Monday, September 25, 2006

Dunn is gunned

Its only a fine line that separates success and failure: hero and zero: everywhere and nowhere and Patricia Dunn would only have understood that concept too well and in the process paying a very big price. Not so long ago she was voted as one of the most powerful women in the world and today she finds herself in a very miserable position, being ousted not only as the Chairperson of the Directors, but also from the Hewlett-Packard Board itself.

Everything started with the bold (few may call it arrogant) step taken by Dunn to tap the phone calls of all the directors following a leak of confidential boardroom discussions to the media. But the repercussions were very severe, with the Directors feeling agitated (may be rightly) at their private life being no longer private! One of the Directors, Tom Perkins, an associate of one Mr Hewlett and one Mr Packard, resigned in protest last week and these scandals have affected the HP shares very badly.

The $100 bn Silicon Valley corporate giant has had nothing but problems since June last year following the quitting of the then CEO Carly Fiorina. However Dunn did a grand job during the CEO transition but she too would realize in a future day that butting in the personal life of fellow employees is a grievous offence. Now that she has been asked to leave the Board of Directors, HP would only lose the services of a woman who belong to that rare breed that posses intelligence, authority and alacrity.

Quitting of Patricia Dunn from the Board of HP directors will have its impact in
1) The face value of the HP shares in the market
2) Management of HP affairs
3) Future growth of HP

The market is prone to the sentiments of the people for a company and it would be adversely affected if the company’s Chairperson is quitting after a scandalous affair. The share prices fell by 5% immediately and despite the resurgence after Mark Hurd, the "Dunn-protege" CEO taking over the incumbency, it would take at least a while for HP to reach the heights of the previous months.

Even the directors who voted in favour of ousting Dunn would accept the fact that she did a fantastic job for long as one of the Board Directors in her former years and then as its Chairperson in her later years. HP grew leaps and bounds under her tenure and her quitting would surely leave a big void, which I bet would be very hard to fill.

Of all the jobs in hands that Hurd should address to, the most important one would be maintaining the momentum of the growth of the company. He certainly has a very challenging job in his hands and it would be very interesting to watch whether he can weather the storm and reach the dizzy heights achieved by his “celebrated and yet ditched” predecessor. As they say, Time is a great Judge and we have to wait for its verdict

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