Thursday, August 26

Lingering Aftershocks: Hewlett-Packard


Hewlett-Packard (HP) is still learning the hard way. In the immediate aftermath of a crisis, every decision made is weighed against the crisis. Every decision, including the acquisition of 3PAR.

Three weeks of being unwilling to match Dell’s $18 per share offer for 3PAR, HP re-entered with a $24 per share bid. The switch has some people wondering whether the change of heart is tied to HP's apparent need to prove that it is "business as usual."

Without Closure, Every Decision Becomes A Comparative.

You can hear the rumbling in the background. Even if the acquisition of 3PAR is lucrative for HP, the unwritten questions remain. What would Hurd do? And, more telling, are the board of directors pushing for the acquisition for public relations?

These questions might not be asked as often had HP been more aggressive in closing out the crisis as opposed to attempting to operation it out of the picture. Worse, they've spun up several new allegations and stories, some of which don't add up (hat tip: Ben Tremblay) while leaving plenty of questions unanswered.

No one can blame HP for insisting that they want to "look forward and not back," which basically means they intend to shrug off transparency. It also reinforces the idea that the universe doesn't understand negatives. Every time those words are uttered, it means the opposite for everyone else.

The evidence is all over the 3PAR discussions. HP has put itself in a position where winning or losing looks equally questionable. (Note, I'm not saying the acquisition is vital for HP or not.) If they don't see it through to the end, people will wonder if the acquisition about-face was public relations driven. And if they do win, they might ask the same thing.

The primary question people ought to be asking is how much is too much to pay for 3PAR. But, with the scandal still lingering in the background, the merger (win or lose) won't clear HP from the crisis it picked. What will it take? A new CEO who delivers gains for two quarters ought to do it. Their crisis communication should have this benchmark built in.

Finding The End Of A Crisis Is Harder Than Managing A Crisis.

Most crisis communication plans never consider the situational challenges that occur long after the immediate crisis has ended. One might even say that this is the caveat missing from the Toyota concept that all is forgotten after 70 days. While there is some truth to that, crisis communication planners need to have a realistic view of when to start that 70-day ticker.

In this case, closure didn't occur with the resignation of Hurd. (You can see it in the stock valuation.) Had he not resigned, the company could have started the ticker on the date of the harassment settlement. More importantly, companies have to be careful in how they make bold movements while still suffering from crisis aftershocks.

As long as the motivation is only to deliver shareholder value, it's easy to back bold moves. But if decisions are being made because there is something else to prove, then they've done more than lose the HP way. They've lost any semblance of purpose.
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