HP’s CEO Mark Hurd Resigns

HP’s CEO Mark Hurd has resigned his position, with CFO Cathie Lesjak stepping in as interim CEO. The HP board will be searching for a replacement.

A great deal has already been written about this, and I just wanted to say: don’t jump to conclusions, folks. HP isn’t Apple—they’re not driven by a charismatic, dominant CEO like Steve Jobs (not that this is inherently a bad thing). While the organization will certainly be affected, nobody should assume that any major changes will take place. After all, Hurd did a great job of building HP into the company it is today by following a certain strategy. There’s no reason to assume an incoming CEO will be so quick to change it.

For the record, I nominate HP’s Todd Bradley to replace Hurd as CEO. Bradley was once Palm’s CEO, and has done a great job of leading HP’s Personal Systems group to tremendous growth and a #1 spot in many markets. Here’s his bio:

Under Bradley’s leadership, the Personal Systems Group has accelerated profitable growth, firmly establishing HP as the No. 1 PC vendor in the world. During his three-year tenure, the business has added more than $15 billion in revenues and increased profitability threefold.

His organization reset the global PC industry with its “The Computer Is Personal Again” campaign, setting a new standard for design, user interface and the overall customer experience. At the helm of the largest global supply chain in the IT industry, Bradley has promoted environmental and social responsibility across thousands of suppliers and channel partners and millions of customers whose lives and businesses HP touches.

During his 28-year management career, Bradley has held senior roles at GE Capital, Dun & Bradstreet and FedEx. Prior to joining HP, Bradley was chief executive officer of Palm. Before that, Bradley was executive vice president of global operations for Gateway.

Update: I immediately thought of Bradley as a good choice to succeed Hurd as HP’s CEO. Of course, this would be outstanding for Palm and webOS: Bradley spearheaded the acquisition and is an obvious fan. I’m not sure if HP could be any more serious about the platform, but if it’s at all possible, Bradley’d be the one most likely to make it happen.

One concern that some others have raised is that a CEO could come in who doesn’t share the enthusiasm over webOS at the heart of HP’s long-term mobile strategy. One possibility is that someone with strong ties to Microsoft or who sees better value in maintaining that relationship could come in and push HP in the direction of Windows Phone 7. Or, someone could look at the market’s reaction to Android and direct HP to join in the fray of producing Android devices.

While both are possible, I suppose, I find them extremely unlikely. In both cases, HP would be competing in a crowded market with no clear advantage. With Palm and webOS, HP owns the hardware, software, and services infrastructure to enable them to control the entire user experience. And, the question is, how many smartphones would HP be able to sell against the likes of HTC, Motorola, LG, Acer, Lenovo, and Samsung, and how would they differentiate themselves well enough to become a dominant player? HP could likely compete on price and margins as they do in PCs, but would that make for a strong long-term strategy?

Already, HP faces significant pressure from Asian manufacturers in its PC business, with companies like Acer threatening to steal market share. HP has a strong supply chain, but they’re likely unable to beat the margins enjoyed by companies from the Far East. So, why would they deliberately toss aside their $1.2 billion investment in Palm and ignore the opportunity they have to build a unique, powerful, and future-proofed platform with webOS? That doesn’t make a great deal of sense to me.

We need to remember that Hurd wasn’t forced to resign because he’d done a bad job at HP–quite the contrary. He is widely acknowledged to have done an outstanding job as CEO, but he recently made some very bad personal decisions. So, I’m sure that the Board will do everything they can to choose someone likely to essentially continue executing the strategies that Hurd helped to define. And, of course, HP already has a number of strong leaders that could exert their own pressures to ensure that the company remains headed in the right direction.

So in the final analysis, I’m pretty certain that whomever HP chooses to appoint as the new CEO, that person will choose to continue pursuing mobile using a strategy with Palm and webOS at its center. It remains to be seen whether this will slow down the progress in getting the next webOS device(s) out the door.

HP’s earning statement on August 19th is looking like it’ll be particularly interesting.

Comments

  1. HP is much more than just a hardware and software company. Mark Hurd understood this since he came from NCR. Even though HP will recover, losing him is a big blow to the company.

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