By Pete Carey, San Jose Mercury News
Last February, 200 people crowded into a large conference room of a Palo Alto hotel to walk through the split of Hewlett-Packard, a Silicon Valley giant that was being reinvented as two companies.
The task was so massive, with so many interlocking parts, that an improvised flow chart was plastered on a 40-foot-long, 10-foot-high wall, using stickies, index cards and yarn. The growing chart was projected on giant television screens mounted near the ceiling so that everyone could see it.
They were dissecting a company with more than 300,000 employees at 651 locations in 120 countries. There were 2,700 bank accounts and 2,700 IT systems. Every employee had to be assigned to either HP Inc., which makes printers and personal computers, or Hewlett Packard Enterprise, which sells data center technology. The breakup, effective Monday, means about 60,000 employees are being moved to new locations.
"There were north of 200 people in a room, the leaders of all the various work streams," recalled Chris Hsu, who was in charge of the split-up for HPE, where he will become chief operating officer. "We took every work stream and walked it all the way to Nov. 2. The leader would walk through all the key steps they had to take. We had people all over the room with microphones. People would say, 'But I have to do this before you can do that.'"
And the stickies, index cards and yarn would be repositioned.
"That's the level of planning we had to do across work streams," Hsu said. "It's not about each independent team doing what it had to do. Every team had to do stuff in sequence." The timeline was documented for future planning meetings.
Hsu had been at HP for only a few months, coming from the private equity company Kohlberg Kravis Roberts' Menlo Park office, when CEO Meg Whitman asked him last fall to lead the separation for HPE.
Because they're going to be two separate companies, each company is only allowing its own employees to access certain areas where confidential information is potentially being shared. That meant, among other things, separating work areas where there had been shared locations across the globe.
"The first thought I had was, 'Oh my God, this is the biggest, largest, complex project I could ever possibly imagine,'" Hsu said. "In the way she has, Meg sold this to me as best thing in the world — how could I not step up to a great leadership challenge? On the spot I said 'yes.'"
Within a week of taking on the job, Hsu met with various consulting firms and ended up selecting Deloitte, a firm he'd worked with on past private equity deals. The next step was devising a process for making decisions.
"We could not go through the traditional consensus-driven decision-making process," Hsu said. "We had a very small group of people making decisions rapidly." This group included Whitman and Dion Weisler, who will head HP Inc. But the entire separation team eventually grew to about 400 people.
Then began the task of dividing up the company's sites between HPE and HP Inc.
Some cases were clear — San Diego was mostly the printer side of the company, while Plano, Texas, was the technology consulting service side. Where buildings were shared, separate entrances were made or the companies were separated by floors.
"We had some sites in Japan where there was real debate about who owned which part of the building," Hsu said. "There were detailed negotiations."
Then there was a decision about the location of HPE, the company that was being spun off.
"We have our heritage in Silicon Valley," Hsu said. "It directly ties to the founders who founded the company in a Palo Alto garage in 1939, with close ties to the university. More importantly, if you are in enterprise technology, you need to be here. This is the center of the world for enterprise technology. We came quickly to the conclusion that this is where we wanted to plant our flag."
HPE took the modern headquarters at 3000 Hanover St., while the PC and printer divisions moved up the hill to 1501 Page Mill Road, where founders Bill Hewlett and Dave Packard once had their offices.
About 700 people had to relocate from one building to the other, said Tracy Keogh, HP's vice president of human resources, who will take that role at HP Inc.
"It went incredibly smoothly," she said. The older building, which she described as "mid-century modern," is "open and airy, which is very consistent with the culture of the company. It's really quite nice."
Construction crews are still working on an upgrade but some of the original feel of the place is being retained.
Another echo of the past, the famous "HP Way" of management pioneered by the founders, will be retained by both companies. The HP Way is a decentralized system emphasizing teamwork and respect for individuals, in which employees are given a voice, as exemplified by the open doors of the founders' offices. It already had been revived as the HP Way Now at HP.
"Everybody wanted to take the HP Way with them," Keogh said.
Some facilities will be shared, such as the old offices of Hewlett and Packard, which are maintained as museums and are in what is now HPI's building, and the garage on Addison Avenue in Palo Alto where the company was launched. Also shared are a fitness center, a cafeteria and the research and development center HP Labs, which are in what is now HPI's headquarters.
"The labs are a core part of our heritage and our future, and are remarkably expensive to move," Hsu said.
Looking back, Hsu said the job "was so overwhelming that people were physically and mentally exhausted in the first four months of this. We did an organization from zero people to 400 in a matter of months and scaling up to split a company with hundreds of thousands of customers, 300,000 employees in 120 countries — no small feat."
©2015 the San Jose Mercury News (San Jose, Calif.) Distributed by Tribune Content Agency, LLC.
