CIO
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When Hewlett-Packard (HPQ) finally got to fork over its money for Compaq last May, you wouldn?t have expected anyone from Compaq to be running anything. That?s the unwritten law of the business jungle: The dominant company gets all the positions of power in the new company. But Robert Napier, 55, former CIO of Compaq, is now CIO of the combined companies. He?s a clear product of Compaq?s brasher culture and he worked for HP?s CEO Carly Fiorina in an earlier life, which may help explain his emergence. But there?s more to the combined Compaq/HP than meets the eye, as we discovered when we interviewed Napier last July.
CIO: How is the merger going?
Bob Napier: It?s going quite well. We had a lot of great day-one successes. Day-one e-mail systems on a global basis, one HP.com and?I think this was extremely important?one employee portal where all employees from either pre-merger company could get a consistent answer to most of their questions at a very trying time. [It took] huge network integration?39,000 network devices across 160 countries. In essence, we had an enormous day-one success. It was a necessity for two high tech companies.
The interesting thing that I?m not sure I would have thought about from a pre-merger standpoint, but that has really come and smacked me upside the face post-merger, was the enormous addition it made to employee morale. People said, you know this stuff can really work, this integration can really work. Right on their desktops they had proof point and I remember I got all kinds of little e-mails from folks in the first week, even some of my IT folks. A former Compaq person went into an HP plant in France, found a cube that wasn?t occupied, plugged an Internet cable into the wall of that cube and, bingo, was attached to all of his former access in Compaq seamlessly. He didn?t have to change anything on his laptop; all the scripts were handled behind the scenes. I think that was a big deal.
The merger was approved during May, but when did you actually start doing all this work so that it was ready on day one?
We started probably September 10th of 2001. I think we announced to the world on Sept. 4th, or something like that, and by the 10th we had a pretty comprehensive yet small team of IT infrastructure folks from both sides starting to map out what we needed to do.
How many people on that combined team?
Initially, I think it was probably fewer than 20. Now, remember, we had to do things in what we call the ?clean room? fashion, so it was like hand-picking some of your best and brightest, and knowing that once you put them in place, you couldn?t pull them back because we have lots of federal trade commission and FCC rules to follow. I was referred to in those days as a dual-brainer. I was one of those folks who actually could go in and out of the clean room.
CIO: Explain the clean room concept.
When you got into sharing things of a competitive nature in the marketplace, the people that you dedicated to that could no longer occupy a job in either company. They were segregated to only work on merger-related issues. They were not allowed to discuss anything they were working on with any of their colleagues from whichever company they originated from. And if for some reason the merger had fallen apart they would have been sort of quarantined for a while before they could have been mainstreamed back into the company. That was to make sure that we didn?t violate any FCC or Federal Trade Commission rules. The lawyers watched everything we did.
What would you have done for quarantining? Given them some video games?
If you talk about people in marketing, you can see the ramifications, or people that were doing product development. One of the things I did early on, sitting down with both the Compaq and HP legal team, was to say, look, the kinds of things that we?re sharing from an IT standpoint are no different from what we would share as best practices with customers that came into either company. How do you run your HP shop or how do you run your Compaq shop. Or [it was like] a bunch of CIOs getting together at some forum, such as CIO magazine?s forum: We all have this similar kind of problem and everybody gets together and shares what they are doing to solve that problem. The majority of what we are doing are the kinds of things that we happily show Compaq customers or we happily share with our peer groups throughout the industry. There are maybe a few things that we think we do that have a competitive advantage, but most of it, I believe, we consider best practices in the industry and we would share. Over time I was able to make the case with the lawyers that we weren?t mucking around in the things that would make the Federal Trade Commission or the FCC concerned.
Was that ever tested? In other words, did you run into instances where people were talking about what was going on?
Well, the truth of the matter is that as much as I said all that, the lawyers still had a pretty anal view of the world. Yeah, you can quote me on that. We pretty much adhered to the clean room standards as I mentioned, but we got a jump on it. The point I was trying to make before was that the interesting thing was that my former CIO organization at Compaq had put together sort of a cookbook on mergers and acquisitions. It was something of a check-off sheet that we used and continually enhanced so that if Compaq made mergers or acquisitions, we had a pretty standard way to absorb them into our overall IT fabric. Interestingly enough, the HP IT organization had done something similar. So one of the first things we did was sit down, look at both sets of blueprints and figure out the best of breed on that and create a hybrid out of the work done on both sides of the fence. We had our blueprint to go with.
Everyone views HP as the acquirer here, so how does someone from Compaq become the CIO of the combined companies?
I think it?s a good question. The decision was made by Carly [Fiorina] and Michael [Capellas].
It?s unusual.
I think I was a well respected, highly regarded executive of Compaq and considered by the senior management team of Compaq to be extremely competent. Compaq?s internal IT organization was considered to be best of class in the industry. We?ve won a lot of awards in the e-commerce arena as well as in a lot of general categories. We were considered one of the top five shops in the world, that kind of stuff. So that matters. I know Carly from a past life. We worked together at AT&T and at Lucent. And I?m just an all-around nice guy.
Were you at Compaq when it did the Digital merger?BR>I came in just after. I replaced Capellas. They decided they really needed a CIO that knew what he was doing so they made him CEO.
What about the intense public focus on this merger? How did that affect what you did, if at all?
It was really a roller coaster ride, for sure. We just stayed the course. We knew we had to get it done. We always believed it was going to get done. We never wavered from that and it was really about just keeping the team focused on the plan. We were ready to go with most of the key day-one pieces by mid-February, so some of the controversial things that happened actually bought us more time. The proxy fight and the suit that followed probably bought us a couple more months that we didn?t expect to have, quite honestly. I think it just made us a lot stronger as far as making sure that we had our T?s crossed and our I?s dotted. I mean, we did some pretty clever stuff because we couldn?t physically merge the company until we had all the approvals.
