Walter Should Throw In The Towel, Carly Needs To Rebuild Some Bridges

And HP Chairman and CEO Carly Fiorina should go into bridge-rebuilding mode even before Hewlett admits it is over.

Walter, you are to be commended on many fronts. First and foremost, having the guts to stand up against the rest of the HP board is something we need more of in corporate governance. Sadly, we are unlikely to get it. Your action forced a real debate, and every shareholder really thought through which way to vote. The attempt to paint you as some sort of detached eccentric was silly.

But Walter, even if you win your suit nullifying the last-minute vote switch made by Deutsche Bank, it's a moot point. With the vote tally released last week showing HP with a slim 2.8 percent victory and the 17 million switched shares making up far less than that margin of victory, is there any logical reason to proceed?

And while your suit claims HP misrepresented to shareholders the degree to which its integration efforts had advanced, by the time any revote takes place, much more work will have been done on the planned integration.

At this point, the battle is nothing more than great newspaper copy and a waste of money. HP and Compaq management must get on with it and should be allowed to turn their attention to competing in the market.

Meanwhile, Fiorina needs to think beyond the vote and begin rebuilding bridges,both internally and externally.

The recent disclosure that an employee who leaked two memos to the press has been dismissed and the continued investigation into who was responsible for intercepting Fiorina's voice mail to HP CFO Bob Wayman is, in the long run, more damaging than beneficial.

No employee should be trying to undermine management, but there have been many studies showing that employees who believe they are being monitored become less efficient, not more so. In a company the size of HP there is no way to completely eliminate leaks. If employees become fearful that something they do may be misconstrued as an attempt to undermine the company, paralysis will set in and many will be afraid to do their jobs. I understand Fiorina's frustration, but this only detracts from the real business at hand,merging the companies and driving new sales.

This industry needs a strong HP, and at this point the company's ability to compete is being damaged by the prolonged merger battle. The fight was good in many ways, but whether you happen to be for or against HP's buyout of Compaq, you have to hope the distraction will end soon and business will return to as normal a state as possible.

If Hewlett were to admit defeat at this point and withdraw his lawsuit, he would be remembered in corporate history as one of the very few board members of any company who was willing to challenge management instead of just going along with the flow. On the other hand, if the suit goes on and eventually results in a long, drawn-out revote that impedes HP's ability to move forward with its plans, Hewlett will only harm the company his father co-founded.

Walter, it's time to throw in the towel and let Carly and her team get on with it.

Make something happen. I can be reached at (516) 562-7812 or via e-mail at [email protected].