7 Lessons HP Can Learn From Its Peers

It's sad to see HP bouncing over the rocks but there are lessons for Meg Whitman in the behavior of her peers. Here are seven that I've drawn out from some recent interviews and from the pages of the Elastic Enterprise.

1.  Revitalize and rejuvenate.

I've been talking a lot lately with SAP about their attempts to regain their youth - well, a different type of youth. SAP wanted to replace their old ERP image with an image that represents their more diversified and leading edge approach to business. Though they have emphasized the SAP Community Network, a big first in social business, I have been more impressed by Streamworks. Whatever takes your fancy, the former ERP giant is doing a lot right in social, and by being more open and less controlled. The new JAM social business suite looked strong when I saw Sameer Patel present it in Madrid. SAP have a way to go but they could provide HP with a model for culture change - and a better acquisition strategy.

2. Externalizing the core

Cloud computing allows companies to turn a lot of process to the Cloud, freeing up CIO time for business strategy. But there is a bigger move towards externalization. If you compare an Intel with ARM as two models of microchip design and manufacture, then clearly ARM (2500 employees) has externalized many processes that are core to Intel (15,000 employees in California alone). But then if you look at Ubiquiti networks, you see they have externalized processes that even ARM believe are core. Ubiquiti has around 100 employees but has half the turnover of ARM.  HP could learn from this trend.

I recently talked with Aaron Levie from Box about core competency, as part of my Future of Work project - I'll be publishing some results here.  I found that younger CEO's like Box's Aaron Levie, talk about constantly evolving the core, rather than protecting it.

3. Building ecosystems

The corollary of that is that companies are now nurturing relationship-building as a core skill. I've heard this from companies as distinct as P&G, Nokia Siemens Networks, and Bombardier.

We've seen a swathe of ecosystems emerge around mobile applications (Apple's App Store, Android Market, LinkedIn), where relationship building is fairly automated through APIs and SDKs. But clearly ecosystem models don't need to be at Apple or LinkedIn scale. HP needs to build ecosystems that matter, regardless of size, but you also think anything that would open the culture up has to be beneficial.

Whitman should be more vocal about this - her eBay experience should fit her well to understand ecosystem businesses. And like Jobs she could talk up the role of the little guy and the opportunities HP can create for others.

4. Trusting the community

SAP has a guide-rails approach to the SCN, nothing too formal or preventive, trust the community. That is a trend I notice in many, many interviews. I am near completing thirty interviews with CIOs and Chief Innovation officers for my Cognizant Future of Work project and a recurrent theme is for management to guide rather than dictate, and to keep the faith when control looks like turning to chaos. HP has to become a highly externalized enterprise. From what I can see, even its open innovation program is fairly narrow and confined to academic relationships. One CIO said to me recently, any start-up can eat your lunch, and that's why he was trying to cast the net very, very widely. It means you need to have  ingest mechanisms for a far bigger relationship network but the models for that are out there.

5. Peer-based leadership

I interview on average three people a day and I'm always struck by the contrast between those who are command-centric and those who are peer-centric. Peer-centric leadership is the future and most peer-centric leaders are wrestling with their own identity and role in their company. If you don't hear the sounds of doubt and uncertainty then you are dealing with a command-centric leader. The way Nick Vitalari and I told this in The Elastic Enterprise was that even Steve Jobs became peer-centric. A reputation for a ruthless commander, he in fact was viewed by his peers as first among equals, and later in life acted that way.

6. Building a strategic options portfolio

Another lesson Nick and I took from exploring the Elastic Enterprise is the capacity of good companies to have many more options to hand than they actually use. I wrote a while back that RIM suffered from a poor strategic options portfolio. The actions it took seemed to be the only actions available to it. I still think that is the case. The new OS might turn out to be great but what is its portfolio of options if the OS and new phone go badly. HP lacks a strategic options portfolio, an extensive range of options that it could play into the market at any one time.

7. Better de-risking

HP is clearly bad at assessing and integrating acquisition targets. In the Elastic Enterprise we logged new ways of handling risk as a key leadership quality. In fact we called it de-risking to signal that good leaders do everything they can to de-risk an opportunity without killing it. Jobs' reluctance to go with the iPad before the iPhone had proved itself is a good example. But HP could also have run with an open source solution to search, while mulling over the Autonomy buy.

HP is suffering from its outdated culture. Time to open up.

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