HP : How HP Takes Advantage of Business Disasters

HP : How HP Takes Advantage of Business Disasters

What would you do if your supply chain was destroyed, one of your biggest competitors tried to push an acquisition, and your cash cow company disintegrated nearly immediately?

In the early 2020s, HP experienced precisely this. By all rights, the business ought to have failed. The printing sector as a whole shrank 9.4%, and HP's prospective acquisition, Xerox, had a more than 60% decline in earnings per share, yet a year later, its revenue and earnings are stable (EPS). Why did HP succeed when others failed?

The solution is in HP's preparation for rogue waves. When many unusual natural events meet, a large wave known as a rogue wave appears seemingly out of nowhere. Large ships are frequently sunk by rogue waves in the deep ocean. They obliterate growth and risk-reduction strategies in company.

Rogue waves are frequently discounted as unlikely by leaders. The cumulative likelihood of implausible events, however, is actually fairly large. Major shocks are actually rather common due to geopolitical conflicts, health crises, social movements, technology advancements, and countless other variables. In actuality, American businesses experienced four shocks on average a year throughout the 20th century. These shocks can produce rogue waves when they collide in the correct way, and as the globe gets more linked and complex, this will happen more frequently.

HP's success in 2020 can be attributed in large part to its long-standing recognition of the dangers (and opportunities) posed by rogue waves and its deliberate, proactive approach to utilizing them. I was directly involved in the company's strategy for resilient growth as the former Global Futurist and Director of Long-Term Research for HP. Since leaving HP, I've also carried out a thorough literature review on the subject that served as the basis for my book on the best practices for spotting, surviving, and taking advantage of radical change. Based on this research, I've created a three-step framework to explain how any company may not only survive the next rogue wave, but also benefit from it.

The Basic Building Blocks of Resilient Growth

Convincing people that rogue waves exist is the first step in preparing for them. A business won't adapt if it doesn't understand why it must.

At HP, we set up a small team called the "Future Unit" to keep an eye on social, economic, and technological trends that might have the potential to coalesce into rogue waves in order to raise awareness of potential hazards and opportunities. People with expertise in a wide range of subjects, such as social science, policy, economics, technology, and more, made up this core team. They were urged to do as broad a range of research as they could.

The growing probability of a pandemic was one potential concern that this study discovered. Aging demographics, foreign travel, and rising urban densities all showed that the threat had been growing long before the first Covid-19 cases were discovered.

Of fact, a comprehensive risk assessment doesn't typically correspond well to the immediate priorities or goals of any one team. In order to address this, we established procedures to ensure that these insights were communicated throughout the business so that everyone was aware of potential difficulties in the future. In order to make sure that long-term strategy decisions were supported by a thorough, current study of dangers and possibilities, the Future Unit periodically briefed the C-Suite and board. In addition, we created a bigger cross-functional, international group with regional managers, representatives from HR, finance, legal, facilities, sales, and customer support. This group not only added a local, on-the-ground viewpoint to the Future Unit's higher-level study but also assisted the Future Unit in effectively distributing important information throughout the organization.

Behavior

After putting in place a system for maintaining awareness, HP's next step was to make sure that everyone in the organization had the authority to take advantage of a rogue wave if and when it materialized. To do this, important behaviors had to be modified in order to be more responsive to the trends we had discovered.

In order to do this, the Future Unit actively educated key decision-makers to take these elements into account while formulating global trade strategies, designing sales channels, and making investments in technologies, competences, and assets. For instance, studies from the Future Unit motivated HP to invest in modifying inkjet printer technology for medical applications like medication development, vaccine research, and quick diagnostic testing years before the coronavirus pandemic started.

Although HP lacked a crystal ball, it was prepared to seize the opportunity presented by pandemics since it had identified them as one of a number of potential risks. HP immediately redirected its resources to focus more on work-from-home goods and the health care technology it already had in development after the coronavirus pandemic devastated its main market for office equipment.

Culture

Of course, altering hearts and minds is necessary before altering behaviors. A culture of open communication, transparent procedures, and a proper ratio of hierarchy to independence were all necessary for carrying out the aforementioned initiatives in an efficient manner. Our organization gave priority to rules that let various teams work together on high-level objectives while still acting independently on lower-level ones. Junior staff members were given permission to communicate their opinions and suggestions to senior leadership.

In the end, it all came down to creating a psychologically comfortable environment for our staff, but HP also used some tactical techniques like:

• establishing trustworthy, organized teams with distinct tasks and responsibilities for each employee while working with HR and management.

• reducing the time and costs involved with implementing new ideas by flattening management structures.

• establishing and disseminating "risk bands," or the maximum and minimum amounts of risk that employees should accept.

• assisting them in developing their communication skills, ensuring sure they were supported even when they made mistakes, and encouraging junior staff to participate in and run meetings with senior executives.

• Teams might be encouraged to concentrate on long-term goals by implementing incentives like official bonuses and applauding workers in front of their colleagues.