There’s a Dilbert cartoon in which a frazzled
staffer tells the Pointy-Haired Boss, “Our numbers are way down. What should we do?” to which the Pointy-Haired Boss calmly responds,
“Reorganize the department so there’s no valid history for comparison,” before adding, almost as an afterthought, “Then we’ll fire a few people and give
ourselves awards for saving money,” while the incredulous staffer mutters “El Diablo!”
staffer tells the Pointy-Haired Boss, “Our numbers are way down. What should we do?” to which the Pointy-Haired Boss calmly responds,
“Reorganize the department so there’s no valid history for comparison,” before adding, almost as an afterthought, “Then we’ll fire a few people and give
ourselves awards for saving money,” while the incredulous staffer mutters “El Diablo!”
That cartoon is not far from the reality of what has been going on the last few years in one
corner of Silicon Valley—specifically the corner of Page Mill Road
and the Foothill Expressway, home of a once proud, and mighty company founded
by two pioneering engineers: Bill Hewlett and Dave Packard.
corner of Silicon Valley—specifically the corner of Page Mill Road
and the Foothill Expressway, home of a once proud, and mighty company founded
by two pioneering engineers: Bill Hewlett and Dave Packard.
You can probably guess which company that is.
In any event, Dilbert came to mind as we were
listening to the recent meeting at which the management
of that company finally admitted what everybody who more or less paid the least bit of attention
to what was going on out there in Palo Alto already knew: that things weren’t
good.
listening to the recent meeting at which the management
of that company finally admitted what everybody who more or less paid the least bit of attention
to what was going on out there in Palo Alto already knew: that things weren’t
good.
At all.
Now, readers of this column can’t say that anything
that happened at last week’s meeting surprised them, excepting the fact that
for one, brief, shining moment the scales seemed to fall from the eyes of Wall
Street’s Finest: for some reason we do not quite grasp, the bright, shiny object—“non-GAAP Earnings”—the company has been waving to distract
them from reality suddenly stopped working.
that happened at last week’s meeting surprised them, excepting the fact that
for one, brief, shining moment the scales seemed to fall from the eyes of Wall
Street’s Finest: for some reason we do not quite grasp, the bright, shiny object—“non-GAAP Earnings”—the company has been waving to distract
them from reality suddenly stopped working.
But last week’s
analyst meeting did have at least two whoppers that go beyond earnings puffery,
recurring “one-time” charges and—our biggest beef—including only the good stuff from acquisitions like EDS (i.e.
revenues) while excluding all the bad stuff (i.e. all the costs associated with turning
EDS around…which appear endless, thus far).
analyst meeting did have at least two whoppers that go beyond earnings puffery,
recurring “one-time” charges and—our biggest beef—including only the good stuff from acquisitions like EDS (i.e.
revenues) while excluding all the bad stuff (i.e. all the costs associated with turning
EDS around…which appear endless, thus far).
Whopper #1
“In addition, another challenge is that HP has
too many areas of focus, whether it’s products or services or geographies. When
Todd Bradley took over the Printing and Personal Systems business, he was
surprised to find that we made more than 2,100 laser printers. In every
business, we’re going to benefit from focusing on a smaller number of offerings
that we can invest in and really make matter.”
too many areas of focus, whether it’s products or services or geographies. When
Todd Bradley took over the Printing and Personal Systems business, he was
surprised to find that we made more than 2,100 laser printers. In every
business, we’re going to benefit from focusing on a smaller number of offerings
that we can invest in and really make matter.”
—Meg
Whitman, CEO
Whitman, CEO
Thus we have a Dilbert-esque situation in
which anybody who’s ever tried to accomplish the maddening task of downloading the correct driver for a particular HP printer knows what a company veteran apparently, somehow, did not.
which anybody who’s ever tried to accomplish the maddening task of downloading the correct driver for a particular HP printer knows what a company veteran apparently, somehow, did not.
Whopper #2
“Autonomy has—as we showed you here, this was an Autonomy
technology. It has tremendous technology, second to none, and has a lot of
potential to it. Where we are struggling with right now, and I’ll use that word
even, is the sales model was very non-scalable…”
—George Kadifa, EVP Software
technology. It has tremendous technology, second to none, and has a lot of
potential to it. Where we are struggling with right now, and I’ll use that word
even, is the sales model was very non-scalable…”
—George Kadifa, EVP Software
In this case, one year after closing on a $10
billion acquisition (remember, that was 11-times revenue), and eleven months
after telling Wall Street’s Finest that “The integration is going well thus far,
and we are focused on enabling our global sales force to ramp on the Autonomy
product line-up, so they can begin selling Autonomy software in Fiscal 2012,” the world is now told Autonomy’s sales model “was very non-scalable” in the first place.
Not somewhat non-scalable.
billion acquisition (remember, that was 11-times revenue), and eleven months
after telling Wall Street’s Finest that “The integration is going well thus far,
and we are focused on enabling our global sales force to ramp on the Autonomy
product line-up, so they can begin selling Autonomy software in Fiscal 2012,” the world is now told Autonomy’s sales model “was very non-scalable” in the first place.
Not somewhat non-scalable.
Very non-scalable.
We’re not sure what the truth behind both
assertions may be, but it does seem time for somebody to be held accountable at
the house of Bill and Dave—Ha! We’re
joking.
assertions may be, but it does seem time for somebody to be held accountable at
the house of Bill and Dave—Ha! We’re
joking.
It’s time for another reorg, of course.
Jeff Matthews
Author “Secrets in Plain
Sight: Business and Investing Secrets of Warren Buffett”
Sight: Business and Investing Secrets of Warren Buffett”
(eBooks on Investing,
2012) Available now at Amazon.com
2012) Available now at Amazon.com
© 2012 NotMakingThisUp,
LLC
LLC
The content contained in
this blog represents only the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and
clients advised by Mr. Matthews may hold either long or short positions in
securities of various companies discussed in the blog based upon Mr. Matthews’
recommendations. This commentary in no
way constitutes investment advice, and should never be relied on in making an
investment decision, ever. Also, this
blog is not a solicitation of business by Mr. Matthews: all inquiries will be
ignored. And if you think Mr. Matthews
is kidding about that, he is not. The content
herein is intended solely for the entertainment of the reader, and the author.
this blog represents only the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and
clients advised by Mr. Matthews may hold either long or short positions in
securities of various companies discussed in the blog based upon Mr. Matthews’
recommendations. This commentary in no
way constitutes investment advice, and should never be relied on in making an
investment decision, ever. Also, this
blog is not a solicitation of business by Mr. Matthews: all inquiries will be
ignored. And if you think Mr. Matthews
is kidding about that, he is not. The content
herein is intended solely for the entertainment of the reader, and the author.
3 replies on “Bill and Dave…and Dilbert”
First, ask the Board to resign. Carly, Hurd and Leo are already gone. The BofD is the only remaining holdover and is ultimately responsible for some really bad decisions.
True, but the CFO has been CFO since 2007…
JM
If they fired the CFO they would have to come clean on the numbers…