When Hewlett-Packard Co. launched its
Adaptive Enterprise strategy in 2003, Chairman and CEO Carly Fiorina said a key was gauging a business's ability to adapt to change.
Adaptive Enterprise is about linking IT to business demands, and enabling businesses to quickly adapt to changing demands, she said. As such, part of HP's initiative was an Agility Assessment Service designed to help businesses figure out how well they adapt to change and what can be done through technology to help improve that capability.
On Thursday, the Palo Alto, Calif., company is rolling out an addition to that service, vertical indexes designed to help businesses in the financial services, manufacturing, IT service provider and telecommunication space see how their ability to deal with change compares with those in their respective verticals.
The benchmarks were collected over the past 18 months through interviews with more than 300 customers, said Nora Denzel, senior vice president for Adaptive Enterprise at HP. It was done in conjunction with INSEAD, an international business school in Fontainebleau, France.
"Not only can we give them their index, we can also benchmark their index to those in their peer group and those in other industries," Denzel said. "It really is quite helpful for customers because if the rate of change in their company is slower than what's going on outside their companies, then they run the risk of extinction."
Through the Agility Assessment Service, HP representatives talk with customers to find out what changes are happening in their businesses, how they are responding to those changes and what is needed to improve the response. It measures the time it takes a business to respond to change, how broad the changes tend to be and how easy it is to make those changes.
The vertical indexes give businesses one more metric by which to judge their ability to handle change.
Much of what HP offers through the service the company learned from its $19 billion merger with Compaq Computer Corp. in 2002. And HP—with 140,000 employees spread over 167 countries—has learned a lot, Denzel said. In any given week, HP has to make 500,000 IT changes. For example, the company has hired as many as 5,000 people in a single day, with each new hire setting off a series of IT changes.
HP is still working out the kinks from its merger with Compaq. Click here to read more.
"Understanding how fast you can automate those IT events is understanding the heart of how fast you can respond to change," Denzel said.
And those changes are happening more quickly these days, she said. Businesses now move more slowly in reacting to change than they did before because the average business changes seven times faster than its ability to meet that change, Denzel said.
In the 1920s, the average lifespan of a company was 65 years. Now it's 23 years, she said.
"[That] tells me that those that adapt to change are more likely to survive, and those that couldn't adapt are more likely to merge with another company or actually go out of business," Denzel said.
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