When Life Hands Your Business Lemons . . .

Posted by Chuck Kocher
On November 16, 2015

Last month there was a popular Halloween joke costume for adults staying at home. People claimed they were going to wear a simple white tee shirt with LIFE printed on it and hand out lemons to trick-or-treaters.

When life hands your business lemons, however, it’s no laughing matter. It’s all good and well to talk blithely about turning lemons into lemonade, but how do you actually make that happen?

Hewlett Packard, with its 75-year history, is arguably one of the most successful and iconic businesses in the country. And yet, over the past decade, they have been handed a lot of lemons. Of course, it could be argued that to some degree, they planted those seeds and are now harvesting some rather sour fruit.

What’s indisputable is that the company recently split into two companies: Hewlett Packard Enterprise, which sells hardware, software and services to companies, and HP, which sells printers and PCs to consumers. Meg Whitman is the CEO of Hewlett Packard Enterprise—and the one who ultimately made the decision to split the company in two.

There is no question that the split has been painful for the company (especially for employees). Whitman, however, sees “lemonade” where some only see lemons. She sees the split as a positive opportunity for each of the new entities to be more successful as separate entities than they were as a single company. She’s already excited by the growth she’s seen, but is very aware that the marketplace will ultimately decide if this was the right move.

What should you do if your business is divided between two distinct markets like Hewlett Packard’s is? Should you split things up so that you can focus your attention on your differing markets? Whitman says you have to approach that kind of decision carefully. You have to approach that kind of decision strategically. Are your markets really different? Are you looking at different competitors and different cost structures? What will you gain by splitting things up? What will it cost you?

One thing Whitman cautioned was: “Do not underestimate how much work this takes.” It’s not a move you want to make without a lot of research and consideration. At HP there was a five-month debate about whether they should make the split or not.

Click here to view an interview between Daniel Roth and Meg Whitman on this topic. Time will tell whether HP got it right or not. Some experts are projecting that the companies have six to nine months to make it. We’ll have to see whether they end up with lemon juice or lemonade!