HP Compaq merger was met by immediate challenges of building a new global organization, creating a uniform work culture throughout the organization, retaining and motivating the key talent and maintaining business and customer focus throughout internal changes. Thus at HP after the merger, there was a need to create a "bigger and better" company, such that the new HP is able to address the following:
Reaching the customers in a better manner
Achieving a leading positions in the major markets of the world
Achieving better operational efficiency
Economies of scale
So, in order to achieve these goals it was necessary that employees at HP were able to make swift decisions and for that it was inevitable to provide them with directions and clarity about what was happening around.
For handling immediate integration, "People Strategy" program was launched. This program had three parts:
Stabilization of the new organization by building and strengthening the foundation
Creation and mobilization of a high performance workplace
Energizing employees in a manner so as to make them feel that HP is the best employer in the EMEA region
In order to facilitate smooth integration process, a clean room integration tool was adopted, wherein over 1000 key employees from different businesses of both the organizations from different parts of the world were incorporated and they chalked out a detailed integration planning. This strategy was very helpful when the actual merger took place because all the ground work had already been done and the team had already carried out the detailed due diligence process.
Following HR interventions were used in order to achieve the above stated goals of the company:
Fast Start: This was a program for "new team" discussion designed for every employee. Such sessions were meant to be one of the first meetings employees had with their new managers to help both managers and employees explore the new HP. Such sessions covered market strategy, approach towards the customers and the new company culture.
Adopt and Go: This was aimed at introducing fast paced changes and eliminating the any dual systems during the change process in the organization by making immediate decision on the question of whether to use a pre-merger Compaq or HP way of operating, a combination of both or creating something new. This strategy enabled HP to achieve an 80 percent success rate from the start, rather than aim for 100 percent perfection and takes an incredibly long time to implement key systems.
Focal Point Review: This HR system was adopted from pre-merger Compaq. Specific teams were created in order to address some of the key employee issues like that of compensation and benefits. The rewards and benefits integration teams were created which assessed local benefit packages of pre-merger HP and Compaq employees and then formulated plans for each country.
Post merger the organizational structure was reorganized and a global job structure was created which included a common system of job codes, titles and functions.
As a result of these efforts HP was awarded with the title of "Best Places to Work" in 2007 by Boston Business Journal.
CONClusion: HP-Compaq Merger
HP-Compaq union is one of the few deals to create so much controversy and this can be substantiated by the fact that Michael Dell had once called it "the dumbest deal of the decade". But the deal was declared a success by the year 2006-07, a period of six turbulent years, which included a long battle with the son of one of the founders, a steady loss of shareholder value for the first year after the merger and the ouster of the first CEO, Carly Fiorina who was the iron lady behind this merger. By this time the shares of HP had tripled from what it was in 2004 and the company surpassed Dell to become world's largest PC maker in terms of the number of units sold. As per Jean S.Bozman, who served as a research vice president at IDC's Worldwide Server group in 2007, the merger between HP and Compaq ensured a long term success for these two companies in a fast transforming industry. The deal played a critical role in pacing up the growth of the revenue and profits in a highly competitive market environment.
As per the analysts, the merger came at a very appropriate time when both these companies were lagging in a number of key product segments and proved to be a panacea by helping HP position itself in the new unexplored product markets and enterprise computing, surpassing the trends that were working against the success of these companies as independent entities.
Following is a brief summarization of HP's growth from 2007 (when the deal was first declared to be a success onwards till present:
HP under the leadership of CEO Mark Hurd, showed a total revenue growth rate of 13.5% in 2008 over the previous year and since then has shown very impressive growth rate very year. At present HP has many remarkable achievements to its credit. It holds 40% of the share in the global printers market and 30% share in the global server market Over these nine years after the merger as can be seen from the above details, HP has successfully proved itself as a company that is capable of producing and delivering both volume and value products. This is one of the main reasons which give it easy entry into more markets as compared to its competitors. However, HP has a lot more challenges ahead. Some of these are the necessity of reducing the complexity of its solutions, expanding its software business and clarifying its strategic approach towards the services business and leveraging the untapped assets in the consumer market segment.