The HP Way Only Sounds Simple, Says Vyomesh Joshi
STANFORD GRADUATE SCHOOL OF BUSINESS—What does it take for a company to create a sustainable business? Identify holes in the market; develop appropriate price models; establish business partnerships with other enterprises; foster respect and trust with employees; and provide leadership that puts business first, people second, and managers' egos third.
These were the five key success factors distilled from 25 years' experience with Hewlett-Packard Co. that Vyomesh Joshi, executive vice president of HP's imaging and printing group, shared with attendees of the 13th annual Net Impact Conference on Nov. 12.
"They sound simple," Joshi said, "but in fact they're hard to do."
Addressing an audience eager to hear how corporations are integrating social and environmental responsibility into their bottom lines, Joshi also said that HP partners with retailers in "take back" programs to retrieve and recycle 200 million pounds of used inkjet and LaserJet printer cartridge paraphernalia each year. "There must be a balance between caring for the environment and shareholders," he said. "You can do both.
Soon every HP inkjet cartridge will come with a postage-paid envelope for return when depleted, he announced, and the company is ramping up the "energy-saving" functions such as "sleep" mode on its printers. HP also has social projects in several regions in the United States and abroad to expand communities' access to computer technology. "These efforts don't make money, but we see them as part of our corporate responsibility," Joshi said.
Joshi focused his remarks on what it has taken to help build HP imaging and printing into a $25 billion business. "In 1984, when we started, we had no idea we would be so successful," he said. "We simply saw a market trend—that personal computers would be big." Reasoning that people would want to be able to print right off their desktop, the new team figured out how to use inkjet and laser technologies to create a low-end product for home users and a more upscale model for offices.
The group then filed for numerous patents on its products to create barriers to entry by competitors and settled on a market pricing structure. It paired up with Canon, an expert in laser technology, to create a long-term partnership that has helped make HP printers nearly ubiquitous in offices around the world.
Success at HP has been about more than managing technology well, however; it has been about managing people well, Joshi said. "In 1980, HP was the only place I wanted to work. I knew that if I did the right thing there, the right thing would happen." What contributes to HP's strength as a company, he told young professionals in the audience, is its emphasis on helping employees trust and feel respected by management. "I follow our founders' practice of managing by walking around," Joshi said. "You've got to talk to people to find out what they're thinking, and be honest and transparent in return."
Joshi said his own experience has proven that part of being successful is cultivating leadership that's not afraid to flinch in the face of difficulties and hard decisions. "In 2005 we've had to let 3,200 people go to get our cost structure in line," he said. "It was a very tough thing to do, but what helped us was knowing we had to put the business above all else."
Joshi concluded by listing some key trends that are driving new business models, including the primacy of digital versus analog, and the increasing presence of the Internet. "People spend 26 percent of their free time on the web versus 6 percent reading the newspaper. Yet advertising agencies, for example, spend 30 percent of their budgets on newspapers and only 4 percent on the Internet. That will switch completely." HP itself, he said, is currently experimenting with products that will align with that trend, such as devices that connect directly to the Internet without the intermediary of the PC.
"You've got to constantly figure out how to create new value propositions to meet customer needs in new ways," he told the crowd. "If you miss the opportunity, you don't catch up."
The Nov. 11–13 Net Impact conference at the Stanford Graduate School of Business included three keynote addresses and roughly 50 panel discussions. The event was organized in conjunction with the School's Center for Social Innovation and Public Management Program. Net Impact is an organization of some 12,000 members with 100 chapters around the globe dedicated to using the power of business to improve the world.