Performance

Whether or not you’re an Apple user/consumer/fan, you have to admire what Steve Jobs has accomplished as CEO of Apple, Inc. No MBA, no tenure as CEO of a large company someone else built to prepare him. He started Apple in a garage and built a large company, then returned when it was struggling and led it into prominence as the most valuable company in the world. Who else can make that claim? The company that he built and his vision as to what we want, crave, and will buy has changed whole market segments, and will for years to come. Yes, he made mistakes, but they were far overshadowed by the huge successes. The team Steve built continues on the right path; Apple’s stock price keeps climbing while others fall.

There are lessons we can all learn from the way Steve ran Apple. Lessons applicable to any size business and life in general. We can also hope that other CEOs take note of ‘how Steve did it.’

Unfortunately for the economy, customers, and employees, most CEOs and politicians are nowhere as talented and capable. And who stands out today as the poster child for inept CEOs? The CEO of another super-large tech company who shot himself in the foot, damaged the company in many, many ways, caused unrest and confusion among the customer base, killed off a promising product line, then said they really weren’t killing it (just intentionally wounding it and placing it on life support)… and the list continues. Who else but Leo Apotheker, the HP CEO! To recant the company’s history and all recent mistakes in detail would be redundant – you’ve read it elsewhere. Think of all the employees about to lose their jobs because of his ineptness. Think of all the shareholders who thought they were making a good, safe investment, only to see their investment and dreams turn into a pile of ****. Let the lawsuits begin! Several other tech CEOs have been under fire lately for their lack of performance and vision. (Are they all competing for “Who Wants to be a Bozo?”) The others don’t look so incompetent – the HP CEO has focused most attention on himself! My complaint isn’t so much with the bad CEO (I’m sure he is trying the best he can) as with the Board of Directors who hired him and continue to support him. Their guidance and decisions are the problem. I’m not familiar with the HP Board – don’t even know who’s on it – but they have failed us all.

A statement from HP said they were trying to determine the best future course for WebOS to maximize value for their shareholders, something they obviously didn’t give enough thought to before opening mouth and inserting feet. They spent $1.2 billion to purchase Palm, then spent additional millions to further develop the software and hardware, provide training and incentives to WebOS developers, produce TouchPad tablets they sold at a loss, manufacture phones that will likely sit in warehouses (and later sell at a loss), advertise, and do the thousands of big and little tasks necessary to introduce a new product line and bring it to market. What’s that total…$3 billion? More? Just to be thrown away because this CEO doesn’t like and understand this segment of the business? How many million devices would HP need to receive licensing fees from to just recoup their investment? Sell WebOS outright? WebOS was worth much more before HP decided to kill it. HP could have packaged WebOS in a more favorable light, instead of as a liability to dispose of. The key to any sale now is the value of all the patents Palm owns. HP won’t be needing those patents, since they’ve made it clear their only interest for the future is selling software and services to businesses.

After purchasing Palm, HP said they planned to put WebOS on printers, computers, most everything. That made a lot of sense. Own a WebOS phone or tablet; you’d likely want the ability to use some of the same apps on your home PC. If you had a PC that also had the ability to run WebOS, you’d probably try it out, download and use at least a few apps, and possibly buy a WebOS phone. You’d perceive these PCs as being more valuable, so you’d pay a little more, which would have helped HP’s problem with thin margins on PCs. HP is the largest PC manufacturer in the world, so over 2-3 years they would have seeded the market with a huge quantity of WebOS capable devices.

It wouldn’t have happened overnight, but HP didn’t do anything fast with WebOS except kill the hardware division. I don’t know what was going on internally during that time, but we saw very little happen with WebOS in the year HP owned Palm. That was very disappointing. Finally Palm had access to resources and capital, which should have been the launchpad to great things.

The people running HP must believe the talk that this now is the post-PC era, and their huge PC business is in danger of imminent meltdown.  Since their answer to the post-PC era (WebOS) wasn’t selling, OMG — Chicken Little was right – the sky must be falling!  Second, instead of that poorly worded announcement, what if they had waited until they actually knew what they were doing with WebOS and the Personal System Group?  They would have sounded much more professional, and the stock price may have gone up instead of down.  Third, they plan on taking the company in a different direction, but they haven’t done it yet, and don’t know if it will be a success.  I would have kept the PSG going while I decided its fate, tried to straighten out the WebOS problems, while acquiring Autonomous and building the B2B part of the company.  A year from now I would be able to triumphantly announce future plans from a position of strength, instead of  failure and confusion.  But they probably won’t call me to replace Leo.

I’ve owned many HP printers and computers. The most trouble-free printers I’ve owned were from HP. I see three pieces of HP equipment here now. I tried to find a $99 TouchPad when they went on sale. I’ll likely buy an AirPrint-enabled HP printer. I say this to establish that I’m not a hater who wants to see HP fail. I want to see success and innovation, because that drives other companies and the whole economy upward. And that makes everyone a winner.

The Yahoo Board of Directors fired their CEO, and her missteps weren’t as costly. Lack of vision seemed to be the main problem. No sense of direction, no “This is what we’re about,” the stock price and other financials weren’t improving. They weren’t going downhill, but they weren’t gaining. The sad thing is the Yahoo Board doesn’t seem to have a vision for Yahoo either.

I’ve been an employee, and always had the feeling that if I screwed up, or was overshadowed by someone blowing his own horn, I’d be gone. I’ve been a small business owner, and knew that my performance was the difference between eating well and not eating. I can’t imagine making multi-million dollar mistakes, let alone making them then being around tomorrow to make another, and another. And when that CEO leaves it will be with a multi-million dollar golden parachute. Not for success, but for failure.

Isn’t it time to stop awarding golden parachutes for failure? I know, I know, there are contracts involved. So why are contracts written this way? Again, it goes back to the Board of Directors not performing their duties. Maybe not even understanding their duties. Reward for success, punish for failure. Business 101. When any business isn’t operating this way, it shows how out of touch they are. And can even greater failure be far behind?

It’s really sad when a company this large stumbles so badly.  I can almost understand small companies being so busy with whatever they do that they misstep.  However, when companies are as large as HP, General Motors, and other infamous notables, we expect them to devote proper resources to planning, and to be led by executives who have the vision to know where they’re going.  Anything less should be viewed as criminal.

Gazelle.com is a company buying used gadgets.  “Don’t sell it, Gazelle it” is their slogan.  I wonder if they’d be interested in buying used, outdated executives.  How much is Leo worth?

Our economy is sputtering. Too many mistakes by too many people. Too many mistakes, too much blaming, too much justifying, and not enough achieving. When third-world dictators take everything and make people suffer, we ask, “How can they get away with that? Isn’t anyone going to stop them?” But we let it happen right in front of us and say nothing. Or even worse, justify it.

Postscript Addendum Whatever: While I was proofreading this article, the news came over the Internet that the HP Board of Directors had finally awakened, saw the trail of damage, and Meg Whitman is the new HP CEO. I wish her well. It will be interesting to see how much damage can be repaired, what happens to the stock price, the outcome for the Personal Systems Group and WebOS, and the future course for HP.

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About pdacomputing

Small business owner in Pittsburgh, PA. I've used different mobile platforms over the years; currently using 2 very different platforms.
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