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Technology Industry

Time for a change - Hp changes and what Webb McKinney is doing

Communications News, Oct, 2001 by Sean Kelly

Webb McKinney synchronizes Hewlett-Packard's major merger and IT service strategy.

WEBB MCKINNEY is used to making drastic changes. Only shortly before Hewlett-Packard's (HP's) September announcement that it would purchase Houston-based Compaq for $20 billion in a stock swap, McKinney was busy working on a major refocus of the computer and printer giant's strategy as the recently appointed president of HP's business customer organization. With the creation of the new $87 billion technology giant, McKinney was also named co-leader of the team that is coordinating the integration of the two companies. He remembers another noteworthy adjustment he faced early during his 32-year career with the company.

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"For the first 10 years in my career, I was actually in the instrument business," recalls McKinney, who joined the Palo Alto, CA, company in 1969 as a sales engineer, after earning two electrical engineering degrees at the University of Southern California. "We were building systems that solved engineering problems. I then moved into the computer business, and that transition was really tough. It really required me to learn. I moved in at a research-and-development (R&D) manager level, so I had hundreds of people working for me."

The pressure was further compounded by the fast-changing times in the computer field. "It was in the early 1980s in the PC business, which was a pretty chaotic time," he says. "The first three months, I was really wondering if I was going to survive just emotionally. It was just so hard."

The experience, however, taught McKinney valuable lessons. "There is a saying, 'If it doesn't kill you, it makes you strong.' It just gives you an enormous amount of confidence when you face new things--when you make big changes--just to stay focused on what you're trying to do."

The personal passage toughened McKinney--and also broadened his horizons. "That one particular transition in my career, in some ways, was the most painful for me for a few months," he states, "but it taught me. Since then, I've been willing to do all kinds of things that I've never done before, because I have the confidence that I built at that time."

McKinney draws on that confidence-building experience as he helps guide HP into a colossal transformation. He will continue to head the business customer organization until the merger is complete next year, when it will be renamed the IT infrastructure unit. McKinney's counterpart at Compaq, Peter Blackmore, executive vice president for sales and services, will then lead the unit while McKinney will most likely be elevated to a higher position in the new company.

HP's reinvention will continue during and after the Compaq merger. Under the leadership of CEO Carly Fiorina, the company--founded 63 years ago in a California garage--is remaking itself into an Internet specialist, selling services, hardware and software to provision IT as an always-on service.

Following this new vision is a daunting task for HP, which leads the printer market and is the second-largest computer company in the world behind IBM. The company is ranked No. 19 in the Fortune 500, with $48 billion in revenue and more than 80,000 employees worldwide. The company's IT services sector accounted for 16% of revenue and 22% of profits in this year's second quarter, which ended April 30. Imaging and printing services, however, are still HP's bread and butter, accounting for 42% of revenue and 78% of profits in the same quarter. Computing systems made up 39% of the revenue without showing a profit.

TIME-SAVING IT STRATEGY

McKinney's business customer organization is charged with worldwide sales of HP products and services, as well as marketing and delivery of products to small, midsize and large businesses and enterprises. With two-thirds of HP's revenue coming from commercial customers, the organization has a key role in capitalizing on IT's rising importance to enterprises.

"In spite of the current slowdown in spending, IT is becoming more important to business success in the future," he says. "We see IT becoming pervasive and increasingly being deployed and purchased as a service, almost like electricity."

Simplifying the process for customers is one factor in deploying IT service, McKinney points out. "The key trend we're seeing in the marketplace is that customers are putting a much higher value on the ease of doing business with suppliers and partners," he notes. "There is also a much stronger focus on solutions, in getting a faster return on investments (ROI) and, of course, on faster deployments.

"Customers are always coming to HP saying, 'I need someone who can help me get ROI faster.'" These customers, he adds, are also looking for IT consultants to assist in giving them a competitive advantage.

McKinney says balance is a key quality he learned from the company's founders, Bill Hewlett and David Packard. "It is very easy to get infatuated with the technology for the technology's sake," he notes. The balance includes a focus on innovation, he says, but also on business results.

Technology Industry

Time for a change - Hp changes and what Webb McKinney is doing

Communications News, Oct, 2001 by Sean Kelly

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