In my last missive, I shared one reader’s thoughts on what she would do if she were the new CEO of HP. Vortician Bill Baker also shared his thoughts, and they turn out to be a perfect introduction to a discussion I want to begin with you, gentle readers.
There is nothing so useless as doing efficiently that which should not be done at all.Peter Drucker
Dear Vorticians,
Oh, what a cruel twist of fate.
Earlier in the week, you and millions of others no doubt were relieved to learn that Bubba would not meet his end in a bisque or a salad. No, I don’t mean former President Clinton. I’m referring to Bubba, the 22-pound lobster that a Pittsburgh fish market decided to spare and hand over to an aquarium at a Ripley’s ‘Believe It or Not’ museum. One group called PETA – People for the Ethical Treatment of Animals – had urged the market owners to turn Bubba loose in the great blue sea. The other PETA – People for Eating Tasty Animals – had offered to buy Bubba, who was thought to be up to 100-years-old, to make him the star in a special meal.
It all reminded me of the Saturday Night Live skit in which they asked viewers to vote on whether to eat or save Larry the lobster. Larry lost, as I recall. (Speaking of recalling, did anyone else buy those ‘Believe It or Not’ books as a kid and get alternately fascinated and creeped out by the stories? I still recall the one about the prince in India who could only laugh when his minions ran an elephant off a cliff.)
But, in the aforementioned cruel twist of fate, Bubba died while being transferred to his new home. An autopsy is planned (seriously) but whether Bubba will find his way into some culinary masterpiece remains undetermined.
Here’s a much more positive turn of events. In my last missive, I shared one reader’s thoughts on what she would do if she were the new CEO of HP. Vortician Bill Baker also shared his thoughts, and they turn out to be a perfect introduction to a discussion I want to begin with you, gentle readers.
Here’s what Vortician Baker wrote: “John, I am disappointed with HP. I was, and still am, a big fan of Ms. (Carly) Fiorina and see lots of similarities between HP/Ms. Fiorina and IBM/Lou Gerstner and AT&T/Michael Armstrong. Both were men with vision and more testosterone than their respective boards of directors.
“HP’s board is obviously living in the past; the whole notion of ‘HP innovation’ is a leftover dream from two decades ago. Open source code, cheap technology from China and other PacRim nations, as well as highly educated and capable programmers from India, have closed the gap on technology innovation by U.S. companies.
“The only innovation left for a ‘box company’ is its willingness to move up to the ‘upper stacks,’ namely services and integration, and Mr. Gerstner showed us it is achievable. HP has all of the necessary elements to stage yet another re-invention but one – guts! (Ed. note: Guts is not the word Vortician Baker used. Your imagination can fill the gap.) One look at Sun Microsystems and their insistence on staying with technology ought to alleviate any apprehension about where HP needs to go.
“Real leadership is taking a company where it needs to go, not where it wants to go. As with the aforementioned gentlemen, the real issue between Ms. Fiorina and HP comes down to a mismatch in testosterone levels; the firing of Ms. Fiorina speaks volumes about the severe lack thereof on the part of HP and its board.
In the ’80s, HP had a highly successful marketing campaign that started with a simple question: ‘What if?’ I guess we now know the answer: ‘What if NOT!'”
Thanks, Vortician Baker, for the opportunity to raise an issue that will be central to our discussions at VORTEX 2005 (Oct. 24-26, San Francisco). Vortician Baker has spotlighted for me what is the key challenge HP faces: It is caught in the jaws of the value/value-add monster.
One of the central issues facing technology companies in the next wave of enterprise IT growth is how well they play the game of value and value-add. Dell is a master of the value play. The company thrives by competing on price and operational efficiency. IBM, at the other end of the spectrum, is highly skilled at value-add. IBM dominates by blending a wealth of thought leadership, services and integration skills. Each company understands its position on the spectrum and the clarity of focus results in stronger account control and improved financials.
HP is stuck in the middle. It is out-valued by Dell and out value-added by IBM. Its place on this value/value-add continuum is not clear to buyers and, as a result, its position as a strategic customer partner is weakened. But HP is not alone in facing this challenge. Many of our biggest brands are also struggling to understand their place in the new food chain.
Geoffrey Moore and I will be exploring the dynamics of this value/value-add battle as part of our large exploration of the Paradox of Commoditization at VORTEX 2005. Understanding how the value/value-add battle will play out will have a dramatic impact on the future of companies like Sun, Cisco, EMC and many, many others.
I’d love to hear your thoughts on this. Who best understands this game and plays it masterfully? Who’s most at risk? Share your thoughts at mailto:jgallant@vortex.net.
That’s it for now. Stay out of the boiling water.
Bye.
