hp case study pdf

Leadership and Change Management: A Case Study of HP

Case Study , 2019 , 16 Pages , Grade: 1,3

Autor:in: Alexander Kahlert (Author)

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The paper discusses the former issues of HP. Based on that insights, new leadership and organizational structures are discussed and proposed to bring HP back on a growth track. Various models from modern leadership literature and best practices from peer group companies are used to evaluate recommendations.

List of Figures

1 introduction.

2 Strategy analysis for the company HP 2.1 Current challenges of HP 2.2 HP’s organizational complexities 2.3 Leadership approach of HP’s senior management

3 Strategic Change Plan for HP 3.1 Determination of the required type of change 3.2 Execution plan of the change path 3.3 Required leadership skills for HP’s revolution

Figure 1- Hewlett Packard's dysfunctional organisation

Figure 2- Agile organization as the new dominant organizational paradigm

Figure 3- HP's leadership issues

Figure 4- Types of Change

Figure 5- Lewin's change management model

Figure 6- HP's change path

Figure 7- HP's required leadership profile

Figure 8- HP's path to future success

The company Hewlett Packard (HP) is an international acting technology enterprise with the focus on manufacturing software, hardware and services to individual clients, corpora- tions, governmental and education sector (cf. HP Inc. 2017: I; HPE Ent. 2018: 3.).

HP had a widespread product line starting enterprise standard servers, computing devices, networking products, software and IT-consulting services (cf. Glassman / Zell / Duron 2005: 10.).

Today, HP is structured into two separate companies. HP Inc. is focused on the former hardware product line (computing products, printers, etc.) and the Hewlett Packard Enter- prise (HPE). HPE’s strategy is to use “capabilities focused on technology, people and eco- nomics to enable customer’s digital transformation” (HPE Ent. 2018: 2.). The current share prices of the two HP companies show high volatility in the share price (cf. Yahoo Finance 2019; Yahoo Finance 2019a.).

In 2012, no spin-off was conducted and HP was one IT company. HP struggled with internal structures, significant internal clashes of culture and finding a path to future success. All of these issues are related to a lack of leadership and change management skills within the enterprise (cf. Goleman 2011: 3.; Cook / Macaulay 2004: 5).

This term paper wants to answer the question:

How could a successful strategic turnaround of HP could be structured and implemented?

In answering this question, the focus lies on change management and leadership theories for a successful transformation. The paper is mainly structured in two parts: Chapter two describes the current state of HP in 2012 taking the dimensions of challenges, organiza- tional complexities and leadership issues into account. Based on that insights, a fitting trans- formation plan is derived by using modern leadership and change management tools.

As a result, all gained insights are summarized and finally assessed in the last chapter.

2 Strategy analysis for the company HP

Abbildung in dieser Leseprobe nicht enthalten

Figure 1- Hewlett Packard's dysfunctional organisation.

2.1 Current challenges of HP

In 2011, HP struggled with declining financial performances which was expressed by 19% lower profits and losing market share (cf. Bandler / Burke 2012: 1-2.). This lead to an in- creasing investor pressure on the company to perform better in the short term.

Simultaneously, HP had to deal with an intensive competition with a strong innovation ca- pability (cf. Bandler / Burke 2012: 3.). However, HP showed a significant lack of innovation (cf. Economist 2015). This lead to a vicious circle because HP was also not able to build up innovation capabilities caused by talent hiring issues (cf. Economist 2015.). This resulted in the need for external acquisitions, but significant investments could not be financed (cf. Hall 2017). Furthermore, HP had to decide which strategy it wants to follow. The hardware fo- cused strategy faced a declining market share. The combination of short term pressure from the investor base and the need to reconfigure internal capabilities and the strategy made a challenging general condition for HP. Further disturbances like ongoing law suits against HP (TomorrowNow case) averted to focus on important decisions.

2.2 HP’s organizational complexities

Modern technology companies established a new form of organizational structure: The agile organization. An agile organization consists of a network of smaller teams which are strongly customer-centered. The employees of the different sub-teams are all committed to one predefined vision (cf. Nadella / London 2018: 5.). Furthermore, it operates in fast de- cision and learning cycles so that the ability of quickly reconfiguring structures and strate- gies toward value-creating opportunities is possible (cf. Aghina et al. 2017: 3.).

However, HP did not establish the required culture and structure to cope with similar chal- lenges of the modern companies.

HP’s culture is poisoned. HP’s employees were preoccupied with internal conflicts and power rivalries. Cross-functional collaboration was not accepted (cf. Bandler / Burke 2012: 1-5.). Overall, the culture was damaged by a significant lack of trust between employees and directors (cf. Bandler / Burke 2012: 13.).

Simultaneously, HP established an efficient and cost-saving driven internal structure. Even trash pickups were cut (cf. Bandler / Burke 2012: 4.). This Taylorism management approach was successful in an environment that was stable and predictable. McKinsey defines this kind of organization as “organizations as machines” (Aghina et al. 2017:3.). There was a strong hierarchy and efficiency management rationale established and the business units were clearly silo-thinking driven which led to dramatic misalignments of the business units. For instance, HP printer software could not be run on HP computers (cf. Bandler / Burke 2012: 11.). Modern companies are structured like an organism (flexible and responsive) with strong leadership as the core (cf. Aghina et al. 2017: 5.). HP showed a significant gap in terms of an environment fitting structure and culture which was simultaneously poisoned by internal conflicts.

Figure 2- Agile organization as the new dominant organizational paradigm (Authors own illustration based on Aghina et al. 2017: 5.).

2.3 Leadership approach of HP’s senior management

Good leadership is directly interrelated with the success of a strategic transformation pro- gram (cf. Kotter 2000: 60.). The former CEO Leo Apotheker wanted to take HP towards more software business with focus on big data analytics (cf. Bandler / Burke 2012: 10.). As described in the case, the transformation failed. The leadership approach of HP is evaluated in five dimensions of failure:

( 1) Not Establishing a Great Enough Sense of Urgency

According to Kotter, the first leadership fault in a transformation is to not seed sufficient urgency for the change in an organization. Only motivated and committed people can achieve successful change (cf. Kotter 1996: 4.).

Apotheker did not communicate the urgency in a way that the organization was committed to the change. The process was “messy and contentious” and even senior management participants were not aligned to the new strategy (cf. Bandler / Burke 2012: 10.).

(2) Not Creating a Powerful Enough Guiding Coalition

It is essential to build up a change coalition that supports the efforts. This is a process of a growing fan base of the future state after the transformation (cf. Kotter 2000: 62.).

Apotheker was clearly committed to his own vision for HP and did not seek for different perspectives (cf. Bandler / Burke 2012: 13.). Kotter says that a transformation need a co- alition throughout the hierarchy and it has to grow from the senior management down to the employees (cf. Kotter 1996: 6.). The coalition growth stopped at Apotheker and an opposi- tion gained participants which finally stopped the change.

(3) Lacking a Vision

The vision of a leader for the company plays a key role in producing change. It helps to align and inspire large numbers of people dealing with the company (cf. Kotter 1996: 7.).

Apotheker derived a strategy of how to develop HP further, but never defined a clear vision. The strategy could have been the right one, but the main reason why it was confronted with resistance was that no one saw a clear vision. A transformation without vision leads to in- compatible projects and finally to failure (cf. Kotter 2000: 63.).

(4) Not Removing Obstacles to the New Vision

To achieve a high amount of committed people, obstacles have to be removed. Obstacles can be the structure, compensation systems or middle management directors who want to stop the proposed change (cf. Kotter 1996: 10.).

HP’s hierarchical and silo-focused structure is not able to fastly change. Apotheker started with dictating the strategy without reconfigure the internal structure of HP. Apotheker and his team did not show any supportive or inspiring approaches to convince the directors to follow his strategy. Apotheker did not realize that fear is one of the most important feelings in a process of change (cf. Kotter 2000: 65).

(5) Not Systematically Planning For and Creating Short-Term Wins

People of an organization have to see short-term wins to believe in the long-term success (cf. Kotter 2000: 65.). Apotheker’s short-term performance was insufficient and lead to doubts (cf. Bandler / Burke 2012: 10.). The occurrence of leaks show that the employees did not believe in the strategy and felt confirmed that HP does not follow the right path. Resistence was built up.

Figure 3- HP's leadership issues (Authors own illustration based on Kotter 1996: 16.).

3 Strategic Change Plan for HP

HP had to face multiple challenges that were obviously not solvable with the current state of HP. A restructuring of a company is commonly very costly and complex (cf. Katowski / Wysocki 2014: 116). Therefore, a successful transformation always has to predefine the required type of change and derive a proper change path supported by a fitting leadership approach (cf. Katowski / Wysocki 2014: 116).

3.1 Determination of the required type of change

To define the type of change, speed and extent of HP’s change is evaluated.

( 1) Speed of Change

In HP’s case, investor’s trust is decreasing caused by poor financial performances; no clear strategic path can be defined; cultural issues like leaks and mistrust are increasing dramat- ically and a significant lack of innovation is present (cf. Ibarra / Rattan / Johnston 2018: 10). Therefore, HP’s planned change has to be fastly executed. Otherwise, HP is in danger of losing the trust of workforce and investors. HP needs a “ Big Bang ” (cf. Balogun 2001: 3.).

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Home » Management Case Studies » Case Study: Competitive Advantage of Hewlett Packard (HP)

Case Study: Competitive Advantage of Hewlett Packard (HP)

Hewlett Packard popularly called HP is a company that provides technology solutions to consumers, businesses and all forms of institutions worldwide. The company later expands its operations to IT infrastructure, personal computing and access devices, global services and imaging and printing services. The company is known throughout the world by operating in more than 170 countries around the world. The mission of the company is to facilitate how technology and services can assist individuals and institutions in addressing their problems and challenges so as to realize their dreams. The company applies new thinking and ideas come out with basic and valuable experiences with the technology with her IT corporation headquarter in Palo, Alto, California, USA. The company has been maintaining a lead among her contemporaries due to the effective strategic planning of the company and this has been jealously guided by the company in virtually all her businesses.

How Competitive Advantage helps HP Company

HP Company being one of the world largest IT companies with a quarterly revenue of approximately $97.1 billion is able to maintain such a wonderful record through the sustainable competitive advantage over the competitors. The sustainable competitive advantage has benefited the company in so many ways that she has no other choice other than sustaining such record. The gained competitive advantage has increased the company’s revenue tremendously. In year 2006, HP recorded a much better revenue of $91.7 billion against the rival, IBM with $91.4 billion. In year 2007, the annual revenue of the company was jacked up to $104 billion to become the first IT company reported to have a revenue of more than $ 100 billion, it doesn’t stop there, acquisition of the EDS in 2008, also jacked up the revenue to $118.4 billion. All these achievements in terms of boosting in the revenue are products of the gained competitive advantage.

The competitive advantage gained and sustained ever since by HP can be also attributed to her leadership position in the world technology with groups strategically assigned to drive industry leadership in main technology areas. The Personal Systems group are responsible for the lead in the business and consumer PCs, mobile computing equipment’s and work station. In the same manner, the imaging and printing group is responsible for the successes recorded in all forms of printing devices (personal and commercial printing), printing supplies and the enterprise business group is in charge of all business products. The performance of each of these groups among others is what makes HP what it is today among her equal.

In addition HP became the largest world seller of personal computers as a result of her competitive advantage. In January 2010 a report from Gartner and IDC (Market Research Firms) shows that there is a wide gap between HP and Dell with HP taking 8.3% market share lead at the end of 2009. It was equally reported that HP is the 6th largest world software company.

HP Company is equally reported in year 2008, to have retained the global leadership position in Jacket, laser, large format and multifunction printers market and at the same time the second IT service provider throughout the world. All these benefits/achievements do not come by chance it is as a result of being able to maintain some degree of superiority over the competitors. This results in to competitive advantage and the benefits being discusses the created values based on the competitive advantage.

Analysis of Competitive Advantage in HP Company

HP is able to achieve and sustain competitive advantage with her distinctive competencies . First of all, the company is committed to simplifying technology experiences for all its customers. This is applicable to all the services rendered ranging from printing, personal computing, software, services and IT infrastructure. This is very important since it assists in making virtually all the HP products usable by the intended users by putting the customers first.

There is no way one can analyze the competitive advantage of HP Company without discussing the HP values; HP values is associated with the complete adherence to the ways or paths set out by the founding HP leaders. These unique ways account for the decision-making and the firm’s advancement since it is just like a roadmap. Also, HP pioneers based the corporate culture on the integration and reinforcement of critical opposites. This is achieved by simultaneously creating an environment that both celebrates individualism and at the same time supports the team work. The beauty of it is that such a practice will allow the company to tap from the benefits of both approaches as the case may be and also to neutralize their associated risks.

Another way by which the competitive advantage of HP Company is sought is through her concept of developing cross functional individuals. Unlike other companies that just hire staffs and train them for a specific job requirement to be assigned to such staffs throughout their stay in the organization, HP makes sure that all her employees move more than 4 to six functional areas within the company to allow them to work in more than one departments of the company and thereby effectively managing the organizational knowledge through effective sharing among her staffs. It has been widely agreed that in this knowledge era, effective knowledge management will surely lead to achievement of competitive advantage.

The quest for developing employee has always been the strength of HP company in attaining competitive advantage since this makes the company to achieve effective organizational change considering the rampant changes in the business organizations. Since 1980, HP has been engaged in extensive employee retraining program called Software Job Skills (SJS). Personnel who might ordinarily be laid-off underwent serious retraining the complex set of required skills and techniques. This makes the company to be able to sustain her competitive advantage since the employees always continue to be relevant and compliant with the new trend organizational need and employee are considered important in the performance of every organization.

Organizational competitiveness is derived by the implementation of knowledge management and its associated benefits. Knowledge management helps in reducing the production cost as a result of the possibility of reusability. This allows the organization to be able to offer services of the same quality or even better than that of its competitive at a relatively low cost. This is an important way of gaining competitive advantage. In addition, the implementation of knowledge management brought about enhanced employee productivity and coordination which has a resulting positive effect on organizational performance .

Another important factor is early delivery or ubiquitous service deliver powered by the real time communication facility. It is a wise saying of HP as quoted as follow “If only HP know what HP knows!” It means that the required knowledge and skills for solving your problem resides somewhere within the company. This means that the company has achieved a lot through effective communication. All these account for achieving sustainable competitive advantage. There have been series of academic evidences responsible for the early delivery experienced in the company due to regular improvement and enhancement of the supply chain .

Full optimization of the business supply chain cannot be achieved using only the Operation Research (OR) approach in this demanding fast-paced ubiquitous business environment of the globalized era. Using OR alone will require a lot of time which might result in to delay in the service delivery and thereby negatively affect customer satisfaction . HP strategic planning and modeling (SPaM) came out with a more efficient approach which combines the optimization ability of OR and scenario analysis of the expert knowledge to arrive at an effective supply chain approach capable of solving complex supply chain decision problem for HP’s imaging and printing group of company. the earlier the customers can get the required service the more satisfied they are, the efficient supply chain of HP has been of the secretes of the company’s sustainable competitive advantage.

It ha equally been argued that the risk associated with supply chain are related to product demand, component cost and availability uncertainties and they all affect the company’s revenues and profits. Procurement management group is formed in HP and they developed and implemented a mathematical model, business process and software to estimate and manage risks associated with supply chain. This has brought a lot of benefits to the company. To the extent that in year 2006, HP was able to manage $7 billion of her spending by saving only material cost of not less than $128 million. This really maximizes the company’s profits and contributes to the sustainable competitive advantage of the company.

The products of HP are always better than that of her competitors and such are refined and re-branded from time to time to meet the changing technological needs of the customers. Just in November 2009, HP StorageWorks X9000 was introduced as the new network storage system which is primarily designed to meet the emerging trend of the explosive data growth and to enhance the performance of the file-based applications using scale-out network storage that has the ability to manage information efficiently using a single namespace. This has fetched the company more popularity in the networking society since such an innovation is needed in virtually all organizations that deal with large data. The StorageWorks is very efficient in storing data and it is known for relatively low down time.

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On June 29, 2010, Hewlett Packard’s (HP) highly successful CEO Mark Hurd received a letter from a lawyer alleging he had sexually harassed a former HP contractor. Hurd shared the letter with HP’s general counsel Michael Holston. The case series follows the general counsel’s and the HP board’s decision-making process as they coped with the scandal.

Learning Objectives This case series allows participants to discuss how the board and the general counsel (GC) can address a crisis that engulfs the CEO of a corporation. Faced with a potential scandal, what facts and possible consequences should the board and the GC take into account? How can they best address events and possibilities proactively?

Subjects Covered Corporate Counsel, Ethics, Crisis Management

Setting Geographic: United States Industry: Technology Event Year Begin: 2010

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