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March 21, 2014

Shadows of IT Leaders, at HP and Apple

JacksonEarlier this week, the Reverend Jesse Jackson made an appearance at Hewlett-Packard's annual shareholder meeting. He used the occasion of a $128 billion company's face-up to stockholders to complain about racial bias. In specific, Jackson complained that the HP board, by now, should have at least one African American serving on it.

HP's CEO Meg Whitman took respectful note of Jackson's observation, which is true. After 75 years of corporate history that have seen the US eliminate Jim Crow, and the world shun apartheid, HP's board is still a collection of white faces (10 of 12). Hewlett-Packard always had a board of directors, but it didn't become a company with a board in public until it first offered shares in 1958. We might give the company a pass on its first 20 years, striving to become stable and powerful. But from the '60s onward, the chances and good people might have been out there. Just not on HP's board, as Jackson pointed out.

But that story about the vendor who created your HP 3000s, MPE, IMAGE and then the systems to replace all, is incomplete. It's just one view of what Hewlett-Packard has become. In spite of Jackson's accurate census, it overlooks another reality about the company's leadership. HP has become woman-led, in some of its most powerful positions. Whitman had the restraint to not to point to that. But she's the second woman over those 75 years to be HP CEO.

Companies with potent histories like HP will always be in the line of fire of misunderstanding. The same sort of thing happed to Apple this week. This rival to HP's laptop and desktop and mobile space was inked over as a company still run by the ghost of its founder Steve Jobs. Like the Jackson measurement of HP's racial diversity at the top, the Ghostly Jobs Apple story needs some revisions. HP's got diversity through all of its ranks right up until you get to the director level. Given what a miserable job the board's done during the last 10 years, it might be a good resume item to say "Not a Member of Hewlett-Packard's Board."

HauntedempireipadRegarding Apple, the misunderstanding is being promoted in the book Haunted Empire. The book that's been roundly panned in reviews might sell as well as the Steve Jobs biography by Walter Issacson, but for the opposite reasons. Jobs' biography was considered a hagiography by anybody who disliked the ideal of Apple and "Computing for the Rest of Us." He indeed acted like a saint in the eyes of many of his customers, and now that very sainthood is being devolved into a boat anchor by the writer of  Haunted Empire. It doesn't turn out to be true, if you measure anything except whether there's been a game-changer like a tablet in the past four years.

BillanddavecoverSimilar things happened to Bill Hewlett and Dave Packard after Hewlett died in 2001, leaving HP with just the "HP Way" and no living founders. Whatever didn't happen, or did, was something the founders would've fought for, or wouldn't have tolerated. The Way was so ingrained into the timber of HP that the CEO who preceded Whitman, Leo Apotheker, imagined there might be a Way 2.0. Tying today to yesterday can be a complicated story. There was an HP Way 0.5, according to Michael Malone's history of HP, Bill and Dave.

And the term "Bill and Dave" is invoked to this day by people as disappointed in 2014's Hewlett-Packard as Jackson is impatient with its diversity. Like the Ghostly Apple story, WWBDD -- What Would Bill and Dave Do -- can be told with missing information. Accepting such missing data is a good way to show you know the genuine HP Way. Or if you care, the correct state of the Apple Empire.

Since my reader will care far more about WWBDD, let's just move to Malone's book, well-reviewed and available for the cost of shipping alone. Under the section An Army of Owners, he outlines the discounted HP employee stock ownership, one product of the Way.

One of the least-noticed aspects of Hewlett's and Packard's managerial genius was their ability to hide shrewd business strategy inside of benevolent employee programs, and enlightened employee benefits within smart business programs -- often at the same time.

Having so much company stock in the hands of HP employees ultimately meant that Bill and Dave could resist any pressure from Wall Street to substitute short-term gains for long-term success.

Malone goes on to note that employee stock purchasing gave Bill and Dave a great engine to make cash, as well as keep lots of stock out of the hands of institutional investors. That HP Way 0.5 came out of the period when Hewlett and Packard established their business ideals -- then crafted the story about it in a way that was true, but missing some of its most potent context.

When HP employees' stock descended into the nether regions of popularity -- share price plummeting into the $20s and qualification for the program becoming tougher -- Mr. Market of Wall Street started to take over. The board let the vendor chase big markets like PCs, as well as cut down small product lines to make way for a new way of doing business at HP. Bigger was sure to be better, even if it sparked lawsuits and besmirched the HP patina built over all those decades.

But at the same time, the company was getting on the right track with diversity. One of the last general managers the 3000 group had was Harry Sterling. He came out as a gay man before he left his job, and diversity for gender preferences was written into HP's codes.

The New York Times story about Jackson's visit to the meeting emphasized that representation of gender was not Jackson's chosen subject.

HP has a female chief executive, a female head of human resources, and a female chief financial officer, perhaps the largest representation of women in power of any major Silicon Valley company.

Meg Whitman, HP’s chief executive, cited what she said was a long record of civil rights activism on HP’s part. Mr. Jackson noted that HP did not currently have a single African-American on its board. “This board, respectfully, does not look like America.”

Ms. Whitman later said she would meet with Mr. Jackson on the subject.

HP's diversity, or the success of the post-Jobs Apple, are subjects to be misunderstood. Past injuries -- from dropped products, or envy of a supplier that made its fortune on mobile while others did not -- tend to shape beliefs about all that follows. Some 3000 owners will never forgive this vendor for losing its belief in unique platform environments, starting with MPE. Other pragmatists still have an all-HP shop, including decade-old 3000 iron. Leadership changes, sometimes more swiftly than products are eliminated. If Whitman and her board figure that naming an African-American is part of a new HP Way, they're likely to do so. Directors Shumeet Banerji and Rajiv Gupta would remind Jackson HP's board already has some diversity. HP isn't supposed to look like America, but present a world view.

07:43 PM in History, News Outta HP | Permalink

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Comments

Comments

I wish he had said something about how stupid the boards have been to take perfectly good products and throw them away, e.g. MPE. And if they were that stupid, can we really expect them to have equitable representation on the boards?

Posted by: Tim | Mar 24, 2014 11:25:37 AM

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