After leading a turnaround at NCR, that firm's current CEO Mark Hurd has been hired to lead HP.
HP's board of directors selected him following the abrupt dismissal of Carly Fiorina earlier this year. Hurd will be named president and chief executive officer, and will be formally introduced during a conference call today.
NCR issued a statement Tuesday confirming Hurd: "Has resigned, effective immediately, to accept a position with a large global technology company."
Introducing mark Hurd
Hurd is a 25-year veteran of NCR, a supplier of retail point-of-sale hardware and software. He was named president and CEO in 2003 after serving as head of the company's Teradata division.
His experience running a company with multiple businesses will serve him well at HP, said Sam Bhavnani, an analyst with Current Analysis. Hurd is also noted for his painstaking attention to operational efficiencies, a trait that helped him boost NCR's stock (NCR) price from around $10 in 2003 to Monday's closing price of $37.90, he said.
NCR investors were certainly disappointed to lose Hurd, sending the company's stock price down $6.50, or 17.2 per cent, to close at $31.40 on the news that he had been picked for the top spot at HP. HP's stock rose $1.99, or 10 per cent, to close at $21.78 Tuesday afternoon.
Hurd in demand
Hurd was on the short lists of many companies searching for new executives in recent months, said Umesh Ramakrishnan, vice chairman of New York executive search firm Christian & Timbers, the company that found Fiorina for HP in 1999. He described Hurd as a "solid citizen" who will focus on making HP run smoothly.
"If you look at the track record, he took a company that was floundering and took it around to where it's a very healthy company. HP's board is looking to him to do something similar here, because he's had success executing on strategies," Bhavnani said.
HP ousted Fiorina in February. Fiorina was known as a visionary marketer who engineered the complex acquisition of Compaq in 2002, transforming HP into a technology powerhouse that could compete with Dell and IBM. However, this failed to deliver the promised returns to HP's investors. She was also criticized for a hands-off approach to daily management and a refusal to name a chief operating officer to help her run the company.
Fiorina's replacement will have a tough job. Aside from the company's lucrative printing business, the $60 billion company has been struggling to find ways to make its business units profitable and the controversial acquisition of Compaq is now widely regarded as a failure.
Since Fiorina's departure, HP has been run on an interim basis by the company's chief financial officer, 36-year HP veteran Robert P. Wayman. In February, Wayman said the company's next CEO would be "someone who will fit in the culture." However, he added, "that doesn't mean that you don't want a leader that doesn't challenge that culture."
As an outsider, Hurd will have the freedom to make sweeping changes in operational procedures at HP, Bhavnani said.
While Hurd is bound to make changes at HP, his ascension to the CEO position sends a strong message to financial analysts who have called for the company to spin off its PC business, said Roger Kay, vice president of client computing with IDC in Framingham.
"It basically says we're not about breaking up this company, we're about making it work," Kay said.
HP's board has long said that its differences with Fiorina were related to execution, not her acquisition strategy, but many financial analysts think HP should cut its losses in the PC business and get out, much like IBM has by selling its PC group to Lenovo.