HP Taps NCR's Mark Hurd as New CEO

Background as a turnaround specialist appears to be the key to his selection.

Tom Krazit, IDG News Service

After reviving NCR, Mark Hurd now has another reclamation project on his hands.

Hewlett-Packard's board of directors selected him as the company's new leader, replacing Carly Fiorina, who was abruptly dismissed earlier this year. Hurd, who is credited with the turnaround of NCR's fortunes, will be named HP's president and chief executive officer, and will be formally introduced during a conference call tomorrow morning.

NCR issued a statement today confirming Hurd "has resigned, effective immediately, to accept a position with a large global technology company."

Hurd is a 25-year veteran of NCR, a supplier of retail point-of-sale hardware and software. He was named president and chief executive officer of the Dayton, Ohio, company in 2003 after serving as head of the company's Teradata division. Teradata provides data warehousing and customer-relationship management software to businesses.

"If you look at the track record, he took a company that was floundering and took it around to where it's a very healthy company," said Umesh Ramakrishnan, vice chairman of New York executive search firm Christian & Timbers. "HP's board is looking to him to do something similar here, because he's had success executing on strategies."

His experience running a company with multiple businesses will serve him well at HP, said Sam Bhavnani, an analyst with Current Analysis in La Jolla, California. Hurd is also noted for his painstaking attention to operational efficiencies, a trait that helped him boost NCR's stock price from around $10 in 2003 to Monday's closing price of $37.90, he said.

NCR investors were certainly disappointed to lose Hurd, sending the company's stock price down $6.50, or 17.2 percent, to close at $31.40 on the news Tuesday that he had been picked for the top spot at HP. HP's stock rose $1.99, or 10 percent, to close at $21.78 Tuesday afternoon.

On the Short Lists

Hurd was on the short lists of many companies searching for new executives in recent months, said Bhavnani, whose company found Fiorina for HP in 1999. He described Hurd as a "solid citizen" who will focus on making HP run smoothly.

HP ousted Fiorina in February after revealing that she and the board of directors were at odds on how best to run HP. Fiorina was known as a visionary marketer who engineered the complex acquisition of Compaq Computer in 2002. The deal was supposed to transform HP from a sleepy research and development firm focused on printers to a global technology conglomerate with leading market share positions in just about every segment of computer hardware.

Fiorina did create a technology powerhouse that could compete with Dell and IBM, but she failed to deliver the promised returns to HP's investors. She was also criticized for a hands-off approach to daily management and a refusal to name a chief operating officer to help her run the company.

Tough Job Ahead

Fiorina's replacement will have a tough job. Aside from the company's lucrative printing business, the $60 billion company has been struggling to find ways to make its business units profitable and the controversial acquisition of Compaq is now widely regarded as a failure.

Since Fiorina's departure, HP has been run on an interim basis by the company's chief financial officer, 36-year HP veteran Robert P. Wayman. In February, Wayman said the company's next CEO would be "someone who will fit in the culture." However, he added, "that doesn't mean that you don't want a leader that doesn't challenge that culture."

As an outsider, Hurd will have the freedom to make sweeping changes in operational procedures at HP, Bhavnani said.

While Hurd is bound to make changes at HP, his ascension to the CEO position sends a strong message to financial analysts who have called for the company to spin off its PC business, said Roger Kay, vice president of client computing with IDC in Framingham.

"It basically says we're not about breaking up this company, we're about making it work," Kay said.

HP's board has long said that its differences with Fiorina were related to execution, not her acquisition strategy, but many financial analysts think HP should cut its losses in the PC business and get out, much like IBM did by selling its PC group to Lenovo Group. HP clearly valued Hurd's experience with NCR juggling hardware, software, and services businesses at NCR when making its selection, and he will likely keep the company intact, Kay said.

Robert McMillan of IDG News Service contributed to this report.