Fiorina takes credit for laying foundation of HP’s current success
Former Hewlett-Packard chief executive Carly Fiorina was the subject of a New York Times profile last week focused on her role in John McCain’s campaign for president. She is officially chairwoman of the Republican National Committee’s “”Victory ’08” committee
dedicated to McCain’s election.
“Three years ago, Carleton S. Fiorina was the celebrity C.E.O. who was spectacularly fired by the Hewlett-Packard board,” began the piece, by Elisabeth Bumiller. “She produced a best-selling memoir, ‘Tough Choices,’ but for the most part spent the years after her ouster in relative self-imposed exile from public life.”
Inevitably, her success, or lack thereof, at HP was discussed. Bumiller cites concerns from
some unnamed Republicans that “it is hard to see why a woman widely criticized for
mismanaging one of Silicon Valley’s legendary companies is advising and representing a
candidate who acknowledged last year that he did not understand the economy as well as he
should.”
Fiorina’s response is typically sure-fired. “Well, see, the good news about business is,
results count,” Fiorina told Bumiller from her office at Republican National Committee
headquarters on Capitol Hill. “And the results have been very clear. The results have been
crystal clear. From the day I was fired, every quarter, even before they had a new C.E.O., has
been record after record. That doesn’t happen unless the foundation’s been built.”
Given our location in a part of the business world built largely upon the shoulders of William Hewlett and David Packard, we figured some folks out around here might have thoughts on the topic.
So, did Fiorina lay the foundation for the resurgence at HP?
12 comments
SM
The correct spelling for laid is as such. Not “layed”
Proofreaders?
Jun 10, 2008
Jack Davis
Dear SM — you ARE my proofreader, I’m afraid. Thanks you for the feedback. You’ll be happy to know I re-wrote the headline on this item.
Jun 10, 2008
billythekid
I think it’s hard to dispute that Carly laid the foundation for HP’s current success. She bucked much of the conventional wisdom with the Compaq acquisition as people said she was crazy to “double down” on the p.c. business. But it’s been exactly that p.c. business that has helped fuel HP’s run. The real question is whether the company would have realized this success had Carly stayed on for the execution of the plan. Personally, I think it took someone like Mark Hurd to execute her vision, but you can’t discount her accomplishments.
Jun 10, 2008
Peter
Yes, no doubt about it. I was there (at HP) and without Carly the company would not be where it is today.
Jun 10, 2008
Dan M
Fiorina got her job because she was a great saleswoman, and it’s appropriate that she’s trying to sell revision now. It took 4 years to restore the $20 billion of shareholder value that she destroyed in a -single day- by buying Compaq at a price that didn’t make any sense. Sure, the PC business is good now…but HP could have either bought Compaq later for an awful lot cheaper or created the growth themselves if she was moderately competent. She wanted a giant company for a giant paycheck. She lost, but I guess the paycheck came in the book and her ego.
Jun 10, 2008
WasatHP
Hurd and Fiona are both successful because they have big egos, put a good spin on all situations, and believe they make all the difference. Hurd is unlikely to admit it, but the HP/Compaq merger helped create the HP that is successful today. It would not be HP’s fortune without the merger, and who knows what would have happened to Compaq. Fiona was smart, but she was challenged by the old HP blood that didn’t like change, and her press relations were not strong, esp in the US. She paid the price. Or should I say, she got paid the price. I should be so lucky to get paid out so much to retire and get into politics as an interest!
Jun 11, 2008
ReignForrest
I completely disagree with the first two posters. Carly knew nothing about HP’s business, nor the culture which allowed it to foster. She took the standard path of upstart CEOs to ensure themselves a golden parachute when their incompetence would show up — (i) instituting lay-offs claiming bloat and a need for downsizing and (ii) acquiring another company to show action and to delay the financial results that can prove leadership. After leading HP into a tailspin for two years, she chose to acquire wholly unsynergistic Compaq. When that didn’t improve the bottom line (And why would it?) she was fired, but packed off with the usual overgenerous enriching that is the wont of American business practice.
Her fluffy speeches reflected her complete ignorance about technology. She was arrogant and had a sense of entitlement which made her fly around in her own exclusive jet (something even HP’s legendary founders didn’t do). And, in a particularly telling nose-thumbing, she even had a couple of beautiful old trees cut down to land her plane.
There must be SOME smart people among the Republicans. Rove, Cheney, Rice, for all their misguided evil, at least appear to be smart. Ms Fiorina, on the other hand, appears to be in the mold, instead, of Reagan, Quayle, Bush (W), et al.
Jun 11, 2008
Tim
Fiorina was a visionary… I’ll give her that. She layed the foundation, but lacked the managerial leadership to build the structure. Her tenure at HP caused internal divisions, degraded employee loyalty, and caused many employees to question, “Where did the HP Way go?” It’s no wonder that the stock floundered under her “leadership”. I don’t think it’s a question of if she’d stayed, whether the merger would have born fruit. Rather, her departue enabled HP to realize the potential of this deal.
Jun 11, 2008
Sacto
If one looks at HP’s stock price when this self-absorbed maniac joined HP, it’ll be at roughly $112/share post split. Today it’s trading at $46 and some change. So, in roughly 8 years, HP stock hasn’t gone to it’s value when this evil one joined HP. Is that success? Additionally, she was universally-hated by the majority of HP employees due to her uncaring disregard for HP employees and her disdain for the “HP Way”. This woman is a great spinner and public speaker but the only thing Carly is interested in is increasing Carly’s power. She used her medieval history degree on HP with various forms of torture. Now she wants to do the same with the U.S.
Jun 11, 2008
Harry
A sampling of the great decisions and actions taken by Carly Fiorina in her effort to destroy HP
The primary motivation for the Compaq acquisition was for Carly to renegotiate her contract with the HP board as it was about to expire. She did. Michael Cappellas (who was touted as the long awaited operations manager) left less than 6 months later with $25M. Carly was given the boot with a $46M package (when you account for all of the vested options) after many dismal quarters and the board waking up from a bad dream. Her renegotiation of her contract worked!
Back to Carly’s record:
Failed bid to acquire Price Waterhouse for $18B (no due diligence here)
http://news.cnet.com/HP-mulls-18-billion-bid-for-PricewaterhouseCoopers-arm/2100-1017_3-245530.html
IBM picked them up for $3.5B (less than 2 years later)
http://news.cnet.com/IBM-grabs-consulting-giant-for-3.5-billion/2100-1001_3-947283.html
Finally, in a desperation move after many dismal quarters and in typical knee jerk fashion she decided to move the PC business into the printing business
http://news.cnet.com/HP-combines-printer,-PC-units/2100-1003_3-5536391.html
Mark Hurd’s 1st order of business upon arrival was undoing (what he could) the major blunders of the Carly era by freeing up the PC business as a stand alone organization which facilitated the success of where it is today. The printing empire is still suffering the effects of absorbing and funding the $25B Compaq acquisition.
Is this the person we want as the top economic advisor to the President of the United States? I think not!
McCain get with the program and get her off of your advisory council ASAP!
Jun 11, 2008
Peter
@Harry
Capellas was a disaster, didn’t leave HP a a day too early.
The merger of the the PC and printer business was not a decision made by Carly, it was forced by the HP board.
Carly deserves a lot more credit than she get’s and one of the smartest moves made by the McCain camp is to have her onboard. And if somebody can get HP on track, then there’s a good chance that, that somebody can do the same for America.
Jun 11, 2008
Josh Smith
Fiorina was, unfortunately, destroying the morale at HP.
Look what she did with the HP-Cisco alliance (btw she was sitting on Cisco’s board as well): HP sales people were awarded for selling Cisco products, but Cisco’s ones were not. They were earning great bonuses while their own company’s, HP’s, sales adverently or inadverteantly, were going down. She essentially made HP a sales office for Cisco products. Innovation got a huge dent at HP.
That has changed with Mark Hurd’s arrival who stopped the absurd practice and revived ProCurve technologies which enabled HP to become a No.2 player in networking business, and chipping away the market share – now 7% vs Cisco’s 70%. Cisco’s used to be 90% at one point.
Apr 23, 2009