HP And The Stone-Throwers

When big companies stumble, activist investors storm into the picture. For Dell it's Carl Icahn demanding a new CEO. For Sony a transpacific hounding from Dan Loeb. Even Apple earned a tongue-lashing from David Einhorn about its dividend policy. So why haven't the stone-throwers come after Hewlett-Packard?

The answer: Meg Whitman and HP's Chief Financial Officer Cathie Lesjak struck a quick truce in November 2011 when activist investor Ralph Whitworth of Relational Investors proposed that he join the HP board. His agenda called for a more careful approach to capital spending, and the HP leaders embraced that. As Lesjak recalls, "We walked out of the room and said: 'Wow, we like the way he thinks.' "

Whitworth has jousted with other companies' management in the past, but by public appearances all is lovely between him and HP. When HP director Ray Lane stepped down as chairman this April, Whitworth took over the chair on an interim basis. Whitworth announced his new status in an upbeat HP blog post, declaring: "I walk away from every interaction more confident about this company's future."

Whitworth will want to cash out at some point, and other activists may pound the table for aggressive agendas. But Lesjak, a 24-year-veteran of HP, is betting that candor and civility will carry the day. "When we talk to investors it's all about communication, communication," she says. "Things won't always play out exactly the way you want. You just have to put everything on the table."