Five reasons HP's Mark Hurd resigned

Five reasons HP's Mark Hurd resigned

The official reason for Mark Hurd's resignation as chairman and CEO of Hewlett-Packard Co. over an allegation of sexual harassment left a lot of questions unanswered.

Hurd's resignation was announced after the close of markets Friday by HP's board of directors, which said that he ran afoul of the company's business conduct rules.

But didn't HP have other options than an abrupt departure by its top executive and the unwelcome attention such a move was bound to make on HP? Or did Hurd's problem present the company with an opportunity for change, an opportunity that it took?

Here are five reasons why Hurd left HP and what's ahead for this company.

HP's board wanted a change in leadership

Hurd's chief task at HP became surviving the recession and preparing the company for growth. He cut thousands of employees and worker salaries across the board. The company consolidated its own operations, taking 85 data centers down to six.

It was tough and scarring work, and the company may have wanted a new face to lead a leaner HP.

Hurd's focus on operations may have run its course

The board may have been asking itself whether Hurd was the best person to integrate HP's recent string of acquisitions -- including Palm and 3Com -- and keep ahead of the industry's fast pivot to mobile, Android and the cloud. It wants an innovator.

HP's interest in a CEO with a little more of Steve Jobs' DNA may have been telegraphed Friday, when HP signaled a new approach with Marc Andreessen. A member of HP's board, Andreessen may best be known for his work on developing browser technologies and co-founding Netscape, but he also gave HP some key server and data center automation technologies with the sale in 2007 of a firm he chaired, Opsware, for $1.6 billion. Andreessen is a Silicon Valley icon with a record of innovation.

And it was Andreessen who acted as the HP board spokesman when investment analysts were summoned for the call late Friday with this news. Andreessen was a particularly strong voice on the call, calling Hurd's removal "necessary," and telling those on the phone that "HP is not about any one person."

Andreessen is on the board's CEO search committee. If Friday's call is any indication, then it is Andreessen who may define what HP is seeking in its next CEO and for the company.

Cathy Lesjack, HP's CFO and now Hurd's temporary replacement, will carry a consistent message to Wall Street and is not seeking the CEO's job.

The strong CEO and chairman model wasn't working

Hurd is the second consecutive CEO at HP to leave on rocky terms -- and HP has to be worried about the third strike rule. Hurd's predecessor, former CEO Carly Fiorina left her post in 2005 after disagreements with the board over strategy. Hurd's resignation may be about an internal desire to restructure HP's top jobs and redistribute power as a way to to make room for different approaches.

During HP's conference call with investment analysts Friday, Andreessen was asked whether the CEO position will be filled by one person or whether it was possible to split the CEO into two different roles. Andreessen didn't rule out the possibility. "We will examine that question over the course of the search," he said.

The potential P.R. disaster was too great

This is the era of WikiLeaks and TMZ, and the prospect of this story breaking on its own may have been too much for HP's board to bear. Even if this issue with Hurd was fixable, HP wanted the problem over now.

Hurd's story had a tabloid element. The woman, identified Sunday night, as Jodie Fisher, is a single mom with a college degree, business credentials and experience as an actress. Fisher "has been in various television shows and films, some of which were R-rated when she was in her 30s," her attorney Gloria Allred, a high-profile Los Angeles litigator, said in a statement Sunday night.

Fisher was also in the short-lived NBC show Age of Love, where male contestants are "given the chance to choose a woman in her 20s, or a 40-something on the prowl." According to a biography of her on the show's site, Fisher was 46 at the time the show aired for one season in 2007.

Another problem for HP was Gloria Allred herself. Allred is a Los Angeles attorney who is to the legal profession what Angelina Jolie is to action movies: She loves explosive, big box office productions.

Allred describes herself as "the most famous woman attorney practicing law in the nation today," and a fighter of the "rich and powerful." Her clients have included Amber Frey, girlfriend of convicted murderer Scott Peterson, and the family of O.J. Simpson's murdered ex-wife, Nicole.

HP was simply enforcing its standards of conduct

HP investigated allegations of sexual harassment in the case and determined that Hurd had not violated the company's sexual harassment policy. But it did find that Hurd had violated corporate standards of business conduct.

Michael Holston, HP's general counsel, told investors on the conference call Friday that Hurd "had a close personal relationship" with a contractor hired by the CEO's office. What did "close personal relationship" mean here?

In the absence of clarity from HP, Allred's law firm issued a one sentence statement to spell out what wasn't involved: "There was no affair and no intimate sexual relationship between our client and Mr. Hurd." Fisher reiterated that point yesterday.

What Holston said was this: "The investigation revealed numerous instances where the contractor received compensation and/or expense reimbursement where there was not a legitimate business purpose. And the investigation found numerous instances where inaccurate expense reports were submitted by Mark or on his behalf that intended to or had the effect of concealing Mark's personal relationship with the contractor."

HP's publishes its "Standards of Business Conduct" on its Web site. Enforcing those standards may have been the paramount reason behind Hurd's resignation.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at Twitter @DCgov or subscribe to Patrick's RSS feed Thibodeau RSS. His e-mail address is

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