Editor's Note: Transform Or Be Tragically LateEditor's Note: Transform Or Be Tragically Late

Noted business thinker Gary Hamel once said, "Turnaround is transformation that's tragically late." That should be a warning for any company that has ignored problems, has avoided customer demands, has turned its focus away from innovation, or has just laid low hoping for another bubble. There have, of course, been successful turnarounds--think of Lou Gerstner at IBM--but for companies that make transformation part of the fabric of their business, chances are they won't find themselves steering a sinking ship. Hewlett-Packard's new CEO, Mark Hurd, is about to take on a big job. It's not quite the makings of a turnaround, but transformation is clearly in order. He needs to find a way to improve financial performance while also preserving a culture of innovation and risk taking that HP employees, customers, and competitors admire (see story, "HP Gets Practical"). The famous HP tagline "Invent" may need to become "Reinvent."

Siebel Systems is another company undergoing reinvention. CEO Michael Lawrie has spent his first year at the company overhauling just about everything he can get his hands on: the business strategy, the management team, and the decision-making culture. The customer-relationship technology the company sells hasn't really changed much, but the way the company sells it has. Siebel wisely joined the "on-demand" brigade and has been aggressively selling software in a new way. What's better, it seems to be approaching customers in a new way--less arrogance and better service. (See story, "Will Nice(r) Sell?".)

I hate the saying, but "time will tell" whether these two companies will effectively transform themselves or be tragically late. But there's no doubting that smart leaders and smart strategies equal happy customers and happy shareholders.

Stephanie Stahl
Editor-in-chief
[email protected]

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