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Tip For Meg Whitman: Beware the H-P Boot

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Congratulations, Meg Whitman. You are next in line for the H-P boot.

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At Hewlett-Packard Co. (HPQ), the precedent is set. Leo Apotheker, Mark Hurd and Carly Fiorina are mostly just remembered for stepping down. Even former chairwoman Patricia Dunn had to resign after a weird little corporate-spying scandal in 2006.

You are well on your way to being next. You saw the market reaction to news of your appointment: a six-year low for H-P stock. Did H-P Chairman Ray Lane really think getting on CNBC last week and touting the same losing strategy with a bubbly new CEO was going to bring back investors?

Good thing you are No. 331 on the Forbes rich list after being the celebrated CEO of eBay Inc. (EBAY). All you can do at H-P is shake the bag of tangled wires they handed you until you get the H-P boot, too.

Here are a few thoughts that might help you last longer than the 11 months it took for Apotheker to get the H-P boot.

- Have the company formally apologize to Hurd. Nobody has any idea what he did or did not do with that former actress turned H-P event planner. This was a garden-variety sexual-harassment claim, and it would have been settled quietly were it not for all the indiscrete noise from H-P's board. Today, all we really know is that H-P stock was rising under Hurd, and that it's lost more than 60% of its value since he got the H-P boot. Hurd doesn't need the apology, mind you. He's clearly better off at Oracle Corp. (ORCL). But an apology will make you look classy, and you may get more sympathy when it's your turn to get the H-P boot.

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- Don't be so quick to tout your financials. One day on the job and you were already telling investors your priority is to make fourth-quarter revenue and earnings targets. Who cares? This is Apotheker's quarter. Drop the quarterly mentality. You were hired to come up with long-term solutions.

- Hire someone to write Lane a more-coherent script. Here's how he explained your qualifications on CNBC: "Ronald Reagan was an actor. He was a pretty good president....So, you know, leaders are leaders. Meg is a leader." What? Reagan was just an actor so that qualifies you to run H-P?

- Remember, H-P is not a startup. "I see a tremendous opportunity to restore the luster of this Silicon Valley icon," you said on CNBC. You started at eBay with 30 employees and $4 million in annual revenue. Now you're starting with 320,000 employees and more than $125 billion in annual revenue. It's just not the same thing.

- Make friends. H-P is in no condition to survive vicious competition with Oracle, Apple Inc. (AAPL) and Microsoft Corp. (MSFT) all at once. Apotheker unnecessarily alienated these competitors by openly, albeit lamely, challenging them. Remember when Oracle and H-P joined forces to compete against IBM? Kiss up to Oracle.

- Hold on to the PC business. H-P spent the better part of a decade trying to become the world's largest PC maker. The enormity of this business not only gives H-P a pricing advantage on components for other products H-P makes, like servers, but it also gets the company through the front door of some very large corporate accounts. You want to evolve into higher-margin businesses? The hardware business can get you there. Getting rid of it was Apotheker's big idea, and I am rooting for you to last longer than him.

- TouchPad is going down in history as the "OuchPad." Getting out of tablets and smartphones was an embarrassing admission of failure on H-P's part. At least pretend to care.

- H-P recently spent billions of dollars buying companies such as Palm and EDS. Figure out why, and do something with the assets. WebOS--which H-P acquired in its $1.2 billion Palm buyout last year--has got to be worth something.

- Back out of Apotheker's $10.3 billion deal to buy British enterprise-software company Autonomy Corp. Everyone says the deal is overpriced and depletes H-P's coffers. H-P will need the cash for tough times ahead.

- Quit bragging about your leadership skills. You spent $144 million of your own money mounting the most expensive statewide political race in history. Then you lost the California governor's race to has-been Democrat Jerry "Governor Moonbeam" Brown. This makes Brown the leader. And you, the loser. Try touting your talent as a graceful loser instead. This will make it so much easier when it's your turn to get the H-P boot.

 

(Al's Emporium, written by Dow Jones Newswires columnist Al Lewis, offers commentary and analysis on a wide range of business subjects through an unconventional perspective. The column is published each Tuesday and Thursday at 9 a.m. ET. Contact Al at al.lewis@dowjones.com or tellittoal.com)

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