Hewlett-Packard
When Mark Hurd stepped into his role as its new CEO, Hewlett-Packard (HP) was the eleventh largest company in the United States. It was well known, however, that HP was struggling financially. Under the guidance of the previous CEO, Carly Fiorina, HP had paid $19 billion to acquire Compaq but then incurred more than $10 billion during the integration of the two companies. In short, expenses had risen too much, revenues and market share had risen too little, and HP was earning profits far below its competition. A number of other significant problems were apparent as well. The first was HP's strategic vision, which Fiorina had repeatedly described as "digital, virtual, mobile, personal." While this sounded good, no one was quite clear what it meant. Another problem was HP's confusing business structure, which blurred lines of accountability and slowed decision making. For example, HP sales people reported to people in four or more divisions such as sales, printing, computing, and corporate. A fourth problem was HP's reward system, which was so complex in its calculation that no one understood how their performance affected their bonuses. The most worrisome problem, though, was the deep sense of distrust that pervaded HP, from first-level employees to executive suites all the way to the boardroom.
Mark Hurd did many things to correct these problems. First, he sat down with his management team to specify the financial targets they would strive to achieve three years later. After specifying those goals, he and his team worked backwards to determine the financial goals for each part of the company. Indeed, that process was a key part in deciding to lay off 14,500 employees. Those layoffs, which saved the company $1.9 billion a year helped HP to maintain its $3.5 billion a year budget for product research and development. Next, Mark decided to follow Fiorina's strategic plans for HP but recast the strategy into specifics. Fortune describes Hurd's version of the strategy like this, "…selling big businesses every little thing they want for their IT departments, offering printing services as well as printers, and selling portable products like notebook and handheld computers." Then, Hurd
began tackling key operational and implementation issues like the company's confusing business structure and its complicated bonus system. Mark divided the sales force three ways so that sales, printers, and corporate would have dedicated sales people who do nothing but sell and service their products. A new, simpler bonus plan linked bonuses to the performance of the HP division and to the company as a whole.
Finally, Mark began to address the distrust at HP. Says Hurd, "I like being part of teams that go into things that people don't think are doing very well and getting into them to do better." He would frequently call people three or four levels down in the company to ask them specific operational questions about how things did or did not get done. Consistent with that approach, Hurd regularly sits in on divisional reviews of performance, something that Fiorina never did. And, then, to make sure things got done, Hurd held his managers and staffers accountable for following up. Managers and employers appreciated that Mark was willing to help them do their jobs. Dave Booth, senior vice president for sales, said, "If I pick up the phone and tell Mark's office I have an urgent customer request, if he isn't already with a customer, he'll stop what he's doing and call me to find out what he can do. The fact that I pick up the phone and call his office directly and not go through channels is new."
-Refer to Hewlett-Packard. As Mark Hurd began his role as CEO, he needed to______ of his management team.
A) initiate structure
B) improve situationals
C) implement position-power
D) implement a mission statement
E) initiate change to improve the performance

The Two Types of Visionary Leadership Are______

Multiple Choice

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