NCR’s Hurd to herd HP’s cats as CEO

Board chair Dunn said new executive has led company with product scope wide as HP’s

HP’s board of directors looked outside the company’s org chart for its last CEO. This month it takes on a chief executive who was off everyone’s chart. But Mark Hurd looks like a man who may not need charts to know the way to lead a technology company with products as independent as cats, as well as a rich heritage.

The 48-year-old Hurd hails from Texas, the same state as ousted CEO Carly Fiorina, but the Baylor University graduate couldn’t be more different from his celebrity-style predecessor. Former co-workers describe him as low-key, personal and not flashy. His children attend public schools in Dayton, Ohio.

Perhaps most significantly to an HP 3000 community waiting on news of MPE’s post-2006 future, an HP director said Hurd could institute strategy changes at HP. Such shifts would only take place once the CEO gets grounded in the many wandering facets of HP — a company he first described by invoking its founders’ names at a March 30 press conference.

“I approach the opportunity with both excitement and humility,” he said. “Excitement because of the limitless opportunity that I believe Hewlett-Packard has and the bright future it has. Also, for the leadership integrity that Bill Hewlett and Dave Packard set as a standard for this company that I will do everything in my power to live up to.”

Hurd was a surprise to most analysts and business writers, but the business community hailed the choice as a deft stroke by a board looking to change HP’s leadership style. An AP report quoted the Yale School of Management’s dean Jeffrey Alan Sonnenfeld saying Hurd is a “180-degree turnabout from Carly, and very low-key." The new CEO doesn’t just court the financial press, but “does the dirty work of running a business.”

Sonnenfeld called Hurd a brilliant choice. Like HP co- founder Packard, the new CEO has even co-written a book, “The Value Factor: How Global Leaders Use Information for Growth and Competitive Advantage,” ranked at Number 80 in Amazon’s sales tally.

The vote tally for the new CEO was unanimous among the HP board, according to non-executive chairman Patricia Dunn. Board members on the search committee were completely different this time. New director and technology VC maven Thomas Perkins was on a committee that also included Dunn and George Keyworth.

Dunn noted that NCR is a company much like HP. Hurd’s biggest accomplishment there, other than the turnaround, was building Teradata, a database and data warehouse operation, into a major profit center.

Hurd started in sales at NCR in the early 1980s, when the company was moving into minicomputers. His technology heritage stands as an important issue both to the HP 3000 community and HP customers at large. HP hoped in 1999 its choice of an alluring CEO would shake up a company which believed it had missed out on the Internet boom. Fiorina, who took the helm when HP’s stock traded at a record high, courted the big deal to lift HP’s fortunes, going after PriceWaterhouse Cooper before landing Compaq.

In contrast, Hurd took over in 2003 at an NCR posting a $220 million loss and led the company to a $285 million profit in its latest fiscal year — all without a major merger like HP’s Compaq purchase. He had NCR buy airport kiosk firm Kinetics for a total of $26 million, a rounding error compared to the $19 billion Compaq deal.

The new CEO steps in to lead a company more than 12 times the size of NCR in revenue and with a workforce five times bigger than NCR’s. At NCR he cut the workforce by less than 10 percent to turn the company around.

Hurd went to work April 1, but the new executive wasn’t going to fool around with such rash changes — not without talking to employees and managers inside HP, the company’s partners and its customers. “I have a lot to learn,” he said. “So don’t expect to see a lot from me right now. I think I’ll take my time to understand more of where we are, before we go out with any strategic discussion.”

But he called his new employer, which gave him a four-year, $5.6 million contract with a $2 million signing bonus, “fundamentally sound. It can meet the needs of global companies wherever they do business. I’m not at all concerned with the past; I’m only concerned with the future.”

Hurd said his initial focus would be on operations, driving demand for HP’s technology and creating profitable growth. “I don’t think you’ll find me trying to do anything very tricky,” he said in a 20-minute Q&A session at HP’s Palo Alto headquarters.

HP took only seven weeks to select its fifth CEO in the company’s 66-year history. Hurd said he “didn’t have a pitch” to win the position. He said he had “a dialog” with the search committee about issues that included HP culture.

Hurd alluded to entering a company with its own culture, having risen through the ranks at NCR, a company more than 50 years older than HP. Although Hurd was no medieval history major like his ousted predecessor, it was plain HP’s heritage matters to him.

“I came from a company that was founded in 1884,” he said. “Companies with that much history have tremendous assets in that legacy. They also come with some baggage. What you’re trying to do anytime you’ve got a company with a great legacy of a Hewlett-Packard is to leverage the benefits of that legacy: the history of customer relationships, the history of competing and serving multiple markets.”

Hurd added that HP’s legacy should be “leveraged into the great opportunity for the future. We need to take the best of our history and align that to the opportunity we have in the future, to blend that into the HP of the future.”

Its new CEO began saving the company money from the moment he signed, taking a bonus $1 million less than Fiorina’s and a stock options worth millions less — in part because HP’s share price has plummeted on Fiorina’s watch. Fiorina got 1.5 million shares of HP stock; Hurd signed for 700,000 shares.

Hurd brings experience improving profits from 2002-2004 that Fiorina failed to deliver even on the wings of the current IT recovery. The new CEO will influence a strategy of more profitable HP business — the type its proprietary technology like the HP 3000 delivered — according to HP chairman Dunn.

“Strategy is a living, breathing thing,” she said in a 20-minute conference call on March 30 with financial analysts. “It’s the responsibility of the CEO to recommend strategy, and I’m sure Mark will do that.” Dunn and HP CFO Bob Wayman had said during their February conference call to announce Fiorina’s firing that HP’s strategy was sound.