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HP: No Surprise

By Frank Hayes
September 11, 2006 12:00 PM ET

Computerworld - Why was I surprised to hear that Hewlett-Packard spied on its own board members to find the source of a news story? I shouldn't have been. Last year, just after Carly Fiorina walked away with $21 million in severance pay, I ran a letter in my column from a demoralized HP employee. "After all these cost cuts, stealth layoffs, expense and travel reductions, no raises for years, no bonuses, here Carly walks away with all this money after basically running HP into the ground," the anonymous reader wrote. "Oh well, tap me on the shoulder for that workforce reduction -- I'll take the severance, the unemployment, and have a nice rest."

A week later, an HP manager asked me, "Who was your source?"

At the time, I was more amused than offended. Of course, I didn't identify the source, whose only crime was grumbling without a license. And I wrote off the question as coming from a gung-ho manager who didn't realize how out of line it was -- how completely contrary to everything that HP is all about.

Looks like I was wrong. Now we're learning that in January, HP Chairwoman Pattie Dunn hired outside investigators to track down a boardroom leak. The offending news story had reported on a marathon management retreat where HP executives and board members hashed out plans to use AMD chips, make more acquisitions, develop commercial printers and improve HP's internal technology for managing direct sales.

According to news reports, investigators lied to get the home phone records of the CNet reporter who broke the story. They also lied to get phone records of New York Times and Wall Street Journal reporters.

And, oh yes, they also lied to get home phone records for the members of HP's board.

Venture capitalist Tom Perkins quit the board in disgust when he found out. Then he refused to sign off on board minutes that claimed the board knew about the "pretexting" to get phone records. Now he's raising a stink that has reached the California attorney general, who's investigating what laws were broken and by whom.

Something else has been broken, though, for sure.

That's trust. Especially our ability to trust HP. For anything.

Look, there's something spectacularly wrong with the culture of a company that doesn't trust its own leadership. That's not just paranoia. That's despair.

And there's something even more wrong with a company that doesn't trust its own employees, the 150,000 people who actually do the work and make money for HP. That's a sign the rot has reached all levels of management.

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