HP at a Strategic Crossroad - Assignment Example

HP at a Strategic Crossroad Answer Managerial Leadership style adopted by Carleton Fiorina at HP Carleton Fiorina, labeled as America's most powerful female executive by the Fortune magazine, joined HP with revolutionary ideas for revitalizing the company. No doubt she was a talented executive with business intelligence and had the ability to convince her detractors about her arguments. She has been a different kind of persona is quite apparent from the way she pursued her studies. After joining Hewlett Packard she had a vision for the company with introduction of new ideas and strategies. HP has a long history of being a leading company in computing equipment. But, the company was not able to take up the challenge thrown up by the rapid advancements in technologies and some of the competitors. Fiorina had proved herself at AT&T by bringing about a successful spin-off at its equipment and research branch. With such a legacy she joined HP and started her mission to refurbish the image of HP and implementing the requisite changes. For introducing changes in an organization and its functioning, the manager is supposed to take into confidence the team leaders, departmental heads and other support staff. The CEO will be able to plan and execute the strategies effectively if she had fullest support from other managers and the governing board. In this case it appears that Carleton Fiorina didn't believe in collaborative or democratic type of functioning. Instead she took pride in imposing her decision and carrying through her plan irrespective of what others have to say on that particular decision. She gained notoriety for placing her interest over the interests of the organization. This is a serious shortcoming for being an able and acceptable leader. To manage an organization, the manager has to manage the human resources, the machinery and the strategies. The leader will be termed as successful, if she is able to take active cooperation of the human resources in managing the machinery and planning & executing the strategies. But in this case Fiorina resorted to 'ambush marketing' from the very beginning. Without caring for the tradition or conventions at HP, she started imposing her plans. It can very well be argued that in this era of cut-throat competition, an organization has to plan out its strategies according to the demand from market, but expecting the change to take place overnight, proves detrimental for the health of the organization. This is exactly what Fiorina did after joining HP. It is said that, companies and organizations are made for people and by the people, and obviously their effectiveness depends on the behavior and performance of the people running these companies. Howard Good (2006), the former president of Highland Central School Board in Highland, NY, says, "Being board president brings power and prestige, but you must inspire and help others to be successful". A team leader therefore plays the central role in making or breaking the team. It is the team leader who can synergize the efforts or just wither away the advantage, with his actions. A team leader is supposed to delegate the powers and responsibilities amongst his/ her team mates, inspire the team members by being an example and motivate his team with appropriate motivating factors. A leader can synergize the efforts by; Eliciting the contribution from all concerned Organizing the team members by assigning them the responsibilities, and Developing an information system for monitoring and coordination activities. It can very well be argued that HP had become a bureaucratic type of an organization and was on the verge of loosing the status of being a leader in innovation. World's first scientific calculator was given to the world by HP way back in 1967. The company has been a market leader in printing and imaging business solutions since 1985. But somehow the company could not keep pace with the changing technology and the competitors like IBM and Dell overtook it. The revenue figures started declining. A dynamic leader was required to bring about a revamp and the lost glory of the company. Carleton Fiorina was appointed the President and CEO of HP taking into account her successful career at some other companies. But she failed to capitalize on the opportunity, which could have given a lift not only for the company but for Fiorina as well. The fact that she had to be unceremoniously removed from the scene by the board, goes on to show that she lacked the necessary leadership skills and a vision for the company. She might be good at the marketing skills, but once she is appointed as the CEO of a company, everybody expects her to take care of all the departments and to address the concerns of all the departments. Managing the human resources forms a very crucial component of strategic planning. They are the one's who are responsible for implementing the strategies of the company. Moreover a good leader has to keep in mind that not all individuals can be treated equals. Similarly, no two companies can have similar organizational structure, similar organizational culture, people with similar attitudes, similar working conditions etc. Therefore it is very crucial that the new incumbent to a responsible post in a new company must make all out efforts to understand the basic fabric of the organization she is going to handle. The human resource in particular must be handled much more carefully as the workforce tend to be little apprehensive about the 'outsider'. Fiorina never sincerely tried to take the workforce into confidence. This proved detrimental for the morale of the workforce. Factors that affect attitude of an individual are; Financial matters Recognition and acceptability in the organization Personal problems Certain beliefs and presumptions Emotional environment, feelings and behavior Self image problems Feedback from the organizational bosses Grooming, both at home as well as at the workplace It is said that organizations are not passive components. They are live, full of activity and environment-responsive like living beings. Effective HRM can do a world of good for the organization as well as for the individual by keeping a close watch on the needs of the individual, so that it helps in the development of a positive attitude in the individual. Positive attitude in turn helps the organization by; Triggering enthusiasm: It creates enthusiasm and extra energy not only for the individual but for the people around him as well. This results in a chain reaction of positive attitude amongst the group of individuals. Enhancing creativity: A positive attitude allows an environment of possibility. Ideas get a chance to be explored. Suggestions and improvements are readily heard and accepted. Causes good things to happen: When the individual has a positive attitude, good things just seem to happen, which in turn create a good working environment. But going by the case study, it is amply clear that Fiorina never actually tried to take the workforce as partners in progress of the company. This resulted in poor execution of boardroom strategies. The workforce remained apprehensive of the intentions of their CEO. While the organisation kept declining, its CEO preferred to remain in the limelight, which gave an impression that she wants it all for herself and not for HP. Therefore, in a nutshell it can be said that Carleton Fiorina proved to be a highly ambitious lady, with poor leadership skills and a narrow line of thinking. This proved fatal for HP and its people. Answer-2: Change Implementation at HP 'There's nothing permanent except change', goes the saying. Organisations too are part of the system developed by human beings. As companies grow from one room offices to multiple regional organisations, vertical, horizontal, functional, divisional and other departmental growth occurs. Companies and organizations are made for people and by the people, and obviously their effectiveness depends on the behavior and performance of the people running these companies. Organisations success or failure depends upon the success or failure of the people within the organisation. Therefore any change taking place within the organisation directly affects its people, which in turn affect the running of the organisation. The management of change is now commonly viewed as a complex and difficult area worthy of special attention and study (Buchanan and Boddy, 1992). Hewlett Packard had a legacy of working with "HP Way". The traditional approach was almost like a religion for HP. This system had been working quite fine till couple of years back. But now in view of the less than encouraging figures for the company, fingers were being raised by analysts that there's need to go for a change in the strategy. Late 1990s have brought in two major strategic shifts, adaptive technology solutions were being demanded by the customers instead of off-the-shelf solutions and secondly internet has become a very crucial component of business. Analysts therefore called for adjustments in strategies with the modern times. McKinsey & Company, hired by HP for suggesting revitalization, in its report called for a spinning off of all activities not related to computers and printers. Accordingly HP tried to implement the suggestions, but somehow the desired results could not be achieved. HP, ranked no. 13 on the Fortune 500 list was suffering from a number of ailments. The organisation had become more of a bureaucratic organization There was lack of synergy between different units at HP Apparently the company was overstaffed or the business operations of the company had shrunk to an extent that there was not enough work for the staff. The marketing teams were lacking in proper coordination, which often resulted in more than one teams visiting the clients. This further resulted in creating a bad impression amongst the premium customers. Apparently different marketing teams were resorting to such tactics to complete their marketing targets, unconcerned of the image of the company. Most of the business operations were either aging or operating with slower growth rates. As the company was not able to upgrade the technology, it was still working on the older versions. These shortcomings required an immediate attention with a long term strategy for reversing the trend. To come out of this age old mould and adopt a more market friendly approach Fiorina tried to enforce the changes without apparently sparing a thought for the change agents, i.e. the human element. She ordered a spirited overhaul of HP immediately after joining the company. Some of the changes that Fiorina tried to bring about were; She prepared an ambitious plan for the next three years. HP was run like a holding company for 83 separate units, Fiorina sought to put an end to this practice by giving the company a single face. But in this effort she ended up consolidating majority of the powers in her hand, thus making the heads of different units almost redundant. Fiorina also tried to do away with the practice of her predecessors of promoting diversity at workplace. Change is always resisted, that's the human nature. And if change in enforced in such manner that an abrupt end is sought to an age old practice of diversity and harmony amongst the workforce, this is bound to have repercussions on their motivation levels. She prepared an agenda of dismissing the sales representative who could not meet the targets. It is worthwhile to mention that she never tried to encourage the sales team, which could have motivated them to do more. The financial benefits of the staff were curtailed. Such practices led to de-motivating the workforce, which in fact resulted in poor implementation of the strategic plans of the company. Fiorina ended up giving an impression that she is a 'woman in hurry'. On the one hand she sought to encourage the practice of speaking out amongst the workforce, but on the other hand, she kept consolidating all the powers in her hand. In order to implement the changes effective, she should have led from the front. But whenever some strategies failed in bringing in desired results, Fiorina was on the prowl for a scapegoat. This resulted in breeding a sense of fear and insecurity amongst the managers and other workforce. She appeared to have encouraged the practice of sycophancy around her, which did not allow others to enter the near circle, thus further creating divisions amongst the workforce. Fiorina's marketing skills had brought in the desired results in the form of an image makeover for the company, as she focused on brand HP instead of individual products. But once such an image is established it needs to be backed up with sustained inputs in the form of encouraging reports from the company, its workforce, the customers and other market communication agents. Fiorina'a HP failed to deliver on this count. Thus the branding efforts too were not very successful. On the contrary, 'brand Fiorina' appeared to become more powerful, as she had offers for a number of television shows, other interviews etc. Thus, instead of caring for the brand HP she started working for herself, forgetting the simple truth that she is here because of the organisation. Because of the manners in which she was bringing about the changes, she was at loggerheads with almost everybody in the company, including Walter Hewlett, the son of HP's founder and her staunch supporter turned bitter critic Richard Hackborn. It is therefore quite clear that Fiorina failed to implement the change in the company and instead ended up in its further decline. Answer-3: How I would approach the change at HP Hewlett Packard is in need of a change is more than apparent. But how should this change be brought about, so that it results in assisting the individuals instead of discouraging them. Individuals within an organisation go through a reaction process when they are personally confronted with major organizational changes (Jacobs, 1995; Kyle, 1993). This is true in case of HP as well. The workforce had started living in a bureaucratic style of functioning, with least amount of work for quite some time, which required an appropriate corrective course. Quoting Scott and Jaffe (1988), Bovey and Hede (2001) state that the process of change consists of four phases: initial denial, resistance, gradual exploration, and eventual commitment. A longitudinal study conducted by Waldersee and Griffiths (1997) of 500 large Australian organisations during 1993 and 1996 came out with the conclusion that employee resistance happened to be the most frequently cited implementation problem encountered by management whenever introducing change. Over half of the organisations surveyed experienced employee resistance. Taking a cue from these findings I'd go about implementing the changes in a gradual manner with participative style of functioning. i. To start with, instead of being smug with my abilities and the past, I'd have taken the board of directors and the team of mangers into confidence. Since I am a novice to the organization, therefore I'd have spent considerable time in studying and analyzing the company. by no means HP can be termed a small company, which we could have controlled in an overnight operation. ii. Taking the managers of different units into confidence would've helped in better implementation of strategies, because they are the one's who would help in convincing their own staff towards the change. This would have a two pronged effect. First, I as a CEO don't need to pass on routine orders for implementing certain policies and secondly the managers too would feel the importance being given to them. Just in case some decisive convincing or decisive order is to be passed, that will be done by me, which in turn would carry more weight. This would help in resolving ticklish issues. But if I get myself involved in the beginning itself, I loose the upper hand. iii. In order to better analyse the present situation and to arrive at suggestive solutions, I'd taken thorough feedback from the managers and other important persons in the hierarchy, as they are better experienced than me at HP and they know the latest about the company. This way I'd have increased my acceptability in the company and a good leader has to be an acceptable one. Once I get myself firmly acquainted with the company that I am in a position to carry out the task of implementation. In order to be a good leader one has to be; a. An Initiator: The leader must be able to take a lead in defining the work environment and team spirit. b. Model: The leader must himself be able to display his workmanship, so that he proves be a role model for other team members. Merely avoiding the workforce during luncheon meetings and passing the buck for all failures will not bring any brownie points for me. c. Negotiator: The negotiating skills are the one's which distinctly differentiate a team leader from other members. While stuck up in a tricky situation a team leader uses his skills to convince the concerned people, tries to extract reasonable benefits for his team mates and negotiates a better deal from suppliers while weighing the outcomes of different alternatives. d. Coach: A team leader has to be a good coach as well. He is supposed to impart the basic working principles amongst his team members. But he must not take this job so seriously that he starts interrupting the team members for each and every task. This results in undue interference in routine functioning of the team. This is exactly what happened in this case as Fiorina sought to downplay the importance of all others which led to her becoming unpopular. iv. It could be argued that HP's legacy might not be fully in tune with the times, but at times conventions, traditions and legacy prove to be an emotional attachment with the existing workforce. Therefore such issues need due diligence and utmost care, particularly when changes are to be implemented. The leader must be ready with arguments supporting such changes with realistic targets. Therefore I'd have set for HP realistic targets with individual units being assigned unit targets. In order to make the transition smooth, I'd preferred to encourage the workforce by announcing appropriate bonuses related to their achievement of targets. v. The image makeover exercise is indeed a prerequisite for a big company like HP. Therefore I'd have certainly taken up this task. But the marketing communication principles demand that such an exercise requires active support from all concerned. The brand will be better established if it is positively talked about by the employees, customers, media analysts, business community etc. Employees play a crucial role in all such efforts. Therefore, all efforts should have been made to take them along. vi. A decision like Merger and Acquisition, which has long term connotations should never be bulldozed the way Fiorina did while taking over Compaq. When most of the key players of the top management team were opposed to this deal, I'd given them a patient hearing and just in case their misgivings were based on certain misconceptions, I'd have tried to clear such misconceptions. Otherwise I'd have definitely listened to their reason or logic for such an opposition. On the one hand HP is laying off a big number of its employees, on the other hand, another 65000 people are let in on account of the Merger decision. That requires a rethink on the part of the strategists. vii. I'd have certainly avoided being a media figure at the cost of my company. I fail to understand the logic when I keep getting awards but my company keeps declining. viii. In order to foster discipline amongst the workforce, I'd have asked the marketing manager to assign responsibilities in such a manner that no customer in general and no premium customer in particular, like Ford, or Best Buy Co. are bothered by unnecessary visits from our marketing people. ix. I'd have certainly tried to remain near to the ground level worker. Gestures like being in their company at luncheon places, social gatherings etc. helps in instilling confidence amongst the workforce. References: 1. Good, Howard (2006). "Leader of the Pack". American School Board Journal, xx 2006. 2. Buchanan, D., Boddy, D. (1992), The Expertise of the Change Agent, Prentice Hall, Hemel Hempstead 3. Jacobs, J.A. (1995), "The winners know how to change - do you", Hospital Materiel Management Quarterly, Vol. 16 No.4. 4. Kyle, N (1993), "Staying with the flow of change", Journal for Quality and Participation, Vol. 16 No.4. 5. Bovey, Wayne H. and Hede, Andrew (2001). "Resistance to organisational change: The role of defence mechanisms". Journal of Managerial Psychology, Volume-16, issue 7/8. Bradford 6. Waldersee, R, Griffiths, A (1997), "The changing face of organisational change", CCC Paper No. 065, Centre for Corporate Change, Australian Graduate School of Management, TheUniversity of New South Wales, Sydney. Read More