The curious case of H-P: what they taught us in English class but never in B-School

Stop the Press!  Theodore Dreiser novel makes headlines in 2010!

That’s what went through my mind as I heard and read about the tragic story of Mark Hurd, now former CEO of H-P.

Okay, so here we have the story of an aspiring actress who is attracted to the fame and wealth of a powerful corporate executive.  She accompanies him to social events, dinner, theater.  The executive, who is married and has children, becomes careless in his matters dealing with the actress.  Soon their relationship is revealed, along with certain financial improprieties of the executive.  In the next act the executive falls from grace, resigning his position and facing estrangement from his family.  The actress is catapulted into the spotlight and fame.

Mark Hurd and Jodie Fisher?  No, Sister Carrie.  The novel written over 100 years ago by Dreiser.    It’s a wonderful, torrid, steamy, censored affair (the original version was not published until the 1990s).  You can download it from Project Gutenberg or just read the summary in Wikipedia.

Jodie Fisher

Jodie Fisher

The more I read about Jodie Fisher, more striking become the parallels between her and the narrative arc of Sister Carrie.  It’s updated, with a Hollywood twist instead of Broadway.  The movie credits of Ms. Fisher  (Sheer Passion, Body of Influence 2) probably  contributed greatly to the troubles that Mr. Hurd faced from the HP board of directors.  We can also vividly imagine what he must have faced going home and telling his wife about the situation.

Her star is rising.  Up 6% on IMDb’s STARmeter

And the total irony of the situation is that this is HP, the same company that was investigating and wiretapping its own board members a few years ago.  In the first day of trading since the news came out, the company’s valuation dropped $9 billion.  Yes, that’s right, $9 BILLION in value.

In the investigation done by the board, they found no evidence of the sexual harassment accusations.  They did uncover a reported $20,000 in wrong expense reports to pay for dinners with Ms. Fisher.  Hurd has been a solid performer for HP, stabilizing the company after the disruptions earlier in the decade.  He’s led the company to record revenues and earnings.  He’s moved in all the right directions.

So did HP do the right thing by asking Hurd to resign?

Some people say no, that Hurd was cleared of the accusations and his leadership is invaluable to the company at this time.

From my perspective, the simple answer is yes.  And the more complex answer is still yes.  There are several compelling reasons that weigh heavily in favor of the resignation.

The first and foremost is that the behavior of a CEO should follow the same standards as any employee.  (In one very remarkable company I know, there isn’t even a reserved parking lot for the CEO).  If I were found with $20,000 in wrong expense reports, you can be pretty darn certain that I’d be out on the street.

The second is that the board needs to be transparent.  The moment this became public, it was easy to predict how distracting it would be to the performance of HP and the company’s reputation.  And you can be certain that in today’s world a secret like this wouldn’t stay a secret very long.  Not with movies like “Sheer Passion” lurking in the background.

This was reported to be the advice of their PR firm, APCO.  It sounds like excellent advice.  Imagine for a moment that you are on the HP board, know this explosive secret and exercise stock options before it is revealed.  That would put you in a pretty tight spot, too.  From the moment they heard about it, they must have been under great pressure.

So my strategic solutions to prevent this problem from arising again in 21st Century corporations:

1.  Have all MBAs take at least one course in literature.  Fiction is the stuff of life.

2. Give a copy of Sister Carrie to all board members of public corporations.

3. Give all executives a copy of The Jungle by Upton Sinclair.  We can all learn a little from his famous observation on business: “It is difficult to get a man to understand something when his job depends on not understanding it.”

4. Hire lots of people with Master of Fine Arts degrees to stimulate the corporate imagination.   In the interests of transparency and full disclosure — I have my MFA degree in creative writing.

Anything I left off the list?

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