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November 09, 2010

Hurd's aftershocks emerge in two reports

HP CEO behavior looks overdue for a clean-up, but it's not certain that new company leader Leo Apotheker can scrub up the image anytime soon. Former CEO Mark Hurd's flings keep tarnishing the office, based on a pair of reports released last week.

Hurd-Ellison In stories published by Fortune and The Wall Street Journal, reporters are pulling back the rug tossed over Hurd's behavior with sexpot actress Jodie Fisher. HP's rival Oracle made a stink about Hurd's firing; Oracle CEO Larry Ellison hired Hurd as soon as the ex-CEO's HP parachute opened up. Ellison, who's gotten to be 66 somehow, doesn't turn a saintly profile when it comes to female relations himself. (We don't know who this woman is who sits between Hurd, at left, and Ellison during an Oracle event -- but the most hopeful story might be that she's Ellison's granddaughter.)

This story runs far afield of the technology reports that occupy everyday IT managers at HP 3000 shops. But those who are migrating might care a little about the company's leadership choices, as they impact decisions about product and technology futures.

HP 3000 owners, and the vendor's partners, may have shrugged or scratched their heads over Hurd's booth-babe hijinks. If your IT strategy is based on bottom lines and sharp pencils, or the data sheets that glow brighter than legacy highlights, then Hurd's ouster doesn't matter much. If integrity and honesty -- elements that are rarer than ever at Fortune 50 suppliers like HP -- figure into your partner formula, then maybe these Fortune and WSJ stories make you feel a little safer about HP.

People want to know why there's probably no more than 10,000 HP 3000s running today. At its most strategic level, the vendor has been angling for sweetheart deals with pinups like Fisher, while its smaller customers-next-door were faithful to a fault.

When you read these stories, dotted with off-the-record comments from inside HP, you might see the board of directors had little choice but to fire Hurd in what seemed like an overnight act. But nights were at the heart of Hurd's ejection. Specifically, the nights he met with Fisher for personal, private dinners expensed to HP. Or more seriously for a married fellow of 20 years, the two times he met with Fisher in her hotel room, just the two of them. HP's executive integrity was ushered outside the room during those evenings.

Seriously, should a man earning more than $20 million a year need a Jodie Fisher to talk to the right customers at what HP called CIO Executive Summits? Hurd's right-hand assistant Caprice Fimbres, program manager in the office of the CEO and a fan of reality TV, thought so. According to Fortune's report, when Fimbres saw the little customers tying up Hurd's time during these meetings, an attractive blocker was needed. "The Age of Love" looked like a good place to recruit for this talent, as such people called in the film business. Fisher was hired to reduce the time smaller sites could win with HP's top executive at summits. That might sound familiar to the typically-small HP 3000 shop -- customers on the fringes of the massive corporation's attention for two decades by now.

Fortune found some fault with the logic of pairing up HP's CEO with an actress who was then-retired to managing an apartment complex in exchange for free rent. The magazine interviewed Nadine Johnson, a publicist for some of the other cougars on "The Age of Love."

At least two other contestants from the "Age of Love" discussed an HP role with Jolson. But the tech giant ultimately hired a 47-year-old divorced single mom from Los Angeles named Jodie Fisher to act as a greeter at events where Hurd met top customers. Her job was to gracefully steer clients, ensuring that Hurd spent the right amount of time with the right people.

By this time, Hurd was so frustrated at meeting HP's biggest pinups that he started tracking his time on a spreadsheet. He was hired by HP's board for such focus on details. These Executive Summits weren't well known around HP. The privacy was the largest fault in Hurd's ethics. A CEO might feel like he's entitled to work out of bounds at some companies; Oracle comes to mind. But this was not the first time Hurd got caught evading the rigors of public disclosure.

Remember the HP Pretexting scandal? Serious enough to earn Hurd some face-time testifying in front of a Congressional committee, that affair revealed that Hurd had approved some level of spying on board members and the media. Hurd made contrite explanations, and $14.5 million of HP fines tamped out the fire.

Just like Apotheker, Hurd had little reputation in the CEO recruiting world. One question never would have been imagined on the checklist when they picked a replacement for Carly Fiorina. As Fortune put it at its worst, "Why would the CEO of the world's largest technology company hire a failed B-list actress to greet the company's most important customers?"

There are seven members of 10 on the HP board who were hired by Hurd. After a steamy letter about the CEO's relationship with Fisher, the board couldn't take a chance on customers linking Hurd's pretexting ethics with even more private behavior, all unbecoming of Hewlett-Packard. The ouster happened so fast that a replacement took more than six weeks to name and nearly two months to start working. Once again, it was an executive not on anybody's short list.

HP was insistent that Hurd's misbehavior didn't include violations of HP's sexual harrassment policy. It didn't interview anyone but Hurd, his bodyguard and Caprice Fimbres to make that conclusion. Oracle has been fingered by some in Silicon Valley as having done just as little due diligence in hiring Hurd. The new HP non-executive board director Ray Lane has accused Hurd of lying to the board. Lane's got Oracle in his pedigree, but now he's running the HP board.

If there's any silver lining in the current array of HP players, it might be the battle between Oracle and Apotheker. If HP is lucky, Apothker could be the anti-Oracle element. This week Ellison testified in a suit that accuses HP's new CEO of being a party to the theft of Oracle secrets while working at SAP. HP helped Apotheker avoid a subpoena to testify in that suit as one of his first acts as CEO. HP wanted him to stay on the job -- in Europe, where HP "refused to accept service" of the call to testify. Harrassment is what HP claims is behind the summons. An interesting claim, considering that Apotheker got his job when harrassment created an opening at the top of HP's empire.

 

04:18 PM in News Outta HP, Newsmakers | Permalink

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