by Thomas Wailgum

Mark Hurd’s HP Dismissal: 5 Unsolved Mysteries

Aug 10, 2010

Hurd's sudden departure from HP was intended to avoid a PR fallout. But several facets of this story have yet to be explained.

The “Mark Hurd-HP-expense report-false sexual harassment claims-Jodie Fisher” scandal is in full swing now, despite HP’s efforts to keep a lid on this thing—which began with a well-timed Friday “Oh By The Way” 5 p.m. press announcement last week. (For the record, HP’s shares lost $8.7 billion in market value on Monday.)

Unfortunately for HP, it appears that there are still many more questions than answers, too many obvious contradictions that haven’t been addressed, and some HP executive practices that were not “The HP Way.” Here are five factors that make you go “Hmmmmm.”

1. Felling the Financial Disciplinarian

Mark Hurd made his name for his “disciplined execution” while in charge of HP. By all accounts, Hurd was a process expert and a numbers guy who instilled fiscal discipline into HP’s ranks. So it’s rather ironic that his HP career has ended over “falsified expense reports.” That’s the real reason? Really? HP’s board let him walk away with his severance, which it would not have had to do if he’d truly defrauded the company. But it appears that HP’s board decided it couldn’t trust Hurd anymore. So why bother with this expense report angle?

2. Larry Ellison to the Rescue!?

Oh boy. Things got a lot more interesting when Oracle CEO (and Hurd tennis buddy) Larry Ellison decided to write an e-mail to The New York Times in defense of Hurd. Said Ellison: “What the expense fraud claims do reveal is an HP board desperately grasping at straws in trying to publicly explain the unexplainable; how a false sexual harassment claim and some petty expense report errors led to the loss of one of Silicon Valley’s best and most respected leaders.” Ellison does score some points in noting the obvious discrepancies. However, one must consider the source making these claims: A high-powered tech CEO now married for the fourth time who has not been immune from a few corporate scandals of his own.

3. The Tiger Connection

An article on insinuates that HP’s board members relied heavily on the advice of a lone “specialist” from PR firm APCO in making the eventual decision to push Hurd out. “As the career of Hewlett-Packard’s chief executive Mark V. Hurd hung in the balance,” notes the article, “a public relations specialist convinced the company’s directors that HP would endure months of humiliation if accusations of sexual harassment by a company contractor against Hurd became public.” Tiger Woods’ name (and tawdry situation) was bandied about during the presentation.

Two things: 1. Why would HP’s board of directors rely so much on the lone advice of an outsider and not place more weight on the collective opinion of HP people or themselves? (Unless this was indeed some type of Hurd Witch Hunt.) 2. Outside of the Gloria Allred connection, to link Hurd’s situation to that of Woods’ is a classic apples-to-oranges comparison designed solely to create FUD among the HP board. The question remains: Why?

4. The Eye Candy Question

Most of us are aware of the booth babes phenomenon at high-tech trade shows and continuing debate about their presence. But should we be shocked to learn that, from 2007 to 2009, HP’s marketing department paid Jodie Fisher “up to $5,000 per event to greet people and make introductions among executives attending HP events that she helped organize,” according to one report? Another article claimed up to $10,000 in pay per event.

Just what kind of events required this type of hostess? Customer and CEO dinners only? Does HP still employ other female event greeters—and why are they needed at all? There’s a fine line between “event organizer” and “a female hostess paid to look pretty and laugh at all the executives’ dumb jokes.” Aren’t there plenty of smart, personable managers and execs already working at HP who could have done meet-and-greet work at events? Or just not enough of the types who had appeared on reality TV?

5. What Did HP Learn from the Last Scandal?

For decades, the biggest corporate scandal coming out of HP was when an employee neglected to make a new pot of coffee in the company kitchen once the previous one was emptied. The “HP Way” was storied. But scandals of a more severe and public nature have become more of a regular occurrence. First, there was the boardroom in-fighting surrounding former CEO Carly Fiorina’s acrimonious departure in 2005. Then there was that whole HP Spying Scandal that resulted in HP forking over $14.5 million in a civil suit.

What lessons did the HP board apply from that experience to this one? Act quickly to stem the PR damage seems to be one. But the grade on how the company handled even that aspect of the Hurd departure is far from being final.

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