The media didn’t like her. Employees didn’t like her. Wall Street didn’t like her. But she’s back.
Carly Fiorina, one of corporate America’s most powerful women, is reinventing herself. In 1999, Fiorina ditched her successful sales and marketing career at AT&T and Lucent Technologies to become CEO of Hewlett Packard. In 2002, she spearheaded what was at the time the biggest IT merger in the nation by acquiring Compaq Computer. Three tumultuous years later, the Board of Directors booted her–with a cool $21 million in severance.
Since then, Fiorina has capitalized off her controversial image by writing a book and becoming involved in conservative politics. Recently, John McCain took her under his wing as campaign chairman. Fiorina’s charisma, history as a power woman, and–let’s face it–Hillary-esque pantsuits and cropped blond hairdo–are supposed to endow her to legions of female swing voters.
Still, her tarnished reputation from HP remains. History has seen to it that Fiorina’s controversial personality and business moves left a stronger aftertaste than her considerable strengths. (Fiorina’s strategy may have provided more long-term benefit than people anticipated. HP eventually did see some good quarters after merging with Compaq.)
So what combination of traits made Carly Fiorina so undesirable to the media, her employees, stockholders, and Wall Street? Why do people hate her?
10. She didn’t take the time to build trust.
Strong-arm tactics work well in certain situations, but good leaders need legitimacy to back them up. One major way leaders achieve legitimacy is by gaining the trust of their employees. Fiorina came in with a mandate of change, but didn’t make any effort to build trust between herself and the company. Indeed, she sullied her image by exalting herself without regard to her employees’ reactions.
Buying a personal jet in front of a distrustful and alienated workforce is one example. Freezing employee salaries while giving herself and her executive ilk bonuses is another. Doing these things in light of nearly 18,000 employee dismissals (2003) is just plain callous.
9. She didn’t provide numbers to back up her promises.
She promised better shareholder returns and increased profits, but in execution, Fiorina’s $19 billion Compaq acquisition looked disastrous. In the short term, millions of stakeholders lost equity. Fiorina lacked numbers to back up her choice, and lacked legitimacy to make people believe she’d done the right thing for the company’s long-run future. (The company pulled off record computer sales years after Fiorina left.)
The company didn’t collapse. In fact, HP managed to double its sales in the period between 2000 and 2005. However, most of the increase was due to its pre-existing printing business (think replacement ink cartridges), which accounted for nearly 80% of operating profits in the first quarter of 2005.
8. She favored market dogma over innovation.
In IT, that’s a death knell. Though reports indicate she continued to support HP’s talented R&D staff, she tried to engineer HP’s expansion into an aging PC market rather than new avenues. She had people capable of creating flagship products–Apple’s iPod comes to mind–but didn’t harness their capabilities. This move may have cost the company incalculable opportunities.
7. During her time in office, she didn’t successfully implement her own vision.
Fiorina came in with a self-discovered mandate to shake up what she saw as a stale company and stake out territory for a bigger, more diverse HP. Changing the company slogan to “invent” is an example of one of her refurbishing tactics.
The problem is that she never managed to execute her own plans. She shook the company up, but never settled it down afterwards. She expanded HP’s product line, but never delivered the financial results to back up her decision. She had a sweet slogan, but, as tech reporter Larry Magid puts it, “whatever inventions HP came up with simply were not inspiring enough to change the company’s fate.”
6. She failed to preserve HP’s key cultural assets.
On her website biography, Fiorina claims that “The HP Way was being used as a shield against change.” Surely a possibility at the time. Still, the HP Way had many benefits, not the least of which was a capacity to empower its own employees. By implementing a top-down management structure that hobbled employees’ abilities to communicate effectively with managers, Fiorina threw out one of the company’s biggest assets without considering its worth–the old baby with the bathwater maxim.