Gary Barnett's Blog

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• Employee morale is at a deeply low point across Europe
• This is a far cry from Bill Thomas’s vision of Fun, Impact and Operational Excellence
• It is not to0 late but HP has got to work hard to re-engage with European Employees
• My advice – close the chapter, re-engage, retain some of the old EDS values while blending them with HP’s

Employee morale is at a deeply low point across Europe

HP Enterprise Services is having a gnarly time of it at the moment. The loss of the DWP desktop deal with Fujitsu (which also has one or two HR challenges to deal with) named as preferred bidder and tipped as most likely to replace HP could be spun as just a set-back, but combined with the level of employee unhappiness that going on strike implies it’s clear that HP’s most senior executives need to step in.

Morale within the former EDS organisation astonishingly low across Europe (most notably in the UK and Germany), with employees expressing a mixture of despair and anger at the scale of the redundancies in Europe and serious pressure on salaries.

This is a far cry from Bill Thomas’s vision of Fun, Impact and Operational Excellence
At HP’s annual analyst event in 2009, Bill Thomas (then the GM of Europe) characterised his vision using the four words “Fun, Impact and Operational Excellence”. It’s fair to say that EDS was never a “cosy” place to work, but the company managed to attract and retain some really formidable talent  in deal-making, service delivery and hard-core technology expertise.

One of the things that Bill Thomas, and his boss Ron Rittenmeyer, were absolutely focussed on was operational excellence. Bill was able to express his enthusiasm for operational excellence in more moderate terms than Ron, who was almost violent in his insistence on it – But it was always clear that both shared the same passion and both were very willing to reward employees that delivered.

Clients picked up on this. In 2008 I spent an evening in the company of a civil service mandarin who had nothing but good things to say about his EDS account director and the EDS relationship as a whole. He wasn’t interested in how “cool” EDS was, or how “exciting” their solutions were, he was happy that he had a partner that cared about his success.

It’s not the same today, despite the fact that HP Enterprise Services actually has more capabilities post-merger, and still cares every bit as much about client outcomes.

It is not too late but HP has got to work hard to re-engage with European Employees
HP’s services arm now has a European workforce which feels that is has been badly treated in terms of pay, conditions and empowerment.  If HP doesn’t take proactive steps to re-engage the company will find it increasingly difficult to replace the talent that it will inevitably lose.

Without some corrective action HP’s business will suffer.

My advice – close the chapter, re-connect, retain some of the old EDS values while blending them with HP’s
HP needs to move to close this chapter in its employee-relations history. First, the outstanding grievances need to be resolved. Next the company should cancel the pay freeze and provide a transparent process through which employees can see how their efforts will be rewarded. The company also needs to establish and fund a retention program.

Finally, in order to move on HP needs to acknowledge those elements of the EDS values that won the company business – The Texan focus on “outcomes” (which helped to keep clients) and the suited conservatism (which helped to win larger clients who don’t want “funky” preferring “formal”) and then blend in HP’s  reputation for  innovation (something that EDS did a lot of but was never quite able to leverage).

HP Services has a level of capabiliy that is only matched by IBM in terms of its, depth, geographical coverage and basic pulling power. The key in services, unlike perhaps the hardware business, is to focus on profits as well as cost….

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