Amid major leadership changes, the corporate comms team at HP stays on message and helps it emerge on solid ground.
Slightly more than a year ago, Hewlett-Packard was responding to CEO Carly Fiorina's exit, news that sent the media and tech industry at large into armchair-quarterback mode, questioning everything from the Fiorina-led acquisition of Compaq to the company's future.
Fast-forward to 2006, and that shaky ground is looking a lot more stable. In February, when HP released quarterly earnings, its stock price was up nearly 50% from a year ago, and 2005 fiscal year revenue rose 8% to $87 billion.
New CEO Mark Hurd has received much of the credit for the turnaround, particularly for making tough decisions like layoffs and streamlining business units.
Also receiving praise: the communications team for helping HP stay on message and delivering a coherent vision and game plan.
Jason Corsello, a program manager with analyst firm Yankee Group, hails the job HP has
done communicating with various stakeholders, yet maintaining a concise and coherent message.
"They've done an excellent job of staying on message," he says. "They were internally focused at first, looking at the execution of business. Hurd looked at the company's core businesses and is helping those get back on track. And they've done a great job of communicating that."
Communications was critical not just in conveying what was - and wasn't - going on at HP, but also in setting expectations.
Business as usual
The company was fortunate that CFO Robert Wayman stepped in as interim CEO during the period between Fiorina and Hurd, says Robert Sherbin, VP of external communications. Wayman was well-known and trusted by employees and external audiences, including investors, the media, and analysts. That made it much easier to push the message that it was business as usual at HP after Fiorina's departure, even when so many naysayers were trying to prove that it wasn't.
"[Wayman's] familiarity with HP and level of trust with those external audiences gave us a lot of credibility," says Sherbin. "We wanted to make sure that 'business as usual' was an easy message to tell."
And that meant continuing to do what the PR team had always done - granting the occasional CEO interview, handling earnings announcements, and launching new products. By focusing on HP's businesses, and not on the CEO search, the communications team sought to show that the usual news was coming out of the company, and the lack of a permanent CEO wasn't creating a sea change.
"There was this wave of coverage over Carly's departure and a lot of speculation over who'd be the next CEO," says Sherbin. "We really endeavored to show that the business was moving forward."
During such a tumultuous time, the best thing a communications team can do is focus on the basics, says Ryan Donovan, director of corporate media relations.
"It was just an unbelievable avalanche of coverage," recalls Donovan. "Every day is crisis mode when you work in corporate communications. That's the nature of the business. [It's] unpredictable."
The corporate communications team worked closely with the business units' PR teams, which report to their respective marketing heads, to push that "business as usual" theme. But corporate communications had to pull back on business stories about trends
or corporate culture because "you know the questions you can't answer are going to get asked," adds Donovan.
Corporate communications typically works closely with the business teams when it comes to business press. But coordination was essential, as the corporate communications team knew journalists would request interviews with business units, with the intention of eventually asking questions about Fiorina's departure and the company's future.
"These kind of Trojan horse interviews weren't an unusual tactic," says Donovan. "The business units don't report to us. We can't tell them what to do. But we can stop certain things. So there was more communication between us and those teams."
Donovan moved over from the HP Services PR team to help Sherbin. His boss, VP of corporate communications Pam Wickham, left in March, just three months after joining HP, to take a job with Raytheon as VP of communications and corporate affairs. Wickham left just a month after her boss, SVP of marketing Allison Johnson, left to join Apple Computer. Johnson's departure came just a few weeks after Fiorina left.
Sherbin, who joined HP in October 2004, was named acting head of corporate communications and officially became VP of external communications in August.
When Hurd arrived in March 2005, Sherbin recognized that the new CEO had clear views of what he wanted to do and say. He just wasn't ready to say it yet, at least not in great detail.
"He [knew] a lot of eyes were on him, [joining] a new company," says Sherbin. "But he was reluctant to make any sweeping generalizations. He knew there had to be a good level of due diligence."
New leader, new vision
So the morning HP announced Hurd was its new leader, HP held a press conference, which Sherbin says is unusual; virtual events are more practical, given companies' global nature these days.
One of the first things Hurd said was that he had read The HP Way, the seminal book about HP and the culture bestowed by founders Bill Hewlett and Dave Packard, a culture that some detractors felt Fiorina had drifted from.
That comment wasn't something Hurd was coached to say, notes Sherbin. But it was clear that it spoke volumes about Hurd's understanding of and respect for HP's roots and heritage. And that kind of culture is rare in Silicon Valley, says Sherbin, where most companies are quite young compared with the 67-year-old HP.
But Hurd also let the media and analysts know that they wouldn't be hearing much more from him in those initial months because he was going to focus on correcting the company's course.
"We live in a culture that is so focused on personalities," says Sherbin. "It's the default setting of much of the media to focus on a specific individual. But that's not what Mark wanted. So we told the media that he's keeping his nose down for a while, and we're not granting interviews."
Not that the media were kept in the dark about HP's direction. The company was able to talk about new executives, which indicated where Hurd was headed.
All the same, Hurd's decision to keep out of the spotlight got mixed reviews from those eager to hear from him.
"The general consensus is that the company really went for some time without articulating any kind of vision," says Dwight Davis, a VP with analyst firm Summit Strategies. "Carly was quite articulate and engaging. She did a good job of keeping the company visible and gave it some flair."
But operationally, Davis adds, there was much internal unhappiness about things Fiorina was doing, and Hurd chose a different approach: to focus internally first.
Donovan says the corporate communications team stood by that strategy, particularly as it put other executives, new and old, in the spotlight while Hurd did the job he was hired to do.
The company wanted to move away from the communications model of having the CEO as the sole vehicle for delivering news.
"A good company delivers the news through a number of channels and people," says Donovan. "We wanted the media to give the guy a couple of quarters to get the company under him. And I think most of the media was receptive to that."
Hurd finally unveiled his much-anticipated first steps in July, when he announced a program to streamline the company, reduce costs, and enhance customer focus. This included moving sales and marketing into business units for a tighter connection to customers, the creation of three distinct business units, and layoffs.
"Since Mark has been on board, he has met with about 50% of employees, either in person or through satellite conferences," says Yvonne Hunt, VP of internal communications. "So I think employees weren't surprised when he made this announcement."
Hurd had alluded to the direction in which he was moving the company during his meetings with employees, adds Hunt. And employees have seen that as a level of much-needed and appreciated honesty and transparency.
The communications team focused more on executing Hurd's plan than presenting it as a "grandiose strategy," says Sherbin. That would come later.
Media notes improvement
As for the restructuring, corporate communications worked closely with partner, channel, investor, internal, customer, and Web communications to make sure the announcement reached all constituencies. A special team, composed of all PR groups reaching those aforementioned stakeholders, came together to work on just this announcement.
"We had an unusually long lead time," says Sherbin. "The nature of business is that you often don't know the nature of announcements until the last second. Often, it's a crisis. But we had time to very carefully plan, and I think that shows in the success of the announcement. I think we had prepared people for it."
July brought the operational announcement, then December brought the strategic announcement that the media and analysts were waiting for. Many pundits suspected that Hurd was more of an operational leader than a visionary one, a description that some still believe.
But regardless of how that December meeting was viewed, it also marked HP's evolving relationship with the media. While journalists have always attended the securities analyst meetings, this was the first time HP held a separate event at the same venue specifically for press.
HP also instituted a media call after earnings were reported, so reporters could speak to Hurd in that context.
It was a welcome change from the initial days when Hurd kept his nose down, focusing on HP's recovery, not on media interviews or generating hype. That silence was by design, says Donovan.
For all of Fiorina's flair, some in the media had felt she was too distant from the business press. Before her departure, Fortune and The Wall Street Journal ran articles blasting her management style.
HP alienated the financial press during Fiorina's reign, Rob Enderle, principal analyst with the Enderle Group, told PRWeek in February 2005. "The PR team didn't step up to the problem of negative press," he said. "They needed to rebuild the bridge between [Fiorina] and the media, and no one did that. She never developed a relationship with them."
So media concern about Hurd's lack of availability was understandable. But they quickly found that with Hurd, less is more, says Yankee Group's Corsello.
"He has provided a shift from Carly," says Corsello. "He's more operational, more hands-on. And he's done an excellent job of staying on message."
So Donovan says Hurd's calls with the media are critical to building media rapport.
HP had not traditionally been that strong about communicating its vision, says Summit Strategies' Davis. He describes HP as a company of engineers, not marketers.
"Hurd is toning down the visionary rhetoric," says Davis. "He wants to focus on what people care about and then execute on that. But if they get too far away from visionary statements, they could lose customers who buy into long-term strategies. So they really need to articulate both."