IMHO, a big part of HP's downfall is a lack of quality. I have an HP calculator that was built sometime between 1982 and 1989. That's at least 23 years ago. And it's still going strong. And the HP-12C, first introduced in 1981, is still being sold today.
On the other hand, I bought a new HP calculator a few years ago so my son could use it for homework, with the expectation that I would get it when he was done. Even though he didn't abuse it (there aren't any cracks or scratches) the keyboard did not survive a full 3 years.
HP used to be known for high quality, carefully thought out equipment. Now they're more known for mid-tier PCs and throwaway inkjets. That's not how you build brand loyalty. As long they're more concerned about being number 1 or 2 in each market than in building equipment that's "insanely great" in capabilities AND quality, their malaise will continue.
Yes, I remember those days. I used to borrow a HP calculator that had Reverse Polish Logic back in 1975 and then bought another another HP calculator with the RPL in 1980 or so... it still works. They were master pieces of American engineering and manufacturing. Recently, I bought a HP server rack loaded up... what a pile of junk. The construction is flimsy. Runs Windows Server and has Intel chips. Nothing proprietary from HP.
HP does have its own proprietary technology in the stuff they sell. Got to have a Gorilla Game. Selling commodity products and services is a low margin biz.
They need a different kind of management. All Meg Whitman did at Ebay was milk the innovations of the founders. Made a ton of money for herself. Is she working for $1?
try having a compelling vision and then lead change. we'll hear a lot about their ability to "manage" change, but as pointed out, that's arranging deck chairs in a nice neat line.
HP built a company and reputation on quality and reliability. The small volume, high margin model, as has been stated. HP products were as reliable as a light switch, you new what you were getting and you were happy to pay for it. They had fierce brand loyalty
Thinking they could leverage that reputation into the high volume, low margin market is a mistake that is made on a daily basis. When their shareholders ask why can't we be like Apple, they are not asking why can't we have brand loyalty and brand recognition like Apple. they are asking why can't we be as profitable as Apple. This is the question that has put them in the position they are in now.
You are doomed to failure pandering to the shareholders and not the stakeholders. Good riddance.
Look, it wouldn't be an easy job to turn around a company like HP, even if it were Steve Jobs himself running the ship. Changing corporate culture that is so ingrained after decades of doing things one way may be close to impossible to do. As much as people, including Apotheker, talk(ed) about HP needing to go the route of IBM, IBM may have become more profitable, but they're not the highly respected [tech] company they once were either.
I agree with others that have said that Meg is not going to be at HP for very long - she's already trying to set the stage that HP has nothing new in the pipeline (because they haven't invested in R&D), so the only way they can improve their financials is to cut staff. Which of course will not make HP a healthy work environment, which will drive the creatives further away from HP (not that there were or are any creatives there now). And the board, well I wouldn't blame them exclusively either - they're part of the problem, but it's much deeper than that.
I don't have an answer for what they could do to improve things. I think all old-school tech companies and even some of the newer ones are scratching their collective heads on what they can come up with for new product that will take some of the limelight away from Apple. When you think about it, it is going to take some brilliant thinkers to create the next "thing" that will take off as a worldwide phenomenon like the iPod, iPhone and iPad have.
HP had a chance with development of their own OS, but now has given that up. That means they are stuck working with MS, making their pc's nothing special compared to any other pc that uses MS. This forces them to compete on price and race towards the bottom.
They have a big chunk of the laser and inkjet market, but here too, there are issues revolving around the transition to digital. I'm just not sure there is any going back to people printing out all the photos they once did.
What else is there for them to lead the market on?
HP is in the situation because they squander their opportunities. They bought EDS, and failed to leverage its core strengths. They bought EYP, and have sent the team running. They bought Palm and just gave up.
They strive for building a brand that competes with all their biggest competitors, but lack focus to prioritize which market to focus their energy on. They are built on consumables in every segment; the parallels are there with Kodak-- they will have trouble surviving when their margins shrink.
Without improving on quality, I can't see them being around in 20 years.
HP is in the situation because they squander their opportunities. They bought EDS, and failed to leverage its core strengths. They bought EYP, and have sent the team running. They bought Palm and just gave up.
They strive for building a brand that competes with all their biggest competitors, but lack focus to prioritize which market to focus their energy on. They are built on consumables in every segment; the parallels are there with Kodak-- they will have trouble surviving when their margins shrink.
Without improving on quality, I can't see them being around in 20 years.
Making a major acquisition is always something that pleases the ego of the CEO, but the hard part comes afterwards, when it comes to digest and integrate. Apple reluctance to engage into such major acquisitions proves to be the right approach : if you do not have in your culture innovation spirit, how can you acquire it from outside ?
then they need to fire everyone at the top, starting with the board. All the non-contributors need to be fired as well.
This is exactly what Steve Jobs did. He did not just cut the fat, he remade Apple into what it needed to be.
That only works if you have someone at the top that has the needed brains etc to mold a new team into a working machine. Whitman doesn't strike me as that type of person
What a dumb question to ask. Nobody else is like Apple. If somebody wants to invest in something like Apple, then buy AAPL. Don't buy HP, and then ask the company why they're not more like AAPL.
HP stopped being considered innovative around 1994.
Sun Engineers I used to eat lunch with wanted to work at NeXT and later Apple.
It starts at the top. You cannot create a Steve Jobs. You cannot create a Jony Ivy.
Very few companies have natural leaders. Lots of narcissism, but very little leadership.
Imagination and a high aesthetic for taste and how to shape it is not taught. You discover it or your do not. Lots of friends come from various engineering, liberal arts and business backgrounds.
All talented to do tasks, when a solid vision is in place. Creating that vision is an entirely different ball of wax. It either surfaces as a child and grows from there as you get older or it does not.
Meg couldn't lead a creative, highly driven engineering vision to fruition due to having none of these qualities in her.
Odd, weird and unique were all qualities described of Steve as he grew up and developed Apple, then NeXT, PIXAR and back at Apple.
There are tons of degrees in the Valley. Not so much when it comes to personalities that stand out in a crowd.
Steven P. Jobs is an original. It's not something you see more than once or twice in a life time.
My company used to have HP everything. We spent so much time troubleshooting their products we have no more HP products except for a color laser and that's on it's way out. When we buy new equipment, HP isn't even an option.
HP built a company and reputation on quality and reliability. The small volume, high margin model, as has been stated. HP products were as reliable as a light switch, you new what you were getting and you were happy to pay for it. They had fierce brand loyalty
Thinking they could leverage that reputation into the high volume, low margin market is a mistake that is made on a daily basis. When their shareholders ask why can't we be like Apple, they are not asking why can't we have brand loyalty and brand recognition like Apple. they are asking why can't we be as profitable as Apple. This is the question that has put them in the position they are in now.
You are doomed to failure pandering to the shareholders and not the stakeholders. Good riddance.
the shareholders are stakeholders too, but that is beside the point.
Which areas can HP go into or expand with a High Quality/High Profit marketing model?
Could they sell enough super duper photo printers? Or expensive laptops? Super duper calculator/tablets for engineers? Super heavy duty tablets and laptops for roughnecks?
Or what?
I'm really curious about what you may have had in mind.
What a dumb question to ask. Nobody else is like Apple. If somebody wants to invest in something like Apple, then buy AAPL. Don't buy HP, and then ask the company why they're not more like AAPL.
Sometimes, you are very, very correct.
WTF do shareholders want, a company in which to buy stock which is "more like" another company in which they could buy stock? Just buy the stock you want, and ignore the one you don't want.
Comments
IMHO, a big part of HP's downfall is a lack of quality. I have an HP calculator that was built sometime between 1982 and 1989. That's at least 23 years ago. And it's still going strong. And the HP-12C, first introduced in 1981, is still being sold today.
On the other hand, I bought a new HP calculator a few years ago so my son could use it for homework, with the expectation that I would get it when he was done. Even though he didn't abuse it (there aren't any cracks or scratches) the keyboard did not survive a full 3 years.
HP used to be known for high quality, carefully thought out equipment. Now they're more known for mid-tier PCs and throwaway inkjets. That's not how you build brand loyalty. As long they're more concerned about being number 1 or 2 in each market than in building equipment that's "insanely great" in capabilities AND quality, their malaise will continue.
Yes, I remember those days. I used to borrow a HP calculator that had Reverse Polish Logic back in 1975 and then bought another another HP calculator with the RPL in 1980 or so... it still works. They were master pieces of American engineering and manufacturing. Recently, I bought a HP server rack loaded up... what a pile of junk. The construction is flimsy. Runs Windows Server and has Intel chips. Nothing proprietary from HP.
HP does have its own proprietary technology in the stuff they sell. Got to have a Gorilla Game. Selling commodity products and services is a low margin biz.
They need a different kind of management. All Meg Whitman did at Ebay was milk the innovations of the founders. Made a ton of money for herself. Is she working for $1?
Thinking they could leverage that reputation into the high volume, low margin market is a mistake that is made on a daily basis. When their shareholders ask why can't we be like Apple, they are not asking why can't we have brand loyalty and brand recognition like Apple. they are asking why can't we be as profitable as Apple. This is the question that has put them in the position they are in now.
You are doomed to failure pandering to the shareholders and not the stakeholders. Good riddance.
I agree with others that have said that Meg is not going to be at HP for very long - she's already trying to set the stage that HP has nothing new in the pipeline (because they haven't invested in R&D), so the only way they can improve their financials is to cut staff. Which of course will not make HP a healthy work environment, which will drive the creatives further away from HP (not that there were or are any creatives there now). And the board, well I wouldn't blame them exclusively either - they're part of the problem, but it's much deeper than that.
I don't have an answer for what they could do to improve things. I think all old-school tech companies and even some of the newer ones are scratching their collective heads on what they can come up with for new product that will take some of the limelight away from Apple. When you think about it, it is going to take some brilliant thinkers to create the next "thing" that will take off as a worldwide phenomenon like the iPod, iPhone and iPad have.
HP had a chance with development of their own OS, but now has given that up. That means they are stuck working with MS, making their pc's nothing special compared to any other pc that uses MS. This forces them to compete on price and race towards the bottom.
They have a big chunk of the laser and inkjet market, but here too, there are issues revolving around the transition to digital. I'm just not sure there is any going back to people printing out all the photos they once did.
What else is there for them to lead the market on?
Whitman said she encourages her leaders to just do "a few small things well."
That, in a nutshell, is the problem. No vision, and no appetite for trying big things.
Look at Johnny, he can run fast... why can' t you run fast.
Poor kid
They strive for building a brand that competes with all their biggest competitors, but lack focus to prioritize which market to focus their energy on. They are built on consumables in every segment; the parallels are there with Kodak-- they will have trouble surviving when their margins shrink.
Without improving on quality, I can't see them being around in 20 years.
HP is in the situation because they squander their opportunities. They bought EDS, and failed to leverage its core strengths. They bought EYP, and have sent the team running. They bought Palm and just gave up.
They strive for building a brand that competes with all their biggest competitors, but lack focus to prioritize which market to focus their energy on. They are built on consumables in every segment; the parallels are there with Kodak-- they will have trouble surviving when their margins shrink.
Without improving on quality, I can't see them being around in 20 years.
Making a major acquisition is always something that pleases the ego of the CEO, but the hard part comes afterwards, when it comes to digest and integrate. Apple reluctance to engage into such major acquisitions proves to be the right approach : if you do not have in your culture innovation spirit, how can you acquire it from outside ?
then they need to fire everyone at the top, starting with the board. All the non-contributors need to be fired as well.
This is exactly what Steve Jobs did. He did not just cut the fat, he remade Apple into what it needed to be.
That only works if you have someone at the top that has the needed brains etc to mold a new team into a working machine. Whitman doesn't strike me as that type of person
Apple is Apple because of Steve Jobs, his Vision and his ability to hire great people. Nuff Said.
Agreed. And no one like Steve to motivate people and get them to believe in the products that they are creating as he could.
Talent. Talent. Talent.
Meg was turned down for work at Apple.
HP stopped being considered innovative around 1994.
Sun Engineers I used to eat lunch with wanted to work at NeXT and later Apple.
It starts at the top. You cannot create a Steve Jobs. You cannot create a Jony Ivy.
Very few companies have natural leaders. Lots of narcissism, but very little leadership.
Imagination and a high aesthetic for taste and how to shape it is not taught. You discover it or your do not. Lots of friends come from various engineering, liberal arts and business backgrounds.
All talented to do tasks, when a solid vision is in place. Creating that vision is an entirely different ball of wax. It either surfaces as a child and grows from there as you get older or it does not.
Meg couldn't lead a creative, highly driven engineering vision to fruition due to having none of these qualities in her.
Odd, weird and unique were all qualities described of Steve as he grew up and developed Apple, then NeXT, PIXAR and back at Apple.
There are tons of degrees in the Valley. Not so much when it comes to personalities that stand out in a crowd.
Steven P. Jobs is an original. It's not something you see more than once or twice in a life time.
Hear, hear!
I am reposting so that people can re-read.
Now it is in the hands of the MBAs so unless something dramatic happens, IMHO, I think it is terminal.
Hey, don't blame MBAs. There are MBAs and there are MBAs.
Tim Cook, for instance, is one.
There's more valuable advice and insights in the 1.5 pages here than all of the strategy and leadership memos at HP put together, I'll bet.
Get out while the gettin's free!
F
HP built a company and reputation on quality and reliability. The small volume, high margin model, as has been stated. HP products were as reliable as a light switch, you new what you were getting and you were happy to pay for it. They had fierce brand loyalty
Thinking they could leverage that reputation into the high volume, low margin market is a mistake that is made on a daily basis. When their shareholders ask why can't we be like Apple, they are not asking why can't we have brand loyalty and brand recognition like Apple. they are asking why can't we be as profitable as Apple. This is the question that has put them in the position they are in now.
You are doomed to failure pandering to the shareholders and not the stakeholders. Good riddance.
the shareholders are stakeholders too, but that is beside the point.
Which areas can HP go into or expand with a High Quality/High Profit marketing model?
Could they sell enough super duper photo printers? Or expensive laptops? Super duper calculator/tablets for engineers? Super heavy duty tablets and laptops for roughnecks?
Or what?
I'm really curious about what you may have had in mind.
What a dumb question to ask. Nobody else is like Apple. If somebody wants to invest in something like Apple, then buy AAPL. Don't buy HP, and then ask the company why they're not more like AAPL.
Sometimes, you are very, very correct.
WTF do shareholders want, a company in which to buy stock which is "more like" another company in which they could buy stock? Just buy the stock you want, and ignore the one you don't want.