By Guest Author James T. Healy
[In his first article Jim set forth strategies for selling in what he calls non-objective environments, where there are unhealthy levels of internal competition and political power plays, and outlined four types of people who thrive in these environments. Today he describes in more detail how the second type, the “misguided technologist”, works, using the example of William Hewlett of HP.]
In a non-objective environment a misguided technologist (MT) is the true nerd enamored with a technology old, new or just different and wants the opportunity to play with it. MTs may purchase an item because it has the latest feature even though this feature is of no practical use in the application and may not be the best solution for the company. The MT may purchase it because it is supplied by or made with a product from a particular popular vendor or big name brand. Buying technology for technologies sake is also a common characteristic of the MT. The end game can be quite costly to the company.
In contrast, the practical technologist will attempt to align a decision to purchase a specific technology in concert with the goals and objectives of the company or project. The MT puts their perceptions of the “technology” above those goals and objectives. The MT may decide not to buy the best technology for the application because he wants to avoid change or perceived risk. He will use his technical expertise and exalted technologist standing to his advantage and cloud the “to buy” or “not to buy” decision making process.
HP’s William Hewlett, son of the co-founder of HP, is an example of a misguided technologist.. When outsider Carly Fiorina came to engineering-oriented HP, her marketing prowess was viewed with some trepidation by the staid HP establishment. She believed that the PC business was viable and that HP would win in the market if they could achieve mass and innovate. Her vision required some serious internal changes to the HP culture and the acquisition of Compaq. Compaq had a proven track record in PC innovation, and combined with it, HP would have the mass required to dominate the PC market.
In 2001 when she announced the proposed merger, she set off a conflagration of controversy. Hewlett, the resident misguided technologist, dismissed it as a foolish gamble. He said the acquisition would do nothing to help HP compete against Dell or IBM. The CEO of Dell said it was “the dumbest deal of the decade.” Hewlett then drove a fierce proxy fight to prevent the marriage. The stockholders and the press were fiercely divided on Fiorina’s strategy. Undaunted, she sold it hard.
MTs will not buy the best product for all the wrong reasons. Hewlett believed in the “HP Way.” Actually the old HP way, collegial, conservative and consensual was waning. Hewlett’s misguided belief was that their “safe” position in digital imaging, a market position that was somewhat fuzzy, would be the key to their success.
In selling to or around an MT, one must be aware of potential traps in the sales process. Hewlett was against acquiring Compaq and his “trap” was quite logical. He said, “HP can’t out-Dell Dell and out-IBM IBM at the same time.”
The MT usually has an elaborate justification to support what they wish to do. MTs tend to be inflexible once they have disclosed themselves. They typically focus on one need with which they identify, and tend to be non-objective in relation to the total selling process. Hewlett’s “need” was to obstruct a merger with Compaq. Therefore he devised an alternate strategy. Invest in imaging and printing, target smaller acquisitions in the enterprise arena and de-emphasize PCs, focusing on profitability rather than market share. This was diametrically opposed to Fiorina’s strategy.
In dealing with the MT it is necessary to feed information to support their needs. Then convince them you have something they need because once MTs commit themselves, they are almost impossible to turn around. The unique need or problem to be solved for Fiorina was profitable growth. She had taken over HP when the technology market was declining and profitability was illusive. Fiorina believed that HP had to make some serious changes to survive and grow. The justification for the acquisition of Compaq, growth and profitability through PC market dominance, was incorporated it in her selling process. Her objective was at best to win over the MT, Hewlett, or at least to neutralize him.
In a selling situation, when you are up against a technical guru, especially one with power, it is important to involve others in the organization and develop a scenario which makes it obvious to others that the MT’s reason for not buying your “product” is in essence personal, and not in concert with the company goals. At the base of their position are invalid assumptions. It is difficult for the MT to see these assumptions as invalid, while others in the organization see it quickly. MT’s frames the decision/sale from a non-objective posture. This makes direct feedback almost impossible.
Fiorina knew she had to work around this MT using peer pressure to contain Hewlett. Peers who understood the company objective saw past the non-objective positioning. By necessity she became a disruptive selling machine, bent on bringing HP and Compaq together. Undaunted by the opposition, she took on Hewlett as well as other naysayers. She adroitly out-maneuvered them to get just enough of the stockholders to buy into her vision and successfully acquire Compaq. She operated within the norm of technology acquisitions regardless of the impact on organization and culture. Consequently, her forcing of the merger got her fired. But one could say she got a nice commission for the “sale.” The $21 million severance package was not all bad.
Ultimately, Fiornia’s decision to acquire Compaq was the right decision to meet HP’s goals and objectives. HP became the market leader in PC sales in 2008. Essentially her sales acumen resulted in the out-Dell’ing of Dell and the out-IBM’ing of IBM, at the same time. Thanks to Fiornia’s vision and ability to sell against the misguided technologist, HP is the king of the worldwide PC market. Dell is relegated to the #2 position. As for IBM, in 2005 they sold their PC business to Lenovo of China. They are now #4 in worldwide sales. I guess it was not the “dumbest deal of the decade.”
One wonders if her major in medieval studies at Stanford University helped her overcome the feudal HP culture, setting the stage for Mark Hurd’s HP renaissance.