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Was Apotheker doomed at HP from the start?

Some observers aren't surprised by reports of Hewlett-Packard CEO Leo Apotheker's imminent departure

As reports swirled Wednesday of Hewlett-Packard CEO Leo Apotheker's imminent ouster from the company after less than a year on the job, some observers suggested that if such a thing indeed comes to pass, it won't be that much of a surprise.

"Leo is probably one of the smartest strategists in the industry, but he doesn't know how to communicate," said Ray Wang, CEO of Constellation Research. "To be an effective leader, you've got to put out a vision that everyone can get excited about."

A former head of business software vendor SAP, Apotheker was seen as a surprise choice when he was announced as a replacement for former CEO Mark Hurd, one of Silicon Valley's highest-profile figures. Hurd left HP last year after a scandal involving a relationship with an HP contractor. He has since landed a job as co-president of Oracle.

Apotheker's reign as sole CEO of SAP was a rocky one, marked by flagging software license revenues, tensions among customers over an unpopular support fee hike and low employee morale. He ultimately was removed as CEO in February 2010, less than a year after being named to the job.

It didn't get any easier for Apotheker during his time at HP, with the market reacting badly to a series of strategic decisions as he sought to position HP as a more enterprise software-focused company. Those moves included a possible spinoff of HP's PC division as well as plans to purchase infrastructure software vendor Autonomy.

Arriving at HP, Apotheker faced a "big cultural mismatch," Wang said.

What might have worked better is for HP to have acquired a company like Salesforce.com and installed its flamboyant and outspoken CEO, Marc Benioff, in the executive suite, Wang said.

"Would Marc have taken the job? That's a whole other story," he said. "But you need someone like that to go in and inspire people."

Apotheker was "a curious choice for HP from the get-go -- a case of hoping for wish fulfillment," said Forrester Research analyst China Martens via e-mail. "If you hire an enterprise software CEO, your company will ergo successfully become a much larger enterprise software player."

The whole situation has a sense of déjà vu as well, Martens said. "Like SAP a while back, HP is now going through rough patches, trying to redefine and overhaul its business and looking to Leo to lead that revamp, while at the same time dealing with some poor handling of its public message."

Anecdotal evidence suggests that discontent over Apotheker has become rampant among rank-and-file employees.

About 3,000 individuals identified as HP employees had posted anonymous reviews of the company to the careers website Glassdoor.com as of Wednesday. Overall, the company now has a 2.5 rating on the site's five-point scale.

Apotheker has a cumulative approval rating of 58 percent, based on 297 ratings. But his rating plummeted in recent months, to 25 percent in September, according to a Glassdoor.com spokeswoman. Apotheker had a 73 percent rating in July, before the PC spinoff plan was announced in August.

In contrast, at the time Hurd left the company, his cumulative approval rating was 34 percent. Both are well below the 62 percent average approval rating for CEOs on the site, the spokeswoman said.

HP CFO Cathie Lesjak, who served as interim CEO before Apotheker was hired, logged a 55 percent overall approval rating during her short tenure.

Ex-eBay CEO and current HP director Meg Whitman reportedly is being considered for an interim CEO post should Apotheker be removed.

Asked for comment Wednesday, an HP spokeswoman said "it's the company's long-standing policy not to comment on speculation."

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is [email protected]


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