Recently fired Hewlett-Packard CEO Leo Apotheker set at least one new record during his brief tenure — the company lost nearly $40B in value during his 11-month rein.

He wasn’t the first choice of everyone on the board when he replaced Mark Hurd; some decision makers had apparently doubted if he had the right stuff. To his credit, Apotheker was savvy enough to negotiate himself a nice “parting gift,” reportedly worth about $25M in money and stock as a severance package. But based on readers’ comments about my blog in August where I cited HP, I’m guessing his payout has outraged many who still care about the company.

Many observers will cite the former CEO’s decision to push software (even though the segment is currently about 2% of its revenues) and jettison several key cash cows upon which it grew into a business doing about $125B in revenue. But I don’t think that’s why he got turfed.

My guess is that the board wasn’t totally surprised on that front given that he came from SAP. In all likelihood that decision wasn’t his alone; he must have had at least some board members’ agreement before he announced such a significant change in corporate direction.

On several fronts, I believe, Apotheker is out of work because he failed, first and foremost, as a leader.

A few years ago, I concluded that there are 12 principal characteristics usually found in truly great leaders. Not all great leaders have every one of them, of course, but they usually have enough to get the job done and move their organization ahead with common focus. The entire list is here.

HP is an incredibly big organization with a demanding culture and a storied history. That, combined with the markets it dominates, demands that this company’s leader must be truly solid just to survive. Beyond survival, HP’s leader must have most of those traits too if (s)he expects to succeed over the long haul. In Apotheker, these leadership characteristics — at a minimum — were not evident:

1. A strong sense of purpose — Organizations can be driven by purpose. Properly crafted and communicated effectively, purpose can unify a broad and disparate culture to achieve goals that otherwise will create havoc and poor results. We know where HP is.
2. Power vs. force — Forcing outcomes leads to negative results. Leaders who are savvy know that the organization’s success is greatly enhanced by helping teams understand what needs to be done and why. That takes time, but it’s time well spent.
3. Great listening skills — Great organizations serve the needs of all their constituents: customers, employees, shareholders. One of the best ways of serving a constituent is to ask and listen. Apotheker seemed to believe that if something is “right” in his opinion, it could be rammed through. And then it would succeed.

The trajectory HP has witnessed will become one of the world’s great business case studies. In situations of all sizes and across many sectors of industry, this type of colossal failure as a result of hubris has been played out before. Unfortunately it will be played out again in other companies.

Don’t make similar mistakes.


Executive and Leadership Coach