Fiorina to HP ranks: It's a "historic day"

On Sept. 4, 2001, Hewlett-Packard sent an e-mail messageto all of its employees. This letter was obtained from a filing with theSecurities and Exchange Commission. The text of the e-mail messagefollows.
Dear HP colleague,
Today is a historic day for our industry. Today is an important day forHP's customers. And today is an exciting day for you, as a member ofthis team and this company.
The people of HP and the people of Compaq are joining forces--we'veagreed to merge our two companies to create an even more capableorganization to serve our customers. We believe that by joining withCompaq we can provide them more choice, more freedom, and moreflexibility so that they can make the most out of their past, current,and future technology investments.
For our employees, I think it's a rare chance to be part of anindustry-changing team--a company with the reach and capability andexpertise to fundamentally change how technology transforms business anddaily life. We have an opportunity to create a world where technologyworks for people-not the other way around.
A significant leap forward in achieving our strategy
This merger greatly accelerates our journey--our journey to reinvent HP,our journey to offer not just great products but great solutions, ourjourney to become a more customer-focused organization, and our journeyto transform ourselves into an indisputable market leader.
From the beginning, we have had the ambition to be #1 or #2 in everymarket in which we compete. What's new with this era, is that we alsohave an opportunity to lead the industry and our customers to a newmodel of computing--a model of computing based on industry-standard,market-unifying technologies and architectures.
As I have said time and time again, this is a company with a bigculture, a big brand, a big legacy, and big ambitions. Today's newscertainly delivers on every dimension. With this one move, we:
• Extend our lead as the #1 leader in imaging and printing--with moreopportunities and even more experience in competing along the fullspectrum of solutions. Compaq brings not only its customer base, butspecifically also deep expertise in competing in highly competitivemarkets.
• Extend our lead as the #1 consumer IT solutions company in the world.
• Catapult HP into the #1 small- and medium-business IT solutionscompany.
• And, for the first time in a very long time, IBM will have acompetitor that's strong enough, bold enough, and talented enough totake them head-on in the enterprise space.
Our structure:
The new organization--the end state five to eight months from now
Let me talk about what I envision our company will look like five toeight months from now; it customarily takes this amount of time to gainapproval to merge two companies of this size. (I will circle back tothis point in a moment, in that I want to be certain that HP stays ourcourse during this time.)
Our goal has been--and in the new organization will continue to be--tostructure in a way that enables us to both deliver superior customerexperiences, as well as superior products and solutions. Both HP andCompaq have moved to a front/back organizational model. When we mergethe two companies after we gain approval on the merger, we will build onour shared front/back structures-but we will evolve the model. We willhave four primary businesses in the company-and our goal is to have atleast 80% of the "front/back motions" contained within any givenorganization. By putting the key processes and the key decisions under asingle leader in each unit, we will achieve more accountability andcrisper decision-making. That said, the 20% of the front/back processesand efforts that will be shared between organizations requires and thatwe maintain a high commitment to collaboration.
The four main units of the new HP will be:
• IT Infrastructure: By combining the server, storage, and softwarecapabilities of Compaq and HP, we can offer you an even more compellingsolution-servers (from industry standard servers to high-end,fault-tolerant systems) that are designed to specifically address theevolving nature of an always-on Internet infrastructure. Managementsoftware that allows our customers to optimize, manage, and monitortheir entire network. Storage solutions that allow them to manage 10times the data without adding to the payroll. And the services andsupport expertise to help them design, build, and keep it running. Thiswill be a $23 billion business, lead by Peter Blackmore, currentlyExecutive Vice President of Sales and Services at Compaq.
• Services: Let's spend a little more time on services. We will havedeeper and broader capabilities in consulting, outsourcing, andsupport--to help you strategize and manage your infrastructure. Withmore than 65,000 professionals around the globe in the new HP Servicesorganization, we want to be the partner of choice in architecting theenterprise. By combining forces, we become a top-tier servicesprovider--offering a true choice in how large companies strategize andimplement IT projects. As a new kind of industry leader that valuespartnerships, we plan to be the partner of choice for consultants andsystems integrators as well-- PricewaterhouseCoopers, Accenture, andKPMG. This $15 billion business will be led by Ann Livermore.
• Access Devices (PCs, handhelds, and new kinds of Internet-accessdevices): By combining two strong businesses into one, we plan to offerour customers a broader range of PCs, handhelds, and other Internet-enabled devices--via the channel that best meets their needs (directlyfrom us, from our partners, or from retailers around the globe).Products that "simply work better together." Devices that will enablepeople to work the way they want to work in the office, at home, or onthe move. This $29 billion business will be led by Duane Zitzner.
• Imaging and Printing: We remain committed to one of our corestrengths--our expertise in recording, sharing, storing, and printinginformation, memories, documents, and ideas. In fact, in the nextseveral weeks, you'll see us make some announcements on this front thatwill prove our commitment and leadership in this area--and improve theways customers can use information to empower their organization andenhance their relationships with their customers. This $20 billionbusiness will be led by Vyomesh Joshi ("VJ").
I will serve as Chairman and CEO. And Michael Capellas will join the newHP as President. The CFO of the combined company will be Robert Wayman.I will name the additional executive leaders in upcoming communicationswith you.
The integration team: Drawing on the best strengths of bothorganizations
As exciting as all this news is, I also want you to know that I realizethe challenges of integrating these two great companies: We are both inthe middle of our own reinvention efforts. We both must continue to runour businesses, while planning for integration. We both do business inhighly competitive market segments that will be unforgiving of misstepsor slowed decision making or response times.
We will tackle the challenge of integrating this organization withdiscipline, decisiveness and focus.
That's why I've asked Webb McKinney to head up the integration effortalong with Jeff Clarke, Compaq's Chief Financial Officer. They will leadan integration office responsible for planning the integration--allowingour line managers within HP to focus on running the business, withminimal distraction.
We already have several things working in our favor:
• We have a comprehensive integration plan.
• We've already done much of the strategic work required to make smartdecisions about how to evolve our solutions sets in the combinedcompany-- and our goal will be to provide roadmaps to our customers tomake their transition a smooth one.
• We have the top managers selected and retention contracts in place--sowe can retain key talent.
• We've hired outside experts with deep experience in integrationefforts of this scale.
What this means for you: Stay focused.
As I said, this merger is a game-changing move in our industry.
Our competitors are going to use every chance they can to discredit it:
They'll say we'll lose focus, they'll say we won't be able to execute,they'll say we won't be able to make the tough decisions fast enough.
I believe we will prove them wrong.
Despite today's very exciting news, it's vitally important that, untilyour manager tells you otherwise, stay focused. Focused on what you'redoing now. Focused on running the business. Focused on serving customersand beating the competition. We must continue to meet our financialcommitments, so that we can reap the benefits of this merger long term.
As I said in the beginning of this communication with you: This is ahistoric day. There is much to celebrate. Congratulations, HP. It'sgreat to be part of this team.
Warm regards,
Carly