HP Challenges, Organizational Learning

17th, May 2010 ORGANIZATIONAL LEARNING FINAL ASSIGNMENT: HEWLETT PACKARD (HP)

Introduction

When we talk about organizational learning, the first thing that comes to our mind is an
organization that actively inculcates current, as well as previous knowledge and experiences,
codifies these information into meaningful insights, and channels these knowledge towards
improving the management and flow of their business.

”Organizations are seen as learning by encoding inferences from history
into routines that guide behavior.” (Levitt & March, 1988: 319)

Today, organizational learning enables companies to manage everything to be successful
in their business, and to introduce a flatter organizational structure, which can lead to reduced
costs and increased productivity. Organizational learning means the process of improving actions
through better knowledge and understanding. To operate effectively, organizations need to fit or
align themselves with their environment, strategies, capabilities and leadership skills. To
compete successfully in a highly competitive and constantly changing business environment,
however, organizations also need to achieve fitness and the ability to learn and change to fit new
circumstances. In other words, firms can lose their competitive advantage through the lapse of
time, therefore learning is the only sustainable competitive advantage there is.

After speaking to course mates, industry players and a series of research, we have
decided that Hewlett Packard (HP) will be the subject of our case study for the Organizational
Learning course assignment. Reason being, the HP culture speaks, acts, and operates within their
values, which will be further elaborated in their motto that is widely shared at HP, “The HP
Way”. The core organizational values have been embedded and practiced by their employees
over the years proves that HP is one of the best learning organizations around today.

Final Assignment: Hewlett Packard | 1


Company History & Background

Hewlett Packard (HP) is an American information technology corporation headquartered
in Palo Alto, California, USA. HP is one of the world's largest information technology companies
and operates in nearly every country. HP specializes in developing and manufacturing
computing, data storage, and networking hardware, designing software and delivering services.
Major product lines include personal computing devices, enterprise servers, related storage
devices, as well as a diverse range of printers and other imaging products.

In 1939 when Bill Hewlett and Dave Packard created HP, they worked on an audio
oscillator in a garage in Palo Alto, California. After Walt Disney bought several of these
oscillators for their latest movie, Fantasia, the company was off and running. While HP began as
a company that produced all sorts of electronic products, their first focus was on test products
like counters and voltmeters. HP ended up becoming the founder of Silicon Valley. They got into
semiconductors in the early sixties and by 1966, they entered the computer market with the HP
2100 and the HP1000.

1984 saw the emergence of their first ink jet and laser printers. These were meant for the
desktop. HP rose in popularity, marketing their computers to the average consumer and opening
an online store to help reach them.



Core Business of HP

HP over the years diversified its business. It provides infrastructure and business
offerings that include handheld devices, some of the world's most powerful supercomputer
installations, storage solutions, digital photography, digital entertainment, computing and
printing. HP’s target market includes households, small to medium size businesses and
enterprises.

HP has seen a rise in profit in recent years due to the introduction of innovative new
products and solutions that suit the needs of the consumers while distinguishing it from the
competition. With the merger with Compaq in 2002, HP has taken its mobile computing products
to a new level with the introduction of handheld computers, iPAQ pocket PC and PDAs and it
became a major player in desktops, laptops and servers for many different markets. It acquired
EDS in 2008 and 3Com in 2009. HP currently is the market leader for printing solutions and its
core business of Personal Computers, servers and printers have seen increase in the profit
margins, highlighting the fact that it continues to play to its strengths while undertaking new
ventures. The traditional device business continues to show significant strength against their
competitors. If their core businesses continue to thrive then it will have the money it needs to
pursue the goal of expanding its software and services business. In 2007 HP was the first IT
Company in history to report revenues exceeding $100 billion and it has topped the list of the
largest worldwide seller of personal computers since 2007. HP was ranked 9th in the Fortune 500
ranking in 2009.

The key to HP’s success is due to it being a Learning Organization which continually
innovates and responds to consumer feedback by being ready to change and adapt according to
the latest trends and technology.



HP as a Learning Organization

Hewlett Packard (HP), started off as a company manufacturing electronic devices. The
core business focused mainly on computers and supporting electronic machinery. HP founders,
Bill Hewlett and Dave Packard, successfully managed to instill a very strong organization culture
and proud to say that the employees worldwide, live by it until today. It was the organization
culture that helps shape what HP is today.

As we all know, in this given day and time, companies need to evolve. Change is almost
predominant everywhere, almost in any type or nature of business. Here HP has evolved from
what it was to where it is now today.

In this assignment we will study the characteristics of a learning organization, and the
character similarities with HP. There will also be an insight on how the cultural aspect of HP
managed to stand trough, facilitate and help as a core supporting factor for HP, given all the
changes that has taken place to date.

We will take a look on 2 main challenges which HP did overcome using its best
practices, learning and culture to improvise on its content management functions, localization
and translation features to various other countries and places it deals with in terms of business.



Challenge 1: HP and Talent Management

The first case talks about the priority HP has put into managing their talents. This
addresses the issue of why so many young talents leave the organization on short period of time,
and how as a learning organization can help retain they talents.

Most companies recognize that a talent management program is necessary for ensuring
long term leadership capability, which is a key driver for success. Now we can see that
leadership shortage is a common problem all over the world. Some can blame this onto the
education system. And even on the organization’s level of talent management and training plans.
Here HP has long recognized that and is towards building a strong talent pool. Talent
management continues to remain one of the main priorities for the organization and our talent
development program reflects the specific needs of people at HP.

All this while, HP has created a culture in which managers at all levels are accountable
for managing their talents. The process starts at the very top of the organization and is cascaded
down. Reason it is top down here is that, effective talent management program must be aligned
to the company’s strategy and business objectives, as defined by top management. Management
is able to define the right profile of people needed only after determining what needs to be
achieved.

HP starts by translating their strategy and business goals to specific requirements towards
talent. The process is designed and implemented by HR but owned by the business leader who
engages all managers from the business. Usually, the management team spends half a day per
month in a session dedicated to talent management. First, they define organizational needs that
are derived from business strategy. These needs translate into talent requirements. In practice,
this means defining the ideal profile of candidates to be hired, and linking it to future business
objectives. Every manager presents a thorough assessment of all employees within their
organization, including the level of skills, strengths and gaps. Succession plans and development
plans for talent and successors are part of this agenda. This clearly shows that HP looks into a
long-term perspective and not focusing only on the immediate future. From the nature of their
recruitment, HP seeks for young talents with high development needs.



HP knows that strong performance is a prerequisite for future career growth, but as
critical skill set, HP looks for people with global mindset, customer focus, results orientation and
deep business understanding. However, since the current population is very young, HP
emphasizes on past performance results and future potential on the one hand, and willingness to
learn and openness on the other.

Identifying a talent pool is just the start of the journey. Equally important is the next step,
which is defining and driving specific actions for organizational and individual development.
Since the talents are put into intensive development programme, those programs start with
constructive feedback from various sources. While managers are the most appropriate source for
feedback, HP also uses development center sessions or 360 degree feedback. As the feedback
comes from different angles, it is more objective and complete.

HP talents are informed to participate in projects and assignments, where they can build
new skills and experiences. HP believes that exposing them to a global organization with its
dynamics and letting them operate in new environments opens their perspectives and provides
them with new knowledge and skills.

From experience dealing with young talents, HP knows that they are looking for seniors
of the company to teach and inspire them. That is why HP strongly believes in coaching and
mentoring as two different means for achieving this goal. Almost of HP talents have mentors
assigned to them, selected from senior managers in HP. There is always good feedback from
both the mentor as well as the mentee, who find this way of learning very effective.

HP also realizes that, for these young talents, at the beginning of their career paths, HP
cannot forget formal education to equip them with knowledge. During the program they have a
chance to participate in a series of face-to-face workshops led by senior and experienced trainers


that focus on HP leadership standards. HP also offers so called “Leadership Master Classes”
during which they have a chance to meet and interact with senior leaders from within and outside
HP, build their own network and learn from their experiences.

As a learning organization, the commitment towards retaining talents is high. Deploying
and driving an effective talent management program requires commitment and strong support
from top management but it also requires the involvement of every manager and of HR.
Therefore, the time and effort spent on this program is quite significant. However, HP sees this
as a valuable return to their investment.

First of all, talents identified in the organization are highly motivated. This is very
important as low levels of motivation and low appreciation can lead to bad work performance.
Talents perceive this as recognition. At the same time, having defined career paths and
development plans allows them to see their future in the organization, making them less likely to
leave. The employee turnover rate, which is a high cost for any company, could be a few times
lower in this selected group of employees than for the rest of the employee population.

Another benefit to HP is succession planning. With identified talents, the company’s
leadership pipeline is considerably stronger. For critical positions, including managerial ones,
there are potential candidates who are ready immediately, or with some further development.
Having ready candidates in the organization saves time and money for recruitment and training
of external talents.

And another important factor found by HP, is the attraction factor. Today, it’s very clear
that candidates applying for jobs, as well as existing employees, want to see developmental
opportunities. Having a talent management program implemented addresses those needs. At HP,
this is the time of year for talent reviews. As a learning organization, HP sets a good example on
how a company retains and developments its young and motivated talents pool. This clearly
shows that HP, a learning organization, believes in investing in their talents. HP believes that
these young individuals with high potential may lead the organization in the future.



Solution & Conclusion from Challenge 1: HP and Talent Management

This is a classic case which most companies are going through. The ability to retain
knowledgeable talents within the company. HP, a learning organization sets a good example on
how a company retains and developments its young and motivated talents pool. This clearly
shows that HP believes in investing in their talents and workforce. In other words, HP believes
that these young individuals with high potential may lead the organization in the future. This is
done in the right way by HP. In other words, HP practices the people based management system,
which looks at people or its talents as the most valuable asset to the company.

Here we can see that HP aligns its talent management approach with its business strategy.
And this has a lot to do with employee succession planning, in other words, employees do not
see themselves as part of the organization for short term only, but view their future development
and promotions due to the proper and managed succession planning system which is practiced by
HP. This clearly shows that HP understands that the workforce today should be aware of their
career development plan within the organization. This has a lot to do with employee retention
and motivation levels.

The workforce today consists of knowledge workers. Characteristic for such workers is
that they are highly educated, have the ability to acquire new knowledge fast and continuously
adapt to new conditions, possess the ability to work without supervision and control, have good
interpersonal skills, possess the ability to solve problems by creative evaluation of different
possibilities, and by contributing with own ideas to reach solutions to the emerging problems.
Therefore, with all these qualities within the people of their workforce, HP should be able to
retain their talents in a proper and managed way, which would clearly benefit the organization
and its people.



Therefore, HP clearly knows that it’s important that the employees can clearly see how
they can grow within the company. This is done by ensuring that HP has enough touch points
with the employees so that they can see themselves having a career that they can grow with HP,
which is one of the important opportunities a knowledge worker seeks in the workforce today.



Challenge 2: HP, Content and Product Data Management

One of HP problems was how to deliver the product that has been created out to the
customers. The method that Hp used to follow acted as “spaghetti”, Mario Queiroz, Vice
President said. It looked alike “spaghetti” when users and vendors are around the business
meetings and conferences.

HP needs to publish their products to multiple websites as well. The challenge was how
to make the bowl size able to hold the connection between HP business units and their customers
especially when the customers’ size was already huge. It was indeed that HP has to reconstruct
its product content supply chain. Content and Product Data Management (CDPM) Organization,
took the lead to solve the problem.

HP was in need to publish its content, but for effective content globalization it requires
the perfect balance between satisfying the customer in local languages and maintaining corporate
branding. Given its presence in 178 countries worldwide, the scale of HP’s globalization
requirements is daunting.

Content management and globalization management are treated as business solutions at
HP, not as technologies.. The content and product data management business processes that drive
HP’s solutions align with the company’s product lifecycle, and they ensure consistency of
content globalization throughout the enterprise.

Most of these processes are self-explanatory. “Provision content” is the process of
making globalized content available to the destination publishers, both online and offline. The
delivery mechanism is based on a syndication model. The regions subscribe to content via
business rules held in what HP calls a “provisioner.” When new content becomes available, it is
pushed out to the subscribing site. The publishing team at the subscribing site assembles the
appropriate content received via the provisioner and finally publishes the content on the local HP
site. These repeatable processes are continuously improved in the constant quest to provide
content consumers with the right information, at the right time, in the right way.



At HP, three primary sets of activities support the mechanics of global publishing:

• Regionalization - adapting content to a geographic region.
• Translation - transforming content from one language to another.
• Localization - modifying content to account for differences in distinct
markets, with cultural sensitivities and legal requirements in mind.

In 1998, the established processes were not optimized operationally. This was not a
situation unique to HP. Six years ago, HP faced these very issues. At the same time HP was
depending on its websites as its primary methods of communication with customers and partners.
As translation and localization (T&L) Manager Alison Toon notes, “In a global operating envi-
ronment, the Internet has become a primary interface between customer and vendor. And the
customer expects to see consistent and timely information regardless of how and where it is
published, whether on a website or in a printed brochure or manual.”

In 1998, Toon started seriously to study the T&L problems under the coverage of an HP
services organization to which she belonged. Content globalization processes were highly
decentralized; the business units and regional divisions worked on their own to translate and
localize product content for their local target audiences. As a result:

• Translation was inefficient due to redundancies. Two factors were in play. First, some
regional translation agencies were not using translation memory, starting from scratch
each time a new translation cycle was required. Second, there was no influence across the
translation memories that did exist; they were isolated project silos.



Solution 2: HP, Content and Product Data Management

In 1999, the globalization of a customer support website called the Information
Technology Resource Center (ITRC) presented an opportunity to begin exploring ways to
address HP’s content globalization issues. The ITRC was managed centrally, including all the
languages in which it was published. The release is simultaneous—all regions at once, rather
than English first and others to follow. If one localized ITRC misses the deadline, they all miss
the deadline.

The T&L group wanted to enable HP’s business units and regional organizations to take
advantage of enterprise technology and services without preventing them from using local
services where appropriate. The team developed the concept of an enterprise translation
architecture that centralizes content globalization efforts and provides mechanisms for leveraging
translation work that has already been done. The business objectives for the architecture
translated into two key technical requirements:

• Workflow capabilities for automation and communication, and
• Support for centralized sharing of translation memories.

From a technology perspective, TRADOS Global Enterprise Suite is a server application
that connects project managers and translation suppliers in an end-to-end workflow solution. As
a centralized application, it enables HP to:

• Provide all translation vendors with a consistent user interface.
• Maintain and make available databases of translated content that are specific
to the business units and to individual products, yet globally available and
leveraged throughout HP.



Global Enterprise Suite components include:

• Integration with content management systems.
• Tools for translation project managers to create work packages for distribution
to translation vendors (highly automated when the TRADOS Suite is
integrated with content management systems).
• Workflow for automating file transfers and communication among the various
participants in the content globalization process.
• Reporting tools for analyzing reuse rates and other key metrics.

The reporting tools enable the T&L group to measure its progress towards improving
reuse of translated content. Prior to deploying Global Enterprise Suite, the company was unable
to measure reuse at all. “When we started the first project, we had no idea how much translated
content was being reused because we never had tools to measure reuse,” says Toon. “The old
adage is true. If you can’t measure it, you can’t manage it.”

Globalization Output

The T&L group supports more than 65 translation and localization programs and enables
the company to translate more than 30 million words per year in 36 languages. Plans for 2005 are
to continue growing the use of the system exponentially throughout HP.

HP has achieved additional measurable benefits at the level of T&L.

• The enterprise translation architecture has produced translation cost savings of
greater than $3.5 million annually.
• The reuse rate of the content currently managed within the enterprise
translation architecture is estimated at 68% for 2004, up from 50% after the
first year of using TRADOS Global Enterprise Suite. Toon’s eye is always
trained on the remaining translations that take place outside the architecture.



Translation Workflow

The Translation workflow: Helped HP address their localization and translation challenge

Lessons & Results from Challenge 2

1.) Customer Focus

“Provide our customers with the right information at the right time, and in the right way”. The
CPDM organization puts addressing the customer experience front and center as it decides which
content comes into the globalization architecture, which projects are prioritized, and which
technologies can be applied to achieving the best results for end consumers of product content.
By treating its technology assets as modules, HP can swap out capabilities as they evolve and as
new solutions come into the marketplace.

2.) Scalability

Scalability is also at the top of Toon’s list of lessons learned. The huge volumes of content that
need to be managed in HP’s structured and unstructured content repositories are likely to stress
the limits of commercially-available systems. Toon advises content management adopters to be



as specific and as granular as possible when describing scalability requirements to potential
software suppliers.

Today HP’s digital content management infrastructure serves the needs of approximately
13,000 sales and marketing users. HP has realized the following measurable benefits as a result
of its content management initiatives:

• The structured content factory, in production for 18 months, has reduced the
cost per new product introduction by 56%.
• The sales force is 10% to 15% more efficient due to simplified access to
content.

• Conclusion from challenge 2

In other words, HP is following the adaptive learning method, they have merged their
problem which was in the website content.

The globalization and localization problems were also solved by the same department,
which means they learned together as an organization and individuals to recover the issue. They
have used HP Name as a cover for the process.

They also went through the organizational cycle, by generating the problem then
integrating with the suitable solutions at that time, but each individual in that department was
concerned how solve content and how to satisfy the customers from different locations with
various languages. So they worked as one team to demonstrate the problem and to reach to the
best solutions.

The output was clear, when the sales have increased to higher rate, plus the customers
satisfaction had increased. They also learned from the mistakes as an organization leaning, which
resulted in conducting the final solution.


HP Challenges, Organizational Learning

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