Monday, June 04, 2007

HP's Resurgence: The Details

Today's Wall Street Journal features an article purporting to describe, in detail, the reasons for H-P's resurgence under Mark Hurd. According to the piece, it all comes down to Hurd's first new hire, Todd Bradley, late of Palm.

What Mr. Bradley did, upon arriving at H-P, was essentially three basic things:

-reviewed consumer purchase behavior research

-concommitantly focused H-P's PC marketing on retailers

-identified, tackled and solved various operational issues involving distribution to said retailers>

What ought to concern any reader, and does me, is that none of what Mr. Bradley did was all that unusual. As I wrote about Burberry's recent CEO change here, so often, the solutions are not all that novel.

Why is it so hard to find people who can do the mundane and obvious? Where was H-P's board all the while when Carly Fiorina bumbled this one, via her 'management team,' such as it was? Why wasn't that board grilling Carly & Co. as to the reasons for whatever PC strategy they had, and why it wasn't working?

As I look at Mr. Bradley's actions, they are classically excellent. Clearly, this guy is worth whatever they pay him, as is Hurd, for finding him. But why did it take just Bradley? Why wasn't there some underling in the marketing or product management ranks at H-P who has or had sufficient talent to do this?

Let's review Mr. Bradley's program for rescuing the PC business.

First, he went to the data. He learned that Dell was weak in retail.... duh! That most consumers were now moving to buy laptops and notebooks and, consequently, wanted to see, touch and feel them, then walk out of the store with them. As I wrote here last fall, one benefit of selling notebook computers is that there isn't a whole lot to customize, so a vendor can realistically cover several price points at retail, without the time and expense of custom building the products for each order.

Next, Mr. Bradley focused on channel management issues. He improved communications and service to his downstream partners, listened to their problems and ideas, forged stronger relationships with them. Now he was in a leadership position in the channel of choice for notebooks and laptops.

Finally, he went about hunting down and fixing the various logistical stumbling blocks inside H-P that threatened the successful execution of the retail strategy. Through painstaking homework to identify bottlenecks, hold frequent meetings and establish performance metrics, he brought the logistical performance up to grade, and completed the overhaul of the unit's product and marketing strategy.

What about any of this was magic? Bradley did not apparently bring a team with him, or, if he did, the article omitted this. He simply used basic, traditional marketing strategy and tactics, common sense, and good management skills.

Are these so lacking in most American businesses, and H-P, as to require an infusion of this type of skill from another company?

Honestly, I think this speaks very poorly for the continuing state of American management education, the MBA as a useful degree, and middle-to-upper management in the average large US corporation.

H-P prior to Hurd seems to have simply been allowed to become mediocre. Even the board seemed to take a long time to show Fiorina the door and usher in a more competent CEO, Mark Hurd.

How many more US corporations underperform, consistently underperform the S&P500 total return, due simply to inept management of decent products in attractive markets?


Citizen Carrie said...

"What ought to concern any reader, and does me, is that none of what Mr. Bradley did was all that unusual. As I wrote about Burberry's recent CEO change here, so often, the solutions are not all that novel............. Why is it so hard to find people who can do the mundane and obvious?"

I have been spending a long time thinking these very same things - and never mind any comments on not having a life! :-)

It's hard to verbalize this without falling into the "Everyone's an idiot except me" trap. But there just seems to be something horribly amiss when a lot of people just cannot figure out the obvious. Is it because the fundamentals are boring and we're all trying to prove how flashy and sophisticated we are?

I don't think we're purposefully trying to reward mediocrity. I think that in trying to find new ways to dazzle the public and the competitors, the fundamentals become buried and forgotten about.

Citizen Carrie said...

And speaking of mediocrity, why does Blogger insist on typing my nom de plue as "citizen carrie" when I am fully aware of the conventions of capitalization and know it should be published as "Citizen Carrie"?

C Neul said...

Hi Carrie-

Looks like the caps are coming through now.

Thanks for your comments.

I'll stand by my original thesis. The quality of students, their preparation for grad school, and their grad school educations are all slipping. The basics suffer, perhaps for more focus on the sizzle of modern technology.

But at root, I think it's a simple ignorance, by teachers and students alike, on business fundamentals.


Citizen Carrie said...

You were a gentleman for not pointing out how I misspelled "plum" in "nom de plum".
And when I reach the comment section through your home page rather than the dedicated archived page, I still see the small caps, which is a Blogger problem.

I totally agree with your comments. I wonder why the fundamentals are not being taught? Have we skipped a generation of instructors who are even versed in the fundamentals? Are the fundamentals just too boring and students wouldn't sign up for the classes? Do students not have the attention span anymore to sit through subject matter that doesn't lend itself to a lot of PowerPoint presentations? Is there just so much new subject matter that needs to be presented that the fundamentals are ignored? Are the fundamentals considered to be so obvious by some that they think they don't even need to be taught anymore?

Just thinking aloud.