Earlier this month the world learned that Hewlett-Packard, the company once known for its engineering excellence and management best practices, would be split into two entities. What has not yet been revealed is the struggle within the once-proud corporate giant for a clear direction for each component as well as the best way to deal with the Hewlett-Packard name and corporate identity.
BUSINESS MODELS and STRATEGIES
The “old HP” was built on a significant investment in R&D and a corporate-wide commitment to customer satisfaction. While these were laudable areas of focus, clearly this HP was out of step with the rest of the industry. One management consultant summed it up this way – “Granted the old Hewlett-Packard was a great place to work and had great products, but the majority of the world had never heard of them. What is the use of great engineering, outstanding customer support and industry-leading business practices if you have to constantly remind people that you don’t work for a car company?”
As the influence of the founders weakened over time, new teams of managers were brought in and began to rework HP based on the belief that product innovation and meeting or exceeding customer needs was “just too hard”, “kind of expensive” and probably not necessary.
The direction of the company was also impacted by a new focus on mergers and acquisitions. It was felt that by buying competitors who were failing in the marketplace, they would gain invaluable knowledge that was not available in HP at that time. This led to the practice of placing the managers of the acquired companies in positions of authority in the “new HP”. This allowed the combined entity to benefit from the valuable lessons the acquired managers had learned in their slide into receivership. A parallel strategy was to overpay for the acquired companies as a way of showing the investment community just how confident HP was in the wisdom of each acquisition.
This helped set the stage for the recent announcement of the intention to split.
WHAT IS IN A NAME?
It is too early to know what business strategies each of the new companies will adopt but our sources have provided some background on the selection of names. As of today the two new entities will be named “HP Inc” for the PC & printing business and “Hewlett-Packard Enterprise” for the systems and services business. You should not be surprised however, if at least one of these names is changed before the end of 2015.
The consumer (PCs & printing) portion of the company was initially going to be called “HP Ink” in recognition of the obvious. Unfortunately that choice was passed by in favor of the more mundane “HP Inc.” and this name will likely remain.
The enterprise side of the business was initially going to be labelled as “New HP” but someone wisely pointed out the parallel to New Coke might bring up unwanted associations. Perhaps with a nod to our own masthead, or more likely based on a desire for truth in advertising, some were lobbying for “Not Quite HP” as the new company name. In the end, it was decided to provide a temporary name (Hewlett-Packard Enterprise) while a group of outside consultants worked through the details of a radical alternative.Thanks to documents provided by our sources within this consulting group, we can share the new nomenclature.
In an attempt to break with negative connotations from the recent past and create a new image in the minds of their customers, the enterprise businesses will now be identified only by the following symbol.
Since there is no verbal equivalent for the symbol, we expect (based on precedent) that many may find it useful to just refer to “The Company Previously Known as HP” which does have a certain ring to it.
While the symbol invites individual interpretation, the consulting group and HP management team are confident that this is the best way to break with the recent past and create a new and exciting future. One of the consultants, speaking off the record, told us that “this new symbol means that prospective customers can no longer look up negative reviews online because you sure can’t google this.”
When asked if there was any specific reason that it was so similar to the symbol used by Prince, our source stated, “While the ‘old HP’ was obsessed with making innovations, we realized that not only is imitation the sincerest form of flattery, it is usually the cheapest to produce.”
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