Wednesday, February 09, 2005


Woke up to the news this morning that Carly Fiorina had been sacked as CEO of Hewlett-Packard. Seems there are not many damp eyes in the corporate corridors of power, including my family. Several cousins of mine were vehemently opposed to the HP-Compaq merger, and never quite did forgive Carly for not following through with the finanical rewards it was supposed to have accrued to the company. Daniel Gross at Slate provides a more detailed background to the Fiorina denouement:

For Fiorina, a marketing whiz at Lucent in the go-go 1990s, the CEO job was all about sales—selling employees on the merger with Compaq, customers on the products, investors on the stock, the board on her strategy, and the media on her. (Adam Lashinsky's 2002 Fortune article nicely captures her style.) But the controversial Compaq merger, which lashed HP's highly profitable printing business more tightly to a commodity PC business, didn't produce the synergies and higher profits she promised.

Over time, the gap between her polished rhetoric and the mediocre results grew wider. In July 2004, as Carol Loomis wrote in an excellent Fortune takeout, Fiorina gave a "totally upbeat speech at Allen & Co.'s big Sun Valley conference." A few weeks later, the company announced yet another disappointing quarter. While audiences of media moguls lapped up her speeches, the audiences that mattered most weren't buying what she was selling. The stock bumped along. Fiorina and her team didn't believe their own spiel, to judge by their actions. This record of insider transactions suggests that in the last two years instances in which directors or top executives dug into their own pockets to make even symbolic purchases of shares in the open market were few and far between.

Perhaps insiders and professional investors sensed that Fiorina was distracted. CEOs justify the money, resources, and time spent going to Davos, serving on corporate boards and chairing presidential commissions as ways to schmooze customers, network, and plant the corporate flag. But really, they're more about building a personal brand than a corporate brand. Fiorina's globe-trotting may have sent not-so-subtle messages to investors and her board that her heart wasn't in HP.

1 comment:

Anonymous said...

What Mr. Skilling and Ms. F have in common is their indifference to the substance of their businesses. They are all "message." They despise their employees, their shareholders, and their customers; they have little interest in the products their companies sell; but they love themselves and the trappings and power of their rank.