The value of Mark Hurd, one of Silicon Valley’s best-regarded business leaders, was spelt out in no uncertain terms by Wall Street on Friday.
Within minutes of Hewlett-Packard disclosing the departure of its chief executive amid allegations of unethical behaviour, nearly $10bn was wiped from its stock market value.
There could have been no clearer signal of the confidence that Mr Hurd’s no-nonsense business style has instilled since he took the helm of a troubled HP more than five years ago. Over that period HP’s shares have doubled, while the broader US stock market has gone sideways.
HP moved quickly to try to contain the damage, reassuring Wall Street about its current performance by raising its earnings guidance and ruling out any broader impact on the company from the allegations against Mr Hurd.
Given his close identification with HP’s turnround, however, and with no obvious heir-apparent, the damage caused by the cloud of uncertainty now hanging over the company was rapid.
Mr Hurd had already skated around one corporate scandal at HP that could have claimed his career at the company. Soon after his arrival in 2005, the company’s chairwoman, Patricia Dunn, was forced to resign after it emerged that she had used private investigators to “pretext” journalists, tapping into their private phone records.
It later emerged that Mr Hurd had also been given information about the nature of the investigations, although he said he had not read the reports and was unaware of the details.
The sudden loss of Mr Hurd marks the third time HP has been forced into a search for a new leader. Carly Fiorina, a former senior executive from Lucent and now Republican candidate for senator in California, was brought to try to revive HP after it missed out on much of the tech industry’s growth boom during the dotcom years.
She was later replaced by Mr Hurd, however, after failing to bring enough operational discipline to the sprawling conglomerate.
A former boss of NCR, the computer maker once owned by AT&T, Mr Hurd brought an attention to detail and “no-excuses” management policy that proved an effective formula for rekindling HP’s earnings growth.
More recently, he had embarked on a series of acquisitions to strengthen the company’s presence in a range of markets, including EDS in services, Palm in smartphones and 3Com in computer networking.
However, some Wall Street analysts had started to raise questions about the success of his acquisitions.
HP said it would again look outside the company in its search for a new leader, though the hunt would include potential inside candidates. Ann Livermore, head of HP’s services division was quickly identified by several analysts at a likely contender, along with Todd Bradley, a former boss of Palm and now head of HP’s PC division.