Dear Mr. Hurd, how to avoid being an asshole (UPDATE)

For much of my professional life I’ve worked for large American corporations.

It wasn’t until last weekend that I realised why these corporations were so dysfunctional.

The realisation came about because of Mark Hurd’s resignation as CEO of Hewlett Packard, and it just so happened that I used to work with Mark at his previous firm, NCR.

Now some people think he’s a bit of an asshole - "On HP's Mark Hurd: Assholes Sometimes Get Their Due" - but that always seems to be the case when we talk about senior management.

In fact, through my experience, I’ve realised that in most companies the nearer you get to the top, the more of an asshole you become, as embodied by this classic joke:

An organisation is like a tree full of monkeys... all on different limbs and branches...all at different levels...some climbing up and some falling down. The nice thing is that the monkeys on the top of the tree look down and see a tree full of smiling faces. The monkeys on the bottom of the tree however, look up and see nothing but assholes.

Now don’t get me wrong. There are plenty of good and worthy CEO’s out there.

But it tends to be that certain corporations breed a certain type of CEO where the core workers of the firm are dedicated, loyal and trying to do the best they can for the firm, whilst their management are just in it for themselves.

And I probably shouldn’t blog about this, but here are a few very personal stories which I share in the hope that it may help shareholders to avoid appointing leaders who are just little more than con artists, soft shoe shuffling their way through a political mire of internal bullshit.

Lesson #1, senior executives care only for themselves

As mentioned, I used to work with Mark Hurd and thought he was OK.

We tag-teamed when he headed up the Computer Group in NCR, and I ran a sector of the financial markets.

Anyways, I was amused to hear the story of when he received his first major promotion from Vice President to Senior Vice President.

This meant that Mark moved from the ground floor of NCR’s Dayton HQ, where everyone worked in Dilbert-styled open plan cubicles, to the executive floors where he had his own, private office.

The result was that Mark hand wrote a note that said: “Mark Hurd, now Senior Vice President, can be found over here”, with an arrow.

He photocopied the note and laid it on the floor every three or four metres from his old cubicle to his new executive office.

Nice.

It didn’t go down well with the cubicle crowd but hey, it’s a joke. Get it?

Lesson #2, senior executives know how to work the internal machine

On another occasion I was new to the company, having been hired in as a senior marketer for Europe.

At the first off-site management meeting, there were 200 of the most senior execs gathered for the firm’s annual briefing with the CEO.

In the afternoon, we all piled onto buses to go to an evening reception, and I joined one of my peers on the bus.

As we sat there, John got on the bus.

Now John was known for being a real worker of the internal machine.

I didn’t realise he was so politically astute until my friend said, “ah there’s John. Watch him for a minute as he won’t stay on this bus.”

Sure enough, John did a walk up and down the bus, eyes twitching everywhere.

After getting down to our end of the bus, he abruptly did a U-turn and walked down to the other end and got off the bus.

“How did you know he wouldn’t stay on the bus?” I asked.

“Because there’s no-one important on this bus”, my friend replied.

Sure enough, when we got to the evening reception John got off the bus behind ours, chatting with the SVP in charge of Professional Services.

John ended up being Chief Marketing Officer for the firm.

Lesson #3, senior executives will screw anyone who doesn’t tow their line

A new executive joined my firm.

He was a true asshole, as he joined as Chief Marketing Officer when it was blatantly clear that he knew f-all about Marketing.

But hey, knowing the job is no qualification for a senior exec, as most pre-credit crisis management teams in banks can testify.

It turned out that he didn’t need to know anything about marketing anyways, as he was given the CMO role purely as a holding position until the management team, who had handpicked this guy as the CEO’s successor, could move him into his chosen rank.

Upon promotion six months later, he immediately reversed a whole bunch of strategic decisions that the rank and file fought for tooth and nail.

Basically, the fight was over strategy: should the company be a solutions firm based upon software platforms, for which they were known and successful, or a solutions firm based upon consulting services, for which they were not known and had failed several times to achieve.

The new CEO was determined it was the latter and sacked, fired or made life unbearable for anyone who disagreed.

The result?

Within two years, he got rid of all of his direct reports and hired a new group of ‘yes men’ to work with him. This meant that the company lost the complete executive management team that had been in position on the day he was appointed, many of whom had been with the firm for years and knew it inside out.

Within four years, the share price of this firm had lost 90% of its value.

Within five years, the firm had a new CEO.

Lesson #4, senior executives will screw anyone they can

I worked in a firm where a new management team were appointed.

In the opening days, their arrival was like a breath of fresh air.

After a few months, there was a bit of a stink in the air however.

The stench emanated from the head of my division (a man) being known to be engaged in an extra-marital affair with his head of marketing (a woman), who also happened to be my immediate manager.

The problem this created is that any decision she didn’t like, she would get him to reverse during coital moments.

One of many examples was the Financial Markets Advisory Board.

The Financial Markets Advisory Board represented our most senior customers worldwide and, for my sins, I was lucky enough to be in charge of it.

The Board was co-funded by the Financial and Computing Divisions at a cost of around $100,000 a year, with our division committed for $50,000.

In January, I presented the plans and the Head of Marketing and Head of Division both committed the funds for an April and November meeting that year.

I busily started to co-ordinate plans, inviting CEOs and CIOs from our best customers and prospects.

Now, because I never understood Lesson #1 (work the politics), I accidentally pissed off Mrs. Marketing one day with the result that, two weeks before the Advisory Board were due to meet, the Head of Division called me in and said that he’d changed his mind and was cancelling the funds.

Not good for me ... or the customers or the company. But at least it kept his mistress happy.

I could illustrate things with so many other stories of subterfuge and salaciousness, but am saving it for my next book: “How to run a company without being an asshole”.

Actually, the book is a joke but, for the reasons above, firms really do need to vet their leaders better, as these guys and gals are placed in positions of great power where the only people who can confront or change their views of the world are shareholders.

The thing is that the shareholder does not provide governance over these executives once they are put into position, because they only care about the share price.

The result is that management runneth amock unless and until they make a grave error, as Mr. Hurd appears to have done, or the share price tanks.

In the meantime, they can pretty much do what they want.

Case in point: Sir Fred Goodwin.

Meanwhile, what would be the key tips to avoid being an asshole?

Well, I always go back to a really simple statement from a CEO friend of mine: "Happy staff make happy customers make happy shareholders".

His mantra in life is to build a business where everyone feels included, and where staff have a clear stake in the game and direction.

To me, it's just called plain old fashioned leadership.

Now, I could write endless blogs about vision, leadership, culture and inclusion, but this blog is not the place for that.

This blog's about banking, not leadership.

Although, thinking about it, the latter is something that wouldn't go down badly in banking at the moment.

So maybe one day I will write a little more on this subject.

Meanwhile, here endeth today’s corporate lesson.

UPDATE 12th August 2010, 14:30:

There's been a huge outpuuring of hate against Mark Hurd since his departure, e.g. it turns out those who worked for him called him "Mark Turd".

This anonymous alleged HP employee is happy, for a change

Mark Hurd was an immoral bean counter with no personality besides arrogance and a complete disregard ... for the "HP Way". I ... have seen the changes in culture go from one of pride ... to a now miserable bitter and inefficient work force ... Customers come dead last, and shareholders and stock value are the only thing that matter. ... I can't stand the man, and am so happy he is gone. I hope all his minions go with him.

As is this alleged ex-HP'er

He won't be missed inside HP! ... The heart is gone out of HP and he killed it. ... I think the board finally woke up to his game and used this as a reason to get rid of him!
...
In the end I left HP to do the same job elsewhere and received a 50% pay increase. ... Mark Hurd will be missed like a hole in the head!

Chuck House thinks the stated reasons for him leaving were excuses

This guy was a thug, nicknamed Mark Turd by ex-HPites. ... He raped HP employees (figuratively) ... by eliminating the sixty-five year concept of profit sharing. ... He was profane, a bully, autocratic, threatening, demeaning, vindictive, and rude.
...
Employee [surveys] showed in April an astonishing finding -- more than two-thirds of HP's employees would quit tomorrow if they had an equivalent job offer. ... That number never used to be in double digits. ... There's lots more to "worry about", and it is easy to imagine that the HP Board ... didn't know where to "pin the blame". This "non-sexual" harassment was simply a convenient foil...

Rob Enderle has a similar thought

One final thing to think about: Mark Hurd took over the chairmanship of HP. When he had the initial sexual harassment problem, because of a conflict of interest, he couldn’t even participate in the board discussion that led to his termination.
...
This allowed someone else ... to drive the conversation suggesting his very grab for power may have actually been what caused him to face the extreme penalty.

But Henry Blodget is surprised

Interesting take. ... All tough CEOs have their enemies, especially those who drive profits by cutting costs. But we've been surprised by the outpouring of cheers over Hurd's ouster.

Eric Jackson told ya so

Almost one year ago, I wrote ... Mark Hurd was the emperor with no clothes. ... What alarmed me about Hurd last year was the piggish behavior he and his executive team were exhibiting. ... They were gorging at the trough ... at the same time that they were ... turning the screws on H-P employees ... to accept pay cuts and reduced benefits.
...
This management team mandated that year that all Hewlett-Packard staffers would take a 5% pay cut ... they boasted that they ... would stand shoulder to shoulder with the staff by taking 10%. ... They forgot to say ... that they would more than make up for that on options, restricted stock units and other bonus goodies.

Jason Hiner thinks the dislike "may have come back to bite him"

Although Hurd was reportedly in negotiations for a new contract before the sexual harassment allegations came to light, there has been growing discontent with Hurd inside HP. ... You can’t blame HP employees.
...
He helped the company get its financial house in order and in the process ... tripled HP’s profits. But, Hurd did it with a brutal scorched-earth policy ... that demoralized many of the company’s 300,000 employees.

And Erick Schonfeld agrees

Even Yahoo CEO Carol Bartz ... and Microsoft CEO Steve Ballmer ... are more loved by their employees than Hurd.
...
It is not exactly a mystery as to why Hurd was not universally loved. ... He was a relentless cost-cutter, an expert at eliminating thousands of jobs ... while paying himself handsomely. ... Employee sentiment can only tell you so much. ... He also got HP back on its feet, adding $30 billion in revenues and tripling profits over five years.

Thanks to Computerworld for the links.