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August 11, 2010

Old HP hand voices new hope on Hurd firing

HouseMug Chuck House served HP for 29 years in top technical management, a period that included the birth of the HP 3000 as one of the company's best business solutions. This week the retired exec has been sharing his happiness for his old company since it jettisoned Mark Hurd. In 2009 House wrote his book The HP Phenomemon, and at his blog of the same name in an entry titled "Holy mackeral" he blasted the CEO best known for cutting HP down in size.

This guy was a thug, nicknamed Mark Turd by ex-HPites who worked directly for him -- stories that have circulated in the Valley for three years. He raped HP employees (figuratively, without violating the sexual conduct code at HP) by eliminating the 65-year concept of profit sharing, preferring to move to obscene bonuses for himself and his five top minions -- a mere $113 million payout for them in a year he chopped everyone else's pay by 5 percent plus profit-sharing. These were raises for some of the five people by as much as 400 percent -- a tidy uptick.

House was responsible for Software Engineering at HP during the era when the 3000's operating system was taking shape as a stable and productive resource. He's old-school Hewlett-Packard in the best sense, thinking independently back then and staying true to the company's roots. In his blog bio (and well as his book) the notes with pride that he "also holds HP's only Medal of Defiance, awarded by David Packard for 'extraordinary contempt and defiance beyond the normal call of engineering duty.' "

On a Bay Area TV broadcast about the firing, House said he "couldn't contain my glee on the 11pm news -- best news for HP in a very long time!"

House has been no fan of Hurd's management mantra, cost-cutting above all, ever since it became plain that acquisitions would rob the company of its R&D resources. In a blog entry titled Whither HP Now? House explains why he believes HP has made a habit of under-investing in creating technology.

HP, after spending 9 percent of revenues for 60 years, almost like clockwork, cut that to 6 cut under [CEO] Lew Platt's regime, and from the midpoint of Carly's time until now, it has been reduced by a cool 0.5 percent per year, until now it is only 3 percent of revenues -- one-half of IBM's investments in its future. To cut R&D by two-thirds, to rework HP Labs to the point of only pursuing work that the divisions will market or that universities will support (huh, say that again?), is to sell out the future. Period.

One might confidently predict that the constant wellspring of "renewal" -- so long the hallmark of HP -- is running dry. The acquisitions had better work.

House thinks the future at HP looks a lot brighter now that Hurd's movie-star-struck outlook is part of the company's past. "He managed by fear, managed by ruthless, authorocratic style," he told KGO-TV in San Francisco. "It was take no prisoners. Cost cutting was his entire gig. I think that we are so lucky to have this happen at this time, because it gives us a chance to restore the morale in the company."

Aside from the $28 million it will cost HP to jettison Hurd, the damage to the company from five years of sweatshop policies could be a serious loss of top talent. While some industry watchers speculate that any upturn of the economy will trigger a serious exodus from Hurd's HP, House simply referenced real data -- a classic HP survey of its employee satisfaction. The numbers look grim and unprecedented, House said in his blog.

The Voice of the Workplace, HP's 35-year historic "measure" of employee feelings (done every five years) showed in April an astonishing finding -- more than two-thirds of HP's employees would quit tomorrow if they had an equivalent job offer. Not a raise, not a promotion, simply an alternative.

That number never used to be in double digits. Other companies in the Valley have reported an amazing rate of HP resumes being submitted; one large company saying, "we didn't know they had that many people working there."

There's more at the House blog entry, including an assertion that Hurd falsified multiple expense reports of $1,000-$20,000 each, and that HP paid him almost $80,000 in "tax true-ups" as compensation during 2008. That was a year with $243,000 of Hurd expenses he filed for "personal meals" paid for by HP.

It's those R&D cuts that stand to impact the HP 3000 customer the most, at least any who are making a migration to other HP technology that requires in-house innovation. HP-UX and virtualization some to mind immediately, along with anything else touted as better tech not purchased from a company that HP has acquired.

01:30 PM in News Outta HP, Newsmakers | Permalink

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