Agilent Technologies: Organizational Change (A)

On March 2, 1999, Hewlett-Packard (HP) announced a plan to create a separate company, subsequently named Agilent Technologies, made up of HP’s businesses in Test and Measurement, Semiconductor Products, Healthcare Solutions, Chemical Analysis, and the related portions of HP Laboratories. In developing the transformation strategy, Agilent President and CEO, Ned Barnholt, grappled with how to improve the efficiency and effectiveness of the new company, while still maintaining the best portions of HP’s culture and practices. He and his transformation team embarked on the delicate task of updating the HP values so ingrained in his workforce. Barnholt adopted HP’s values of innovation and contribution, trust and respect for individuals, and uncompromising integrity, but he added three new values: speed, focus, and accountability. Barnholt also wanted to improve the company’s efficiency in terms of shared services (e.g. IT and HR). In mid-2001, amidst the company’s transformation efforts, the Agilent team faced a series of unexpected challenges. On April 5, 2001, Barnholt announced that business conditions had worsened further than previously expected, especially within the communications and semiconductor end markets. Barnholt wondered whether he and his team had gone too far in the organizational and cultural changes they had tried to implement. He wondered whether his vision of speed, focus, and accountability would be compatible with HP’s legacy values and culture; and if they were compatible, how would he integrate the two?