KARL MOORE – This is Karl Moore of the Desautels Faculty of Management at McGill University, with Talking Management for The Globe and Mail. Today I am delighted to speak to Robert Burgelman who is a senior professor at the Stanford Graduate School of Business.
Good morning, Robert.
ROBERT BURGELMAN – Good morning, Karl.
KARL MOORE – Robert, you have been looking at Hewlett-Packard – a company that has had great ups and some real downs. What are some of the key lessons you have learned from HP?
ROBERT BURGELMAN – The book I am writing is called Built to Become. So the idea is that companies like HP, and others that have been long living companies, have put in place processes that allow them to continue to take advantage of new opportunities and avoid major threats – even though nobody in advance could determine what those innovations and threats are going to be. For instance, if Dave Packard and Bill Hewett would come from the Elysian Fields and would come back and step into HP they would probably not completely recognize the company. They would be surprised by some of the things that they would see and some of the directions that HP has moved. On the other hand, they would probably be happy that the company is still around because HP has been able to buy Compaq; well they merged with Compaq but basically acquired them. Compaq had already acquired DEC [Digital Equipment Corp.] and Tandem and other major corporations and HP is still around and has been able to absorb some of these other actually fairly well known and important companies that are no longer around. The idea, therefore, is what is it that allows companies to, overtime, across a series of CEOs, not just one CEO, but to continue to be viable and to be able to continue to succeed? Again, I think this has to do with the ability to balance these two processes – one is to continue to be successful in the environments in which you are, and at the same time to be able to develop some new areas.
KARL MOORE – The question is, HP has had great success over a long time, what is it that allows them to move through tough times and continue to survive? What is it that they do that is different from other firms?
ROBERT BURGELMAN – I think what sets them apart from the firms that fail, and it may be similar to other firms that continue to survive like IBM and like some others, is that they have very deep substratum of knowledge and of people who actually are dedicated to the survival of the company, who continue to develop new ideas, who have great technical expertise on which the leaders can draw at different moments in time, that is, in my view, the most important part that sets companies apart – is to have that deep substratum, deep set of knowledge and dedication. The question is to what extent can the current leaders of the firm continue to inspire the next generation of leaders so that, while we don't exactly know what the company will be doing 15 years from now, we do know that we continue to have this substratum of deep technical and other sources of knowledge, commercial knowledge, and we have, and I use the word culture here which maybe is a very broad notion. There is a sense that all the time there are new leaders coming up that have a strong interest, both rational but also emotional, in continuing to in fact help the company navigate the opportunities and threats that are unpredictable 15 years from now but where we know we will have the people who will be able to cope with those.