Meg Whitman's thoughtful plan
Meg Whitman, president and CEO of Hewlett-Packard (NYSE: HPQ), should be cloned. Her clones should then be dispersed to Wall Street, Capitol Hill and the boardrooms of the Fortune 500, where they can start a rebellion. I say this without regard to politics, I assure you, or even to the relative merits of any given tech company. I say it solely on the basis of Whitman's willingness to take a stand for the long haul.
Since taking the helm of HP in 2011, Whitman has made it known that her strategic vision does not aim for a quick boost to the next quarter's bottom line. Instead, she plans to put the company on a path toward solid, sustainable growth and thereby secure its success for generations to come. Taking the gentlest poke at the myopic thinking of some of her predecessors, Whitman is clear that she's heading in her own direction.
"In my view, it's better to be very thoughtful and strategic and lay things out for the long haul. I think, historically, there's been a little bit of `let's fix up this year," Whitman told an audience of more than 5000 CIOs and senior IT executives at the Gartner Symposium ITXPO in Orlando late last month. "I want to set this company up for the long term."
Whitman's farsightedness is tantamount to blasphemy on Wall Street, and it has not endeared her to analysts or investors. After she cautioned everyone not to expect a turnaround before 2014, HP's stock dropped by more than 10 percent. Her strategy flies in the face of the kind of thinking that led to the nation's financial crisis and ensuing economic woes, but she is not being rewarded yet for leading in a different way.
The myopia that Whitman is up against seeps well beyond Wall Street, permeating our politics, our media and our entire culture. Former FDIC chairman Sheila C. Bair noted in the wake of the financial meltdown that the crisis was predictable for anyone who cared to look ahead, but very few chose to.
"We tried to stop the excessive risk-taking that was fueling the housing bubble and turning our financial markets into gambling parlors," Bair wrote back in July 2011 in an op-ed in The Washington Post. "But we were impeded by the culture of short-termism that dominates our society. Our financial markets remain too focused on quick profits, and our political process is driven by a two-year election cycle and its relentless demands for fundraising."
The media bear their own blame for fueling the short-termism, Bair pointed out: "The type of information that dominates cable news and the blogosphere is generally not designed to appeal to our more rational, long-term thought processes. Instead, is excites our emotions, inducing greed and fear, and more often stokes prejudice and cynicism than rationality and fortitude. The 24-hour news cycle bombards us with constant information that compels action, not patience."
As for HP, Whitman says that if everyone can just be patient, the company will see accelerated growth in 2014 as it starts to reap the benefits of the process improvements and the R&D that are being put into place. The changes she is making require tremendous investment in systems, processes and people. They require a shift in the culture and behavior of a corporation of 320,000 employees. Affecting this change is a lot harder than cutting R&D or squeezing other costs without regard to the future--which is what Wall Street prefers--but she does not appear to be afraid of hard work or financial analysts.
While it remains to be seen whether Whitman will turn HP around by 2014, her willingness to stand up against the enormous pressure of short-termism and champion the long term is a triumph in itself. If more business and political leaders found the fortitude to adopt this stance, it would go a long way in returning our economy to a more stable path. - Caron