Let's review for a moment. HP fired former CEO Mark Hurd ostensibly for irregularities in expense reports, but more likely because the company had plunged into such a complete mess, with employee morale scraping the bottom and the company's "Invent" tagline now a joke. Perhaps the board finally realized it, just as it eventually had to come to terms with Carly Fiorina having been a bad choice for more obvious reasons. Or maybe Hurd just went so far in his presumption of what he could do that it became impossible to ignore.
In any case, the company has needed a new CEO. For two months, industry watchers have kept asking who it would be, as if finding a CEO for one of the top PC manufacturers in the world required nothing more than an ad on Monster.com. The company's choice has many -- probably the same people who had cheered Hurd and then wondered why his replacement wasn't easily and quickly secured -- going, "Huh?" So let's take a quick look.
Apotheker spent 20 years at SAP. He became CEO, but lasted less than a year after becoming sole CEO (there were co-CEOs before) when the had its first loss in about 7 years. When he left, the stock had dropped by about half from its high of a decade before.
Here's a chart, via GOOG (GOOG) Finance, that shows the long-term stock movement of SAP, HP, and Oracle (ORCL), now Hurd's new stomping ground.
Note that the big drop in SAP's 2006 share price was due to a change in share capital and issuance of additional shares. Some reports like that of Bloomberg point to the drop in share price between 2000 and Apotheker's departure without qualifying the big drop, leaving a false impression that he had sunk the boat, when most of the reduction owed to the change.
Frankly, Apotheker's situation says far more about SAP than it does about the man. The board didn't even give him 12 months, and it was a company that was both bogged down in a long-standing cultural swamp and stuck in a strategy that essentially left it a one-product company. SAP's stock has been essentially flat since 2007, while both HP and Oracle trended up, even with global economic troubles, so it's also not as though Apotheker was such a dynamic engine of change that results shown through, or at least gave the SAP board confidence.
Apotheker has significant experience in enterprise software and services, though, again, in a fairly stagnant way. He hasn't worked in the PC industry. At least Hurd, coming from NCR, had experience in enterprise computer sales, before the company sold that part off and concentrated on ATMs, point-of-sale systems, and data warehousing software and services.
Perhaps the board recognized that HP badly needs to strengthen its software and services businesses, as hardware continues to become commodity product. Given that Ray Lane, managing partner of managing of storied VC firm Kleiner Perkins Caufield & Byers and former COO of Oracle, became non-executive chairman at the same time, the board clearly wanted clearly wanted to emphasis this aspect.
And yet, this is still the company that hired and fired two CEOs and a chairman of the board, all within a few years. Something has gone really, really wrong for the company to experience this much organizational turmoil. Simply replacing the person at the top will do no good if there isn't an emphasis on understanding exactly where HP has gone wrong culturally, no matter what the numbers suggest, and what it will need to do to right itself. So, as a start, maybe a change from the expected might not be such a bad idea, after all.
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