One HP vs. One Lenovo: The Promise and Problem of an Integrated Tech Company

Large companies, and tech companies in particular, are known for having silos that don’t really work well together. This introduces extra complexity and friction while also reducing synergy. Large companies are often more like holding companies. Dell Technologies is an example of this as a group of loosely aligned companies that largely come together seemingly as a group but more often operate like separate entities. Part of the reason for this is that it is easy to create an umbrella corporate office that loosely manages these entities that are competing with each other for resources. At Dell, the PC unit is losing in that fight.

First, Lenovo and HP decided to address this problem, and it wasn’t easy. To bring the units together means you have to eliminate the competition for resources. Otherwise, the units may just give voice service to the effort and torpedo it after the fact. For instance, the guy driving a similar effort at IBM back when I worked there was applauded in public but widely derided in private with the term “clueless idiot” being far too common for what was, supposedly, a strategic initiative.

Let’s talk about both the Lenovo and HP efforts in contrast given HP just pushed its effort at the HP Amplify partner conference.

One Lenovo

This was an initiative driven from the top as it must be. Otherwise, it won’t be successful. Lenovo’s business units are mostly complementary and additive to each other. Lenovo is the only enterprise-class tech vendor that has a full suite of client devices ranging from smartphones to workstations. And its enterprise IT offerings allow it to compete with Dell as a peer with significant regional advantages.

Lenovo has been working on this initiative for some time, yet its smartphone business, both Motorola-branded and Lenovo-branded, still seems largely disconnected from the whole. These businesses are doing fine, but there doesn’t seem to be much, if any, synergy between the smartphone side of the house and the PC side, with one exception: the ThinkPad Smartphone.

Now, should PCs and smartphones converge, you’d think Lenovo would be at the forefront of that conversion. However, it is unlikely the PC unit or the smartphone unit would agree to subordinate their efforts to the other, making it relatively unlikely Lenovo would even explore this outcome before someone created an iPhone event that then forced the industry to pivot.

This showcases that this isn’t easy, even though it should be easier at Lenovo than it will be at HP.

One HP

HP is by nature more collaborative and cooperative between units. I expect this is both due to its culture, which has always fostered collaboration, and its last two CEOs who tended to be far better people managers than their immediate predecessors, some of which were somewhat famous for abusive behavior.

However, HP is a PC and printer company which is not naturally synergistic. Yes, on the consumer side, the same person may buy and specify both printer and PC, but on the business side, printers are largely centralized resources that might not even be managed by IT but by facilities. In addition, the printer market is a razor/blade market, which means you make money on the supplies and services, not on the hardware, while with PCs, you generally (with some PC-as-a-service offerings being exceptions) make money off the sale with a smaller percentage going to services and software.

Both PCs and printers are going through very different evolutions at the moment. Printers are in slow decline, and PCs are in the midst of an AI revolution. AI can and will be applied to both offerings, but HP printers exist in non-HP PC shops, and HP PCs exist in non-HP printer shops. So, creating hard connections between the two could reduce rather than increase market opportunity if they were seen as exclusionary, limiting what HP can do with the “better together” concept,t which is the basis of these “One HP” efforts.

So, while HP is far less complex than Lenovo, its problem is a loss of obvious synergy between its PC and printer groups, making the degree of difficulty similar even though they are very different in makeup.

Wrapping Up: Making One Lenovo and One HP Work

The first thing that has to be done is to adjust executive compensation to favor collaboration over individual accomplishment, and to eliminate metrics that reward a lack of cooperation as much as possible. If one side gets more headcount, funding etc., it doesn’t mean the other side gets less. Both sides should be measured and provisioned independently of each other, which is far easier said than done, given limited resources.

Then, there should be an overlay that provides greater rewards for success that benefits the entire company over success that only benefits one side or the other. For instance, let’s say one group sacrificed a timely product release and took a revenue hit to create a solution that, in the end, was vastly more lucrative for the company in spite of the lost revenue. The person who made that decision should be publicly recognized and compensated for putting the company first, not hit with headcount reductions or termination.

For Lenovo, working to create greater synergy between smartphones and PCs, which it’s doing, should be a very high priority. For HP, creating synergy between PCs and printers, which it’s also doing, should be the priority. For both companies, the potential progress they could be making has been significantly greater than the actual progress, suggesting the drive to create the result of an optimized company isn’t getting the attention it needs to truly be successful.

HP is working with its Wolf Security unit across both units and arguably has the best security solution individually and collectively for both PCs and printers and announced quantum protection for its enterprise printers at the event.

One thing that can be done that HP announced they were doing is a gap analysis to figure out what products and services are missing to create a more integrated firm with complete lines in every category. I’d recommend creating a working group under the office of the CTO focused exclusively on this with the mandate to look at everything from how products are created to how employees are compensated so they aren’t just coming up with new products but working to eliminate the friction between operating units that currently prevents stronger collaboration.

The whole point to building companies like Dell, IBM, Lenovo and HP is synergy between the units. If you don’t have that, they might as well be separate entities without the overhead of a corporate umbrella. But, without a major shift in operational practices, these efforts tend to underperform potential.