What CSC Is Doing Right (and Wrong) In Its Turnaround Efforts
In the last 15 months, Computer Science Corp. CEO Mike Lawrie has handpicked his executive team and streamlined the CSC product line. This is a good start, but if CSC wants to emulate the turnaround efforts of IBM and Apple, the company should look for a formidable CFO and step up its marketing efforts.
Fri, May 10, 2013
CIO — The Hewlett-Packard turnaround started around a decade ago and has been badly hampered by a revolving door on the CEO office. Mark Hurd and Leo Apotheker arguably made things worse, leaving current CEO Meg Whitman a nasty mess to clean up.
Meanwhile, Computer Science Corp. CEO Mike Lawrie started a few months after Whitman (February 2012 versus September 2011) but has gone farther faster. Understanding why, as well as what both CEOs are missing, provides some insight into how to turn around a complex company.
Why CSC Can Recover Faster Than HP
For starters, there are three key differences between the two companies that explain why the HP turnaround has been far more difficult.
- CSC is a relatively focused company. It's most similar to the Electronic Data Systems-heavy HP services unit, which is a major part of the HP enterprise division, which in turn is only part of a company that also includes significant, and very different, PC and printer divisions.
- CSC was very near bankruptcy, while HP was in far better financial shape. Leading a company near financial failure gives a CEO has a great deal more latitude than one at a company that's still very financially viable.
- Finally, HP is battling an unprecedented number of companies, with EMC, Cisco, IBM, Oracle, and Dell focused their sights on HP's business. CSC, on the other hand, mostly flies under the radar.
These three factors give Lawrie a huge advantage. He's given more freedom to make changes, he has far less complexity to deal with and he isn't constantly under attack by other global companies.
CSC Streamlines Offerings, Replaces Executive Team
I spent a bit of time with CSC executives at EMC World 2013. The difference between Lawrie's execution and Whitman's at HP is dramatic. CSC at its worst was admittedly simpler than HP, so Lawrie's success is understandable but still amazing.
Even though IBM's Louis Gerstner and Sam Palmisano trained Lawrie, his execution is more reminiscent of Steve Jobs, who faced similar problems and also enjoyed greater latitude than even Gerstner had. As a result, Lawrie has made far more progress in turning CSC into a well-managed company.
Both CEOs came to companies with far too many products to manage. While HP's relatively profitability makes it hard for Whitman to make dramatic changes, Lawrie has whittled CSC's product line from nearly 3,000 products to fewer than 100.