HP juggernaut takes a hit to its bridge

Key Microsoft partner loses CEO Mark Hurd amid scandal

A few weeks ago, I posted a blog about Glassdoor.com, a Web site at which employees of public companies get to anonymously comment about their employers and rate their CEOs on a scale of 1-5, five being the best. Microsoft rated a 3.5 and CEO Steve Ballmer earned a 52 percent approval rating.

But when I compared Microsoft to top IT companies like Apple, Google and Oracle, one other name jumped out: HP. It earned only a 2.5 rating and CEO and chairman Mark Hurd earned the support of only 34 percent of employees on the site. I’m looking at the Glassdoor rating in a new context, of course, in the wake of Friday’s bombshell that Hurd has resigned from HP in the wake of allegations of sexual harassment involving an outside marketing contractor and reports that Hurd falsified expense reports related to the case.

HP quickly moved to quell the uproar, appointing CFO Cathie Lesjak as interim CEO until a replacement is made; Lesjak is not a candidate for CEO. So if HP gets new leadership in place quickly, it should be able to right the ship of state and get back on course, including its partnerships with companies like Microsoft.

HP played a lead role at Microsoft’s Worldwide Partnership Conference in Washington, D.C., last month at which it announced a Windows Azure platform appliance to combine hardware, software, services and a sourcing solution for enterprise customers to get into cloud computing. The Azure appliance deal is part of a three-year, $250 million alliance between the two companies to simplify complex IT environments.

I have covered HP off and on for 10 years in Silicon Valley, including chasing Hurd and his entourage through the convention center in Houston in 2006 after his keynote at an HP tech conference, seeking a comment about the HP board scandal that was unfolding at the time. As a reminder, the board hired investigators to find out who was leaking word of board proceedings to the media and the investigators broke the law in doing so. Hurd emerged unscathed from the scandal but apparently is no Bill Hewlett or Dave Packard to his employees.

The HP founders are so beloved that their original offices at what is now the HP Labs building on the corporate campus in Palo Alto, Calif., are preserved in their early 1960’s glory and could be the set of a scene from a “Mad Men” episode today. But Hurd may hold no such place in HP history.

“Hurd, as he has shown in the past at other companies, is about cutting costs and laying off older experienced employees,” wrote one of the commentors to my July 9 post.

“Hurd is a genius at cost cutting,” wrote another, “but [he] either knows or cares nothing about fostering a creative environment for new products.”

To be sure, though, Hurd delivered for shareholders. Succeeding high-profile and controversial CEO Carly Fiorina, currently a California U.S. Senate candidate, Hurd took a decidedly low-profile approach to running HP. By cutting costs and making key acquisitions, including EDS, 3Com and Palm -- just to name a few -- HP’s stock price grew by 113 percent during his tenure.

But as the comments on Glassdoor.com seem to indicate, Hurd had no reservoir of employee goodwill to save him from his own mistakes.

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• glassdoor.com
• HP
• Mark Hurd
• Microsoft