How Hewlett-Packard Survived a CEO Crisis That Should Have Killed It

For a solid decade, Hewlett-Packard’s C-suite was a masterclass in chaos. A revolving door of chief executives, each with a conflicting vision and dramatic exit, pushed the Silicon Valley icon to the brink of corporate death. So how did it survive?

Act I: The Visionary and the Boardroom War

The turmoil began in the early 2000s under Carly Fiorina, a charismatic leader brought in to shake up the staid tech giant. Her defining move was the massive, controversial $25 billion acquisition of rival Compaq in 2002. Fiorina argued it would create a dominant force in the PC market, but the move was fiercely opposed by board members and the founders' families, who saw it as tying two sinking stones together. While the merger did make HP the world's largest PC seller, the integration was painful, involving tens of thousands of layoffs and unrealized profit promises. By 2005, a boardroom clash forced Fiorina out, leaving the company bigger, but arguably more vulnerable.

Act II: The Cost-Cutter and the Scandal

Next came Mark Hurd in 2005, an executive known for ruthless efficiency. He was the antidote to Fiorina's grand visions. Hurd slashed costs, streamlined operations, and for a time, was Wall Street's hero. Under his leadership, HP's revenue grew significantly and profits more than doubled as he stabilized the company post-Compaq. But his tenure came to an abrupt end in 2010. An investigation into a relationship with a contractor revealed inaccurate expense reports. While a probe found no violation of sexual-harassment policy, it did find a breach of the company's code of conduct, forcing his resignation. Just as HP had found stability, it was once again leaderless and embroiled in scandal.

Act III: The 11-Month Plunge

If Hurd’s exit was a shock, what came next was a full-blown nosedive. The board hired Léo Apotheker, formerly of SAP, in late 2010. In less than a year, he announced a series of jarring strategic shifts that baffled investors. He abruptly killed the company's promising TouchPad tablet, signaled a desire to sell off the massive PC division, and championed the disastrous $11 billion acquisition of British software firm Autonomy. The Autonomy deal was pushed through despite internal opposition from HP's own CFO. Apotheker was fired just before the deal even closed. A year later, HP announced a massive $8.8 billion write-down on Autonomy, alleging massive accounting fraud—a claim that would lead to years of legal battles. This was the moment HP truly stared into the abyss.

The Solution: A Turnaround and The Great Split

With the company in freefall, the board turned to eBay veteran Meg Whitman in September 2011. Her mission was not visionary growth but pure triage. She immediately provided a steady hand, halting the plan to sell the PC business and beginning a years-long effort to stabilize the company and restore morale. Her ultimate survival strategy, unveiled in 2014 and completed in 2015, was radical: she broke the company in two. The old Hewlett-Packard was split into HP Inc., a focused business for PCs and printers, and Hewlett Packard Enterprise (HPE), dedicated to servers, software, and corporate services. Whitman argued that the split would create two more nimble and focused companies, freeing them from the unwieldy structure that had fueled the decade of chaos.