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Low expectations forecast for HP's board

Many aspects of HP have become history, says a former HP engineer and current HP 3000 systems manager. It's true whether you're a migrating customer with a long HP history, like Boeing, or a homesteading company who's disappointed with the apparent changes at the very top of this storied system vendor.

John Wolff is in the latter category. His company LAACO Ltd. is a Los Angeles firm that manages fitness clubs as well as storage facilities and it's used HP 3000 as mission-critical servers since the 1980s. Wolff retired from the OpenMPE board this year, and while he was checking in on OpenMPE business mentioned how the HP board is driving business strategy wildly deviant from the HP Wolff served.

HP's new CEO Leo Apotheker will spend his first week testifying in court -- another first for the company -- as Oracle pursues damages for misappropriated intellectual property: engineering taken by SAP while Apotheker was CEO there. A check by the board on such background is another example of a major vendor falling short of its legacy.

"If Bill and Dave failed at anything, it was at installing the culture in board members that could be passed onward," Wolff said. "When I joined the company [in the '60s] there was an orientation process introducing new employees to the HP Way. "They should have a program like that for members of the board as well." Wolff submitted a letter to the Wall Street Journal, a customer's complaint about the mess at HP's top which has gone unpublished.

The disconnect isn't limited to business press profiles of HP. Not even a company using the 3000 and enjoying a dedicated HP rep enjoys a clear understanding of how HP's 2011 CPU support will play out. "It's not easy to find these things out," said Boeing's 3000 systems manager Ray Legault, while he researched CPU ID reset services.

Customers who are migrating to other HP platforms must endure this company's board decisions. A recent article asserts that Mark Hurd was ousted not for his sketchy relationship with a former actress, but because Hurd had cut out so much headcount and research that he was universally reviled -- by much of the company, except any who held shares and enjoyed continuing profits and stock recovery. Not all of HP operates at this caliber, but when boardroom visions have to pushed back by the rank and file, results can be uneven for the customer.

We've been in contact with the rank and file at HP through the tenure of this HP board which started with its first outside CEO, Carly Fiorina. Slashing R&D and considering shareholders first would never sit well with the 3000-savvy engineers and Business Response Specialists at HP Support. They can do little to impact such strategy, though.

Wolff puts the blame on the board. "The board's really been a failure. It's been a bad board for 10 years or more, and that's been the source of the downfall in my opinion." The purchase of EDS services business has made shareholders happy, but one high ranking consultant in what used to be EDS says that rather than learn from EDS, HP was on a mission to reeducate the new employees in the ways that made HP Professional Services less successful than EDS.

This is strategic behavior that's not going to sustain HP's Services in the long term, and so the company's financial health will impact product line R&D commitments. A customer can't do anything about a vendor's board when the vendor is a Fortune 50 firm. But the concept that the street-level ownership experience is unaffected by bad boards -- that's an outdated ideal. HP marches more in corporate lockstep than ever by now.

There's an outlook on the upswing that peers beyond the size of HP and its stock performance, now that the firm has its third straight outside CEO. Customer satisfaction and the employee loyalty -- two central tenets of the HP Way -- seem to be history in the eyes of IT managers who know HP's legacy. but some legacy systems deserve to be preserved. Perhaps, built on the ideals of those HP front-line employess (some of whom still serve 3000 owners), HP might find its way back to innovation, Customer First, and trusting its own managerial talent.

Hurd was quoted in the business press this week that the measure of his legacy would be who replaced him when he left. If an HP executive, then Hurd's work looked to be seeped into the firm's DNA. The latest outsider, Apotheker, will follow a board he doesn't know, one whose new non-executive chair Ray Lane used to run Oracle. That means a raft of top HP managers will now be courted by headhunters after being passed over, so company innovation will be tough for Apotheker to promote.

Lowered standards seem to be the best forecast for a company scuffling to find customer-driven leadership. Even by those who continue to use HP for systems and services, like Wolff's firm. "It's an ordinary company," he said, "and I've learned to lower my expectations."