The Business Blog at Intuitive.com

Dave Taylor has been involved with the Internet since 1980 and is widely recognized as an expert on both technical and business issues. He has been published over a thousand times, launched four Internet-related startup companies, has written twenty business and technical books and holds both an MBA and MS Ed. Dave maintains three weblogs, The Business Blog at Intuitive.com, focused on business and industry analysis, the eponymous Ask Dave Taylor devoted to tech and business Q&A and The Attachment Parenting Blog, discussing topics of interest to parents. Dave is an award-winning speaker, sought after conference and workshop participant and frequent guest on radio and podcast programs.

HP Board unimpressed with CEO Fiorina...

I can't say that I'm surprised. The Wall Street Journal today has a long piece about how the Board of Directors at Hewlett-Packard are considering an executive reorganization that would strip Chairman and CEO Carly Fiorina of some of her current responsibilities. Make no mistake, this isn't a bonus or promotion, but a demotion. Here's how WSJ phrases it:

"At its annual planning meeting between Jan. 12 and Jan. 15, HP's board discussed giving three senior executives more authority and autonomy over key operating units, according to people familiar with the matter. The board also has asked Thomas Perkins, a prominent venture capitalist and a former H-P director, to rejoin the board, these people said."

If you've been following my Weblog for a while, you'll know that I've written in the past about how Hewlett-Packard's merger of the printer division with the PC division (see HP stumbles) brands Fiorina as someone who just doesn't get it. We're in the 21st century and it's not about making stuff, it's about packing it together in a palatable form.

In other areas, HP gets it. When you send a printer back to the company for repair, it goes to a facility run and managed by United Parcel Service, not HP. In fact, no-one from HP ever sees the unit, and it's fixed faster and more accurately, at lower cost to the company. It's called outsourcing and it's what you get when you begin to thoughtfully and strategically componentized your business. Something that Ms. Fiorina apparently doesn't get, nor, frankly do her senior executives, who should be voicing their concerns and helping lead the company as a team of smart strategists.

Now she's getting a vote of no confidence from the Board (at least that's how I read it). The WSJ journal pegs one of the great problems with her leadership, first by noting "She is very hands on, and that slows things down" then that during her five years at Hewlett-Packard, she's "centralized power by winnowing business units... and consolidating executive authority through her office." Put those together and they spell micromanager and inability to think strategically because she's too busy being tactical. A bad combination.

How's she done in office? Well, in the last five years IBM's stock is down about 32%, and Dell is down about 9% but Hewlett-Packard is down a whopping 55%, which, as a shareholder, doesn't make me feel too happy either. And in terms of diversifying income with the new service strategy? HP still finds more than 75% of its profit from its printer division. This, of course, explains why spinning it off as a separate company would be a bad idea: where would HP's profit come from if they jettison their one profitable division?

Instead the strategy is to see if the stellar printer group can bolster the losing PC group. Bad move. It's no wonder the Board is concerned. If I were sitting on the Board of HP, I'd be darn concerned about Fiorina's judgment too. But then again, my shares never voted for her to assume the CEO position in the first place.

Before you leave a comment, a tip: If you're interested in blogging, you should sign up for my Blogsmart News so you can stay up to date on the latest insider tips and ideas for your Internet business and marketing efforts. Sign up right now and you'll get a free copy of my "Insider's Guide to Blogging" ebook too!