HP and Google - Contrasting Two Philosophies

A definite highlight on my journey so far was the day that I spent visiting HP. I started off by visiting their Executive Briefing Center in Cupertino. The sole purpose of the ECB is to convince big clients to further their cooperation with HP. They do so by demonstrating the newest technological advances and service facilities to the representatives of these huge companies. This strategy has proven to be tremendously succesful, with HP executives claiming that many of their big deals owe a great amount to the convincing power of the ECB; I can only stress the validity of this belief. HP has clearly understood the importance of displaying itself in the best light possible whenever clients show an interest in the services of the company. 

This visit was followed by a tour through HP Labs. Labs is the innovative sector of the company and has been responsible for many of the key inventions that have allowed the company to grow in recent years. Especially the service sector with its great emphasis on data sets has generated a huge amount of money for HP, becoming its greatest source of revenue.

I was very fortunate to have lunch with some of the managing directors at HP, learning a lot about the way that HP approaches the apparent problem of a fall in revenue and the absence of growth.  With the arrival of the new CEO, Mark Hurd, a lot has changed for HP employees. Hurd made his uncompromising course clear since the day he arrived at the company. In order to stay competitive, Hurd argues, we have to cut down on our costs drastically. In order to do so, Hurd has instructed several things. He ordered the removal of many employee benefits such as free donuts on Friday morning or free working hours. Additionally, he has cut down on the space that each worker is given during work (they are actually working in cubes of the size 2 by 3 metres!), leading to a reduction in the cost of working space.

Contrary to expecations, HP has not discovered a substantial loss in the marginal productivity rate of their workers. On the other hand, all these various forms of cost reduction have led to an extra 5 billion Dollars per year, enabling HP to remain hugely profitable.

The message is clear: If you experience a fall in revenues and profits (HP revenue fell by 17 per cent in the last quarter), you have to start to reduce your costs if you are willing to remain in the market. Competition is too big as to allow for any levity in dealing with this issue. 

Hurd famously stated that HP employees are given the choice: Conform to his changes and keep the job, or oppose to these changes and become redundant. 

A completely different philosophy was presented to me when I was kindly given a tour through Google's vast campus in Mountain View.  The company is well known for its revolutionary take on the interaction with its employees, but one really has to visit the campus in order to grasp the real magic of this place. Google's relationship with its employees is unique in a variety of ways. It's the only company in the world that provides its workers with free lunch, breakfast and dinner everyday throughout the week (at an amazingly high quality). Furthermore, the working area is very spacious, and a rule proclaims that a "Googler" should be no further away from food or drinks than 150 feet. Additionally, many leisure and chill areas ensure that the working environment is of an exceptionally high standard. The hierarchy that is evident at a company such as HP is nearly not even existing at Google. Every employee is given the chance to publish an idea; if it is good enough, it has the chance to be implemented: Google Earth, News and Maps all developed out of this concept. At Google, it is not unlikely that an intern would work right next to a managing director. The benefits of Google's concept and philosophy are self explanatory. 

Overall, it must be clear that Google is one of the few companies that can afford to have this very special, yet seemingly costly relationship with its employees.

Consequently, HBM is left with no choice but to follow suit with the HP model. In times of stagnation, one must cut down costs drastically in order to remain profitable. 

J