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HP's Hurd: Company strategy not set in stone

New CEO sees a company "not performing to its potential" and doesn't rule out spinning off its printer unit.

PALO ALTO, Calif.--In his first meetings with Wall Street analysts and the media, new Hewlett-Packard chief Mark Hurd did not rule out the possibility of a spinoff of the company's lucrative printer business.

Hurd, along with Patricia Dunn, the company's chairman, said there were no conditions in his hiring that require him to keep HP's product portfolio intact.

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"I received no preconditions in accepting the job," Hurd said. He officially takes up the post Friday after two years as chief executive at NCR.

But he has been studying up in preparation for his hands-on test at a company that is looking for better execution on its strategy. In the weeks leading up to his appointment as chief executive, Hurd said he has reviewed HP's financial reports filed with the Securities and Exchange Commission, analysts reports and other public information.

"I see a company that is fundamentally strong," Hurd said. "But it's clear the company is not performing to its potential."

Dunn said that HP had sought a CEO who could drive the company's various businesses to their highest potential. Over time, she said, Hurd will develop his own strategy of how to reach that point.

When HP ousted Carly Fiorina, the board noted that the decision was not the result of any disagreements about the company's strategy but rather the speed with which goals were being achieved.

Hurd typically operates off a set of metrics in evaluating the performance of businesses units and whether to spin them off--but he said that evaluation process will take time.

"I got here at 9 p.m. last night and got up at 5 a.m., so I didn't spend a lot of time thinking about spinoffs," Hurd said, noting that the thing he will focus on is, "What is the opportunity for this company to perform?"

And although HP and NCR are similar in that they're both diversified technology companies, Hurd said it would be a mistake to take the formula he used at NCR, apply it to HP and expect the same results.

When he was at NCR, he said, he sometimes heard requests from investors to spin off the company's data warehousing division, similar to the way at HP, some investors have asked the company to cut loose its printer operations.

"I interpret that as a shareholder value statement," Hurd said, noting he would first look at creating shareholder value by improving the performance of the units.

Nothing tricky up his sleeve
In the weeks and months to come, Hurd said he will listen to employees, customers, business partners and investors to help develop his assessment of the company's needs and a plan of action.

During this period, Hurd said, "I don't think you'll find me doing anything tricky."

Hurd also plans to improve morale at HP by ensuring there is clarity in employee assignments and missions, as well as discussing the metrics by which they will be measured, he said.

The new CEO will not only focus on the accountability of employees, but also on driving profitability and growth in HP's business units and shoring up its operations.

"This market is too dynamic to ever take our eye off that objective," he said.

Dunn said she believes Hurd's greatest challenge in the next six months is becoming comfortable and "at home" with HP's culture. The board of directors has not set a schedule for when they expect Hurd to begin taking action in addressing the company's problems, she said.

Hurd, who NCR analysts said instituted noticeable change at the company within nine months of being CEO there, had the advantage of having worked at NCR for more than 20 years before becoming chief executive. Some HP analysts noted he will likely take a longer time to enact change at his new company.

"No timetable for success has been laid out at this point," Dunn said. "Mark is very much a fan of metrics, and we like the establishment of logical performance metrics to monitor that success...This is a marathon we're running and not a sprint."