I've been reading a bunch of articles about HP over the past couple of weeks, and especially today with Carly Fiorina's departure. One recurring theme in many of these articles is the "conventional wisdom" that HP should be broken up to realize true shareholder value.
Somehow this all sounds strangely familiar.
In the early 90's when IBM was hemmoraging cash and struggling to survive, the conventional wisdom that IBM should be broken up to realize true shareholder value. Of course everyone knows what happened. The IBM board hired Lou Gerstner to come in to save the company. After not very much time on the job, Lou bucked conventional wisdom by saying that IBM's strength was in its comprehensiveness of products and solutions, and could serve as a one stop shop to deal with customers' true IT need ... integration.
In hindsight, everyone recognizes that Lou made the right decision to keep the company together. These days, we have the capability to do everything to support an enterprise's transformation: consult with C-level execs, sell mainframes, distributed servers, clients, POS systems, software, and best of all, hook it all up for you and make it run, and keep it running at 99.999% uptime.
No, I'm not trying to sell you on IBM's value proposition; we have lots of marketing and sales folks to do that. I'm just saying that there's a lot of positive things to be said for a full-service provider. In fact, many people feel that what Fiorina was trying to do all of these years was to copy IBM's strategy by turning HP into a full service provider. Don't forget that the year before we bought PWC consulting, HP was trying to buy them so that they (HP) could do C-level consulting.
But alas, here we are. Fiorina's out and many analysts are calling for HP to be broken up, with much emphasis on the highly profitable printing business. Yet they rarely mention the lesson that IBM learned in the early '90s.
But one thing to consider is that IBM was very lucky to get a leader like Lou who not only had the courage and vision to buck conventional wisdom and make unpopular (but correct) strategic choices, but was also able to put the management system and right people in place to realize the strategy. Because after all, goals without the ability to execute are simply fantasies.
Break up HP? You mean like IBM was supposed to break up in the early '90s?