Stepping Into the Shoes of an Industry Legend : Transition: Platt takes the helm of Hewlett-Packard, world’s No. 2 computer maker and a master of reinvention.
Where do you take a company after its past leaders have already been bestowed legendary status as no less than the founders of Silicon Valley?
That’s the job facing Lew Platt, 52, as he adds the title of chairman and consolidates his control of Palo Alto-based Hewlett-Packard Co., the world’s second-largest computer company.
A 27-year company veteran who last year became president and chief executive, Platt inherits H-P from David Packard, who announced Friday that he is stepping down as chairman of the company he founded 54 years ago with fellow Silicon Valley legend Bill Hewlett.
“You don’t step into those shoes or even attempt to fill them, but you give it your own touch,” Platt said in a telephone interview. “The principles on which this company was built, creating a sense of teamwork and oneness, will remain. . . . But it’s a different challenge when you’re talking about a company of 100,000 employees, to maintain that family atmosphere.”
Platt is taking over a company that has reinvented itself in the last several years to take advantage of new generations of technology.
H-P, with revenue last year of $16 billion, has undergone several incarnations--from a maker of instruments to a builder of calculators, from a manufacturer of minicomputers based on its own brand of proprietary technology to a maker of so-called open-systems workstations that can interact with any other brand of standardized equipment by other manufacturers.
The company has launched forays into the personal computer business, laser and ink-jet printers, and a new category of hand-held computers called subnotebooks.
In the 1990s, Hewlett-Packard also changed its image from an overstaffed and lackluster earnings producer to a company that has adapted to global recession better than rival giants International Business Machines Corp. and Digital Equipment Corp. It surpassed the foundering Digital in the last two years, and now most often competes with industry leader IBM in the market for corporate computers.
“There aren’t many companies as well positioned as they are,” said Richard Chu, an analyst at investment bank Cowen & Co. in Boston. “Unlike a lot of the companies of their vintage, they were a lot more swift in changing.”
Packard, 81, came out of semi-retirement in 1990 to help reorganize H-P, and he eventually encouraged the retirement of John A. Young, who served as chief executive for 14 years until he stepped down last year.
Platt, who served as executive vice president in charge of the company’s computer systems division, assumed day-to-day management responsibility in November, although Packard stayed on as chairman.
Before the reorganization, H-P was “adrift in its strategic direction, focus, aggressiveness and profit growth,” said Herwick.
Packard and Young removed whole layers of management, freeing managers in divisions to take responsibility for decisions.
H-P also led a charge into new computer technologies, competing with Sun Microsystems Inc. for the throne of the multibillion-dollar Unix operating system market. The company also began to adapt its image as a conservative company and a coddler of its employees. It offered early retirements to employees. Still, it has grown from 91,500 in 1990 to 94,900 at the end of July.
And it pioneered new businesses. H-P commands perhaps 70% of the world market for laser printers and much of the market for a newer technology known as ink-jet printers. Printer sales helped the company add more than 4,000 people in the last year, a spokesman said.
For the third fiscal quarter ended July 31, H-P reported a 44% increase in net earnings to $271 million, or $1.06 a share, compared to net earnings of $188 million a year ago.
The transition of power announced Friday had little impact on Wall Street. H-P stock closed the day up 12.5 cents at $67.875 a share in trading on the New York Stock Exchange.
Platt, meanwhile, said his biggest challenge will be to continue cutting the company’s costs, essential in an industry where prices fall almost daily. And he acknowledged the difficulties he faces in light of the heritage.
“It’s a lot easier to take an organization that is not a leader and make the changes and take the risks to put yourself into an important position,” he said. “Having achieved that, one of the great challenges is getting the organization to respond.”
Times staff writer Jonathan Weber contributed to this story.
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