When Leo Apotheker took over as CEO of Hewlett-Packard Co. four months ago, he inherited a position plagued with scandal. His two predecessors, Mark Hurd and Carly Fiorina, were both ousted from one of the most prominent and troubled jobs in technology. He's now charged with leading HP past several troubled chapters in its history, while tying together the far-flung parts of a conglomerate that's under pressure about its growth prospects.
The Associated Press recently sat down with Apotheker, a day after a meeting with analysts and reporters in San Francisco in which he outlined for the first time publicly his vision for HP's future. In the interview, he described what he's discovered at HP and how he prepared to take on one of the toughest, and most perilous, jobs in business.
Q: What's the most surprising thing you've discovered about HP?
A: When you join a company like HP, it's always a bit overwhelming because the breadth and the depth of the company is incredible. And what keeps on surprising me is that it seems I discover, every day almost, new things that are popping up in the company that I didn't know the day before. That is probably the reason it was so important we were finally able to articulate an overarching vision.
Q: You inherited a company in the midst of absorbing a lot of acquisitions. How much of your strategy diverts from, or dovetails with, your predecessor's strategy?
A: That's a delicate subject. Let me just put it this way: I think it was time for HP to have an articulated, strong vision about where the industry is going, and what HP's role in it is going to be.
Q: How do you approach growing a company the size of HP? Is there a detriment to being too big? Some analysts are worried about HP's ability to grow at a meaningful rate.
A: People associate growth with high growth rates, percentages. That's understandable and certainly an applicable metric if you are small or smaller than HP. If you take a company like HP and you grow 5 percent, 4 percent, make it 1 percent, which as a percentage doesn't sound like much, but when you look at the absolute number, it's pretty substantial. If you're focused on the 5 percent, you'd say that's not much. If you focus on the fact that's $6.5 billion, you'd say that's quite a lot. If we grow by $6-$7 billion dollars, we basically add a Fortune 200 company every year — it's not too bad.
Q: What do you think about criticism from rivals, particularly IBM, that HP's services division focuses on lower-quality work, and that buying EDS for $13 billion in 2008 may have been a mistake?
A: I think IBM characterizes our services business in a way that suits IBM. We are doing a lot of high-value work for our customers. We are really appreciated by our customers, and the margins in our services business are pretty good. If it was all low-value work, we wouldn't be generating these kinds of margins. And we'll continue to drive our services into higher-value areas, and if that makes IBM suffer, I'm sorry about that.
Q: When interviewing and preparing for the job, did you do anything in particular to learn about HP?
A: When it became serious, I read everything I could find about The HP Way, because I was very conscious of the fact that being the CEO of HP meant much more than being the CEO of another large company. It's an iconic company; it's a company that created Silicon Valley. I tried as best as I could to have as much of an informed opinion as possible about HP. The bad news is that when I joined the company I realized I had barely scratched the surface. There was still much to discover.
Q: Can you describe the listening tour you went on when you started the job?
A: I was able to rekindle an old tradition at HP by walking around, which my predecessor didn't do. I was able to reconnect with the employee base, which is really important. They were hungry for that, and I learned a lot. I learned about the issues, the opportunities, what works what doesn't work, what needs to be improved, what needs to be improved really fast, and I was impressed by the passion and the hunger of the HP employees.
Q: On a personal level, people are very interested in what the life of a CEO looks like. Things like, how many e-mails do you get in a day?
Too many. Way too many. On top of that I have this horrible habit of wanting to answer every e-mail personally. I used to be able to keep to a rule that I would answer everything within 24 hours, but I can't.
The average day of a CEO is a pretty long day. You get up really early in the morning, among other reasons, because in California, when you wake up really early in the morning, it's already late everywhere else; you're running really hard just to stay behind, so you have to do that.
Q: What management technique has been most helpful?
A: You have to have a capability of filtering, and you need to. The first thing you need to learn as the CEO of a large company is not to micromanage, because from a scale point of view, it's impossible to do. So you need to empower people. You need to give people a sense of direction, you need to tell them why that direction is relevant, and you'd be surprised how people actually will come up with very smart and very creative ways to actually make that happen.
Q: Any advice for the decision-making process?
A: You need to talk to as many people as you can find, you need to be outside of the company as well, so I spend a third of my time anywhere else except inside my office. And you need to be looking at a cross-section of the world and capture the information, distill it and try to provide the guidance and the direction you want the company to go. There are always issues that pop up that you can't expect. You have to deal with that as well.
If you want to be successful, do not have only yes-people around you. Have people who will challenge you, have people with different opinions, and provoke a discussion.