Mark Hurd's Turnaround Strategy at Hewlett-Packard

Introduction: HP Before Hurd

The pre-Hurd Hewlett-Packard had a corporate culture that was not conducive to strong operational performance. The previous leadership had lost sight of the necessity for operating discipline, instead focusing on grand visions and bold strategic moves. The company had, in effect, become unfocused — a circus of ambition without the structural grounding needed to execute. Mark Hurd's first priority was to settle the culture down and re-focus it on a simpler, more disciplined operating model.

Cultural and Personnel Changes Under Hurd

One of the most important steps Hurd undertook to realize his vision was reconsidering key personnel. He brought in individuals who shared his priorities, including R. Todd Bradley. These new hires were focused on the tasks Hurd felt were most critical: improving operations and rigorous financial analysis. The communication style of the company was also transformed, shifting toward directness and clarity (Burrows, 2005).

Hurd shifted the culture toward what was a more traditional HP culture — one that was more businesslike than the atmosphere under his predecessor, Carly Fiorina. This cultural realignment emphasized core operations and personal responsibility, making individual managers accountable when key performance measures lagged. The move toward accountability trickled down throughout the organization. Managers became more focused on delivering expected results, since that was what was rewarded at HP under Hurd (Burrows, 2005).

Dismantling the Matrix Structure

Structurally, Hurd removed the matrix structure that had been implemented by the previous management. Matrix structures can be highly effective but are notoriously difficult to implement. Hurd concluded that the challenges associated with the matrix structure were simply not worth the benefits it offered. He simplified the operating structure of the company to place greater emphasis on direct responsibility and clear lines of communication (Burrows, 2005).

HP also recognized that the matrix structure was fundamentally misaligned with what its businesses required. Its product lines — PCs, servers, and related technology — depended on innovation and marketing to thrive. A streamlined organizational structure with direct lines of communication and accountability was far better suited to focusing managers on results, including both innovation and cost control.

Conclusion: The Combined Effect of Hurd's Reforms

In all, it was the combination of all three changes that led to HP's revival. The company's culture had deviated from the values that had originally brought it success. Hurd's return to a more traditional HP culture reinvigorated experienced managers and gave them the environment they needed to perform. The simplified operational structure improved communication flow and sharpened accountability throughout the organization.

Under the new culture, managers embraced accountability and responded well to the challenge it presented. The controls employed were largely numerical: managers understood what they needed to achieve and were given the freedom to determine how best to get there. This approach played directly to Hurd's overarching strategy — mobilizing the substantial talent already within HP by focusing it on specific objectives and equipping it with the resources needed to succeed. The reforms were not revolutionary in isolation, but together they transformed HP's trajectory.

Works Cited

Burrows, P. (2005). HP says goodbye to drama. Business Week, New York, September 12, 2005, Issue 3950, pp. 83–86.

Burrows, P. (2006). HP's ultimate team player. Business Week, New York, January 30, 2006, Issue 3969, p. 76.

Einhorn, B., Kharif, O., & Roberts, D. (2007). Grudge match in China: HP and Dell are exporting their rivalry and starting to challenge Lenovo. Business Week, New York, April 2, 2007, Issue 4028, p. 42.