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论老子

道,领导也。领导必需要不断呼唤,教导下属以及以身作则。下属的过和错皆因领导懒惰。

 
 
 

日志

 
 

Chapter 3: Information Manipulation  

2012-06-20 11:58:37|  分类: 7 Deadly Mgnt Be |  标签: |举报 |字号 订阅

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Two months into his new position as CEO of Hewlett-Packard, Mark Hurd announced in mid-July 2005 that he has hired Dell Inc.'s Chief Information Officer, Randy Mott, to fill the same position he then held at Dell. The month before, Mark Hurd split HP's personal computer and printer group back into its two separate divisions – it was a merger that was one of the former CEO’s last moves before her departure.

Why would someone merge two seemingly unrelated divisions? The printer division was known as the crown jewel of HP which profit was almost equal to the whole of HP’s profit for many years. The other four divisions in HP did not bring in any significant profit with the personal computer division as the least profitable.

In 2002, the former CEO acquired Compaq - a computer manufacturer. Unfortunately, the acquisition has made the company to suffer from losses, quarter after quarter. To hide the fact that the computer division was profitless, its account was merged with the printer division and thus combined, the net account of these two divisions showed profitability.

The sliver in the eye suddenly disappeared thanks to the manipulation – an approach often taken to hide poor performance.


Table 1: Contrasting performance between the personal computer and printer divisions

The same practice was also applied to HP Services division and its IT department. Both of them offered IT services: HP Services division provides IT services to external clients while its IT department provides IT services to all internal employees. Even though HP Services division was much smaller in terms of manpower and operating expenses, it brought in substantial revenue contrarily to the IT department which was purely a cost center that did not bring in any revenue but had a burden of more than US$2.7 billion operating cost per year.

By combining those two income statements together, the IT department’s annual operating cost of US$2.7 billion did not stick out like a sore thumb anymore and hence, justified its operating expenses. In his third month, Mark Hurd saw that fallacy and brought in Randy Mott to be the Chief Information Officer to head the IT division.




[1] For the full stories, please read chapter 1, ‘Misused of average’ in book “The untold secrets of VSM” by the same author.

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