HP, thinking that they would love to get into the mobile space themselves, saw an opportunity to buy their way in by acquiring Palm and essentially slapping an HP logo on the back of the Palms products. While this all seemed like a great idea for both companies, it is apparent that the executive leadership of both Palm and HP failed to remember the importance of the 7S model that they should have learned in their strategy class in college.
By throwing the people from Palm in the HP world, the 7S model became totally misaligned. Perhaps the two biggest misalignments invovled structure, and style.
HP is notorious for their quirky "cube culture". When it comes to style, HP and Palm couldn't have been more different. Palm, led by former Apple executive Jon Rubenstien, had adopted Apples style of creativity and focus on product development. Palm had long earned a reputation as a thought leader and creative product innovator. HP, on the other hand, specializes more in acquiring innovation from others and re-branding. When the two came together, something had to give. As a result, many of the Palm executives jumped ship.
As mentioned earlier, the strategies of the two companies were very different, Palm's strategy had been to continuously lead the market in innovation, while HP's strategy has long been to invest in other people's innovation and sit back and reap the rewards. When HP bought Palm, they tried to deviate from their own tried and true strategy and found out that things get tough when you leave your comfort zone.
As a result of the misaligned style and strategy of these two companies, the acquisition of Palm by HP was an epic failure. It took almost a year for HP to even put a product to market and once it did, it completely pulled the blog a few weeks later. The Palm brand is completely dead, the talent that HP acquired has nearly all left for other jobs, and now HP can't even sell off the Palm division that only a year ago they spent billions of dollars for.
