Home Leadership IBM & HP – A Tale of Two Companies

IBM & HP – A Tale of Two Companies

by Brian Ray

It goes without saying that both IBM and HP are legendary giants within the IT industry.

However, each has suffered from a similar set of problems in the past, and now those issues are once again setting the stage for disaster.  These include a lack of vision, extremely poor decision making on part of their leadership, a continual focus on the wrong priorities, and the same old cheap bag of tricks being used time and again.

There are 2 particular tactics that are being used extensively these days to create the illusion of ‘positive momentum’, so let’s take a look at those now.

•  Workforce Reduction

Chief among the tactics being used is the implementation of massive layoffs in order to boost the bottom line in the short term.  Over the past few years this has earned several different CEOs and Executives the moniker of being named the “Hatchet Man/Woman”.  In every aspect, this title is very apt as many CEOs have their compensation and/or bonuses tied to how much revenue they can generate within a specific time frame.  So, in order to generate capital quickly, they terminate as many people as they can indiscriminately.

Secondly, this is also done to appease the shareholders and generate the illusion that leadership is accomplishing something useful.  The sad thing is that many people who use this tactic live in absolute denial of the damage it does in the long term.  Those individuals just continue to focus on instant profits over effective, long-term stability and consistent revenue generation.

So, just like so many times before, it is the workforce who ultimately pays for the greedy, short-sighted decisions made by Corporate leadership.  Media outlets have already reported that the layoff situation at IBM is akin to a “bloodbath”, and the situation at HP is no better.

As someone who knows many individuals currently employed by HP, my heart breaks for these talented, dedicated people who are caught up in the storm through no fault of their own.  They poured their hearts & souls into seeing that company through the difficult times because they believed in it, and now many of them will simply be discarded at the whims of those in charge.

• Off-Shoring

Another tactic being used for short-term profit generation is that of off-shoring.

In particular, one of the most despicable maneuvers that is utilized by companies is having the current workers actually train their off-shore replacements.  Usually this is accomplished by the company holding the current employees severance pay or unemployment benefits hostage through various means to ensure compliance, then cutting them loose.

In other cases, some employee tasks are transferred to off-shore locations, accompanied by a few layoffs.  Then those remaining individuals from the original then have to take on additional, higher lever tasks, such as managing multiple accounts instead of one, without any additional compensation whatsoever.  This is usually accompanied by various quips from Executives that those remaining employees should be grateful just to have a job.

Additionally, HP has now taken this activity to another level by changing the name of the term to “Best-Shoring”.  However, this is nothing more than another attempt at creating an illusion of something positive out of an underhanded business practice.

End Game

After several years of working to move forward, both of these companies have regressed to a point of grasping at any straws possible in feeble attempts to generate some kind of momentum.

What is even more frightening is that HP seems to be trying to implement business models and thought processes from the 1990s.  So instead of trying to truly innovate and firmly bring the company back to the modern era, their leadership is instead choosing to cling to the past.  Yet another example of the old saying – “Those who forget history are doomed to repeat it”.

Instead of looking back, true leaders need to emerge to help these companies learn from their mistakes, avoid the shadow of greed, and leave the past behind.

Unfortunately what appears to be happening is another cycle of where the current leadership at these companies will once again take their excessive pay and bonuses, throw their hands up and say – “We did what we could” – and leave these companies as nothing more than broken shadows of their former selves.

It is shameful that in the 21st century, Corporate responsibility toward its workforce has become nothing more than a philosophical term instead of a common practice.

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