Recent disasters of the complete write-down and lawsuit with Autonomy purchase from the tech industry giant HP provided us some valuable insights to today’s business world and management lessons:
1. A sky-dived savior from outer space seldom will save the world. HP’s use of ex-CEO from an European company proved to be more of a disaster than a game changer. European’s business culture and management system differ startlingly from those of the Americans. High flying ideas and quick turnarounds that are rarely seen from the European business arena cannot be tested on a big American company without a proof of concept.
2. Like holidays sales, hot purchases based on wishful thinking usually cool soon after getting into the hands. A lot worse for those “no-return” ones. Microsoft’s 2007 purchase of AQuantive at $6.3 billion with 85% premium (a writedown of $6.2 billion in July 2012) and HP’s purchase of Autonomy at $11.7 billion with 64% premium (a writedown of $8.8 billion in November 2012) were of the same suit. There are more similar stories to come(for example, the May 2011 acquisition of Skype for $8.5 billion while Skype was valued at $2.75 billion by EBay’s divestiture just 18 months earlier.”So wish to get it, no matter at what cost” typically describes the mindset and behaviors of those hot-headed high-ups. What you wish to get vs. what you got, how you wished it be used vs. where you truly can use it are of different things even for companies with many brilliant lawyers and accountants- it’s just not their job to decide. It’s more of the display of the management’s “sudden brilliant flashes in the head”. Caution is needed. Compare, research and listen to the questions and opposite views before you buy.
3. This is a time for many businesses on a true transformation. Yesterday’s breadwinners may no longer be suitable to feed today’s hunger needs. The worldwide recession is a warning and also a calling. Systems-political and economical, industries, individuals, welcome to a changing world where old routines may no longer apply. Tides of changes are coming in bigger and faster ways than many companies have anticipated before. For those who have the culture of easily burning tomorrow’s bread-winners on today’s altar, time to call for a wakening. Tomorrow is already here. Yes, “Elephant can dance”, but it needs leaders who stays current but can see far ahead, who truly understand the culture, the business, who has the determination and means, who has the full backing of the key stakeholders and a little bit of time, to get there. The questions usually are: where to find these leaders, will the companies still have enough time before the next crushing wave? Are leaders and companies prepared in mindset?