Hewlett-Packard's bid to buy Compaq faces a critical test this week when the David and Lucile Packard Foundation board meets to discuss the controversial deal.
H-P Chief Executive Officer Carly Fiorina was expected to pitch the deal to the foundation board's finance committee yesterday, and the board itself may vote on the merger as early as tomorrow, said George Vera, the foundation's chief financial officer.
Walter Hewlett and David Packard, sons of H-P's co-founders, have publicly opposed the deal. Packard in particular has charged that the merger would undermine H-P's culture, known as the H-P Way.
Webb McKinney, president of H-P's Business Customer Organization, leads the process of integrating the two companies, alongside Compaq executive Jeff Clarke. While Fiorina's role is to sell the merger to investors, McKinney's job is to figure how to combine the two companies and define the new H-P's culture. He spoke about this and other issues on Tuesday:
NYT: What would you tell the foundation on how the integration work is going?
Webb McKinney: I can't comment much on what's going on with the Packard Foundation, but I have spoken with Booz Allen [the consultant hired by the foundation] and updated them on how we're managing the integration. I would obviously tell them it's going well.
NYT: What parts of H-P and Compaq's cultures do you expect would be the most difficult to integrate?
McKinney: It's hard to say, frankly. The integration team -- we're the cultural astronauts. We're working round the clock day-to-day.
NYT: Why cultural astronauts?
McKinney: From an H-P point of view, we got into a spaceship and we went to the Planet Houston and encountered these different people. The integration teams are working together every day, day in and day out. This is the first real test of the cultural integration. These are teams from the two companies working together under very challenging, aggressive schedules and dealing with tough issues. We're sort of the pilot run.
NYT: Can you give examples of the differences in the two companies' cultures?
McKinney: H-P has a strong value around respect for the individual and trust for the individual. Over the years, often, that has resulted in people not being willing to raise issues in public. You go into a meeting and in some situations too often we move to sort of a consensus style. We didn't want conflict. We really wouldn't make a decision until virtually everyone in the room was in agreement.
We have already been working at H-P over the last couple of years to clarify that there's a big difference between respecting people and being able to disagree and make decisions without full consensus because full consensus is a slow way to get things done.
In Compaq's culture they appear to be quite good at having constructive open conflict, making decisions and moving on. It's a characteristic that we're already in the process of strengthening in H-P's culture, so that would be a very natural outcome of this work.
NYT: What [employee question] has been the most difficult to answer?
McKinney: The difficult part about the merger in general for regulatory reasons is you can't really say a lot.
The thing that creates the most anxiety is that we've announced that as part of this merger there will be workforce reductions, but we can't really talk openly about where those will be and in what time frame. That creates anxiety, as you might imagine.
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