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HR is driving HP's turnaround (Yahoo, take note)

Rob Enderle | March 11, 2013
Hewlett-Packard shouldn't be succeeding. It's spread itself too thin by competing in too many markets. But the company's turnaround actually seems to be working, and a focus on employees seems to be doing the trick.

Tracy Keogh: Giving HP Its HR Competitive Edge

HP is different than the other companies I've mentioned. It hired Tracy Keogh, a Harvard-trained overachiever, and put her in charge of HR. She apparently didn't get the memo her peers got that says HR isn't strategic.

Keogh is managing HR as a strategic resource. Her process is a litany of best practices heavily based on metrics and HR science. As a result, HP is enjoying some of the lowest employee turnover numbers in the industry, while top performers are being identified, assigned mentors, protected and nurtured.

HP has gone from filling 70 percent of new positions externally to filling 70 percent of positions from the inside. This gives employees career paths but still ensures that new blood keeps the company from becoming stagnant and brings in skills that can't be identified internally.

Meanwhile, HP as a whole isn't making the same mistakes that prior executive teams made, such as cutting salaries while increasing top executive compensation. (This, of course, typically cripples productivity and puts workers in opposition to senior management.) Cuts, when made, have been cleaner and respectful of both the departing and retained employees.

What's allowing HP to compete successfully across a breadth that exceeds any other high technology company is that the employees are being managed as a critical strategic resource, not like equipment that can be bought, sold, cost-reduced and outsourced. Over time, HP employees be able to focus more on their current job and less on finding their next one, to engage with and and loyal to their company, and improve their productivity, hour by hour and person by person.

HP Under-resourced, Still Overachieving

HP shouldn't be successful. The company's spread far thinner than its competitors across more distinct markets. What appears to make the difference is its unique focus on assuring and growing employees. The benefits are in the results: HP's valuation is up, its competitive execution is improving across all businesses (with the unfortunate Autonomy acquisition being the exception), and in the second year of what should be a five-to-seven-year turnaround, it's showing near unbelievable progress.

Given HP's complexity, the turnaround CEO Meg Whitman is attempting should be impossible. Given the right care, motivation, and backing, though, employees often can do the impossible. HP now appears to be a case in point.

In the IBM turnaround, the unsung hero was Jerry York, the CFO who came to IBM after turning around Chrysler. At HP, Keogh appears to be the unsung hero ensuring that the employee is once again the most important part of the new HP Way.


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