This week, I spent some time with Tracy Keogh, HP's talented head of human resources. I remain impressed — so much so that I feel she should be the example that HR leaders in technology should emulate. Keogh started with an incredible mess and, with CEO Meg Whitman's backing and support, has turned HP's barrel of lemons into some rather sweet lemonade.
I'm still a bit dumbfounded when I hear some of the practices Keogh inherited, from forced ranking to forced telecommuting (to keep down site costs) to eliminated employee and management training to … well, you get the point. I'm actually surprised that HP didn't go under; if a lot of change hadn't been brought to bear on the problem over the last several years, it probably would have.
I'm a firm believer that you can't abuse employees and expect to survive. Under Whitman and Keogh, HP is fast becoming a great place to work again.
HP Doing Hewlett and Packard Proud, Respecting Employees Again
HP's success stems largely from its founders; Bill Hewlett and Dave Packard believed in their employees. They created a firm where folks were motivated to innovate, drive through to a conclusion and make a difference.
Unfortunately, things changed at HP, mirrored my many other public companies, which focused a series of executives increasingly on the monetary metrics that financial analysts wanted to see. These CEOs sacrifice employees to reach short-term tactical goals.
At its heart, though, HP still maintained a spark of the company that once was, a firm that marveled at new technology and where people could be proud of what they created. While several parts of the business aren't there yet, you can see HP's financial performance improving as a result of refocusing on people — showcasing that the abusive management style practiced by so many in the industry, and particularly some of HP's former CEOs, isn't necessary.
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Treat employees well and you'll get better, more sustainable performance. Granted, there are times when you'll still have to make painful adjustments, but they'll increasingly be the exception rather than the rule. Valued employees stood at the core of the "old" HP way. That idea has been reinstated — and both Hewlett and Packard would be proud.
When Employees 'Adapt and Overcome,' Everyone Wins
I still can't get over the idea that some idiot CEO put in place both forced ranking (a blight on any company) and forced work-at-home to save office costs. I've heard of a lot of stories of tech CEOs doing incredibly stupid things — and those two together set the low bar. The fact that Keogh reversed these decisions early on is a credit to her skill; given how ingrained forced ranking often is, it wasn't without risk, either.
Keogh then devoted resources to helping employees get the tools they needed to do their jobs. She implemented HP University for management and employee training, to increase the value of employees rather than just replace them when their skills became obsolete. She also instituted reward programs that honored actual accomplishments, not friendships and process-gaming skills.
One interesting change involved redefining the "HP Way" into something closer to the old Marine slogan "Adapt and Overcome." Employees who wanted to fight bureaucracy used to leave or get pushed out. Now, that same process is saved for those who block people trying to get their job done.
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For instance, one new woman executive generated a massive amount of complaint email because she refused to be blocked by stupid HP "process" — or folks who made a living out of using their authority to blackball her efforts. Typically, she would have left in disgust or been fired. Instead, HP motived the folks in her way to change, with the implication that she was doing the job she was hired for and they weren't. HP employees are again learning to adapt and overcome. This will be critical to their future.
HP is again becoming a great place to work. Keogh and Whitman deserve a lot of credit, but this credit also goes to the other leaders in HP who have embraced this important change; those who didn't are either gone or looking for jobs. That, too, is important to a turnaround.
HP Remains in Transition, But Signs Point to Success
Now, HP remains a company in transition, only about half way through its turnaround. Still, profits are up sharply, along with its valuation. HP has replaced forced ranking with the Net Promoter metric. The company has made some impressive progress — and at the heart of that progress is turning HP back into a place where people feel proud of the company and want to work there.
This represents an impressive amount of progress over what remains a relatively short time for a large, complex company such as HP. I remain in awe that HP put someone as capable as Keogh in charge of HR, since that function is often run as a compliance organization. Keogh showcases that HR can be strategic — and that employees, when treated as a strategic asset, can make a material difference to a firm's success.
Now, if HP can ever figure out how to fight in the market as a company and not a collection of divisions, it'll have something truly impressive. That lies in HP's future.
For now, though, my hat's off to Whitman and Keogh for not only doing right by employees but being a shining example of why taking care of employees should be far more important than it often is. They realized that HP's people are critical to the effort to make HP a true power again. As their success mounts, I hope other firms learn from their example, to the benefit of customers, employees and investors.
Rob Enderle is president and principal analyst of the Enderle Group. Previously, he was the Senior Research Fellow for Forrester Research and the Giga Information Group. Prior to that he worked for IBM and held positions in Internal Audit, Competitive Analysis, Marketing, Finance and Security. Currently, Enderle writes on emerging technology, security and Linux for a variety of publications and appears on national news TV shows that include CNBC, FOX, Bloomberg and NPR.