Enrique Lores, president and chief executive officer (CEO) of HP Inc., took the stage at HP’s Amplify event, and delivered a message of what he called “realistic optimism,” sharing his view of the coming months and years for HP and the tech industry in general.
Lores was addressing HP’s channel partners, a part of the business worth he said was worth more than US$8 billion to HP and one that has been part of their go to market approach for eight decades.
The conference hosted over 1,500 channel partners from around the world. It was the first event of its kind for HP in four years, but the energy of finally meeting in person was tempered by the challenges that the industry is facing.
It was held in the shadow of a current tech industry retrenchment, following challenging times during the pandemic. Sales of PCs and office equipment soared in the early days of the pandemic, but supply chain issues made it difficult to fulfill orders. Then, in recent months, PC sales have fallen enormously with little hope on the horizon for a rapid turnaround.
But the real depth of the challenges of the past few years came into focus as Lores apologized to the channel for some having empty warehouses and others having warehouses that were full but unable to ship because of parts issues.
Then Lores delivered the frank message that “In 2022/23 we may not grow.”
Unbelievably, Lores was still able turn his keynote to what he called his message of “realistic optimism.”
Part of this was certainly his personality. He appeared to be in his environment, with a relaxed charisma and a folksy style that somehow still communicates the air of a person in charge.
As the voice of HP, he has credibility. He started as an intern at the company years ago. He went on to successfully head their print division. He took the reins as CEO in 2019, just in time for one of the most tumultuous periods in the company’s history.
He started his welcome with an upbeat and personal tone, talking about how this was more of a “family reunion” than a business conference. This was, he noted, the first “in person meeting in years. He talked about how wonderful it was to once again meet people in person and catch up on marriages, new children and even birthdays.
Then he turned to a more somber message about the state of the industry and his view of the future.
“The world has been difficult for the past few years, ” he said. We’ve had “strongest demand, but significant supply chain issues.” Now, he said, “key markets are not growing, and may not for some time.”
Then Lores moved on and doubled down on “realistic optimism.” Perhaps it was the frank and honest assessment of the past and current challenges, but he spoke credibly as he talked about the future.
He also spoke with the experience of a business leader who had seen more than one business cycle. “After a market slowdown,” he said, “there is always a market recovery.” The task was to “make sure our company is ready for when the recovery will happen.”
Four trends for the future
Then Lores shared his ‘future ready’ plan. He called for a new kind of capital “R” resilience needed by HP to meet the challenges and exploit the opportunities presented by major changes that were happening in the world today. He outlined four key trends:
evolution of technology and entering the age of AI. This will, Lores noted, “create new categories and expand the PC portfolio. The opportunity, he said, was to “improve the experience to customers.” He gave examples of how AI can be leveraged to drive preventative maintenance, to remove external noise in a video conference, and to make employees more productive.
rise of hybrid work. Although Lores is clearly someone who appreciates person to person contact, he admitted that the flexibility employees have is “here to stay.” But he was equally clear that “all work should not be done remotely.” Planning, designing, and discussion are, for Lores, the key elements that need face to face contact, something he clearly values. “With Zoom,” he said, “you are watching a movie. In the office, you are part of the movie.”
the age of resiliency – “We have to build a more resilient supply chain,” said Lores. He said that we need to redesign factories and be ready to be able to deal with changes in the world – globalization, political change, and climate change.
the age of mistrust – “Citizens,” said Lores, “have built a lot of mistrust of their governments. They trust companies more than their government.” Lores talked of an enormous opportunity for companies who can build trust. “The companies that build trust will be the ones that will win in the future. One of the key elements of our brand is trust, and this will be critical for us going forward in the future.”
Having laid the foundation of the future in clear and realistic terms, Lores moved forward to look at how meeting these challenges can bring new opportunities.
A new world of work – a world of new opportunities
In this new world, PC’s have become more communication than calculation tools, and are “not only for spreadsheets and documents.” The opportunity exists to embrace “a very different use model that will affect the design of PCs.”
The hybrid office offers an “opportunity to design a new conference capability” that can create a collaborative experience “when not everyone is still in the room.” Lores noted how frustrating the experience is today, with some people in the office and others being remote.
This is not a new strategy for HP. In 2022, the company acquired Poly, who at the time HP called an “industry-leading video conferencing solutions, cameras, headsets, voice and software.” But as Lores noted, it was now time to “go on the offensive” in capturing this and other key market opportunities.
If you can address the challenge of hybrid work experience, Lores noted, there is an enormous market potential.
“There are 90 million meeting rooms,” he said, “and only 10 per cent of them have video conference systems.” This, he said, “is a multi-billion dollar opportunity.”
Another area of opportunity, Lores said, is to drive aggressively with HP’s printing offerings, expanding these with new products and services. Demand for printing/scanning in the digital hybrid office was noted as one current bright spot both in the enterprise and the SMB market.
But Lores also spoke of extending the core printing capability to 3D printing. HP already offers 3D printing in plastics, but Lores announced that HP had only a few months ago launched what he said was the first 3D metal printing.
An opportunity and value proposition for the channel
Lores spoke passionately about the importance of the channel to achieving his vision of growth. He promised that the HP would work towards doing the “majority of our business” with the channel. “Making sure our partners can benefit,” he said, “is one of our core priorities.”
He committed to growing the portfolio of products and services with a strong value proposition. That value proposition would focus on conquering “the difficulty of experience when not everyone is in room,” alluding again to the the idea that hybrid work is here to stay.
Sustainability as a multi-billion dollar opportunity
HP would continue to focus on sustainability, Lores noted, committing to what he called “the need to continue to innovate with purpose.” Furthermore, he noted, “sustainability is a fundamental driver of our growth. Its the right thing to do, but helping us to win business.”
How much business is sustainability driving? Lores said that HP estimated that three years ago, there was US$1 billion in opportunities to which they attributed to their efforts at sustainability. This year, he said that that number was US$3 billion.
A commitment to “doing the right thing”
It’s not the only time that Lores’ has focused on “doing the right thing.” His commitment to promoting gender equality was evident in the balance of women who took centre stage in the presentations that followed his keynote. But it was also evident in a small networking event for women, where Lores spoke briefly to challenge the channel to work towards having more women in the audience of these events. After that, he took his seat and sat attentively through the presentation.
Lores’ message ended with his commitment to the channel: HP would continue to innovate products and services to make opportunities for the channel. He committed to working to make HP easier to deal with, reducing turnaround times, and increasing assistance in winning opportunities in the channel.
Returning to the personal message he started with, he committed that HP would be a “company you can rely on, on a personal level.”
Doing the right thing, for Lores, is good business. “If you win,” he said, “we win in the market.”
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