CHANGE MANAGEMENT IN

HEWLETT PACKARD &

ROLE OF CARLY FIORINA
 PRESENTED BY
 GROUP 1
 AMAN
 DHANYA
 IFTHAKAR
 JISHNU
 INTRODUCTION
• Bill Hewlett and Dave Packard founded HP on Jan 1st , 1939
• Head Quarters in Palo Alto, California
•


"What we consider the HP Way doesn't just happen from the

top, it's built into the organization. I tell HP people, 'You're
really the propagators of the HP Way. You're where it
resides” - Bill Hewlett
• The company originated in a garage near Palo during a
fellowship they had with a Prof: Fredrck Terman at
Stanford
•
•
•
•
•
 The HP Garage (1939 photo)


• HP's Corporate Objectives have guided the company in

the conduct of its business since 1957, when first
written by co-founders Bill Hewlett and Dave Packard.
 CORPORATE OBJECTIVE
• Earn Customer loyalty
• Achieve sufficient Profit & create value for shareholders
• Recognize & seize opportunities for Growth
• Market leadership
• Commitment to employees
• Developing leaders at all levels for achieving business
results
• Global citizenship & fulfillment of social responsibility

“I am perfectly aware that HP has never guaranteed absolute tenure status to

its employees; but I also know that Bill and Dave never developed a
premeditated business strategy that treated HP employees as expendable”
- David Packard
VALUES UNDERPINNING “THE HP WAY”

• Continually improve the value of the products and

services offered to customers
• Seek new opportunities for growth but focus efforts on
fields in which the company can make a contribution
• Provide employment opportunities that include the
chance to share in the company’s success
• Maintain an organizational environment that fosters
individual motivation, initiative and creativity
• Demonstrate good citizenship by making contributions to
the community
• Emphasize growth as a requirement for survival.
•
PEOPLE PHILOSOPHY IN “THE HP WAY”
• Help HP people share company's success, which they
make possible
• Recognize individual achievements
• Help employees gain a sense of satisfaction and
accomplishment from work
• Relationships will be good only if employees have faith in
the motives and integrity of their peers, supervisors
and the company itself
• Job security is an important HP objective
• Foster initiative and creativity by allowing the individual
great freedom of action
• Individuals at each level in the organization should make
his or her own plans to achieve company objectives
and goals.
•
LEADERSHIP @ HP

A style in alignment with the HP gestalt

 CARLY FIORINA

• Born on Sep 6th 1954 in Austin, Texas

•
• Daughter of Joseph Tyree Sneed & Madelon Montross
•
• Official Birth Name : Cara Carleton Sneed
•
• Popularly known as : Chainsaw Carly
 CARLY FIORINA’s
EDUCATIONAL QUALIFICATION

• Bachelor of Arts in Philosophy and medieval

history from Stanford University in 1976
•
• Fiorina received a Master of Business
Administration (MBA) in marketing from the University
of Maryland,in 1980
•
• MS in management from the MIT Sloan School of
Management in 1989.
 CARLY FIORINA – CAREER GRAPH

President of Lucent Technologies - 1998 CEO, HP -1999

Senior VP AT&T hardware and systems division -1992

Joined AT&T as a management trainee – 1980

• Carly Fiorina became CEO of Hewlett Packard in1999
• First outsider to take control of HP.
• First woman to head a DOW 30 company
• First woman to lead a Fortune 20 company
• Challenge was to help HP grow in the Internet Age
without eliminating its corporate culture.
• HP had over 85,000 employees and operations in
120 countries when she took over.
• A company that offered job security to employees
even during massive downsizing of late 1980’s
 CARLY FIORINA TENURE IN HP

• Chief Executive Officer of Hewlett-Packard Company

(HP) from 1999 to 2005
•
• During her tenure, HP’s revenues doubled, from $44
billion to $88 billion
•
• Her pursuit of the controversial merger with Compaq
Computer is now acknowledged to be the most
successful merger in high-tech history
 THE PROBLEM CARLY FIORINA FACED
IN HP
 Although Fiorina possesses a leadership style and
strategic vision that has contributed to the success of
previous companies that she held leadership positions
in, HP wasn’t ready for the organizational change she
thought would be necessary for the future of HP.
•
 SIX MAJOR CHANGES DRIVEN BY
CARLY FIORINA IN HP
1. Fiorina fostered a top-down approach to management
which conflicted with the HP style of completely
decentralized management
2. Variegated the corporate culture of HP, Fiorinadid away
with a 60 year tradition. Company employees were
not happy about this change
3. Improvised too many revolutionary company projects at
one time against a product improvement
methodology of Founders.
 Eg : Simultaneous Projects on wireless service,
digital imaging, and commercial printing etc.
•
 SIX MAJOR CHANGES DRIVEN BY
CARLY FIORINA IN HP (Contd..)
4. HP employees no longer possess job security. The
company had cut nearly 20,000 jobs between 1999 to
2003
5. Modified the Structure of selling team as well as their
compensation
6. Fiorina has led the company to its most widely
scrutinized strategy yet; the merging of HP with
Compaq

 TWO PERSPECTIVES OF CHANGE
IN HP

• The rapid transformation resulted in resistance

to change
•
 &


• The HP-Compaq merger was widely scrutinized

 SOURCES OF RESISTANCE TO THE
EMPHATIC CHANGE PHILOSOPHY OF
CARLY FIORINA

SOURCES OF RESISTANCE IN HP

INDIVIDUAL
ORGANIZATIONAL SOURCES
SOURCES
 INDIVIDUAL SOURCES OF RESISTANCE

1. HABIT
 When confronted with change the human nature is
to respond in accustomed ways.


2. SECURITY
 People with high need for security are likely to resist
change because it threatens their feelings of safety.


3. ECONOMIC FACTORS
 Change in established work practices can arouse

economic fears in people especially when pay is

closely tied to productivity

INDIVIDUAL SOURCES OF RESISTANCE (contd..)

4. FEAR OF UNKNOWN
 Change substitutes ambiguity and uncertainty of the
unknown


5. SELECTIVE INFORMATION PROCESSING

 People hear what they want to hear & they ignore

information that challenges the world they have

created

 ORGANIZATIONAL SOURCES OF
RESISTANCE
1. STRUCTURAL INERTIA
 Built in mechanisms counterbalance to sustain
stability during change


2. LIMITED FOCUS ON CHANGE

 Organizations are made of number of subsystems,

when change is limited only to subsystems, its

overall effect tends to be nullified by the larger
system


3. GROUP INERTIA
 When Individuals wants to change, group norms

may act as constraint

 ORGANIZATIONAL SOURCES OF
RESISTANCE (contd..)
4. THREAT TO EXPERTISE
 Change in organizational patterns may threaten the
expertise of specialized groups


5. THREAT TO ESTABLISHED POWER RELATIONSHIP

 Any redistribution of decision making authority can
threaten the long established power relationships within
the organization


6. THREAT TO ESTABLISHED RESOURCE ALLOCATION

 Groups that control sizable resources tend to be
content with the way things are
THE UP’S & DOWN’S IN BRIEF
HOW COULD HAVE FIORINA OVERCOME
THE RESISTANCE
Ø Education & Communication
Ø Participation
Ø Building support & commitment
Ø Implementing change fairly
Ø Manipulation & Cooptation
Ø Selecting people who accept change
Ø Coercion
 CHANGE IN HP COMPARED TO
KOTTER’S CHANGE MANAGEMENT &
LEWINS MODEL

KOTTER’s CHANGE MANAGEMENT STEPS



• Establish a sense of urgency

• Creating a guiding coalition
• Developing a vision & strategy
• Communicating the vision
• Empowering broad based action
• Generating short term wins
• Don’t let up
• Creating a new culture by reinforcing change
•
 LEWINS 3 STEP MODEL OF CHANGE
MANAGEMENT

LEWINS MODEL
DESIRED RESTRAINING FORCE
STATE
REFREEZING

MOVEMENT
STATUS
QUO

UNFREEZING
DRIVING FORCE

TIME
 WHAT IS ORGANIZATIONAL
DEVELOPMENT
“A collection of planned change interventions built on


humanistic democratic values that seeks to improve

organizational effectiveness and employee well being”

OD
 5 THINGS I LEARNED ABOUT LEADERSHIP
– CARLY FIORINA
Excerpts from Interview given to CIO Magazine, 2007

1. LEADERS CREATE SOMETHING NEW

 Management is about producing acceptable results within
known constraints and conditions. The force for change must be
stronger than an organization’s natural inclination to preserve the
status quo
2. DON’T FALL IN LOVE WITH YOUR PRODUCT
 I thought the point of our technology was to serve customers
and, in the process, to deliver revenue and profit. Sometimes,
technologists forget the customer. This was happening at HP in
the late ’90s, and it was one of the reasons our growth was
slowing dramatically.
3. THE 21ST CENTURY IS ABOUT BRAINPOWER
 It requires different capabilities than the 20th, and American
competitiveness is not something we can take for granted
 5 THINGS I LEARNED ABOUT LEADERSHIP (contd..)

4. COMPETITION REQUIRES RISK-TAKING

 Leaders have to be willing to make tough choices at the right
time, which usually means before they are obvious to everyone
else. The Compaq merger was a prudent risk given the changes in
the industry and our decision to return to a leadership position
within it


5. ETHICS MATTER
 Businesses often tolerate behavior that’s on the edge; people
justify it as necessary to achieve results and take comfort that it’s
not strictly illegal. Yet such actions are corrosive. Some of the most
important choices I ever made were firing people who weren’t
conducting themselves with integrity.
 EVALUATING CARLY FIORINA TERM OF
OFFICE AND RESULTS FOR HP
BASED ON STRATEGIC LEADERSHIP STUDY REPORT PUBLISHED BY GEORGE FOX UNIVERSITY

FRAME WORK OF EVALUATION



1) GENERAL AUTHENTIC LEADERSHIP PRINCIPLES

2) ETHICAL LEADERSHIP PRINCIPLES
3) LEADERSHIP PITFALLS
4) LEADERSHIP SUCCESSES
•
•
GENERAL AUTHENTIC LEADERSHIP PRINCIPLES
  LOT OF  SOME  NO 
EVIDENCE EVIDENCE EVIDENCE
Perception established that leader is Authentic,    X  
sincere, follows through
Understand self, seek self-improvement, know  X    
personal strengths and weaknesses.
Aware of the needs of those being led  X  
In harmony with organization –understand    X  
history, traditions, customs.

Power applied consistently with the needs of the   X    
organization, and not for sense of power alone.

Words match deeds X    
Convictions match organizational values and    X  
objectives

Leadership style matches organizational need  X  
ETHICAL LEADERSHIP PRINCIPLES

  LOT OF  SOME  NO 

EVIDENCE EVIDENCE EVIDENCE

Takes a moral position – i.e., seeks to do what is  X    
right
Considers a long-term approach to decisions. X    
Separates personal interests from organizational  X    
interests. Able to objectively deal with personal 
bias
Interested in long-term view of organization, to  X    
include product, customers, community as well as 
profitability.

Concern for others   X  
Quietly seeks to do the right thing and influence    X  
others to do the right thing
LEADERSHIP PITFALLS

  LOT OF  SOME  NO 

EVIDENCE EVIDENCE EVIDENCE

Self-centered, and tells lies of convenience to      X
diffuse or divert negative situations.

Disclaim weaknesses X   

Overly dependent upon “vision” as a leadership  X    
method

Overly dependent upon charisma resulting in  X    
prior hypothesis bias
LEADERSHIP SUCCESSES

  LOT OF  SOME  NO 

EVIDENCE EVIDENCE EVIDENCE

Builds organization of good people as a top    X  
priority
Faith in the plan X    

Maintain momentum with incremental  X    
improvement
Support technical innovation X    

Disciplined organization that follows  X    
management best practices
 CONCLUSION

•  Fiorina  was  not  wrong  about  the  need  for  change  –  but  had 
she  really  grasped  the  reality  of  the culture of  Hewlett 
Packard,  so  deeply  engrained,  and  now  apparently 
perpetually  endorsed  by  the  almost  mythic  status  of  the 
founders?
•  In 1999, HP was no longer among the top 25 innovators in the 
world.  Fiorina  challenged  HP  engineers  and  inventors  to 
innovate. By 2004, HP was generating 11 patents a day, the 
highest rate of innovation in HP’s history, and had become 
the number-three innovator in the world.
•
• HP  stock  had  stood  at  $54.43  when  Fiorina  joined  the 
company; it rose to a peak of $74.48 
• However  the  company  struggled  to  meet  its  growth  targets, 
especially  as  the  downturn  in  the  economy  that  began  in 
late 2000 started to bite 
• Bottom  line  “  Carly  Fiorina  transformed  HP  into  a  Learning 
Organization. A new culture was impregnated which is the 
foundation  on  which  HP  stands  today  in  the  10th Position   
among Fortune 500 companies or Hp would have perished 
in an Era characterized by
q Explosive population growth,
q Unprecedented Economic development
q Exponential Technological advancement ”

 THANK YOU

QUESTIONS??