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The Fall of Carly Fiorina, by Kate Harrad
In issue 3 of The Column we reviewed Perfect Enough, a biography of Carly Fiorina, who was then chief executive of Hewlett-Packard. In the last month she has been ousted from her role, amid reams of journalistic speculation. So what happened?
Fiorina joined HP in 1999, and in late 2000 the Financial Times was describing her as a “savvy and dynamic leader”. She had clearly been hired to shake up HP’s company culture in order to make it more competitive within the market – a feat she had already achieved at Lucent. And indeed the strategies she introduced have been retained by HP after her resignation: "Carly Fiorina…had a strategic vision and put in place a plan that has given HP the capabilities to compete and win," said Patricia C. Dunn, on behalf of the board, in February 2005.
Why, then was Fiorina forced out? Perhaps it was partly a case of a chief executive falling on her sword for the sake of the company: HP’s share price dropped by more than half during her tenure, which surely cannot be blamed on her alone but which was ultimately her responsibility.
What was very much her failure, though, was the Compaq acquisition. It was a failure in two senses: it is now clear that the merger has not been much of a success for HP financially; and in the process of pushing it through, Fiorina alienated a significant number of people at all levels, from founder’s son Walter Hewlett to the thousands of employees who were laid off as a result of the merger. Before Fiorina’s accession, HP was known as a company that very rarely made job cuts. It was paternal, if not paternalistic; employees stayed there for decades. Perhaps Fiorina’s slim-lining was necessary for the company to become modern and competitive, perhaps not; in any case, it changed the culture. So did her behaviour in becoming a celebrity executive, and an increasingly hard-nosed one.
Did the fact that she was a woman make the situation worse for her? It is impossible to be sure; certainly she was one of very few female CEOs. The HP culture was not macho, but it was a ‘family’ culture and thus required a parent to guide it forwards. Fiorina does not seem to have been very parental – either in a paternal or a maternal sense – as far as running the company went. And she failed to guard its reputation – HP was known for the longevity, reliability and quality of its products, and any undermining of that would be very damaging to the company.
Yet she had been employed to change HP, and she did. It was a gamble that lost, but the gamble was made more by the HP board than by Fiorina herself. Perhaps nobody could have won it. John Kay in the FT (15 Feb 2005) argues that “the range of abilities successful companies require must be sought across a team rather than in a single personality.” It is entirely possible that the HP board simply asked more of Fiorina than anyone alone could have delivered.