Carly Fiorina

Because I’m a CEO, people seem to think I have some sort of deep wisdom related to HP CEO Carly Fiorina being fired. So they keep asking me about it.

First of all, I’d like to point out that it’s highly unusual for people to even know or care if a CEO is fired. If Lee Raymond were fired, people wouldn’t be asking me what I think about it, they’d be asking “who’s Lee Raymond?” In fact, Lee Raymond is the CEO of Exxon Mobil, which based on profits is the biggest U.S. company. Lee Raymond is a name that everyone should know, but they don’t.

Carly Fiorina belongs to a very short list of CEOs who are household names. Maybe only Jack Welch, Michael Eisner, and Bill Gates have better name recognition. I have to wonder if the self-promotion required to become so well known took time away from her more important job of running HP?

The obvious reason she was fired is because she gambled on a big merger between HP and Compaq, and lost. The combined company experienced a predictable clash of cultures and failed to realize any synergies. She championed the merger, it didn’t work, she got fired.

Carly surely knew that most big mergers fail, yet she pursued that course anyway. I think the HP Compaq merger was especially prone to failure given HP’s unique corporate culture.

In my opinion, Carly’s really big failing was in not having a COO. Having a COO you can trust is extremely important to being an effective CEO. The COO allows the CEO to focus on more important external issues such as selling your company to customers and investors while the COO focuses on operations.

A good COO would be doubly important to Carly because she was clearly extremely externally focused—how else could she become so famous? And Carly came from outside of HP’s industry, and she is also reported to have had a weak operations background, making it that much more important that she have a COO from within the industry with a strong background in operations. But Carly apparently had too much ego to share even part of the glory with a COO.

(I thought I had written before about the importance to the CEO of having a good COO that you can trust and rely upon. I run a much smaller company than HP, but nevertheless I know I wouldn’t be as effective without my COO. I looked through my blog and see that the COO post isn’t there—that must have been the post that was eaten by my computer.)

Comments

[xxxxx]

"I have to wonder if the self-promotion required to become so well known took time away from her more important job of running HP"?

You gotta love the transperancy!

[Stuart Berman]

Rich Karlgaard had an opinion piece in yesterday's WSJ where he outlined Carly's seven deadly sins. He brings up similar points. He also offers that she acted like a rock star without being in the postion to do so (something he reserves for company founders such as Gates, Dell and Martha Stewart).

As a corporate employee, small time (IRA) stockholder and avid reader of WSJ, I took more notice of Carly when she got into the public proxy fight with Walter Hewlett. As an outsider I found Hewlett's position articulate and believable. I found Fiorina's position unconvincing and based on an ego or power play. It became obvious that she was going to win the battle and lose the war which for the sake of employees and shareholders is irresponsible. The same scenario seems to be playing out with Disney and Eisner.

But these stories are the anomaly - I have a lot of respect for the majority of CEOs and others who dedicate themselves to the success of companies with hard work and ethical behaviour. Too many seem more impressed by personality than by results. As a shareholder I wish that I could see reports that showed the integrity of corporate leaders, their honest vision for the company and an accurate assessment of the corporate culture.

[James C. Hess]

There is more to the HP matter with Carly Fiorina at the helm than just the failed merger between HP and Compaq. For example, she managed to load the Board of Directors with yes-men and they managed, albeit temporarily, to pull the rug out from under Walter Hewlett and his supporters, by following the belief HP could be more than it was: Test and Measurement. Carly wanted to turn HP into something resembling Microsoft or Apple, which meant generational technology: Software, instead of the tried-and-true hardware. Obviously that didn't work and now she is gone.

But at what price? How many people had to lose their jobs because she was in charge, with her myopic Liberal nonsense?

I like to believe Mr. Hewlett managed to save the actual and original HP by spinning off the TMO portion of the company into Agilent Technologies, and at some point that portion of HP will be returned to the name HP.