The short list for HP's next CEO could be long

With Hurd, HP's board picked an outsider. Will it do so again?

Analysts are developing a short list of possible candidates to replace former Hewlett-Packard Co. CEO Mark Hurd, who resigned Friday. But it's worth noting that Hurd's name didn't come up often, if at all, as a contender in 2005, when he was tapped for the HP job.

At the time, he was a veteran of NCR Corp., where he had served as its CEO and president.

During that search, The Wall Street Journal said executive recruiters envisioned the ideal successor to be "a star CEO at a company with at least $40 billion in annual sales." NCR had revenue totaling just over $6 billon, making Hurd something of a surprise choice.

With Hurd now out -- he resigned after HP's board found fault with his relationship with a contractor and related expense reports filings , the succession guessing game is in full swing. Analysts are brushing off their 2005 lists and some familiar names are emerging as hot prospects.

Among those mentioned, once again, is Michael Capellas, the former CEO of Compaq, and Joseph Tucci, the CEO of EMC . The names of executives at IBM , Microsoft and Oracle are also being bandied about.

HP executives who were likely considered in 2005 and are seen as contenders now include Ann Livermore, the executive vice president of the company's enterprise business and Vyomesh Joshi, executive vice president of HP's imaging and printing group. New to the list is Todd Bradley, a former Palm CEO and president who is now executive vice president of HP's personal systems group.

An easier task, perhaps, than trying to guess names is to determine what type of management style HP's board will want in its next CEO.

Chuck House, an HP veteran who now heads Stanford University's Media X , was especially critical of Hurd's management style in his blog . He outlined in an e-mail what he hopes the board will look for in Hurd's replacement. (Media X is affiliated with the H-STAR Institute (Human-Sciences and Technologies Advanced Research Institute) at Stanford, and works with industry and academics to study the impact of information and technology on society.)

House hopes the new CEO is someone who is "innovation appreciative" and is willing to spend research and development dollars, a leader who employs "management by walking around..., which implies caring and compassion and regard with dignity for employees."

House also believes that HP needs to change its employee reward system by "getting rid of huge bonuses for the few, and restoration of profit sharing and much smaller, but meaningful, stock options for the many," he said. "This is an easy signal to implement, and relatively cheap to do in actuality," he said.

House, co-author of The HP Phenomenon: Innovation and Business Transformation, added that HP needs a listener and a supporter of "collective intelligence" rather than "father-knows-best" management style, he said.

Rob Enderle, an independent analyst in San Jose, Calif., said any internal candidates at HP could have an edge.

"This time around they have internal candidates that could do the job, though external candidates with the needed breadth will be rare," said Enderle. He noted the emergence of board director Mark Andreessen, the co-founder of Netscape who has launched other companies and is a venture capitalist, "as a power player" at HP.

Andreessen "may want to put someone vastly younger and more dynamic in the role than any of the traditional internal or external candidates," Enderle said. "I think the odds favor either an internal candidate or an unanticipated candidate at the moment, depending on how quickly they need to fill the job and how much influence Andreessen actually does have."

Another important area for the next CEO will be ethics. Hurd wasn't directly involved in the company's pretexting scandal in 2006, when HP acquired phone records under false pretenses to learn the identity of a leaker. That incident prompted HP to emphasize its business conduct rules -- rules that eventually led to Hurd's ouster.

"I would expect the company to say publicly that it is strongly committed to ethics and internal compliance, and I imagine that whoever becomes CEO will also say publicly that she/he is strongly committed to ethics and internal compliance and quickly moving beyond this episode," said Miriam Baer, assistant professor of law at Brooklyn Law School.

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Patrick Thibodeau

Computerworld (US)
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