CRN Exclusive: HP CEO Whitman Lays Out Transition Team Plan In Internal Memo

Hewlett-Packard CEO Meg Whitman said she is turning to some of the company's "best leaders," including HP Enterprise Executive Vice President Bill Veghte, to "step up to help HP succeed" as it splits into two new Fortune 50 companies, according to an internal HP memo obtained by CRN.

"When we announced our plans to separate into two new Fortune 50 companies, we committed to a thoughtful and transparent separation management process that would minimize disruption to customers, partners and employees," said Whitman in the memo. "To deliver on this commitment, I am once again asking some of our best leaders to step up to help HP succeed."

Veghte, who has helped drive the five-year HP turnaround strategy put in place by Whitman, is now being asked to lead the charge on the Hewlett-Packard Enterprise split.

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"While I will be closely involved in the key decisions that will shape the future of Hewlett-Packard Enterprise, this team effort led by Bill will allow me to have the flexibility I need to run the current business through next year and assist [HP Executive Vice President of Printing and Personal Systems] Dion Weisler with the creation of HP Inc.," Whitman wrote in the internal memo. "As we announced on October 6, once HP separates, I will become the president and CEO of Hewlett-Packard Enterprise."

The separation management team memo comes just one month after HP revealed it was splitting into two new publicly traded companies: Hewlett-Packard Enterprise, which will be made up of enterprise systems, software and services, and HP Inc., which will be made up of the printing and PC business.

Solution providers said Veghte's steady hand will be critical in ensuring the Hewlett-Packard Enterprise business is successful. HP has said it expects the split to be completed by Oct. 31, 2015.

HP solution providers said the appointment of Veghte, HP's onetime chief strategy officer and chief operating officer, will be key as HP crafts it enterprise acquisition strategy with more than $7 billion in cash once the separation is completed.

"All the big bets and acquisitions are going to happen in Hewlett-Packard Enterprise so having someone like Bill who understands all aspects of the industry is going to be key," said one source close to HP. "When the split is done, I think Bill will end up being COO of HP Enterprise. Bill has been Meg's right arm from the beginning of the turnaround. He has the pulse of the customers, partner community and the entire HP ecosystem."

Whitman, for her part, said in the memo that Veghte will be leading a "collaborative effort" on the Hewlett-Packard Enterprise front working with HP Enterprise Services Executive Vice President Mike Nefkens and HP Software Executive Vice President Robert Youngjohns to "hone and advance our enterprise strategy and catalyze our separation efforts for Hewlett-Packard Enterprise."

Whitman said that Chris Hsu, senior vice president, Operational Performance, who joined HP in May from global investment firm KKR, will "manage the overall separation process and work streams for Hewlett-Packard Enterprise."

Next: Rising Star Neri To Oversee HP Enterprise Business

Antonio Neri, a rising star within HP who is currently senior vice president and general manager of HP Servers and HP Networking business units, will take over day-to-day responsibilities of the Hewlett-Packard Enterprise business.

"With Bill turning much of his focus to assisting me with the separation, I have asked Antonio Neri, SVP and General Manager, HP Servers and Networking, to become the leader of Enterprise Group," said Whitman in the memo. "Antonio has an outstanding 18-year track record at HP across many lines of business and roles. Most recently, he has done a great job transforming and accelerating our server business. I’m extremely confident in Antonio’s ability to drive excellence and success throughout EG. Antonio will continue to report to Bill."

Another key executive in the separation, Whitman said, is HP Enterprise Group Senior Vice President and COO Jim Murrin, a 25-year HP veteran, who will "drive important decisions around the financial and operational imperatives required for a successful separation," according to the memo.

"A significant part of separating HP into two new publicly traded companies is disentangling the existing corporate structure and reconstituting support for two new companies," said Whitman. "This includes finance, tax, contracts, and legal entity separation efforts. To lead this critical part of the process, I have asked Jim Murrin, SVP and COO Enterprise Group, to serve as the Corporate Separation Management Office (SMO) leader, reporting to me."

For the Printing and Personal Systems business, Whitman said Weisler has named 25-year HP veteran Enrique Lores, senior vice president, Business Personal Systems, as the leader for the SMO that will help design HP Inc.

As part of the changes making way for HP Inc., Weisler has decided to "combine the Consumer and Business Personal Systems groups under the leadership of Ron Coughlin, SVP Personal Systems," said Whitman in the memo. "In parallel, the Inkjet, Graphics, and Laser print organizations will be consolidated under Stephen Nigro, SVP Printing."

Whitman said Pradeep Jotwani, who will remain the leader for the Laser Enterprise Systems group, will also report to Weisler in a "new role driving Strategic Corporate Development for HP Inc."
Whitman stressed in the memo that it is "critically important that HP deliver on its "commitments for FY15 while at the same time preparing for the separation of our company. I am proud of the fact that we have the right leadership within HP to do both."

Finally, Whitman congratulated all the executives taking on new roles and asked that HP employees give Veghte, Murrin, Hsu and Lores "all the support they need in the days and months ahead. Our customers, partners, and shareholders are counting on all of us to perform at our best. "

NEXT: The Full Version Of The Memo

Below is the full version of the memo from Whitman to HP Employees.

Meg Whitman
Chairman President and CEO
Separation Management Office Announcement

When we announced our plans to separate into two new Fortune 50 companies, we committed to a thoughtful and transparent separation management process that would minimize disruption to customers, partners, and employees. To deliver on this commitment, I am once again asking some of our best leaders to step up to help HP succeed.

To strike the right balance between running the current business and creating the new Hewlett-Packard Enterprise, I have asked Bill Veghte, EVP Enterprise Group, to lead a collaborative effort with Mike Nefkens and Robert Youngjohns to hone and advance our enterprise strategy and catalyze our separation efforts for Hewlett-Packard Enterprise. Chris Hsu, SVP Operational Performance, will manage the overall separation process and workstreams for Hewlett-Packard Enterprise. While I will be closely involved in the key decisions that will shape the future of Hewlett-Packard Enterprise, this team effort led by Bill will allow me to have the flexibility I need to run the current business through next year and assist Dion Weisler with the creation of HP Inc. As we announced on October 6, once HP separates, I will become the president and CEO of Hewlett-Packard Enterprise.

With Bill turning much of his focus to assisting me with the separation, I have asked Antonio Neri, SVP and General Manager, HP Servers and Networking, to become the leader of Enterprise Group. Antonio has an outstanding 18 year track record at HP across many lines of business and roles. Most recently, he has done a great job transforming and accelerating our server business. I’m extremely confident in Antonio’s ability to drive excellence and success throughout EG. Antonio will continue to report to Bill.

A significant part of separating HP into two new publicly traded companies is disentangling the existing corporate structure and reconstituting support for two new companies. This includes finance, tax, contracts, and legal entity separation efforts. To lead this critical part of the process, I have asked Jim Murrin, SVP and COO Enterprise Group, to serve as the Corporate Separation Management Office (SMO) leader, reporting to me. Jim has done an outstanding job in his recent role as COO of EG, and in his 25 years with HP he played key roles in the EDS and Compaq acquisitions. In this new role, Jim will drive important decisions around the financial and operational imperatives required for a successful separation.

Turning to PPS, Dion has named Enrique Lores, SVP Business Personal Systems, as the leader for the SMO that will help design HP Inc. Enrique has been with HP for 25 years and there are not many people in this company with his level of knowledge and experience. He will be an excellent leader for the HP Inc. separation process.

With Enrique moving into his new role, Dion has decided to combine the Consumer and Business Personal Systems groups under the leadership of Ron Coughlin, SVP Personal Systems. In parallel, the Inkjet, Graphics, and Laser print organizations will be consolidated under Stephen Nigro, SVP Printing. Pradeep Jotwani will remain the leader for the Laser Enterprise Systems group. He will also report to Dion in a new role driving Strategic Corporate Development for HP Inc.

As I have said before, it is critically important that we deliver on our commitments for FY15 while at the same time preparing for the separation of our company. I am proud of the fact that we have the right leadership within HP to do both.

Please join me in congratulating Antonio, Ron, Steve, and Pradeep on their new roles. I hope you will give them your complete support. I also ask that you give Bill, Jim, Chris, and Enrique all the support they need in the days and months ahead. Our customers, partners, and shareholders are counting on all of us to perform at our best.

Meg