Some big news yesterday in the world of technology had to do with Mark Hurd and his resignation following a sexual harassment investigation where he was not found guilty. The woman allegedly involved with Hurd was a former contractor and according to a close source there was no romantic or sexual relationship between the two. What is unusual though is the company on a conference call characterized their relationship as “close” and “personal.”
I am at a bit of a loss to understand exactly what I just wrote means. In other words, did they go hiking together? Were they BFFs? Perhaps they telepresenced each other from time to time. It seems Hurd may have spent some of HP’s money on this former contractor without receiving work.
Here is an excerpt from IDG News:
The investigation discovered that Hurd had a “close personal relationship” with a marketing contractor that he did not disclose to the board, Mike Holston, HP’s general counsel said. The consultant does not wish to be named, he said.
It also revealed that there were numerous instances where the contractor was paid or reimbursed without performing work. There were also inaccurate expense reports from Hurd meant to hide his personal relationship with the contractor, Holston said. That evidence pointed to “a profound lack of judgment” by Hurd, he said.
The facts disclosed to date don’t seem to add up. Did this woman initiate a sexual harassment investigation after receiving lots of financial favors where there was no intimate relationship? Also, Hurd is a millionaire and just last year received $30 million dollars in compensation – why did he need the company’s money to pay this woman?
In terms of succession, TMC’s Ed Silverstein writes that the board has appointed CFO Cathie Lesjak, 51, as CEO on an interim basis.
But where the story gets really interesting is in the comments being made in the IDG News article about Hurd now that he is out:
The executives stressed that the company is financially sound and that Hurd was not solely responsible for the company’s past successes.
“The announcement today has nothing to do with the operational performance of the company but is really all about Mark’s behavior and judgment,” said Lesjak.
In attempting to distance the company from Hurd, HP board member Marc Andreessen said: “HP is not about any one person.”
Lesjak reiterated that point. “Mark was a strong leader but at the end of the day he didn’t drive the initiatives. It was the organization that supported Mark that drove those initiatives,” Lesjak said.
Weird huh? Isn’t it obvious Hurd didn’t do it all himself? But he didn’t drive any of the initiatives? Really? Don’t these statements make you wonder about the HP board and management regards to loyalty to past executives?
After all, when Carly Fiorina a past ITEXPO keynoter was ousted from the company it was because she decided a merger with Compaq was in the company’s best interest as the market consolidates. They trashed this woman and she said as much as she broke the news at the keynote she gave shortly after she was ousted.
Interestingly Hurd gets much of the credit for the appreciation in HP’s stock which came in-part as a result of the pieces Fiorina put in place. Yet the board threw her under the bus and gave Hurd all the credit for the success. Now Hurd is out and they are giving everyone else the credit.
HP has definitely done a great job executing and acquiring in the last few years and they are a tech powerhouse worthy of the moniker. Moreover, for a company in so many markets they have done an admirable job of managing it all and growing in the last few years.
Having said that, there is an obvious pattern here of trashing past executives but if the comments above from Andreessen and Lesjak are correct then HP has one of the best and most hands-on boards around and they are a model company.
But with all the past infighting the board has engaged in, this is an unlikely scenario. Moreover, remember when its nonexecutive chairman, Patricia Dunn, was accused of orchestrating a spying campaign on other board members and journalists? Can you recall when you heard the word pretexting for the first time? The company has a certainly less than exemplary record this past half-decade or so.
But the question is what happens next?
The world watched GE slowly fall apart after Jack Welch left the company. We realize if Larry Ellison leaves Oracle there could be problems. Likewise with Jobs and Apple or Chambers and Cisco.
From the outside, looking in Fiorina and Hurd were both solid leaders of the company. That’s the good news. The bad is that having another success could be more challenging as it is very difficult to hire a good CEO to manage such a large enterprise. But if the board and the rest of the team is as talented as the comments above suggest then maybe there isn’t much of a need to worry about the 10% stock price hit HP took yesterday. It may recover nicely as another interchangeable CEO takes the helm.