Innovator Article

Measuring Morale at Hewlett-Packard
Faculty-Alumna Study Chronicles Employee Distrust

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Faculty Focus • by Robert Preer

In her 15 years at Hewlett-Packard, alumna Amy Stroud ’93 had seen employee engagement plunge at the Silicon Valley–based information technology giant. A series of controversies, cutbacks and rapid CEO turnover had left staff wary of company leadership. HP had gone from the top 10 of Fortune’s “100 Best Companies to Work For” to dropping off the list.

Stroud, an executive with the company’s business strategy and development unit, wanted to create initiatives to improve employee engagement. She believed HP would benefit from expert help and outside perspective, so she approached Graduate School of Management Professor Kimberly Elsbach, an internationally renowned expert in organizational behavior.

“Ever since I graduated, I have been involved with the School, and I’ve followed the faculty research,” Stroud said. “What Kim was doing looked very relevant to what I was working on.”

Elsbach and Stroud decided to work together on a review of public information about HP’s communications to employees, then interpret what they found in an academic framework. Ileana Stigliani, a visiting professor from Imperial College in London, joined the project.

Over five months, Elsbach, Stigliani and Stroud sifted through more than 300 publicly available documents—media reports, agency filings, books and speeches—to paint a picture of how employee trust and distrust evolved between 1995 and 2010 at HP. They identified how distrust built in a series of distinct phases and how attempts to restore employee trust fell short.

The resulting paper, “The Building of Employee Distrust: A Case Study of Hewlett-Packard from 1995–2010,” is scheduled for publication in the journal Organizational Dynamics.

Joint alumni-faculty research is not the norm at business schools. But after the successful collaboration with Stroud, Elsbach says such partnerships make a lot of sense. “It’s gratifying that our alumni have gained skills in critical analysis in addition to technical skills,” Elsbach said. “For faculty, this kind of partnership provides an opportunity to study important management issues in a real-life context. It also connects us to corporations and organizations.”

The case study details how the words and actions of leaders signaled dissatisfaction with employees, disrespect for employees and unfairness in treatment, engendering distrust, which deepened as events unfolded.

Stroud believes HP wants to learn from past mistakes.

“I shared the study with my director before it was submitted for publication. He loved it. He said it was a trip down memory lane, although it was painful at times.”

The paper covers several years when HP was on the “Best Companies” list, and the subsequent tumultuous years under CEOs Carly Fiorina and Mark Hurd. The analysis concludes about the time Leo Apotheker was named CEO in the fall of 2010. Former eBay CEO Meg Whitman replaced Apotheker last September.

Stroud hopes employee engagement at HP will improve. “Meg Whitman is a local favorite. Her strategic plans look really good. All of her language is signaling respect and satisfaction with employees,” Stroud said.

Elsbach noted that the School has long-standing ties to HP. Many full-time MBAs work for the firm after graduation, and HP employees are enrolled in the School’s part-time MBA programs.

Elsbach intends to use the paper as a case study for her classes. “It should make the teaching more relevant,” she said.

Comments

On the right track

Kudos for tackling this tough topic. Overdue, hopefully signals a major shift in HP leadership policy. Thanks for the contribution, and the courage to do the work. Chuck House

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