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The Honolulu Advertiser
Posted on: Monday, July 29, 2002

HP-Compaq marriage turns to counseling

By Brian Bergstein
Associated Press

A few weeks after Hewlett-Packard Co. began the arduous process of merging with Compaq Computer Corp., six former Compaq managers and four from HP huddled in an 18th-century farmhouse near Boston.

Webb McKinney is a longtime HP executive overseeing integration.

Associated Press

With rhododendrons blooming outside in the May sunshine, the newly named leaders of HP's data storage division spent 2 1/2 days dividing responsibilities and setting goals.

The meeting had an unusual element: a buzzer marked "Reset."

"Anytime someone slipped into pre-merger HP or pre-merger Compaq behavior, saying, 'We used to do it that way,' or 'Here's how we did it,' we'd hit the button and call out 'Reset!' " said Mark Sorenson, a former Compaq honcho who had just been made an HP vice president.

Like the icebreaker at summer camp, such meetings have been a big part of the struggle to meld HP and Compaq into a single efficient force.

HP sealed the $19 billion Compaq acquisition three months ago, so it's too early to tell whether the deal will succeed. But emerging details provide a glimpse into the process.

Executives have spent countless hours trying to shape a unified culture for the new company. They have assembled a glossary of several hundred terms used by one company but not the other, or words that had different meanings at HP and Compaq.

"What's a small business? What's a medium business? What's direct, what's indirect?" said Webb McKinney, a longtime HP executive overseeing integration with Jeff Clarke, Compaq's former chief financial officer.

All HP employees will be required to attend meetings at offices around the world, like the Massachusetts farmhouse.

Rarely do merging companies take such pains to boost employee morale, said Karen Cates, an organizations specialist at Northwestern University's Kellogg School of Management.

Some participants said the meetings revealed few cultural differences between HP and Compaq, especially among people in similar divisions.

"Frankly, the HP people thought the Compaq people were fast and brash and wearing cowboy hats and cowboy boots. The Compaq people thought the HP people were introspective and quiet and ate a lot of granola," Sorenson said. "But the fact is, we were a heck of a lot more alike than we were dissimilar."