The tech company’s five year plan won’t take that long to see results, said Meg Whitman, Hewlett-Packard CEO, with an update on her company’s turnaround plan and cloud technology strategy. Meg Whitman was on CNBC today video and transcript below.
HP CEO Meg Whitman Promotes Turnaround & Tech Innovation
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and the revenue about 121 billion rupies. back to becky quick live in sin city though she is not sinning at the conference. becky has a special guest. we don’t know that. you know becky. not at the moment i’m no. guys, thank you very much. joining us now is the woman we’ve been waiting for all morning, meg whitman, hp’s ceo and why we are here. we want to thank you for inviting us here and giving us the chance to sit down with you. thank you for coming to hp discover. we are coming at a really interesting time for hp. you had a great quarter that you announced last month. wall street loved all of the results out there. your earnings came in much higher than the street had been expecting. and the stock was up pretty significantly on that. but this is a long turn ad that you’ve been talking about. and while you may be ahead of where the street thought you would be right now, where are you just in terms of where you thought you would be right now in this process? well, as we laid out, this is going to be a five-year turnaround to get hp running like it should for a company of this iconic status. as i said you don’t have to wait five years for results. i would say we’re a bit ahead where we thought we would be. we’re about 18 months into this five-year turnaround and about where we have to be. we got a long way to go, there is a lot of heavy lifting ahead. the numbers bought you street kred and more patience from investors wondering. but there are bears on the street and their take on this is that the stock is up about 100% from november, and the company’s done some great things when it comings to cash flow but a lot off what they think are non-recurring items. you may not be able to repeat, receivables, what do you say to them? well, in a turnaround you have to do step 1, step 2, step 3. we accomplished a lot. i think there is more work we can do in terms of our cash conversion cycle, looking more carefully. you’re at 21 days. versus 29 before. exactly. part of that of course is business mix. our pc business has a negative cash conversion cycle so it will depend on the mix. this’s more we can do. really, the next phase of the turnaround is how do we get revenue growing. and that is where we really have to now put the focus. you can see at discover we’re going to get rev moo going based on great products, great services and great software. i think-is the strongest lineup hp has had. the veterans around say this is the strongest lineup hp may have had in 20 years. when do you exsnaekt growth? i know you don’t want to get pinned down. you hook at the lines you have now is that something that comes i guess your fiscal year ends in october. is that something that comes after that. we think growth is possible in 2014, i think the biggest wild card is what happens to the pc market as a whole. we define that as personal systems, but the vast majority of our personal systems are pcs and so i think that will largely depend on the market. but we remain pretty confident. as i said this is all about the proed lineup t software, the services lineup, and then you know, going and selling solutions for what i call the new style of i.t., because everything is changing in i.t. pc sales, the industry has gotten hit hard. i think this year sales down the biggest since they started keeping records. right. how do you — is this an industry that is disappearing or really think that you can — it depends on your business definition. i like to think about this as personal systems or devices. the need to create, to consume, to share, is exploding because data is exploding. there sor many more things you can do. it turns out those devices are becoming multi-foreign factor, multiarchitecture in terms of the chips in the devices. so the good news is the business is growing, it’s just the pc segment is declining. we’ll see how long that continues. there’s 140 million 4-year-old or more lap tops on the market place. windows xp, this is no more support next year. so i don’t think it will continue the precipitous trajectory it has been on but we’ve got to get ability, get to other operating systems all of the things that you’ve seen in the booth. one of the things you said yesterday at your keynote speech part of what you have to convince people is you’re here for the long haul. so there is no way you’re changing our mind on what’s happening with pcs, this is a business you are in to stay in? this is a business that we are in. what our customers are looking for from us is consistency of leadership, of strategy, and a partner that they can rely on. i’ll take cloud for an example which is revolutionizing our industry and how technology is bought, consumed, how it’s paid for. our cloud strategy is the cloud that enterprises can rely on. that rely on factor is incredibly important. customers have been through a lot of twists and turns it over the last decade or so. marc andreessen was talking to us and says he thinks you are the best ceo for hp since the founders of the company. he said he had to do convincing to get you to take this job. obviously you don’t need the money. why did you take the job? you’re right, i said many times after i left ebay that was my last ceo job. but i was on the board at hp when the company ran into another chapter and some of the challenges. i had started to really in some ways fall in love with this company. it matters what happens to hp, to our industry, it matters to our customers. i have met over 500 customers in the last 11 months sor so. and everyone says we want hp to win. and it matters to them and the solutions they made, investments in technology over the years and they want us to win in an industry characterized increasingly by consolidation, by change. so, that’s why i took the job beit matters. you could talk about how you see the change happening. marc told us he hears about it from customers and employees. let’s talk about how you are trying to change things with examples. when you took over as ceo there was a contract that came up, microsoft’s bing was looking for a new purchase of servers and you were going up against dell. you lost that bid. so what did you do? so, i wanted to find out why. so i called steve bonner and said put me in touch with the person at microsoft who made this decision and at this particular time chapter and verse what we could have done better. so i spent about 45 minutes on the phone with the decision maker to understand why we lost. and then got our teams together and went through and said what are we going to do. how do we reorganization ourselves. change the supply chain. how do we participate in a way we win. this was april last year when you lost that bid. what did they say, why did you lose? time to market, the ability to iter rate in the rfp process. what does that mean? so in the old days a company would put out an rpf. sorry. a request for proposal. and you would just answer it. here’s what we can provide. but the way these big hyper scale deals are is they have more, they solicit from folks, hey, what can you do for us. then incorporate that into the next one. and then you have to respond again. then you incorporate that into the next one. then come up with ideas that help the customer real time. how long was it taking h, too long and we were just answering the request for proposal as opposed to adding our innovation ideas along the way. saying here’s things you may not have thought of. but if you consider these three it will reduce your cost or increase how effectively your app runs. dell was doing some of those. you went up for another bid in january i think of this year. this was, again, the same situation, bing is looking for servers, what happened? we won. and because we got our team together. and what i have come to learn about hp people. you get the right people in the room, focused on an objective no one does better. we have the best engineers in the city. part of the dna of this company is engineering, product drifben. all the way back to the founders so. we reassembled the team be, set them off in a direction which was, we’ve got to do things differently and the results worked out. it wasn’t just offering the no. you do have to be price competitive but it’s time to market. how you respond, it’s the innovation ideas you bring, the service you’re going to provide so it’s a whole package of things. it’s a very competitive world. we’ll win some, lose some. we sort of learned a new skill how to do after this in a more aggressive way.
HP’s Whitman ‘Best CEO’ Since Founders: Andreessen
Legendary tech innovator, Marc Andreessen, Andreessen Horowitz co-founder, explains why he thinks Meg Whitman is the “world class” chief executive that Hewlett-Packard deserves.
investors are going to pay attention to. back to becky quick who is live in las vegas at the hp discover conference. becky quick. good morning. andrew, thank you. we are joined this morning by a legendary tech investor and inventor, marc andreessen. marc, thank you for joining us this morning. thanks for having me. is early in vegas. we were talking how this is the magic hour. two types of people. our friend howard says this is when the late achievers go to bed and the early achievers go jogging. the one time they intersect. it’s an interesting time of the morning. we are here because of hp discover. and i was reading the cover story from forbes which has your take and a lot of people’s take on meg whitman. i was blown away by some of the things. you said that she is the best ceo the company has had since its founders. why do you say that? it’s such — the founders are so important to this company. the founders, hp had two founders. bill and dave ran the company for 50 years. and the company made tremendous progress. dave packard was last ceo in 1993. the company made progress over the next 20 years. but meg is the world class ceo that i think this company deserves. after a long period of change. a long period of change and period of turmoil. she was on the board with you when things started going awry. yes. with the last ceo. you looked at her and thought she would abperfect ceo. she didn’t want the job. yeah. i didn’t imagine when we recruited her, it was never a thought she would be available. she was never doing this. she had ruled herself out. we knew we had to make a change and so as we got into it deeper and deeper she started i would say intellectually intrigued. at a certain point she got emotionally intrigued. she is worth like $1.9 billion or something. how do you convince somebody to get back in the game? you can’t. they have to convince themselves. she has the a convince herself. so there was a specific — i had six hours. you have to get them in a captive zone where they can’t walk away from the discussion. i had her on a plane for six hours from the east coast during that critical period and i and a couple directors sat with her. halfway through she got the twinkle in her eye. what was the magic moment? what was the conversation that kind of took place when she got that? she said well, let’s say purely hypothetical ukly if i were to do it what would the plan be. and i was like okay, we got her. now it’s a matter — now it’s don’t script the close. what actually is happening? what are some of the changes you think she’s brought to the company because she’s talked about a long term plan, you’re 18 months in. she articulated the time frame and the plan so she laid out right from the start for the employees and the customers and the shareholders the 5-year plan and she blocked it out year by year. look, i call this the great american turnaround. this is the full turnaround you read about, it becomes the subject of books and legends so she laid out the sequence of events. she has been tracking exactly against that, gives the company, shareholders updates against that. in the company she made changes, morale is way up, excitement leveling are way up. you see it in this conference, you’ll see it all day with the customers with a new level of enthusiasm. how does it trickle back? i talk to customers all the time. we have a lot of customers come through our office. we do corporate briefings at our office. i see the customers actually outside of hp a lot. i talk to a lot of employees. what are a couple of examples or like a concrete used to happen this way, now this way. so, a big thing is team dynamic. hp had become a company — 400,000 employees like these companies become nation states and you get like princes and you get all of these sort of power struggles. she’s brought a team dynamic into place. the senior leadership level, she has brought in. she has been emphasizing products more, emphasis on moon shot. she has more stuff out of the labs, more under development. i think hp has more new products under development than it has at any point. and then she put tremendous evident into face time with customers. so much of this business is an assurance, a confidence business and she put a huge amount of evident and gotten a lot of results. she has a lot of results on the earnings too. a couple of weeks ago it was a much better number than the street had been expecting. wall street was thrilled. it’s a long battle because you have to turn around profitability on a lot of these, you have to get to the point you are growing revenue again too. sure. how confident are you here out? i’m confident but that said it’s notcording to strategy. these don’t happen overnight. it’s a process. she’s identified the plan, she is working the plan, performing against the plan so it’s going very well so far. talk about some broader things in technology. you are somebody who has your fingers in a lot of different projects, and you have invested in companies. i think two years ago the only firm that held stock in all four of the highest valued privately held social media companies, facebook, twitter, grew upon and zynga. facebook and twitter, great. groupon and zynga. is it something that you think has a long term life? we sold our positions in groupon and zynga once they went public. i think both companies have a tremendous amount of potential. i think it could be argued both went public prematurely. i talked at length, it’s a harsh environment to be a public company. you have to be ready for a tremendous amount of scrutiny, pressure. i think both companies frankly my view is could have benefitted from a longer time as private companies. but they have enormous customer bases, ta hented development teams operating against big markets. groupon, that’s an entire business model that a lots of people have questions about no matter which company. i always thought this was one of the things, i thought people misunderstood groupon. so the premise from the very start was that online advertising like google and facebook is well suited for 0 online businesses. if you have a website google advertising is great. most businesses of the world are not online action they are offline businesses. they have stores or send people to your house. the whole nine yards. yoga studios, all that stuff. most of the world businesses that are offline there has not been an effective way to market on line and groupon was the first company to figure out a model to do mass online marketing for offline businesses. that remains a very big market opportunity. that in many ways is the big on line opportunity. i want to talk to you about more of these. do you mind if we stick in a commercial break.