By some unofficial accounts, Hewlett-Packard
Sources tell BoomTown's Kara Swisher that the replacement is likely to come from within the company's executive ranks.
I understand the need for a new CEO to hit the ground running. After outbidding Dell
But here's why the company may want to hire from outside its own ranks.
1. HP has a market-confidence problem
Stocks have been rallying in recent weeks, but HP is one of the few tech bellwethers that Mr. Market has left behind. The stock has taken a 6% dip since the company canned Hurd with a regrettable severance package after the market close on Aug. 6. Oracle
If Wall Street had thought that a more-than-capable hire could come from within, HP wouldn't have missed a beat, despite the scandal that led to Hurd's dismissal.
2. There was no succession culture at HP
Hurd was firing on all cylinders, particularly early in his tenure. He was the turnaround guru HP needed. His youth and his popularity among investors meant that the company didn't need to groom a replacement.
In other words, if you're an executive at HP, you certainly weren't there because you figured that there was a shot at being promoted to CEO anytime soon.
3. HP needs a visionary outsider
As great as Hurd was, he had pretty much exhausted the margin expansion that used his cost-cutting initiatives to turn HP into a more profitable company. I compared Hurd with a long middle reliever at HP, coming in to clean up the mess that a sloppy baseball starter left behind. What the company needs now is a closer. It needs someone with fresh ideas to make HP relevant at a time when tablets -- at least Apple
The company's recent whirlwind of buyout activity in the storage- and security-software arenas suggests that there's a blueprint being unrolled internally. But even so, given the first two concerns I raised, the stock market is unlikely to react favorably unless the person calling the shots on those blueprints is a flashy outsider.
Do you think HP should hire from within or seek out an outsider CEO? Share your thoughts in the comments box below.
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Longtime Fool contributor Rick Munarriz hammered out this article on an HP computer, but he owns shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.