Mr. Garrity and the Ciphers from High Cap Companies

Tom Perkins–the one with his name on the door over at Kleiner Perkins Caufield & Byers–resigned from the board of Hewlett Packard on May 18, 2006. Initially the circumstances of his resignation were characterized as a personal decision by HP, but Mr. Perkins persevered until the true reason for his departure came to light.

I had been following the story, along with most people in high tech in Silicon Valley, and was struck by the phrase “ciphers from high cap companies” when I read it in Rob Preston’s story in InformationWeek titled “Down to Business, What They Didn’t Say at the HP Hearings”

It was from an e-mail Perkins wrote to Mark Hurd, H-P’s current CEO, which his attorney, Viet Dinh, included in an Op Ed entitled “Dunn and Dusted” in the Wall Street Journal on Tuesday, September 26, 2006. I have included the full text of the e-mail but have bolded a phrase I want to explore further:

Dear Mark: A while back I promised you that we directors would clean up our act, and free you from worries about the H-P board. I am really sorry that I didn’t deliver on this, and I apologize for the necessity of raising the issue of illegal activity by the board chairman in today’s email to the board. But, it’s an extremely serious matter, and I have legal obligations.

Aside from this, I worry that Pattie, as new chair of N&G, will ‘pack’ the board with the kind of directors she so admires — ciphers from high cap companies, with no fast-cycle technology background, and certainly no Valley entrepreneurial genes.

I worry that you will wind up with a ‘blue ribbon’ board that will be of zero, or even negative, value to you when the going gets tough. I don’t wish you bad luck — but life eventually delivers tough scenarios to CEOs of big companies — and I doubt if H-P will prove to be the exception.

Anyway, I am rooting for you still, and I hope everything works out as you wish best.

Sincerely, — Tom.

Let’s unpack that phrase: ciphers from high cap companies, with no fast-cycle technology background, and certainly no Valley entrepreneurial genes.

• Ciphers: the meaning here is a none-entity, a zero; this was a term my father and grandfather would use as a strong insult.
• High Cap Companies: high market capitalization, i.e. Fortune 50/100/500 (I suppose “Fools from the Fortune 500” doesn’t have the same zing).
• Fast-Cycle: in this context I believe it’s a reference to being able to make decisions rapidly, to execute the OODA cycle (Observe, Orient, Decide, Act) but it also has been applied to product development by Preston Smith and Don Reinertsen among others, to indicate the value of cutting time to market for new products
• Technology Background: comfortable wrestling with Moore’s Law
• Valley Entrepreneurial Genes: possibly overrated, except insofar as there is a higher tolerance for failure in the presence of learning, and a celebration of prudent risk taking (vs. rewarding success).

In this succinct phrase is a warning to startups: be wary of “large company advisors” who lack an appreciation for Moore’s Law, don’t understand that delaying a decision is deciding to delay, and who are motivated more by–or perhaps only by–money than a desire to change the world.

To watch HP’s current management team attempt to demean and intimidate someone like Tom Perkins strikes me as stupidity of the first order. I was reminded of the gypsies in the George V. Higgins’ story “A Small Matter of Consumer Protection” (reprinted in chapter 6 of his excellent “On Writing“) who attempt to con and intimidate a nameless silver-haired 70 year old one Saturday morning, only to discover too late he is a retired–well mostly retired–Mafia don.

But the moral dry rot that has set in at H-P that would allow these stupid (my operating principle is that everything you do will ultimately get found out, and the more the effort you make to keep it secret, the deeper the hole you are digging for yourself)–if not illegal–acts, doesn’t appear to stop with Patricia Dunn. Don Tennant, editor in Chief at Computerworld, wrote about A Culture of Evasion detailing Mr. Hurd’s lost opportunity to answer any tough questions at a public forum while the story was breaking:

The entire episode made me think of the irony of a particular line in Hurd’s keynote — the one in which he said that HP is “trying to build a culture of execution and accountability.” Accountability? That’s going to be awfully difficult as long as the company’s CEO demonstrates by his example a culture of dissemblance and evasion.

Witnessing the ongoing disintegration of a Silicon Valley icon like HP gives me a strange Twilight Zone sensation. If only a Jed Garrity could be found to arrange a meeting between the current and former management.