Fiorina’s rise, fall shaped by traits

Fiorina’s rise, fall shaped by traits

BY GEORGE ANDERS THE WALL STREET JOURNAL

Posted on Sunday, February 13, 2005

URL: http://www.nwanews.com/story/adg/107852

PALO ALTO, Calif. — Unshakable. Self-reliant. Comfortable in the spotlight. Fond of the dramatic gesture. Impervious to criticism. Passionate about the big picture. The kind of person who bounds from project to project, embracing change as a way of life.

Those traits helped Carly Fiorina win the top job at Hewlett-Packard Co. in 1999, an unexpected outsider brought in to run one of Silicon Valley’s oldest and most traditional companies. Now, with her sudden ouster from Hewlett-Packard last week at age 50, her traits are sure to be seen as flaws as well.

Plenty of business issues shaped Fiorina’s rise and fall. After the tech boom ended, shareholders blamed her for the sagging stock price. Longtime employees faulted her for upending the company’s paternalistic culture, known as "The HP Way." Industry analysts chided her for failing to mend Hewlett-Packard’s sluggish computer businesses, even after she pushed through a $19 billion merger with onetime archrival Compaq Computer Corp.

Yet she became front-page news — and a frequent cover story for business magazines — not so much because people cared about server-industry market shares, but because she epitomized an alluring new breed of chief executive officers who combine grand visions with charismatic but self-centered and demanding styles. Psychologist Michael Maccoby called some of them "productive narcissists" in a recent book, arguing that in the right settings, they can accomplish great things. In the wrong environments, he wrote, such leaders fail. Among his examples were America Online Inc. ’s Steve Case and Apple Computer Inc. ’s Steve Jobs. Fiorina was different, of course. Many people called her the most powerful woman in corporate America. But she always said that leadership skills aren’t linked to a person’s sex and asked to be judged on her performance. Last week, Fiorina finally lost her most crucial ally, the Hewlett-Packard board.

1 Directors had bet heavily 5/2 years ago that she, an outsider from Lucent Technologies Inc., would be the dynamic cure for Hewlett-Packard’s stodginess at the time. When criticism of her performance flared in 2001 and 2002, during the height of a shareholder proxy fight over the Compaq acquisition, directors publicly declared that Fiorina was on the right track. This time, they decided she had to go.

Fiorina didn’t return calls and e-mails seeking an interview. At her home in the Silicon Valley foothills, two security guards in sunglasses stood outside the gate to intercept visitors on Wednesday, the day her departure was announced. Before her ouster, she had been scheduled to attend a meeting at the White House with members of the Business Roundtable.

People who have known Fiorina for years say that her spunk and go-it-alone grittiness can be traced back to her teenage years. Her father is a legal scholar and federal judge. During the late 1960s and early 1970s, he moved his family constantly, setting down briefly in California, North Carolina, London and Ghana as he pursued various legal projects. His three children had to make new friends, abandon them, then start over, again and again. "I was always landing in a whole new place," Fiorina recalled in an interview several years ago. "Moving my senior year was really hard. It’s a time of stability for most people. But you learn to be pretty selfreliant. It didn’t scare me any more."

Fiorina ended up in business by a roundabout journey. She majored in medieval history at Stanford University and briefly attended law school before dropping out and later earning master’s degrees in business. She was a rising star at Lucent in the 1990s and impressed people who watched her in boardroom settings with her decisiveness and her crisp presentational skills. But she lacked a technical background, and critics sometimes accused her of valuing boldness over precision or follow-through.

When Hewlett-Packard began a nationwide search for a new chief executive officer in 1999, Fiorina rocketed to the top of the candidates list. She was 44 at the time, and her vitality seemed to directors to be what was needed to speed up the company’s way of doing things. Of all the finalists in the search, she spoke most respectfully of the civic-minded values championed by Hewlett-Packard’s founders, David Packard and William Hewlett.

But once she got the job, Fiorina’s efforts to fit in with the HP Way hit some bumps. Soon after she arrived, an ad campaign featured her standing before what was portrayed as the one-car suburban garage where the company was founded in the 1930s. In fact, it was an ersatz garage erected on Hewlett-Packard property; camera crews couldn’t gain access to the real thing.

Fiorina aggressively reorganized Hewlett-Packard’s business units in her first year, then dismantled some of those changes when they created unexpected snags. She was forced to lay off 6,000 employees, about 7 percent of the work force, in 2001, as the economy stalled. It was Hewlett-Packard’s largest layoff ever and deeply jolted morale.

When she proposed the Compaq merger in September 2001, Hewlett-Packard’s stock stumbled badly at first. Powerful shareholders, led by Walter Hewlett, a co-founder’s son, waged a proxy battle to try to stop the deal.

Fiorina narrowly prevailed in a shareholder vote in March 2002, in part by portraying the merger as something that would help Hewlett-Packard achieve greatness. But close confidantes at the time say the merger battle took a toll on her. She became more brittle in confrontational settings, seldom giving ground, staying focused on facts, but doing little to warm her audiences.

With the merger falling short of expectations, Fiorina has repeatedly been on the defensive. Over time, that has grated on some Hewlett-Packard managers, causing them to jump ship and join competitors. Fiorina has said that she doesn’t believe Hewlett-Packard lost many valuable executives in the process.

Fiorina’s future is undecided. She has enjoyed good working relations with both President Bush and California Gov. Arnold Schwarzenegger, leading to periodic questions about the possibility of political ambitions. In prior interviews, Fiorina has generally demurred, saying: "I’ve never thought about the next job. Never."