Rodent Regatta

Anticipating some word this afternoon from Hewlett-Packard’s telephone conference among board members, I went to the Wall Street Journal’s web site and read this article [subscription may be required]. The title is Divided H-P Board To Discuss
Leak Scandal, Dunn’s Future and it was written by Joann S. Lublin and Peter Waldman. Here’s a paragraph that caught my eye:

In an interview with The Wall Street Journal on Friday, Ms. Dunn said she knew little about the tactics used by outside firms hired by H-P, and said she was “appalled” to learn in the past two months that investigators disguised their identities to obtain private telephone records of reporters and H-P directors. She said she had previously thought the directors’ phone records were obtained properly.

What does it mean to “obtain the directors’ phone records properly?” It seems to me that anyone—short of the FBI—who calls my phone company and identifies themselves as me has instantly committed fraud. If a private investigator has been asked to get my phone records, they are faced with asking me for them, asking me for (written) permission to gather them or they must commit a crime to get them. What am I missing here?

Why isn’t’ something called pretexting also called identity theft and a crime? Can a chairman of a company the size of Hewlett-Packard be so naive as to cover her own mistake with something so silly as, “she thought the records were obtained properly?” Apparently so.

My admiration of and disappointment with Hewlett-Packard has been no secret here. While in engineering school, I calibrated HP oscilloscopes. My first scientific calculator was an HP, and I later taught the RPN notation that made HP’s calculators unique. One of the first HP-150 touchscreen PC’s was shipped to a company I co-owned during the 1980’s. I loved HP products.

The story of HP’s founding, the garage and a long list of amazing products stands as one of the great business stories of all time.

Now HP seems to make headlines for its stories of corporate intrigue. From high profile ousters to boardroom spying, the company is improving operationally under an outstanding leader. Yet, the board seems to thrive on taking its own debates public.

There was a time when the worst thing that could be said about HP was, “oh, that’s just a bunch of engineers over there who don’t know anything about marketing.” Great products and amazing innovations have given way to all the trappings of the rat race. Why can’t sensational engineering be the goal? Why must politics undermine each and every professional effort in the world today?

What should HP do now? Each of the following:

1. Talk to the 151,000 employees. Talk to the ones who were fired. These people have answers for the Board, for the new CEO and for their co-workers.
2. Over-engineer everything as in the past. It wasn’t so bad when HP was known as just a bunch of engineers who didn’t know how to market anything!
3. Analyze specific statistics for the last thirty days of calls to any foreign call center. Examine carefully each customer’s experience. How many buttons did they have to push? How long did they wait to talk to someone? How many times and how long were they put on hold? How many times did they have to have something repeated?
4. Strengthen your joint design/development work with Apple. Determine why Palm languishes and your calculators and handheld devices are no longer the pride of the company. Resume work on handhelds independent of industry standards. Make HP the standard.
5. Become a resource for desktop Linux. Talk to Novell. Talk to Apple. Decide how HP can get out of me-too products in the PC industry.
6. Assess the impact of the Agilent spin-off before doing anything. Agilent was the largest IPO in Silicon Valley’s history when it went public in 1999. The technologies in that company put HP on the map.
7. Manage with facts. Don’t assume your focus should be on Dell.
8. Drop any product which isn’t #1 or #2 in its field and simplify each product line. More than good-better-best confuses customers.

Carly Fiorina has resigned from HP. Some reports say she stepped down, while others indicate she might have been helped down from her perch high atop HP.

This follows a feud with heirs of HP’s founders, a lackluster acquisition of Compaq, countless service problems and Carol Loomis’s masterpiece in Fortune. Now a dispute with the Board apparently leads to this. We can only hope this marks the point at which the company begins revising The HP Way.

UPDATE: HP closed up $1.39 at $21.53. Dell closed down $0.03 at $40.99. IBM closed down $1.43 at $92.70. The companies’ P/E ratios using the last twelve months of earnings and their annual sales are:

• HP – 18.72; $79.90B
• Dell – 33.88; $47.26B
• IBM – 18.72; $96.50B

HP and IBM pay dividends. Dell does not. We’ll see how things look over the next five or ten years.

I came within a heartbeat of buying a new calculator today. My better judgment sent me to the computer for a quick search. After reading reviews here, here and here, I’m glad I waited. It seems HP has lost their touch with calculators. What an incredibly unfortunate decline of a product that engineers everywhere cherished.

For those needing scientific and statistical processing in a handheld, here’s a future product that holds promise. Better yet, if someone can figure out how to make HP calculators with a comparable quality to the HP 35, 45, 25c and 41CV, people are still willing to pay the $395 for a product with the outstanding quality, manuals, accessories and packaging that made HP calculators cult items.