Monday, October 3, 2011

Hewlett Packard's New CEO & the purpose of a business

This is an interesting time for Silicone Valley CEOs. Yahoo fired their CEO, and now HP after the fall out of the previous CEO's decision to quit Hardware (read my previous post here) they've hired Meg Whitman as CEO.

HP has gone through many CEO's in this fashion: Carly Fiorina, Mark Hurd, and the last one, Apotheker. he total cost of ousting these CEOs has been around $80 million. Man, I wish I'd be getting anywhere near that money to get fired. Wow.

Now with Meg Whitman, I have even lower hopes for the company. While Whitman will probably turn the company around back to profitability, she is no visionary. With the amount of money she poured into her campaign, she would've won if she'd had any coherent vision.

Every now and then I hear someone say that the purpose of a business is to generate income or to put it bluntly "make money." Otherwise they say "you don't have a business." Well that's like saying that the purpose of the human body is to breath, eat, and sleep. Just because if any of those functions get impaired you need emergency attention, it doesn't mean that the purpose of having a body is to do that. The purpose of a body is to enable us to live. What you do with your life is up to you but if your only purpose to work was to feed yourself, then the moment you secure enough food for the rest of your life (say you win the lottery or make a gazillion dollars on betting against sub-prime mortgages) then you'd have no reason to move. Sitting there feeding your body, you'd end up looking like a cartoon out of The Oatmeal but your body wouldn't like it and you'd probably not live very long.

The same way a business needs to make money to survive but that can't be it's goal, mission or purpose. Without vision or purpose, the business lays there un-moving eventually eats itself into a heart-attack. You body doesn't only need food to live, it needs to move with purpose, for a reason. A business is the same way.

So vision is important. Yet it is something investors seem to ignore in their rush to satisfy the basic need of profitability of the company.

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