The HP bribery scandal represents a wholesale failure of HP managers to properly supervise the people who report to them. The fact that this happened is proof of their incompetence. As an HP shareholder with a vested interest in the companys success, I will assert that none of them deserve to work at HP any more. I also assert that the fact that this huge and completely rotten scheme could be invented, planned, staffed up, financed, put into practice and successfully hidden (for a while) represents to me a wholesale failure of HPs corporate vision. At its root is the well-known fact that if your products add essentially no value, youll have to adopt all the worst practices of your competition to survive in the marketplace. Bill and Dave understood this, and one of the points of the original HP Way was to actively engage in only those business segments where you could lead and succeed by building the best products. The margins in those businesses meant that it would not be necessary to keep two sets of books to make your numbers, and the quality of your offerings meant that you would not have to bribe your customers into buying them... Trying to own the market for mass-manufactured, low-end consumer goods plays to none of HPs strengths. Instead, it necessarily corrupts the culture. It also distracts you from other market segments in which you could lead instead of follow. It is vitally important to note here that the $108 million fine that HP had to pay to settle for these crimes could have been used productively- for example, to launch several new research projects in its corporate labs. As such, there is an opportunity cost associated with throwing money away like this that is much, much more significant than simply the value of one hundred and eight million one-dollar bills. (For that matter, that $108 million could have been used to hold a cap on the health insurance costs of HPs employees. Year after year, we were told that HP could simply not afford to contribute any more to these insurance premiums (let alone keeping our pay scales in line with the cost of living), but now we see that HP actually has enough cash on hand to unproductively flush $108 million of it straight down the toilet.) Those of you who are familiar with my own career arc at HP will know that I ran afoul of HP management enough times during my 28 years there that by the time I had outlived my usefulness I had also outlived my welcome, for which I paid the price. So be it. This however does not disqualify me from making the criticisms listed above because although I havent been an employee for almost seven years, I am still an HP shareholder, and when the brand is soiled as it has been this week, I pay a price and experience pain. As an investor, I expect better, and am entitled to say so. I also pay a different sort of price, and experience a different sort of pain, as an ex-HP employee who owes his engineering career to the institution that Bill Hewlett and Dave Packard had created. It breaks my heart to stand on the sidelines and watch this happen and know that HP can do better. This is a pain that I and the rest of you HP people who know what I am talking about here can do without. Thats Slim Volumes story for a very sad Friday morning, and hes sticking to it.
Posted on: Fri, 11 Apr 2014 18:05:37 +0000
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