HPE’s next phase – life after Meg

SUMMARY:

Meg Whitman is stepping down as CEO of HP Enterprise after six years at the helm.

Meg Whitman

The tech industry is about to lose one of its highest profile female leaders – at least for the time being – with the surprise announcement that Meg Whitman, CEO of HP Enterprise, is to step down from the top job.

Whitman will hand over to Antonio Neri, HPE’s President, early next year. She will remain a Director on HPE’s board, but beyond that her future plans have not been disclosed. Her departure comes as something of a surprise, despite rumors that she had been in the running to step into the car crash that is Uber to try and turn it around. In the event, she didn’t get that gig, but had spent a lot of time over the past few months insisting she was going nowhere.

So what’s changed? Well, nothing, according to Whitman herself, it’s just the right time for everyone to move on:

There hasn’t been a change in sentiment. What I think is absolutely true is Antonio is ready to take the reins and go the distance. I you think about it, we have a much smaller, much nimbler, much more focused company. I think it is absolutely the right time for Antonio and a new generation of leaders to take the reins. We have got a very good leadership bench. We have got a strategy that is crystal clear and focused.

Neri is a 22-year veteran of the company who began his HP career as a customer service engineer in the EMEA call center. A computer engineer by training, he has a deep technology background and this appears to have been a crucial factor as Whitman declares:

I think I have added a lot of value here in terms of shareholder value creation, financial restructuring, nice ignition of the innovation engine, but the next CEO of this company needs to be a deeper technologist and that’s exactly what Antonio is. He has been with the company 22 years. He is a trained computer engineer and has worked in almost every business of this company. So, I just think it’s the right thing.

Changed

Whitman leaves behind a very different company than the one she inherited six years ago. After becoming CEO of what was then HP, she oversaw the company’s split into two brands – HP Inc and HP Enterprise. She remained as CEO at the HPE, prioritizing cloud services and spinning off product and consumer hardware to HP Inc. That work is still in progress, but the heavy lifting is done, she suggests:

This transition is possible because of all the work we have done during the past 6 years to transform HP. Many of you will recall the challenges the company faced when I became CEO and will recognize how far we have come. During the first couple of years, we focused on strengthening the company across a number of metrics. We stabilized and strengthened the leadership team, improved productivity and reinvigorated the culture. We significantly improved customer satisfaction driving NPS scores from negative in some cases to an industry leading 80 for our services today. And we pivoted hard back towards partners, rebuilding our entire partner ecosystem and shifting resources to this critical go-to-market channel. We also rebuilt our balance sheet paying off the nearly $12 billion of operating company net debt that existed when I joined the company.

Most importantly, we reignited innovation and delivered groundbreaking new technology solutions. For example, we invested in the machine research project, which is focused on creating the entirely new computing architecture for the Big Data era putting memory at the core. We introduced the first prototype earlier this year and have also begun incorporating certain technologies from the project into solutions available today. From a much stronger position, we then looked at our portfolio and made a number of strategic decisions to further sharpen our focus and accelerate performance.

Whitman argues that she’s handing over an HPE that is “more relevant” to customers than it had been before:

[HP] was an enormous conglomerate and you would go in front of customers he’d be talking PCs Superdome Integrity X servers, Enterprise Services, Software and they weren’t sure what we stood for and it was just way too broad and we were not executing with the right R&D against any of those segments. So now HPE is more relevant, they know what we stand for and the core value proposition is the software defined data center on-prem with public cloud-like economics. This whole move to flexible capacity and a pay-per-use model is actually encouraging people to say, ‘Do I need to move every workload to the public cloud?’. And then our new stack offering, I think it’s going to be a milestone in some ways to the innovation and agenda that we’ve driven over the last 6 years. I would also say the speed at which we move [as a] company was a slower company then I would have like to seen 6 years ago. Now we jump on opportunities on problems. It’s far more nimble, far more agile and I think frankly just a better run company than it was 6 years ago.

For customers, there should be no noticeable bump in the road during the handover of control, she adds:

The strategy will remain entirely consistent. It was crafted by Antonio and I…I don’t think he is going to lead another one in terms of reinventing that. We are completely aligned on the strategy, as is the sales team, as is the entire organization. You can see it working in the field. So, you can expect entirely consistent strategy from Antonio.

As for Whitman herself, what’s next? There was immediate speculation that politics might be on her agenda, with Presidential run in 2020 against Donald Trump, whom she has ferociously crticised. Whitman previously ran unsuccessfully for governor of California in 2010 as a Republican, but endorsed Hillary Clinton in the 2016 presidential election. She told CNBC this week that she would “definitely not be running for office”, but that’s a politician’s answer in its own right.

For the immediate future, she will only say:

I am going to work with Antonio through the transition at the end of January and then I will be a very active board member. And actually after a 35 year nonstop career, I have actually come to take a little downtime.

One thing won’t be happening though, she insists:

There is no chance I am going to a competitor, no chance. Listen, I have to say I become quite loyal to Hewlett-Packard and to Hewlett-Packard Enterprise, I love this company and I would never go to a competitor. It has been the privilege of a lifetime to lead the company founded by Bill Hewlett and Dave Packard.

My take

Whitman has certainly made her mark on HP and in a more positive manner than the previous female CEO Carly Fiorina whose disastrous stewardship is best consigned to history. It’s to be hoped that Whitman finds another prominent tech role. The industry cannot afford to lose a positive and empowered female leadership role model like here.

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