From his home office, new HP CEO Enrique Lores is trying to reinvent the hardware maker; a push into 3-D medical printers
By John D. Stoll
Every chief executive in America sits on a hot seat right now.
For Enrique Lores, the seat has been on fire since he took HP Inc.'s top job in November. An electrical engineer who joined the company as an intern in 1989, the 54-year-old Spaniard was barely in charge when turmoil started.
Four days after his start date, news broke that Xerox Holdings Corp. was cobbling together an offer to buy the 81-year old computer-hardware maker. In the months that followed, Mr. Lores swatted away hostile salvos from Xerox. In a letter sent to shareholders Wednesday, he wrote that pursuing a megadeal during a pandemic isn't prudent.
"The key thing I need to do right now is prioritize my time," Mr. Lores told me Thursday morning during a Zoom chat. HP manufactures and sells gadgets in markets all over the world, many of which have been rattled by the coronavirus outbreak. If Mr. Lores doesn't keep production lines moving, management teams talking, and customers buying during a crisis, there will be no HP left for Xerox or anyone else to pursue.
"Right now is when we show the value and culture of HP," he said. The hardware giant is known for its printers, desktop computers and laptops; Mr. Lores thinks now is the time to write a "new chapter." Two things he wants the company to be more associated with are 3-D printers and any product that helps America work from home.
Like many CEOs I've talked to this month, Mr. Lores is spending way more time in his northern California home office than ever before, using the tiny portal on a smartphone or webcam to talk with people he used to grab in hallways or informally congregate with in a conference room. He regularly checks in on operations in hard-hit nations, including Italy and China, and is monitoring liquidity like a hawk.
The tone of conversations is changing. "I think what we're seeing broadly is people opening themselves up." He's sat through a lot of stories recently, including during his calls with those who keep HP's coffers full. "We not only talk about the business, but we use the time to engage with our customers on a different level."
Mr. Lores is the latest in a line of people whose jobs I've profiled during these unprecedented times for the Journal's special "Making it Work" series.
I've learned how a funeral home director advises mourners how to say goodbye in an era of social distancing. How a mail carrier spends as much time washing his hands as delivering mail. How a nurse figured out a sanitary way to reuse a disposable gown.
The CEO's role in making it work? Point people to the light at the end of the tunnel.
Mr. Lores took the HP job with an eye on transforming a culture in need of a refresh. He began his 31-year HP career on a team developing a graphics printer called the DraftMaster. He went on to run various company units, including imaging and printing. He was instrumental in the split of the Hewlett-Packard Co. in 2015, which separated the personal computing division from the division selling corporate services and hardware.
Four weeks before officially taking over for his predecessor, Mr. Lores started shaking things up. He announced up to 9,000 job cuts and said services and new technologies, such as HP's nascent 3D-printing unit, needed to be a higher priority going forward.
Crafting this new strategy and battling Xerox's takeover attempt consumed a substantial amount of time at the start of the year when HP's management began hearing about coronavirus. Mr. Lores tapped heads of four different HP units to monitor the situation and build a continuity plan while the rest of the company focused on growth, cost cutting and strategy.
"The world has radically changed in these last two or three weeks," Mr. Lores said.
HP's capital strategy shows how quickly things can change. In late February, Mr. Lores announced a $15 billion share buyback plan designed to stave off Xerox. That included $8 billion in repurchases committed within a year. That seems like a pipe dream today.
A month later, Mr. Lores is spending time evaluating the scale of that plan. The economy has nosedived; HP's stock -- like almost every Blue Chip in America -- has tanked; and credit availability is fragile. "Right now, cash is king," he said Wednesday.
Rather than fast-track new guidance to appease Wall Street, Mr. Lores is preaching prudence. "We need to say the right thing at the right time." Spending all his time with finance executives and the treasury staff to address one issue would limit his effectiveness.
Because casual encounters can't happen in virtual workplaces, Mr. Lores has bumped up his meetings with senior executives from one a week to three, and is calling on three or four major customers a day. He has changed the digital background on the Zoom app to the Palo Alto, Calif., garage where Bill Hewlett and Dave Packard started the company.
There are people who Mr. Lores regularly checks in with: Two of his sons have returned from New York to California during the self-isolation era; his predecessor at HP, Dion Weisler; HP's Chairman Chip Bergh (who is CEO of Levi Strauss & Co.). And he regularly talks to his sister and brother in Spain, where both are doctors.
He also meets regularly with a group of CEOs in similar industries. An avid runner, Mr. Lores tries to squeeze in running or cycling time. When not on conference calls or reviewing company estimates, forecasts and plans, he pores over emails from employees.
Workers share stories and express eagerness to pitch in any way they can. "The problem is not to find people who want to participate, it's trying to choose the people we want to do it." He wants the workforce to pace itself. "We need to realize this is not going to be a very short-term thing."
On Wednesday, Mr. Lores hosted a video Q&A with 1,200 company leaders. His message to them is that while HP is weathering the same storm every other company is, it has unique opportunities. The trick is to find them, analyze them, and seize them.
Many of the startups disrupting older, established companies did exactly that during the financial crisis. Companies such as Airbnb Inc. and Spotify Technology SA were created during or immediately after the last major downturn. Netflix Inc., Amazon.com Inc. and other tech companies, meanwhile, experienced exponential growth then, following years of tinkering with unprofitable business models.
Mr. Lores has told his employees to use this current crisis to reinvent HP.
The most immediate initiative that shows they are listening directly relates to combating the pandemic. HP has ramped up its printing of mask adjusters, face shields, and hands-free door openers on 3-D medical printers, and has already supplied more than 5,000 of these products to hospitals.
"It's not only about protecting ourselves," he said. "It's about finding opportunity."
Write to John D. Stoll at email@example.com