With his eyes on the prize: for 2005 EXCEL Award recipient Mark Hurd, the focus is on helping HP's stakeholders understand the relationship between the mission and the results.

Is it possible to be both insider and outsider? That's the strategy that Mark Hurd is using in his new role as president and CEO of Hewlett-Packard Co. Hurd, who was named to the top job at HP in March, comes off a 25-year stint at NCR Corp., culminating in his two-year tenure as president and CEO. His leadership there was marked by successful efforts to improve operating efficiency, bolster the position of the company's product line and build a strong leadership team. The turnaround at NCR required an emphasis on communicating to stakeholders inside and outside the company in clear, understandable ways--which is exactly how he hopes to lead HP into its next phase of growth. As this article went to press, news of a 10 percent reduction in HP's workforce--14,500 people--in the coming year was revealed. In Hurd's assessment, these changes are necessary to develop an organizational model that will allow for better implementation and execution and enable leadership to create clarity of mission.

"I used to try to think of myself as an insider with an outside perspective," Hurd says. "Clearly, at HE I'd like to be an outsider who's got an insider's point of view. In the end, you've got to be able to put those two together."

Hurd, who accepted IABC's 2005 Excellence in Communication Leadership (EXCEL) Award at the International Conference in June, talked with CW Executive Editor Natasha Spring about his goals for HP and for himself, and how strong communication fits into the mix.

What's your primary objective at Hewlett-Packard right now?

We're trying to optimize the performance of the company. This company has outstanding assets, a strong brand and incredible trust from customers. We're a very global company, and we're in good markets. HP generated over US$6 billion per cash-flow analysts' estimates, and I think those are strong assets. Add to it the loyalty of our customers and employees to the company--I mean, just tremendous assets. In the end, we do have opportunities to improve our performance, so that's what we'll focus on, trying to take all those assets together and optimize the performance of the company.

A year from now, what would you like to be able to say that you've accomplished?

We have key markets that have opportunity for growth, so we want to [take advantage of] those opportunities and make sure we optimize our ability to grow the company. At the same time, we want to be as efficient as we can. I think when you deal with a company of our scale and size, you can't do all that in 15 minutes. We want to be on a track to optimize both our ability to grow the company and optimize the efficiency of the processes and structures to support the company. If, a year from now, we're well on a path to doing those two things, I'd be pretty pleased.

You talked about the performance going into the company. How do you inspire people to be performers?

I don't think you inspire it. I think you have to give people more of a process than that. You have to give clarity of objectives, tell them, "I expect you to do this; I expect you to deliver what you've committed to." Once those objectives have been set and there's clarity of mission, I see several opportunities to reinforce that, not just to [that person] but also to the entire company. I have the opportunity to either reward them or reprimand them. The more that people can see the interrelationship between the mission and the result, then the clearer it gets for the entire organization what the company is going to be focused on and how it's going to behave.

The flip side of that is that if you give somebody a murky mission and the results are murky, you're going to get a different kind of culture than the more formal one I described. So, for us, it's about how to create clarity of mission. I think the job of the CEO and other leadership of the company is to simplify the mission for employees. If you do that, the likelihood of success goes up, not just on the CEO's part but also for the people executing those missions.

You talked about how a strong communication team has a business advantage and is able to work within that context. What does the communication profession need to provide you with?

There are three great skills that you can bring. When you get into what you look for in a communicator, you've got three pillars: First, you've got to have chemistry with the CEO, if you're supporting the CEO. Second, you need to understand the business that you're in so that you can actually partner with the CEO and build a framework for communication. While you may be very expert at communicating, you've got to have some familiarity with the business that you're in to be able to have the optimal effect. [You should also have] some understanding of the employee base, so you can translate what's in the CEO's head to what the employees hear.

Last, you've got to be able to be good from a tool-set perspective, because there are innovative ways to communicate, and I don't think there's any one way. Webcasts, going to sites, going to small meetings--all of these have some effect on subsets of people, but no one tool is perfect. If corporate communication professionals can know their partner, know the business and the mission of the business and put context around it, and if they are innovative with the tool sets, you've got really strong partners there.

You were at NCR for 25 years. You obviously built up relationships, people trusted you, and some of the tough decisions you had to make were probably made easier by that trust. How are you going to engender that trust in a completely new place, where layoffs may be a reality?

I think that being at a company for 25 years is probably both a strength and a weakness. You build up lots of cement around processes, around structures, good and bad. There are some advantages to being able to come in with an outside view and a clear advantage to having an inside view. I used to try to think of myself as an insider with an outside perspective. Clearly, at HP, I'd like to be an outsider who's got an insider's point of view. In the end, you've got to be able to put those two together, because if you're too ingrained in the company and you can't see outside the company to properly reflect on it, you're not going to be effective. At the same time, [as an outsider], you're not in touch with the pulse of the company. It's harder to ensure that what you do is the right thing. So it is a blend.

The Sarbanes-Oxley Act has placed pressure on CEOs to be highly selective about the comments they share internally with employees. And yet motivating employees and earning their trust requires openness and authenticity from senior leaders. How have you been able to resolve those competing requirements?

I think that what's going on with the regulations today is creating a more and more cautious environment in terms of what, how and when you communicate. I think that the people providing these regulations are well-intentioned and they're trying to ensure that people have full disclosure, and I can't argue with that. But employees like to know things before you tell the world, and frankly, the way that the regulations are today, you just can't do that. If I'm going to release something that's newsworthy, I have to announce it in a way that doesn't create a leak. But if I tell 150,000 people, "I have a secret to tell you," between mother, father, sister, brother, boyfriend, girlfriend, the probability of it getting out is extremely high.

You've got to find the right balance between trying to communicate in a timely way with employees and giving them the full context. Part of the problem you have when you make an announcement externally is when the press gets it before the employees do and starts to spin the [story] before you have been able to give the context to the company. I'd be glad to communicate directly to the company, but employees see all that press and think that the press knows something that they don't. I can't tell you that I've got a great answer to it. We're just going to have to continue to work hard to find the answer given the rules that we've got.

An important part of business is about building relationships, but you are very busy and have only so much time. With regard to building relationships within the company, where are you first focusing your energy?

Being with the employees in the company and being with the customers of the company are the two most important ways for me to spend my time. I think what shareholders really want in the end is for the company to perform at the optimal level. The best shareholders I know are the ones who actually meet with you very infrequently and then ask you to get back to work. So, as we build a long-term shareholder base, my real time is spent focusing on the core of the company, which is inventing stuff, selling stuff, servicing stuff, and on the people who work on that, the employees who make and sell and service, and on the customers who buy. That's where I'll spend my time.

In the wake of Enron and other corporate scandals, CEOs have been under scrutiny more than ever before. Do you think this scrutiny has been unreasonable? How do you think leaders should behave in order to hold themselves up as a model of ethical behavior?

I think if you've got people who are trying to change company performance to the degree of literally cheating for personal gain, and doing it clearly outside the rules, then there should be enforcement. But with such a high level of scrutiny on every aspect of a company, is there a point where you create so much regulation that you stifle a company's ability to get things done? I think that's where you have to be cautious.

With regulations like Sarbanes-Oxley and Sarbanes-Oxley 404, we should start to see higher [public] confidence levels. These regulations are hard. With Sarbanes-Oxley, you are saying that the information was true to the best of your knowledge. Now, with Sarbanes-Oxley 404, you're saying not only that but also that the underpinning processes that support the numbers are right and there are no material weaknesses in the processes that could possibly lead to a wrong answer. That may not sound as bad until you're running a global company in many countries where there are hundreds of processes. So, these are tough regulations and a tough process.

We need to make sure companies don't get stifled and wind up spending more money on regulations than we do on research and development that in the end make the country less competitive. You've just got to find a way to balance those two things.

RELATED ARTICLE: Counseling for communication leadership.

by Shelley Bird

CEOs meeting the challenge of communication leadership must be able to think like a host, appreciate dissent, understand the difference between substance and show, and demonstrate integrity. A survey by the Center for Creative Leadership in Greensboro, North Carolina, found that personal characteristics increase in importance as executives rise. About 20 percent of respondents indicated personal characteristics were a key success factor for midlevel management, while that figure rose to nearly 40 percent for CEOs.

Think like a host

Thinking like a host means truly listening to stakeholders, so that all feel comfortable and valued. CEOs who take the concept of host behavior to heart will make a much stronger positive impression than those who defensively adopt an "I'm the smartest in the room" attitude. Those CEOs generally wind up surrounded by a phalanx of yes-people, a surefire recipe for failure.

When Mark Hurd first became CEO of NCR, he moved into a cubicle to make a statement about everyone's value to the company. When Robert Nardelli took the helm at The Home Depot, he spent months visiting stakeholders, making sure all were comfortable with him as a host, before implementing his vision for the company's next stage of growth.

Appreciate dissent

For CEOs to meet the communication leadership challenge successfully, they must partner with communicators. Communicators must be the trusted counselors, whether the CEO wants to hear the counsel or not.

Unfortunately, many CEOs bemoan the fact that communicators don't fully voice their concerns. While it takes courage and skill to speak up and take an unpopular point of view, particularly if doing so might place your job at risk, communicators must be strong voices of conscience. Communication leadership is a shared responsibility. So, tell the emperor he has no clothes--and see if he covers up.

Understand the difference between substance and show

As CEOs naturally gravitate to employees and other stakeholders with palpable energy, passion and polish--in other words, with charisma--communicators must be alert to ensure that the words and ideas of valuable, capable but perhaps less charismatic stakeholders get the same attention. An effective communication leader knows how to value substance, and can--and will--provide all stakeholders equal opportunities to demonstrate their value.

To illustrate the point, consider the practice--or should I say, performance--of political debates where opponents are more interested in creating a communication conundrum than in really communicating.

Demonstrate integrity

Finally, a company's reputation is one of its most precious assets, and a CEO its most public exemplar. For a CEO to be a communication leader, communicators must ensure that the CEO expresses integrity in all communications and actions. From the first, Ed Breen, Tyco's CEO since 2002, made sure all of his communications exemplified openness and integrity, which helped to speed the healing of the company's reputation.

CEOs who are communication leaders motivate, inspire and keep stakeholders focused on what's important even during adversity. They also maintain perspective, and demonstrate grace under pressure. In other words, they lead, through words as well as actions.

Shelley Bird is chief communications officer and a member of the 13-person leadership team at NCR Corp. She has 20-plus years of international experience in communications, marketing and strategy, having lived and worked in Asia/Pacific, Europe and the Americas. She is also a member of the IABC executive board.

Natasha Spring is the executive editor of CW.