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HP: Sailing without a second in command

With the departure of Michael Capellas, Hewlett-Packard joins a growing roster of Silicon Valley's best-known companies without a clear No. 2 executive.

    PALO ALTO, Calif.--With the departure of Michael Capellas, Hewlett-Packard joins a growing roster of Silicon Valley's best-known companies without a clear No. 2 executive.


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    Oracle and Sun Microsystems are two others that have been noted as lacking in the lieutenant department. Sun, in particular, came under fire this spring when Chief Operating Officer Ed Zander announced plans to leave the company. Questions have similarly been raised over potential successors to Larry Ellison at Oracle.

    Beyond the question of succession, some analysts wondered Monday whether HP CEO Carly Fiorina might be taking on too much responsibility by not replacing Capellas.

    But Fiorina said she can handle the dual roles as chief strategist and day-to-day operations chief.

    "The position of president will not be replicated, period," Fiorina said during an interview alongside Capellas at the company headquarters Monday. Instead, all business units will report to her directly. Fiorina maintained that the five business unit heads that had formerly reported to Capellas are each adept at running their own business.

    As for who her likely successor would be, Fiorina said it's "way too early" to start thinking about such plans. "I've only been here three years and I'm not yet 50." But, she added, "We have a very deep bench here."

    Capellas, who announced his intent to leave HP earlier Monday, confirmed in an interview that he is in talks with WorldCom about taking over as the CEO of the embattled telecommunications company.

    "There has been no definitive decision between us," Capellas said.

    The announcement of his departure comes roughly six months after the acquisition of Compaq was closed, although he and Fiorina were quick to point out that it has been 18 months since they first discussed such a combination.

    Although other companies in Silicon Valley lack a No. 2 executive, Capellas was more than just the company's president. He also served as tangible proof to Compaq employees that they had a prominent role in the new company.

    Fiorina said that even though she expected Capellas might leave at some point for another CEO job, that she doesn't expect other former Compaq executives to follow suit.

    "I think we have a management team that is solid and committed," Fiorina said. "I think Michael is in a unique position. He has been a chief executive. As a chief executive it is completely natural that he would want to do that again."

    Capellas said he is leaving in part because the merger integration is ahead of schedule and tried to reassure his colleagues of that in an e-mail sent to all HP employees Monday.

    "I've spent a lot of time during the past few months meeting with customers, partners and employees, and one thing is very clear--we have come a long way in building the new HP," Capellas said.

    Capellas said he has been talking about new jobs for several weeks, but denied speculation that he has been eyeing other jobs for months.

    "A few weeks ago there started to be some opportunities that sounded sort of interesting," he said.

    Some speculated that Capellas' departure could lead other former Compaq executives to rethink their tenure.

    "I think you can expect further fault lines to emerge between the two organizations--usually in terms of personnel defections," said Robert Hogan, a Tulsa, Okla.-based management consultant and former psychology professor.

    It is not uncommon for chief executives of acquired companies to leave after a transition period, said Steve Mader, chief executive of recruiting firm Christian and Timbers. Capellas' departure was on the early side of average.

    "Six to 12 months is probably the norm," Mader said.

    Inside HP, roles seem to be pretty well defined, especially for many of Compaq's other top officials, Mader said. However, if it was always expected that Capellas would leave, Fiorina could have made that more clear, Mader said.

    News.com's Michael Kanellos contributed to this report.