Portfolio Project Option #1: Submit Portfolio Outline (Outline format) Submit an outline of your Portfolio Project. Please review the rubric. Directions: The first step to understanding an argument is

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"“A Deer Caught in the Headlights” at HP

Plagued by poor performance in its computer and printer business, Hewlett‐Packard’s board hired Carleton (Carly) Fiorina from Lucent.1 This represented the first time since its 1939 founding that HP had reached outside the company for a CEO. Appreciating the urgency of the situation, Fiorina hit the ground running. Her first public appearances were well staged and electric. What she had in mind was clear. She would reorganize HP in order to centralize decision making, revitalize the sales force, trim costs, and energize employees. Based on her previous experience at Lucent, Fiorina had a clear idea of how she would achieve her goals, which she revealed at her first strategic meeting just a month after her arrival. To reverse the company’s “sacred” emphasis on decentralization, she proposed a simpler, more centralized structure: two “back‐end” divisions (each back‐end division included design, manufacturing, and distribution—one for printers, the other for computers) and two “front‐end” marketing and sales operations—one for consumers and the other for corporate customers. The company would also begin to focus on far fewer products. “This is a company that can do anything,” she told executives, “it is not a company that can do everything.” Finally, the culture would change dramatically and immediately to emphasize performance. “Let me make something very clear,” Fiorina told executives. “You will make your numbers. There will be no excuses. And if you can’t make your numbers, I will find someone who will.” Fiorina asked for the support of HP’s top executives on her centralization and reorganization plan, and she got it. That is not to say, however, that they all agreed with her. “I don’t know anyone who was in favor of it [her back‐end/front‐end reorganization plan] other than Carly,” said one. “She came in with a recipe,” said another, “and come hell or high water, she was going to use it.” Carolyn Ticknor, head of laser printing, recalled, “I was a deer caught in the headlights when she [Fiorina] described the front and back end.” Six years after the announcement of the reorganization plan, the company’s board demanded Fiorina’s resignation. The board again looked outside of HP for a replacement; this time selecting Mark Hurd of NCR. When reporters asked Hurd about his plans to revitalize the company, he responded that it was too soon to tell. “We’ll look at the entire enterprise,” he said. “I can’t give you any guarantees on anything,” he added. 2 Diagnosing the Organization The desire on the part of executives such as Carly Fiorina to “hit the ground running” with solutions, particularly when their organizations are mired in poor performance, may be perfectly understandable. The tendency to believe that what has worked for them in the past can provide a kind of recipe for the future is also strong. Reorganization worked at Lucent; why not do the same at HP? Taking that approach, however, fails to create mutual engagement and shared diagnosis that is so critical in shaping and guiding change. It can lead to solutions that are inappropriate to the target organization and are not supported—perhaps even actively resisted—by employees. Theory into Practice Effective change starts with action, not solutions. The desire for quick solutions can lead executives to overlook the critical elements of learning and commitment that can be built through mutual engagement and shared diagnosis. The dynamics of every organization are unique. Additionally, an organization’s external competitive forces are likely to be in a state of flux. Therefore, applying a recipe—what worked somewhere else in the past will work here now—can be overly simple, misleading, and even dysfunctional. Lucent’s best practices may not have been applicable to HP. The act of imposing those practices is likely to evoke resistance. Lack of mutual engagement—of holding an honest conversation among employees about what needed to change, why, and how—leads to low levels of employee commitment. Diagnosis is meant to create learning about the real, current, and unique dynamics impacting the organization’s performance. When combined with mutual engagement, it is designed to create deep and wide commitment to the desired outcome. Theory into Practice Don’t expect formulas—solutions that have worked in the past and are imposed on the current situation—to work for your organization. At its most fundamental level, diagnosis is about learning: learning what needs to be changed and why. Learning is the process by which individuals receive data from the external environment, analyze that data, and adjust their thinking and behaviors accordingly. The notion of shared diagnosis goes one step further. For effective change implementation to occur, many employees at multiple hierarchical levels and in varied units need to change in the same direction. A diagnostic process engaged in by an individual, no matter how insightful, highly placed, or influential that individual may be, will not lead to coordinated change. It is only when the same diagnosis is shared by multiple individuals that change implementation can move forward effectively."