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|Wednesday, January 09, 2013|
HP's profitability is getting crushed and Microsoft's Windows 8 gamble hasn't exactly revolutionized the computing world. Each of these companies has pursued a misguided path in the name of "strategy". The truth is that this direction wasn't a viable strategy for either company because it didn't address the real problems either one faced.
BY MICHAEL J. BECK
A recent article in WebProNews noted that, for the second quarter in a row, Hewlett-Packard reported a write-down in excess of $8 Billion. (Yes, that's "billion" with a "b") The article went on to discuss the two acquisitions that led to these massive losses. It then talked about the large amounts of money HP had invested and wondered whether the issues were related to the market or to mismanagement.
But in my opinion, the facts point to a completely different issue. The issue is one of a lack of a meaningful, targeted strategy. Or perhaps more accurately, the presence of some poor strategies. HP had departed from its core strength in search of a way to compete with other popular technology companies, and it's the same mistake Microsoft has made.
The lure of mobile devices like tablets and smart phones, made popular by Apple, Google, and others, was just too great for both HP and Microsoft to ignore. So instead of working to leverage their enterprise/business positions, they chose to compete in the consumer mobile technology market. After decades of investing in their brands as serious business-focused solutions, each player decided to convince the public they were a fun, cool company. They've each chosen to try to shift their long-established brand away from what it stands for to something they are not.
And the results speak for themselves. HP's profitability is getting crushed and Microsoft's Windows 8 gamble hasn't exactly revolutionized the computing world. Each of these companies has pursued a misguided path in the name of "strategy". The truth is that this direction wasn't a viable strategy for either company because it didn't address the real problems either one faced.
They developed elaborate plans and goals which addressed the symptoms of their problems, and not the problems themselves. When symptoms are "solved", the so-called solutions generally create even more problems. The challenge that they both faced was that they ran out of innovations to grow their core businesses. Each is in a strong position to dominate and perhaps revolutionize how technology - both hardware and software - is utilized by organizations. They each have the ability to innovate how business harnesses and leverages technology. But instead of parlaying their solid business/enterprise brand, they each decided to play the "me, too" game.
Both HP and Microsoft have tried to convince the consumer that they're just as cool and fun as Apple and Google. But the only thing that accomplishes is to lessen their brands in the corporate world and to make them look desperate in the consumer world.
The lesson for us all is that the most difficult aspect of developing a viable, meaningful strategy is in truly understanding the core problem. Developing goals and plans of action which address symptoms (rather than problems) almost always makes matters worse. In addition, if one loses sight of the core principles and advantages driving their business, then it becomes easy to lose one's way and pursue actions which essentially "give away" or dilute that unique advantage.
Reinventing one's business doesn't mean abandoning the old in favor of the new. It means viewing one's business from a new angle, adopting new perspectives, and augmenting or leveraging what already exists. Neither HP nor Microsoft are fun companies, and neither is having much fun as a consequence of their misguided decisions.
Michael Beck is a Portland-based executive strategist and specializes in business strategy, executive development, and leadership effectiveness. Connect on LinkedIn at linkedin.com/in/mjbeck, or visit michaeljbeck.com to learn more.
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