Whither the ‘HP Way’

By Ed Frauenheim

Dec. 6, 2006

Surprising as it may seem, Hewlett-Packard’s spying scandal may coincide with a revival of the famous “HP Way.”

    Defined as a workplace culture of integrity, innovation, accountability and respect for the individual, the HP Way served as a beacon that for years attracted employees to the Palo Alto, California, computer maker.

    But former HP employees say the company’s reputation for sound people practices diminished over time. One former employee who now works at a supplier to HP says the company often failed to hold employees accountable in the 1990s, and then ex-CEO Carly Fiorina essentially overreacted by laying off workers indiscriminately.

    “When I talk to people who are still there, it’s gone from being someplace special to just being another job,” he says. The former employee spoke on condition of anonymity because of the sensitivity of his position at an HP supplier.

    HP has weathered challenging times during the past several years, from the tech industry implosion in 2001 to a controversial merger with Compaq to Fiorina’s ouster in February 2005. The 150,000-employee company has also announced job cuts exceeding 32,000 in recent years, even as it has continued to hire in places including the U.S., India and China.

    Once a mainstay on Fortune magazine’s list of the 100 best companies to work for in America, HP hasn’t appeared on the list since 2001. Amy Lyman, co-founder of the Great Place to Work Institute, which compiles the list, says there has been a decline in company ethos during the past five years.

    “Their senior leadership lost the HP Way for a while,” she says.

There has been a decline in company ethos at Hewlett-Packard during the past five years. “Their senior leadership lost the HP way for a while.”
–Amy Lyman, co-founder of the Great Place to Work Institute, which compiles Fortune magazine’s list of the 100 best companies to work for in America

    The recent spying scandal revealed particular waywardness. In an effort to determine who on its board of directors leaked information to the press, the company violated the privacy of directors, journalists and employees.

    Even so, there are signs HP is turning its ship in the right direction. For one thing, the company has shown solid financial results under Mark Hurd, who took over as CEO in early 2005. Hurd has won praise as a leader, and HP’s stock is trading higher than it has in years.

    Along with this success in the market has come greater employee satisfaction, according to HP. The company said its annual “Voice of the Workforce” employee survey, taken earlier this year before news broke of the probe into boardroom leaks, “showed marked improvement across many key employee satisfaction areas from 2005 to 2006.”

    Meanwhile, HP is still winning workplace awards. It earned a spot this year on Working Mother magazine’s best companies for working mothers, marking its 16th year on the list. And in the spring, Business Ethics magazine ranked HP second on its list of the 100 best corporate citizens. HP is one of just 16 companies that have made that list all seven years of its existence—and HP has been in the top 10 each year.

A    lthough HP’s board-leak probe was a setback, Hurd apologized for the privacy invasions and pledged to prevent similar abuses in the future. “Our culture, our core, which we call the HP Way, remains strong and ethical. But clearly, changes are in order,” Hurd said in testimony to Congress in September.

    There seems to be renewed focus on the HP Way, Lyman says.

    “You can kill a company culture,” she says. “Mark Hurd appears to be trying to recover it.”

Workforce Management, November 20, 2006, p. 25Subscribe Now!

Ed Frauenheim is a former Associate Editorial Director at Human Capital Media and currently works as Senior Director of Content at Great Place to Work. He is a co-author of A Great Place to Work For All.

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