HP's Whitman: Sales Reps That Scoop Channel Deals Will Be Fired

Hewlett-Packard is in the process of rolling out revised rules of engagement for its salespeople that spell out what behavior is acceptable -- and what's not -- when it comes to working with channel partners.

The revised rules, to be formally announced next month at HP's Global Partner Conference in Las Vegas, are part of HP's broader campaign to rebuild trust in the channel. They're necessary because some HP salespeople, perhaps emboldened by the leadership vacuum that comes from having three different CEOs in three years, have been working around partners in deals -- or cutting them out entirely by taking deals direct.

Under the revised rules, "HP will not move a customer from an indirect sales model to a direct model on specific registered opportunities without express engagement with the channel partner, and it must be based on customer choice only," an HP spokesperson told CRN in an email Tuesday.

[Related: HP: We Need To 'Rebuild' Channel Partner Relationships ]

One interesting aspect of the revised rules is that partners that run into channel conflict will be able to escalate issues to HP executives, which hasn't been part of HP's previous policy. Dean Cappellazzo, CEO of Bedrock Technology Partners, a San Mateo, Calif.-based HP partner, says this is an important point that shows the level of HP's commitment to the channel cause.

"Now HP's executive management is going to be seriously involved in driving sales and profitability to partners," Cappellazzo told CRN.

HP CEO Meg Whitman, who is now intimately aware of the problems channel conflict can cause, has made it a priority to reign in aggressive salespeople. What happens if they don't follow the rules?

"They won't be working here anymore," Whitman told CRN in an interview earlier this month. "We don't have a lot of tolerance for this. If you are scooping a partner deal that you have no business having your fingers in, at all, then we will take care of that. It's not appropriate."

NEXT: HP Getting The Message Out Internally

To ensure that its salespeople get the message, HP for the past two months has been identifying bad actors within its global sales organization and making it clear that their behavior will no longer be tolerated, Sue Barsamian, senior vice president and general manager of global sales and operations for HP's Enterprise Group, told CRN in an interview earlier this month.

"In reaction to some of the noise that we heard, we've been going out and seriously re-educating people that need to be re-educated," Barsamian said.

HP has ditched its previous internal system for managing partner relationships and is now using Salesforce.com. Barsamian said HP is in the process of implementing a consistent deal registration framework that will serve to eliminate ambiguity.

"We're getting it consistent and global, so it's easy and quick to tell who has the deal, and which channel partner are we working with on the deal," Barsamian told CRN.

HP vowing to fire sales reps for poaching channel deals is nothing new. In July 2011, HP's Technology Services division instituted such a policy.

Several HP partners told CRN that these declarations haven't had any impact on direct sales behavior. So, some are taking a skeptical view of Whitman's vow to get rid of salespeople who don't follow the rules. "We have heard this so many times. Unless they actually fire someone, I won't believe it," one HP partner told CRN, speaking on condition of anonymity.

On the other hand, HP mentioned its "need to rebuild our business relationships with our channel partners" in its 2012 10-K filing. That, plus Whitman's vow, suggests that this latest campaign might have a bit more resolve behind it than previous ones.

"We totally are committed to the channel," Whitman told CRN. "We recognize that things weren't perfect in 2012, and maybe even in 2011, and we are working hard to make things right."

PUBLISHED JAN. 30, 2013