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Risk

9/11/2006
01:02 PM
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HP Must Rebuild The Damage To Its Image

Like most everyone, I've been thinking about the victims of Sept. 11, 2001, in the past few days. I'm also remembering former Hewlett-Packard Chairman Lew Platt, who died on Sept. 8 of last year, as his former company faces a criminal investigation into tactics used to hunt down the source of media leaks.

Like most everyone, I've been thinking about the victims of Sept. 11, 2001, in the past few days. I'm also remembering former Hewlett-Packard Chairman Lew Platt, who died on Sept. 8 of last year, as his former company faces a criminal investigation into tactics used to hunt down the source of media leaks.My first meeting with Platt (and one of only a few) took place in the suite of a hotel where a technology conference was being held; it was '94 or '95. Lew, surrounded by his PR staff, settled into one of the suite's French renaissance-style sofas for the interview. He glanced at the sofa and the dark red damask curtains on the window and remarked, "This place looks like a bordello."

It was a funny thing to say, odd even, but I was impressed. Here was a big tech company CEO/chairman who wasn't afraid to say exactly what was on his mind at that moment, even if it had nothing to do with technology or business. He didn't lean over my notebook and say the predictable, "You're not going to use that, are you?" Platt wasn't only a great leader, but a personable and kind man. (That's not just my opinion, but his reputation, according to articles that ran after his death from a brain aneurysm at age 64.) His leadership set the tone for HP as a company that, besides producing good technology, was a good corporate citizen and good to work for. HP has long been recognized for its programs for balancing work and life, for example. For what it's worth, Platt was quoted on the great value he thought women brought to management and executive roles and helped usher in former CEO Carly Fiorina.

Twelve years have passed since that funny comment, and now HP faces a huge image problem. Suddenly it doesn't look like such a nice company. And while I've never met HP's current chairman, Patricia Dunn, I'm appalled at her apparent involvement in a private investigation to find out which board member was leaking information about company strategy to reporters. Turns out it was George Keyworth, who reportedly was asked to resign but refused.

Dunn and HP have come clean on this much: Outside investigators hired by HP had obtained the phone records of board directors and nine journalists by giving phone companies fake identities. California's attorney general is examining whether HP's probe was illegal, and the U.S. Securities and Exchange Commission has also asked HP to provide information. Thomas Perkins, the Silicon Valley venture capitalist who quit HP's board in May to protest the leak probe, said on Saturday that Dunn should resign.

I'm also unimpressed with Dunn's ignorance plea. So what if she didn't know that investigators were using questionable tactics to get those records. That leaves me with the image of Dunn standing there like Cruella de Ville, hands on hips, barking to a shaking investigator, "I don't care HOW you get those records, just GET them!" That could be the furthest thing from the truth, and maybe that image will be replaced with a different one as more information comes out. But I'm sure I'm not the only one having these kinds of thoughts.

Here's another not-so-great thought: In this age of the Internet, data privacy concerns, customer data losses, and identity theft (you can't sit through a prime-time TV show anymore without seeing a commercial from Citibank's ID theft services about "getting your life back"), tech company HP is behind the theft of journalists' private information. That can't be good for HP, which like many tech companies is working hard to convince customers that data security is at the top of its priority list. As just one example, it launched PCs with new security features last week.

I'm with you, Perkins. It's looking increasingly like Dunn should resign and a full criminal investigation should take place. HP needs to repair the damage to its image as a good company and a good corporate citizen. Make Lew Platt proud.

UPDATE 09/12/06, 11 a.m.: HP just announced that Patricia Dunn will step down from her post as chairman of HP's board of directors in January, but she will remain a director. CEO and President Mark Hurd will take over as chairman.

And out come the mea culpas. In a prepared statement, Dunn said the "investigation, which was conducted with third parties, included certain inappropriate techniques. These went beyond what we understood them to be, and I apologize that they were employed."

Hurd had this to say about the inappropriate investigative techniques: "They have no place at HP," he said. "HP holds itself to the highest standards of business conduct and we are accountable to these standards for everything that we do. The company will work to put these matters behind us so that we fully resume our focus on the business and continue to earn the trust and support of our customers, employees and stockholders."

 

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