1. cultural due diligence studywelcome
agenda:
presentation of findings
q&a session
2. cultural due diligence studypresentation of findings
3. cultural due diligence studydata collected from around the world in both companies:
127 individual executive interviews
138 focus groups spanning 1,500 managers and individual contributors in 22 countries
5. cultural due diligence study1. comparing and contrasting pre-merge hp and compaq
2. definitions
similarities - things that the people in each company perceived about themselves that matched the other company
differences - things that the people in each company perceived about themselves that were at odds with the other company
unique commentary - things that people in each company expressed very often which those in the other company talked much less about
3. the findings reflect perceptions
7. inputhp on hp
similarities
proud about HP legacy
industry consolidating
disadvantaged in supply chain and overhead costs
good products
unique commentary
pride in success linked to innovation
technical/engineering heritage
good reputation with customers
power historically with the business and the back endcompaq on compaq
similarities
strong brand, products and services
industry consolidating
disadvantaged in supply chain and overhead costs
good products
unique commentary
historically fast, nimble, and able to execute
traditionally short-term focused
fast growth through new business model
redefined computing landscape6
9. strategyhp on hp
similarities
top-down strategy; mid-management not involved
need for planning and execution process
differences
strategy is long-term oriented
unique commentary
strategy increasingly unclear as you go down the organization
strategy has to be translated into something concretecompaq on compaq
similarities
strategy comes through a top-down process
little/no strategic process
differences
susceptible to frequent changes in direction
customer focused with a short-term orientation toward the market; interferes with investing/building for the future
unique commentary
tendency to be influenced more by major customer accounts than technological advancements8
11. workhp on hp
differences
respect for process
strong planning and financial processes
work process is organizationally based, vertically strong, works well
unique commentary
autonomy in managing one’s own work is the norm; accountability at individual level
upper management does not seem to be held accountable in the same way as others
poor cross-functional accountabilities and ownership of workcompaq on compaq
differences
process seen as bureaucracy, aversion to processes
lack of clear, disciplined processes
work process: swat teams
unique commentary
technology is great
information systems are not integrated
multitasking is a norm
work-life balance is not achieved10
13. peoplehp on hp
similarities
low credibility in leadership
differences
leadership focused on relationships (how things get done)
unique commentary
multicultural, diverse, dedicated workforce
team-oriented
losing the “family feeling”
lower levels of management are informal; top management is more formal and removed
recent changes led to low moralecompaq on compaq
similarities
low credibility in leadership
differences
leadership achievement-oriented, rugged individualists (what gets done)
unique commentary
people are bright, committed, and work hard, long hours
good interpersonal relationships
learning happens on the job
insufficient investment in training and development
people do not feel empowered, except in field12
15. formal organizationhp on hp
similarities
goals change too often; they are unclear, execution not enforced
no consequences for not meeting objectives; performance metrics unclear or absent, differ across “silos”
front-end/back-end structure exacerbated problems with accountability
hp is horizontally challenged
more power moving to the front-end organization
hp is becoming more centralized
differences
no common process for decision making; very top-down, slow, long decision cycle times; but thoughtful and high involvement
general perception that decisions are rarely made, but tend to stick once madecompaq on compaq
similarities
goals change frequently and not synchronized between front-end and back-end organizations
people are not held accountable; structure and measurement systems cloud accountability
strong matrix management leading to fuzzy lines of accountabilities
performance management inconsistent, generally poor planning and control
cross-organizational collaboration difficult
country managers are kings
many things are very centralized
differences
decisions made quickly
a lot of “checking in” to make a decision, iterative decisions, top-down14
17. informal organizationhp on hp as strength
similarities
strong sense of ethics
strong customer-focus (make great products)
team culture, have to be part of the group
getting results is rewarded, sometimes effort without a result gets rewarded
having big new ideas is valued
treat people with dignity
multiple subcultures
differences
conflict avoidance and over-compromise are normal
titles not referenced, egalitarian
unique commentary
“silo mentality”
failure deserves a second chance
diversity and people are valuedcompaq on compaq
similarities
ethical behavior is enforced
strong customer orientation (make what they want)
teamwork is valued
highly results/bottom-line focused, sometimes effort without a results gets rewarded
openness to good/new ideas
don’t publicly embarrass people
multiple subcultures
differences
conflict addressed directly/openly, aggressive, brash
titles are referenced, abundant, hierarchical
unique commentary
initiative, flexibility, “go for it” attitude are valued
relaxed/flex work environment; long working hours
here and now orientation16
18. concerns about the other company17
19. cultural due diligence studyadvice to carly & michael from interviews and focus groups:
be inclusive
define your work and roles
define/communicate what you want the new company to be
be bold
clarify roles and organization structure
take action quickly
continue to communicate a lot; be honest, but be sensitive in what you say
20. cultural due diligence studyregion-specific findings
21. Comparison of hp with Compaq --North AmericaCultural gap differences are statistically significant.Compaq’s AverageHP’s Average20
22. Comparison of hp with Compaq --Latin AmericaCultural gap differences are statistically significant.Compaq’s AverageHP’s Average21
23. Comparison of hp with Compaq --EMEACultural gap differences are statistically significant.Compaq’s AverageHP’s Average22
24. Comparison of hp with Compaq --Asia PacificCultural gap differences are statistically significant.Compaq’s AverageHP’s Average23
25. Comparison of hp with Compaq --Enterprise wideCultural gap differences are statistically significant.Compaq’s AverageHP’s Average24
26. cultural due diligence studyin summary . . .
we also heard people say that:
both company cultures were in transition before the merger
the direction that each culture needed to take was, actually, to adopt the strengths of the other
so, if you integrate well, building on each other’s strengths, the potential for success is great
27. cultural due diligence studycultural cornerstones
28. new hp cultural cornerstones (release 1.0 ) values
passion for customers
trust & respect
achievement & contribution
uncompromising integrity
teamwork
meaningful innovation
speed & agilityprofitglobal citizenshipleadership
capabilityemployee
commitmentcorporateobjectivescustomer
loyaltygrowthmarket
leadershipmetrics & rewardsstructure & processesstrategies behaviorspolicies &
practices27
29. lessons learnedfirst, though there were important differences between the pre-merge hp and compaq organizations, there were a great many similarities; and, there were a great many positive characteristics that both companies shared (for example, the emphasis on teamwork)
to minimize unproductive conflict moving forward, there are several lessons or implications from this study for how we work together:
focus and build upon our common strengths
come to agreement about the appropriate time horizon (long-term vs. short-term) for any business strategy or set of strategies
clarify the meaning of terms or language that people are using before making judgments about others -- two people may be thinking about different things while talking about the same subject
agree up front on an approach to decision making to ensure that everyone is on the same page before entertaining discussion about the subject matter
take people’s needs and experience (e.g., comfort dealing with conflict, orientation to hierarchy) into account in how you approach problems and in how you interact to solve problems
where gaps or similarities are consistent across the enterprise, use the same approach to closing the gaps and building upon positive similarities28
30. cultural due diligence studyThe results of the CDD will be posted on the newhpway webpage. See the following url for more information on CDD and the cultural cornerstones of the new hp:
http://hpnow.hp.com/vision-strategy/newhpway