In August 2010, Hewlett-Packard made a surprise announcement: Its CEO, Mark Hurd, was resigning.
In the months that followed, HP’s board explained the action in a scattershot manner. Hurd, the subject of an alleged sexual harassment, had improved the company’s performance, garnering praise for his. His sudden departure sparked concern.
Experts in corporate communications advise leaders to deliver bad news in five steps: tell it all, tell it fast, explain what you’re doing about it, make it clear when it’s over and get back to work. HP’s board failed to follow these steps.
One month after leaving HP, Hurd joined Oracle as co-president. HP’s board sued Oracle in an attempt to block the move, but legal analysts dismissed the lawsuit as fruitless and unlikely to succeed. (It didn’t succeed, and Hurd remains at Oracle today.)
Commentators wondered why HP’s board didn’t anticipate Hurd’s decision to join a competitor—and chastised HP for initiating a costly and disruptive lawsuit at a time when its performance was flagging. To make matters worse, HP’s board rushed to hire a new CEO, Leo Apotheker, who was virtually unknown in America and ill-suited for the role.
Even more outrage erupted when allegations surfaced two months later that the real reason the HP board dismissed Hurd was suspicions that he disclosed insider information. Observers wondered why the board did not reveal this at the outset.
The missteps by HP’s board show the importance of strategic communication. Had the directors planned more methodically, anticipated and addressed problems and provided more information upfront, it would have saved the company from protracted struggles.
— Adapted from The Power of Communication, Helio Fred Garcia, FT Press.