The Compaq worth keeping

Carly Fiorina is probably not spending a lot of time thinking about Canada right now, but I am.

News Wednesday that a United States Judge had essentially cleared the way for Fiorina, chief executive at Hewlett-Packard, to go ahead with the firm’s US$18 billion plan to merge with Compaq

suggests the end of this saga is finally at hand. There are still some hurdles to jump — there will be a vote recount and a challenge to the preliminary shareholder tally — but barring disaster, HP-Compaq could be official by early next week. More important than the judge’s ruling that the vote was legal is the about-face by dissident shareholder Walter Hewlett, who had accused Fiorina of tainting the vote.

Expect to see a flurry of magazine covers over the next few months paying tribute to Fiorina’s persistence and vision. She’ll get Fortune, at least, but probably Forbes, Business 2.0 and Business Week as well. Considering the obstacles that stood in her way, maybe she deserves it. But for thousands of people — employees, customers and business partners — the evolution of this company is more than the portrait of a lady. In the bigger picture, there are prolonged questions about products, executive leadership and management philosophy that must be answered before many in the industry will be prepared to break out the party hats.

This is especially true for many of the regions outside the U.S., like Canada where HP and Compaq have established important beachheads. Though no one from either company will ask me, and it may be premature to do it before the final count, I have a few pieces of advice to some strategic, Canadian-oriented decisions Fiorina’s foot soldiers should make:

Stick with the Evo: Compaq invested a lot in the design of these machines, which led to the discontinuation of its Armada notebook and DeskPro lines. It also matched the brand with a reorganization of its sales divisions along the way people want to get at their data. The Access Business Group model is straightforward and would make sense as the company combines product lines with HP. Compaq is generally better at brand management than HP, which has been playing around with its Vectra, Brio and other lines so often you can barely keep track of them anymore. In the high end, HP should bring its 64-bit expertise (it co-developed IA-UX with Intel) to help Compaq as it phases out its Alpha supercomputers.

Ditch the Jornada: If the merger goes through, it’s time for HP to admit that this Pocket PC is an also-ran that doesn’t compare to the success of Compaq’s iPaq. Last week, in fact, Compaq said the device had passed the two million unit sales milestone faster than any mobile personal technology product in its history. Compaq established the relationship for a joint product with Canada’s Research In Motion, and when sales of the iPaq took off faster than expected last year, the company immediately released a lower-cost black and white version to keep up with demand. This shows more agility than what we’ve come to expect from HP, which simply discontinued the Jornada 820 after a successful James Bond movie tie-in.

Retain Ralph Hyatt: He’s Compaq Canada’s feet on the street. He’s also one of the few constants in a management team that has been shuffled more times than a dealer’s deck in Vegas. David Booth joined Compaq Canada as president after a series of ill-fated choices in the late 1990s, while former veterans like Ron Hulse and Jon Boyle (who handled sales and marketing, respectively) left to pursue other opportunities. Hyatt has handled almost every major role, including channel development, consumer sales and product marketing. Booth may decide he doesn’t want to report into HP Canada president Paul Tsaparis (who late Friday was named leader of the combined organization), but efforts should be made to make sure Hyatt sticks around. If he doesn’t know Compaq Canada’s best practices, no one does.

Be here now: It’s hard to put your finger on this exactly, but in talking with HP Canada I always got the feeling they were waiting for orders from on high. Compaq Canada, on the other hand, seemed always prepared with a vision specific to the local market. This is probably the most important lesson one company can learn from the other. If we meet a united HP and Compaq next week, executives will need to work hard to prove they haven’t created an unwieldy beast that can’t sustain its merger momentum. Part of that will be focused attention on specific locales, rather than a broad-based approach that is supposed to suit all geographies. Fiorina may finally succeed in growing a new HP with the seeds she planted last September. Now she has to make sure she sees the trees for the forest.

sschick@itbusiness.ca

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