New HP chief hailed as "turnaround artist"
Hewlett-Packard (HP) yesterday named NCR Chief Executive Mark Hurd to head the storied computer and printer maker as it struggles to compete...
Los Angeles Times
SAN FRANCISCO — Hewlett-Packard (HP) yesterday named NCR Chief Executive Mark Hurd to head the storied computer and printer maker as it struggles to compete in an industry it helped create.
Hurd, who joined NCR out of college 25 years ago, was a surprise choice. His hiring came seven weeks after HP's board ousted former chief Carly Fiorina over dissatisfaction with her "execution" after the merger she engineered two years ago with Compaq Computer.
In many ways, the 48-year-old Hurd is what Fiorina wasn't. She was flashy; he avoids the spotlight. Fiorina backed big ideas to boost sales; Hurd is known as a strong day-to-day manager focused on margins.
"The key is that he's an operations guy — hands-on and a turnaround artist, and he's solid," said analyst Roger Kay of market researcher IDC. "He's been at NCR for 25 years; he's not in the quick-hit business. Carly always raised suspicions that she was just surfing through, but this guy is completely the opposite."
The selection highlights the difficulties HP faces in running its core computer and printer businesses in the face of relentless competition from rivals such as Dell. HP's sales and profit have languished while Dell's have climbed.
Investors hailed Hurd's appointment as president and chief executive officer. Shares of HP rose $1.99, or 10 percent, to $21.78 yesterday. Shares of NCR, meanwhile, fell $6.50, or 17 percent, to $31.40.
Hurd, who will earn $1.4 million a year and will pick up a $2 million signing bonus when he begins work Friday, declined to comment. He will meet with reporters this morning.
But HP directors said they chose Hurd, in part, because of the structural similarities between HP and NCR, even if HP's $80 billion in annual sales dwarfs NCR's $6 billion. NCR makes automated teller machines, cash registers and point-of-sale devices and sells to a variety of customers; HP makes consumer PCs, corporate servers and printers as well as cameras and televisions.
"Mark came to our attention because of his strong execution skills, his proven ability to lead top-performing teams and his track record in driving shareholder value," said HP Chairman Patricia Dunn.
"He demonstrated these skills by turning around NCR, which, while smaller than HP, is a complex organization with multiple business segments. As we got to know Mark, we were impressed by his emphasis on developing internal talent while reaching outside for new skills, his understanding of the role of culture in a company's success and his personal integrity."
Hurd enjoyed a strong record at NCR.
Since he was promoted from chief operations officer to chief executive in 2003, NCR's profit has quadrupled, to $290 million last year, and its stock price has soared more than 300 percent.
One of Hurd's strategies at NCR could prove particularly crucial at HP: boosting the "attach rate" of sales of server computers, which run large corporate and government computer networks.
"HP has been wanting a higher attach rate where you sell a server, but also software, storage and services," said Jean Bozman, a server analyst with IDC.
"If you look at NCR, they've had a solution-type sell, where when they sell a server they're also making sure to sell a number of other components."