Hewlett-Packard Inkjet Business Unit Challenge
Hewlett-Packard Inkjet Business Unit (IJBU) designs, manufactures, and markets inkjet print cartridges for the HP family of printers, faxes, and large format plotters. The significant growth of HP printers for personal computers resulted in a 63 percent compound annual growth rate over five years, growing revenue from $1 billion to $6 billion. In the meantime, competitive companies were overcoming technological barriers and threatening to step into this market and benefit from this surge in demand.
The IJBU was faced with a positive, but daunting, challenge—to keep up with the tremendous growth prospects in the market and maintain their dominant market position in a competitively charged environment. Dana Seccomb, general manager of IJBU at that time, recalled the challenge of moving a 10,000-employee company in one focused, strategic direction amidst the chaos of phenomenal growth. At one point, his management team had received fifty-six different proposals from the various functional groups on what needed to be done to grow the business.
Seccomb formed a team of ten of his direct reports to identify an implementation plan for the next five years. The team identified two key areas that would be critical to their success. The first was the development of their relatively weak marketing function so that they could remain competitive and hold on to their share as new companies entered the ink cartridge market. The second area was to create a plan for expanding the company’s infrastructure and assimilating the new employees that would be required.
With the key areas identified, the IJBU team sought outside expertise in the form of two different thought leader panels. The first was a panel of experts in marketing at companies such as Coca-Cola, Kraft, Intel, and DuPont. A month later, the team held the second thought leader panel, addressing the issue of ‘‘hypergrowth,’’ with experts from companies such as Cisco Systems, Microsoft, Atari, and Conner Peripherals. Each thought leader panel consisted of presentations by the experts and interactions between the experts and the IJBU team. These sessions were followed by debriefing sessions with the team to distill key learnings and insights and to align around next steps.
Using the insights from the experts who had lived through similar marketing and hypergrowth conditions, the IJBU management team established four strategic opportunity areas that they would develop to drive the business planning. Subteams were created for these four areas, and a total of eight ‘‘bridge strategies’’ were developed to move the company from a $1 billion business to a $6 billion business over the next five years. They included such things as the communication of the business vision, the expansion plans of each of the company’s key business processes, and the communication and training vehicles to assimilate new hires into the distinctive HP culture.
These bridge strategies, the implementation plan, became the strategic road map for the IJBU. They were tracked quarterly by the management team and were reviewed and revised at each yearly strategic planning session.
About “The Sponsor”
The sponsor is the primary cheerleader of that vision to the Discovery team on behalf of the rest of senior management. If the organization lacks a vision, then it is incumbent on the sponsor to personally be visionary enough to not constrain the Discovery team. Typically, this means being open-minded and willing to be stretched by the team in the way he or she views the future of the enterprise.
At the Hewlett-Packard Inkjet Business Unit (HPIJBU), it was Dana Seccombe, as general manager and sponsor of a strategy innovation initiative, who provided the compelling future vision for computer printing—that some day printers will be given away for free, and, therefore, future revenue and profit must be generated by ink and paper. Understanding this fundamental trend before anyone else put HPIJBU in a strong position to strategically out-innovate the competition. Seccombe’s vision, combined with his foresight to sponsor key strategy innovation initiatives, is part of the reason HP’s Inkjet Business Unit was able to average 45 percent growth over ten years through 2000.
Terry Tallis, one of the leaders of a successful strategy innovation initiative at Hewlett-Packard’s Inkjet Supplies Business Unit, notes about that project,
‘‘We were creatures of our past. This experience raised us up so that we could see what had been invisible to us. We had thought we were in the ‘printer’ business. We discovered we were in the ‘printing occasion’ business. We had 50 percent of the printer business but less than 1 percent of the printing occasion business. That was key to the whole growth initiative.’’
Hewlett-Packard’s Inkjet Supplies Business Unit perceived the need to formalize strategy innovation after their initiative. Terry Tallis, business planning manager, said,