Fiorina on Management

I used to criticize Carly Fiorina, mainly because I thought the HP-Compaq merger was a bad idea. She has proven me wrong, so far, and has been very impressive as a CEO. This may explain why.

Called "the Leadership Frame" and first developed by Fiorina in late 1999, it looks like a rectangle with the edges rounded off. Along the top appears the word "strategy," and the right-hand side reads "structure and process." At the base are the words "metrics, results and rewards," and on the left it says "culture and behavior."

"A company is a system, and you have to think about a company holistically and systematically, or it won't perform at its peak," says Fiorina. "Strategy is about what you do and don't do, what your value proposition is. Structure and process, which is what most people think about, is how you organize and use business processes. Everything needs metrics; like [company co-founder] William Hewlett said, 'what gets measured is what gets done.' The culture and behavior is the software of a company, compared with the hardware of processes."

I think the part in bold is brilliant. One reason so many top managers do poorly is because they fail to understand the complexity of an organization. Decisions cannot be made in isolation, because they may have unintended effects on other parts of the business. As long as Fiorina is in charge, HP is going to be a company to watch and learn from.

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