The HP Way

When Carly Fiorina became the CEO of Hewlett Packard, she came into a company steeped with great ideas (both at a cultural level and in terms of long term strategy), an amazing history and some of the most creative people in technology. Things were far from perfect, but the company generally had a strong business model, mostly well respected products and an incredibly loyal and talented workforce.

To say that Carly did not take the time to understand the strengths of her company would be an extreme understatement.

I got to meet her a couple of times and got to see her present many times, and the feeling I came away with from each interaction was the same; It’s not that her ideas were terrible (they were not), but an ability to get her subordinates to follow her direction was almost non-existent. Great leaders always spend the time to understand what it will take to make change, and this always starts with trying to understand the motivation of those that you need to change. I don’t care if you are Stalin or the Dali Lama you need a plan, either to convince or bully.

Carly did neither, she would state her idea, and just blindly assume that it was accepted. And I saw general manager after general manager blatantly ignore her, and just do what they wanted without any consequence.

This lead to massive fragmentation, with different parts of the company doing entirely different things. At the time, I thought this was weird, now I know (from decades of experience) it was the expected result of very weak leadership. I’ve seen other weak leaders since then, but none who were is such a high position.

Growing through merger and acquisition is fraught with issues. In a large percentage of M&A situations the result of one plus one is close to one. In other words the resulting merged company ends up being no bigger than the biggest of the merged parts. To me this is the definition of failure. If you merge two companies and reduce the joint workforce to the size of the previous largest part, and you lose customers and talent such that the resulting revenue is about the same as the largest of the two previous companies and your ability to do new things is about the same as the previous largest of the two companies, then you have failed.

In the case of HP and it’s Fiorina-tenured M&A strategy this is what I believe happened. Billions were wasted, and lead to increased debt that the new business has to service. Less people had jobs, customers were pissed off, and the resultant new company was far less cohesive (split cultural ideas).

In my view Carly Fiorina was a disastrous CEO for HP. I know she doesn’t see it that way, but speak with those who were there at the time, that’s exactly how it seemed to us.

So when she stands up and says she has the talent to be POTUS, and she uses HP as her one and only proof point, it doesn’t work for me.

She needs to apologize to the memory of Bill and Dave


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One Reply to “The HP Way”

  1. Sorry but I think you’re being overly polite.

    I was there in HP at the same time. The only part of Carly’s tenure that I remember was the dogged insistence on the merger with Compaq.

    Everything about it was ill-conceived from HP’s (and HP shareholders’) perspective: we were beating Compaq in the marketplace, and we only needed to keep doing what we were doing to take their market share and see off a competitor that was fast running out of money and resources.

    That the merger stratagem was flawed was bad enough, but the execution was terrible. There was a mean joke doing the rounds in Houston that the Compaq people couldn’t work out how Compaq bought HP with HP’s money.

    What happened was a ghastly clash of corporate cultures, and in my corner of HP our own, brilliant managers were quickly replaced by people from Compaq. We had been expecting the reverse: we knew their business was in trouble (we kept winning deals off them!), but they soon showed us how they had got to where they were – by corporate ladder climbing skills rather than any basic management competence.

    Their own business being in trouble, they thought they’d been given a miraculous second chance, to meddle with ours. And they did. We watched one dumb decision after another, often for what seemed like “because we can” logic, poor products replacing good ones, and so on.

    Fiorina and Capellas both made obscene amounts of money from the merger. None of the ordinary HP shareholders did, and for some, employees like me, the answer was very often redundancy.

    Bitter? Me? Of course!

    Basically she took a once-great company and almost destroyed it. I still have a small number of shares. They haven’t recovered their value.

    I’m not American and I can’t vote for your president. All I can hope is that American voters do ‘due dilligence’ and that someone better is on offer.

    Anyone really.

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