It has been only two weeks since Hewlett Packard split into two companies, but Meg Whitman – now CEO of HP Enterprise – says she already feels an improvement. “What’s the difference?” I asked in our discussion onstage Saturday at EY’s Strategic Growth Forum. Her answer: “Focus, focus, focus, focus.”
Whitman insists it wasn’t shareholder pressure that drove her to split the iconic company – although she credits shareholder activist Ralph Whitworth with playing an important role in the strategy. Rather, she insists the split makes her and her team more effective. And she believes it gives them a significant advantage over Dell and EMC, who are making precisely the opposite bet by merging companies.
This real-life face-off will make a fascinating case study in corporate strategy over the coming years. I asked Whitman if Dell had an advantage because it will operate as a private company, and not be subject to pressure to return money to shareholders. She said perhaps, but that will be offset by the pressure to pay off the massive $50 billion plus in debt it will take on as part of the merger. Under Whitman, HP has sharply reduced its debt load.
Which company has the right strategy? I’m not sure, and am eager to hear the views of CEO Daily readers.
Speaking the morning after the terrorist attacks in Paris, Whitman said the events reinforced her belief that next U.S. President needs to have government experience. That rules out her predecessor at HP, Carly Fiorina (who Whitman says was a competent executive and made the right decision in merging HP with Compaq.) Whitman is finance co-chairman for New Jersey governor Chris Christie.
More news below, including analysis of the potential economic and policy implications of the Paris attacks.
• Paris attacks could hit Europe’s economy
While there are no obvious economic impacts in France following the attacks on the magazine Charlie Hebdo earlier this year, the Paris attacks that happened last week could result in consequences for business – especially when it comes to policy. The European debate on surveillance is likely to become a more high profile subject. And some European leaders may feel emboldened in their anti immigrant rhetoric, with calls to accept fewer volumes of Muslim migrants likely to generate more attention. Fortune
• At G20, focus is on ISIS
While the G20 summit is generally a time to discuss economics, the two-day meeting held this weekend in Turkey saw various world leaders discussing the evolving global threat that is the Islamic State. U.S. President Barack Obama declared he would increase efforts towards eradicating ISIS to prevent more attacks similar to the one that occurred in Paris on Friday. Leaders at the summit were also expected to agree that the migrant crisis is a global problem – and that they need to coordinate a way to tackle it. Fortune
• Democrats debate over the weekend
Just a day after coordinated attacks in Paris killed 129 people and injured nearly 200 others, the three remaining Democrats vying for the party’s presidential nomination met in Iowa for a debate on Saturday night. The CBS-hosted debate opened with a discussion about the brutal terror attacks. Sen. Bernie Sanders of Vermont said the Islamic terrorism was inflamed by the 2003 invasion of Iraq, while former Secretary of State Hillary Clinton conceded that invasion was a mistake. Time
• Japan enters recession
Japan fell into its second recession since Prime Minister Shinzo Abe took office in late 2012, as the nation’s economy contracted in the third quarter as business investment fell. Gross domestic product dropped an annualized 0.8% in the latest quarter, following a revised 0.7 drop in the second quarter. The GDP report could put pressure on Abe and the Bank of Japan to boost fiscal and monetary stimulus. Bloomberg
• Textron to debut new business jet
Textron, which makes the Cessna jet, will today announce plans to launch a new plane focused on the business crowd – targeting a market that remains stagnant after a collapse that followed the financial crisis. The Cessna Citation Hemisphere jet is set to join a parade of swanky new planes with larger cabins, though they are also flying into some headwinds as tough market conditions have forced some rivals to either cut production or cancel aircraft programs altogether. Wall Street Journal (subscription required)
Around the Water Cooler
• JetBlue builds at airport farm
It took JetBlue three years to clear bureaucratic hurdles for the airline to put together a farm on Kennedy International Airport’s grounds – but the company finally made the dream a reality. JetBlue’s project in New York takes up half a football field of space to grow 26 varieties of plants, including potatoes, kale, dill and oregano. But the airport isn’t alone in embracing the “green” movement. In recent years, airports in Canada, India and Alabama have erected indoor “living” walls composed of plants and greenery. New York Times (subscription required)
• UAW to delay GM labor agreement
The United Auto Workers union will delay formal ratification of a four-year pact with General Motors for another week to Nov. 20, which is stirring tension in some plants between production workers, who backed the deal, and skilled trade workers, who rejected it. Because the union has not resolved multiple complaints from its skilled trades members at GM, the UAW and the union’s GM department asked the auto maker to extend the deadline. USA Today