HP: 'No Surprise'

Frank Hayes says he's not surprised by the boardroom scandal

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. ...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, I got a call from an HP manager who asked me bluntly, "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 its 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 whether any laws were broken.

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 the money for the company. That's a sign that the rot has reached all levels of management.

Apparently, that rot is not new. Spying on members of the board is just the next logical step.

It's the new HP Way. "Management by walking around" has now been fully replaced by secrecy, suspicion and spying.

It's easy to say that Dunn should get the boot. And she should, if only because she has exposed HP to terrible publicity as well as potential legal liability if the investigators she hired broke the law.

But that's only a tiny fraction of what's needed. HP has lost its way so completely that a new warm body at the head of the table won't help. HP needs a values transplant. Hard as it is to believe, the company that once was the epitome of wise management in the IT business has become a corrupt, dysfunctional travesty of itself.

We need an HP with integrity. We need it because we can't afford to lose a valued partner, a trusted supplier, an industry leader.

But this mess called HP today? We can afford that even less. We know now that an HP that will chase after grumbling employees in 2005 will lie to get phone records of its board members in 2006.

And in 2007? Will we be hearing that HP is spying on major customers to make sure they haven't defected to the competition? I don't know. But I won't be surprised.

Frank Hayes, Computerworld's senior news columnist, has covered IT for more than 20 years. Contact him at frank_hayes@computerworld.com.

See more coverage:

  •  HP says chairman has no plans to resign over leaks investigation

  •  Opinion: A demand for immediate and full disclosure

  •  Reporters' phone records accessed by HP during leak probe

  •  California AG probing HP boardroom leaks

  •  SEC filing shows board infighting, leaks at HP

Blogs:

  •  Frank Hayes: HP: She really should have known better

  •  Preston Gralla: Was David Ortiz the hacker in HP board scandal?

  •  Joyce Carpenter: HP improves Integrity

  •  IT Blogwatch: HP spy vs. leaker (and 2356 days of Noah)

  •  Martin McKeay: Taking Corporate Spying to the Next Level

Copyright © 2006 IDG Communications, Inc.

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