SAN FRANCISCO, July 13 (Reuters) - Two years into his role as leader of Hewlett-Packard Co. (HPQ.N: Quote, Profile, Research), Chief Executive Mark Hurd says the the world's biggest computer company has improved but has a very long way to go.
"I would give us a good grade on improvement. I think we are better incrementally. I think we are still poor absolutely," Hurd said in an on-stage interview at Fortune Magazine's annual technology conference in San Francisco.
Hurd joined Palo Alto, California-based Hewlett-Packard a little over two years ago from a smaller computer rival, NCR Corp. (NCR.N: Quote, Profile, Research), and has seen a sharp revival in the company's stock price built on solid market-share gains.
"We are doing better. We are not doing great," Hurd said. "On an absolute basis, we have a ton to do.

Hurd said HP's long-term sales outlook remained one of modest growth. Recent better-than-expected revenue growth of about 13 percent, aided by 3 percentage points of favorable currency exchange rates, was not sustainable, he said.

"Think of us as a 4 to 6 percent growth company," Hurd said. Acquisitions, when they occur, will remain "smallish (and) non-transformational" -- in other words, no mega-deals.

In an interview with Fortune writer Adam Lashinsky, Hurd said HP is focused on expanding the number of global 2000 companies it approaches with focused sales teams. He also said HP must do a better job of commercializing its innovations.

"The theory has been: 'Invent great stuff and customers will find it,'" he said of HP research and development labs.

"What I have tried to preach to the company is that if we actually try to sell (our innovations) we will actually do better," he quipped.

HURD INHERITED A 'TOXIC BOARD'
The interviewer pressed Hurd to say, in hindsight, how much credit he himself deserved for HP's turnaround over the past year or two and how much it was tied to changes put in place by his controversial predecessor, Carly Fiorina.

Hurd dodged the question. "I don't really think much about that. You should give all the credit to the people who work at HP -- not the CEOs, either one," he replied.

"The view that the company was in horrible shape at the time was probably overdone," Hurd said. "I think the company has just been more focused."

Hurd was asked what lessons he had learned from the board scandal that seized HP a year ago, leading to the resignation of chairwoman Patricia Dunn, the firing of several key executives and government hearings on corporate spying

"There were individuals involved in this at the board level that were great as individuals," Hurd said, pausing, before adding: "As a board, they were toxic."

He lamented: "It was a very, very personal issue among the board members. It was one of those things that didn't have much to do with the strategy of the company."

Hurd was referring to a series of conflicts that built up under Fiorina among a clique of Silicon Valley leaders and a second group of board members drawn from executives of major companies.

Legendary Silicon Valley venture capitalist Tom Perkins led the first group, while Fiorina, and later Dunn, were closer to the corporate executive grouping, according to many analysts.

The boardroom battles led to the firing of Fiorina in 2005. A second imbroglio over press leaks led to a series of resignations of board members in 2006, which in turn presaged the "pretexting" scandal over spying on local journalists.