger we've got to do things different. And we've got to expedite, the resolutions of some of these fundamental issues and I
think we can do it the long hard way, and we may never get there by ourselves, or we can use this merger as a vehicle to get there in a lot
quicker time.
So some ask, well, why don't we just simply modify what we currently have and not do the merger. I think they miss a couple key points. One is
that I think when we get done with our PC business, we can get this business to pay its own way. We've really got to take funds and invest it in
our new business initiatives in printing and imaging. I think we have a chance to have more of a PC business when we put the two companies
together. We've got to invest in our enterprise systems area. Likewise, over on the computer systems side, by having the volumes of both
Compaq and HP, and the UNIX world and the NT server world, we're going to have a much more leveraged organization that can afford to do the
things we need to do to transition and converge our operating systems, to build on the Itanium architecture.
There's no way in my view that the company can stay the same let alone go back and be the kind of company that I personally think Bill and Dave
would be proud of in the future.
"to employees"
What I would have to say to HP employees are first of all; I'm immensely proud of them. I think they have dealt with a set of really major issues
that have been brewing in HP for many years. I think they really even go back to the early nineties that we have not dealt with. They have done
this in an economic environment that is the toughest that I have ever seen in my forty years, in the high-tech business, far tougher than I ever
had to deal with. And so I have tremendous respect for what they have accomplished. And I think going forward if we can keep that spirit, and
keep our business strategies focused to those areas that we are going to make a difference in, and to keep the employees totally involved,
committed, feeling that they are being handled fairly, including the ones who will probably not have their careers continue at HP. Managers should
really redouble their efforts to communicate with the employees, and if it means different priorities than so be it because I can't think than
anything more important at this time. That's my message if I was going forward in the company. |
