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.
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