Monday, June 20, 2005

The de-Carly-ization plan

Carleton S. "Carly" Fiorina's successor CEO at Hewlett-Packard, Mark V. Hurd, has recently made some big announcements about the direction in which he hopes to take the company.

On June 13, HP announced it would separate its printer and PC divisions. In part, this increased separation may make other PC manufacturers more willing to bundle HP printers with their machines. Hurd seems to have opted for product focus rather than synergy, a strategy that is also apparent in HP's sales force.

Hurd has announced a sweeping reorganization in HP's sales force; a move that will undo a major element of Fiorina's strategy. Fiorina attempted to create an integrated sales force selling bundles of HP products to corporate customers. Hurd intends to return to a more product-specific focus. The change could lower HP's selling costs, since less central coordination would be required. More important, HP would no longer be sending generalist account reps up against the focused salespeople from the likes of Dell and Lexmark.

Hurd is also prepping the company for big layoffs, expected to total 15,000 people, intended to match the efficiency of rivals such as Dell. According to one insider, "The board replaced Carly because it wanted to focus on execution. Mark is doing just that."

This is obviously just the beginning, as Hurd has only been on the job for 2 1/2 months. But these seem to be steps in the right direction.

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