The HP Way!

One of the turnaround stories I like is of HP. In last 5 years that company has transformed itself in to more profitable company and poised to hit big growth considering the recent acquisition in network and mobile computing space.

Net income during last five years has been up an average 18 percent per annum and raced ahead 25 percent in the first quarter of 2010.

All this is thanks to dramatic cost-cutting, the standardization of large-scale purchases like semiconductors and brutalizing culture of accountability for every penny in and out. This is the culture CEO Mark Hurd has bought in.

HP’s chief has also imposed a ruthless efficiency at the highest level. By packing board and top management with more business type executives than engineers and inventors. He has remade HP more in its own image of people who thrive on dissatisfaction and thirst for expansion. You see it reflected in Aug 2008 $13.9 billion acquisition of Electronic Data Systems and recent $2.7 billion grab of 3Com, the Chinese networking company.

Size matters in this business. With expansion of computer networks and data customers need a vendor that can manage many aspects of many businesses and help them to run efficient operations. Clients don’t want to deal with dozens of companies anymore. The new titans of the one-stop world include Oracle, which recently added to its database empire, Sun Microsystems maker of computer servers. IBM, the longtime consulting, software and mainframe power house; Cisco systems, now with servers built in to network and alliances with data storage giant EMC and virtualization software maker VMWare.

HP quickly saw the need to get in to services and the EDS deal boosted the much required image change and helped HP to offer software services along with servers. With recent purchase of 3Com, HP will be in to networking and handset business, thus providing complete range of services.

What really motivate me about this is the vision HP had towards making a success out and the way in which they went to implement it. It has been case study to many research papers.

Result of visionary leadership!!