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Jumat, 19 Agustus 2016

After the split: so is it HP, Hewlett Packard, Hewlett Packard Enterprise or what?

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After the split: so is it HP, Hewlett Packard, Hewlett Packard Enterprise or what?


Sometimes this Kat is puzzled by the selection of a company name (or names) after a corporate split, spin-off or acquisition. This Kat has
previously shared his bemusement over the selection of the corporate name, Mondel─ôz International, adopted in 2012 in connection with the spin-off of Kraft Food’s global snack and food brands (as reported on Wikipedia, it “… was suggested by Kraft Foods employees and is a combination of the words for "world" and "delicious" in Romance languages”). Uncertain in its pronunciation and difficult to store in one’s long-term memory, this Kat still wonders. One thing, however, can be said in defense of Mondel─ôz, after sorting out what the company name refers to, there is never any confusion between it and any other Kraft (or indeed any other) entity. The same cannot necessarily be said about the company names that were selected in connection with the 2015 split of the once-known Hewlett-Packard Company.

In that connection, this Kat recently met an acquaintance, who has a long-time connection with the company. Over a cup of coffee, this Kat innocently asked: “So which HP company do you now work for. And who is running the company”? My acquaintance fumbled his response to both questions, before ultimately coming up with the correct answers. As Kat readers may be aware, the former Hewlett-Packard Company has split into two separate companies. The then existing company changed its name to HP Inc. and retained the company’s personal computer and legacy business (with its ticker remaining HPQ), while a new company was created, called Hewlett Packard Enterprise Co. (with its ticker symbol “HPE”) and consisting of four divisions—Enterprise Group, Services, and Software and Financial Services. In May 2016, it was announced that Hewlett Packard Enterprise would sell its Enterprise Services division to Computer Sciences Corporation. This transaction is to be completed by March 2017; in the meantime, it does not appear that a name has been chosen for this new company.

So what we have is that the existing company has discarded the name Hewlett-Packard Company in favor of HP Inc. (“HP” being a name and mark long associated with the company). The second company is called Hewlett Packard Enterprise Company. (Kat readers will carefully note that the hyphen between Hewlett and Packard has been discarded, and its full presentation, it also includes a logo in the outline form of a green rectangle.) The two companies still both roughly share the Hewlett-Packard nomenclature history.

But it does not have to be this way. Consider Accenture, by some metrics the world’s largest consulting company. Accenture began as the business and technology division of the accounting firm Arthur Andersen and then became known as Andersen Consulting. Tension between the consulting and accounting practices led Andersen Consulting to change its name in 2001 to Accenture. In that same year, the Enron scandal broke, implicating Andersen Accounting and leading to its virtual demise. While the Andersen name will forever be associated with the Enron scandal, Accenture (no whiff of the word “Andersen” in its name) was recently recognized by Fortune magazine among the world’s most admired information technology services companies.

For sure, there may have been a bit of luck involved, since one of the terms of the arbitration award in the dispute between the two companies was that the latter could no longer use the Andersen name—leading to Accenture. But it also points to the risk in sharing a common name, when the two entities are separate and independent, and each goes off in its own business direction. One wonders how Andersen Consulting would have played out if it had retained the name Andersen as the accounting company was being dragged through the mud of Enron.

Regarding Hewlett Packard Enterprise (or HP or HPE or whatever), the issue is in no way connected to negative spill-overs, such as Enron, but rather what kind of corporate identities are being created. Truth be told, trying to keep straight the two companies by name and fields of activity is a constant challenge. One gets the sense that, at least for the moment, those concerned at the two companies seem to want a bit of confusion in their identities. Consider the following, which appears on the Hewlett Packard Enterprise website--
“Hewlett Packard has been in the innovation business for more than 75 years. Our vast intellectual property portfolio and global research and development capabilities are part of an innovation roadmap designed to help organizations of all sizes – from global enterprises to local startups – transition from traditional technology platforms to the IT systems of the future.”
Even after the split, what seems most important is that the two companies both continue to recall their common Hewlett Packard heritage, in haec verba. Whether this is an effective naming strategy in the longer term will remain to be seen.



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