I told you a couple days ago that I was working through this whole question: \u00a0why was Carly canned? \u00a0And what do the circumstances of her departure have to say with respect to her potential as a presidential candidate or even a president?<\/p>\n
This is a long post, so please bear with me as I work my way through this.<\/p>\n
It\u2019s hard to untangle the story of what happened at HP. \u00a0She has defenders everywhere and opponents everywhere, it seems. \u00a0The label \u201cimperious\u201d is applied to her so often, in article after article, that it reminds me of learning about Homer and the ancient Greeks, who used such phrases as \u201crosy fingered dawn\u201d as stock phrases in their oral storytelling tradition. \u00a0In her book, Fiorina addresses this<\/a> with the complaint that she behaved no differently than other tech CEOs but was treated differently because she was a woman and came from a sales, rather than engineering, background.<\/p>\n With respect to her opponents, there\u2019s a lot of anger, more than really makes sense to me \u2014 yes, she laid people off at HP, but there seems to be hatred reserved for her far more than any other CEO who lays off employees. \u00a0Is this anger that revealed itself when she revealed herself to be a Republican? \u00a0Was this simply because her name recognition is higher than most CEOs?<\/p>\n And yet \u2014 file this in the category of \u201codd news\u201d \u2014 one of the HP board members who voted to fire her, and even seems to have been instrumental in that decision, venture capitalist Tom Perkins, has now come out in support of her<\/a><\/strong>, via a full page ad in the New York Times, in which he publicizes his objection to a recent critical story, and says:<\/p>\n I was a member of the HP Board of Directors much of the time Carly was the CEO. I was in the room for many of the decisions she made. I can attest to the strength of Carly\u2019s leadership, the accuracy of her vision and the quality of her management. . . .<\/p>\n Carly was hired at HP because it was struggling. Revenues were down, quarterly earnings were missed, innovation lagged and growth stagnated. HP, once the leader in Silicon Valley, was clinging to the status quo and failing to embrace the new tech era. Silicon Valley companies were prospering by taking advantage of the new technologies; HP was stubbornly clinging to the past. HP needed a change agent and someone who could return the company to its glory days. Carly was the right choice. . . .<\/p>\n Critics often claim was fired at HP because she was unsuccessful. As a member of the board, I can tell you this is not true. In truth, it was the Board I was a part of that was ineffective and dysfunctional. The HP board of directors included family members of the founders. Carly worked with the hand she was dealt as best as one could. While Carly fought to save the company and the employees within, some board members fought for their own power or advancement. You see, some board members wanted to micro-manage the company, hand picking friends and allies to run divisions. This is no way to run a global company and Carly had the strength of character and courage of conviction to stand up to it and ultimately she lost her job because of it.<\/p>\n While lesser leaders would have accepted offers of transition plans and graceful resignations, Carly would have none of that. Carly demanded to be fired. In order to restore peace to the board I voted to fire her. That was a mistake.<\/p><\/blockquote>\n Which brings me to The Big Lie<\/em><\/strong>. \u00a0The book is primarily about \u201cSpygate,\u201d in which a board member leaked information to the press, and other board members and the corporate lawyer engaged an investigative firm to conduct what turned out to be an illegal investigation into the leakers. \u00a0Board members were called on to testify to Congress and were charged with, but not convicted of, criminal conduct in California.<\/p>\n Bianco\u2019s description of the events leading up to Fiorina\u2019s firing is, in this sense, more of a prologue, even though it starts on page 102 \u2014 the prior pages telling the stories of board members prior to their arrival on the board. \u00a0Bianco is by no means a supporter of Fiorina, but his tale is useful in that it gives the board\u2019s point of view throughout, so I\u2019ve attempted to read Bianco\u2019s and Fiorina\u2019s tellings of the events immediately leading up to the firing side-by-side.<\/p>\n Jay Keyworth<\/strong><\/p>\n Director George \u201cJay\u201d Keyworth, Bianco says, was originally a strong supporter of Fiorina as a \u201cchange agent\u201d even referring to Fiorina as the son Dave Packard never had; then<\/p>\n In Keyworth\u2019s view, the Compaq merger in 2002 confirmed Carly\u2019s greatness as a strategist and leader while providing the HP board with a desperately needed infusion of new talent in the person of Tom Perkins.<\/p><\/blockquote>\n (Yes, it\u2019s oddly phrased to speak as if the arrival of Perkins is somehow a crucial outcome of the Compaq acquisition.)<\/p>\n At some point (neither source says when), Perkins organized a technology committee consisting of himself, Dick Hackborn, and Jay Keyworth, and from this vantage point, Perkins aimed to increase his power, and decrease Fiorina\u2019s, as a de facto executive committee. \u00a0Fiorina\u2019s resentment of the committee\u2019s \u201cintrusiveness into what she considered the prerogatives of management probably cost Perkins his seat on the board in January 2004,\u201d per Bianco. \u00a0(Fiorina, in contrast, simply says that he had reached retirement age.)<\/p>\n At the same time as Perkins left, so too did two other board members; in the meantime, in Fiorina\u2019s telling, the board, and Fiorina herself, worked to recruit new board members but without much success. \u00a0Bianco, on the other hand, says she made only a \u201ctoken effort\u201d \u2014 and in any event, the board had decreased from 14 to 9 members, thus requiring only 5 votes to later remove her.<\/p>\n Then \u2014 here\u2019s Bianco\u2019s description of what set the firing in motion:<\/p>\n By the fall of 2004, Keyworth\u2019s admiration for Fiorina had given way to the belief that she was wrecking HP and must be removed as chair and CEO, one way or another. \u00a0Like many of his fellow directors, he had become progressively disillusioned by Carly\u2019s pursuit of celebrity. \u00a0Few CEOs have ever cultivated a high profile as relentlessly as did Fiorina, who traveled constantly, making dozens of speeches and personal appearances every month, many of which had no direct connection to the business of Hewlett-Packard. \u00a0(p. 105)<\/p><\/blockquote>\n (Fiorina addresses this \u2014 I can\u2019t find the page or the quote now, but from memory she says that she was doing no more speech-making than other CEOs, and in any case, she was promoting the HP brand.)<\/p>\n Fiorina could get away with turning Silicon Valley\u2019s largest company into The Carly Show as long as the company performed well, as indeed it did into 2004, her fifth year on the job. \u00a0HP did a good job of melding Compaq\u2019s operations into its own, a Herculean undertaking that consumed eighteen months.<\/p><\/blockquote>\n But, says Bianco, the integration hadn\u2019t produced profit growth, hadn\u2019t produced market share increases, and the stock price was doing poorly, even relative to the tech industry in general.<\/p>\n By [mid-2004], it was apparent to moth HP directors that Fiorina had neither interest in nor aptitude for the hard, unglamorous work of managing a complex company day to day.<\/p><\/blockquote>\n At the same time, Keyworth \u201cstarted spending more and more time at HP headquarters\u201d \u2014 Bianco says this was because he now headed the technology committee; Fiorina says (Tough Choices<\/em>, p. 280) it was because he had just lost his wife, and, to help him, she had allowed\/invited him to get more involved with the company \u2014 but, in a paragraph from the book that Bianco also cites, she says he offered one impractical suggestion after the next (p. 107\/280-281). \u00a0The unintended consequence? \u00a0Bianco says, \u201cunwisely if unwittingly, Fiorina made an enemy of [Keyworth.]\u201d<\/p>\n Confrontation and Resolution<\/strong><\/p>\n Keyworth began building consensus among board members \u2014 at least those who were not open Fiorina supporters \u2014 to terminate Fiorina, or at least confront her with demands to restructure and cede power. \u00a0On January 5th, Keyworth, as well as directors Hackborn and Dunn met with Fiorina, and presented their demands. \u00a0Fiorina was taken by surprise, and didn\u2019t think much of their demands (p. 286 \u2013 287) but agreed to rearrange the agenda for their off-site three-day planning meeting, which was to occur in a week. \u00a0And here Bianco and Fiorina disagree on much but are in agreement on the outcome of this meeting, broadly speaking.<\/p>\n Fiorina says (290):<\/p>\n At the end of the meeting, Lucy [Salhany] said, \u201cYou know, Carly, everyone can be wrong sometimes, and this time the Board was wrong.\u201d . . .<\/p>\n I was tired by the end of those three days. \u00a0I felt as though we\u2019d spent an enormous amount of energy on too many of the wrong things. \u00a0Nonetheless, I believed that in the end, we\u2019d had a reasoned and reasonable conversation. \u00a0The Board had heard even more detail about the operational plans that were now in place and against which their organization would execute. \u00a0The Board declared its substantial satisfaction with both the operational details and the anticipated results of these plans. . .<\/p><\/blockquote>\n Bianco says (114):<\/p>\n There was general agreement that Carly held too much power, but no consensus on the issues of how it should be redistributed and to whom. \u00a0Fiorina made no commitments, but listened, for a change, and also kept her temper in check. \u00a0Most directors came away feeling mildly encouraged that Carly would do what needed to be done to start fixing the company. \u00a0Dunn was so sure that crisis had been averted, at last for the time being, that she flew off to Bali for a vacation with her husband.<\/p><\/blockquote>\n So what happened?<\/p>\n The Leak, and Denoument<\/strong><\/p>\n On January 24, 2005, the Wall Street Journal published a front-page article, \u201cHewlett-Packard Board Considers a Reorganization<\/a>.\u201d \u00a0There was nothing particularly horrific in the article; it presents a board meeting with contention but a consensus afterwards:<\/p>\n Ms. Fiorina \u201chas tremendous abilities,\u201d one person close to the situation said. \u201cBut she shouldn\u2019t be running everything every day. She is very hands on, and that slows things down.\u201d . . .<\/p>\n But in recent months, directors have grown uneasy with H-P\u2019s uneven performance, according to the people familiar with the matter. The board\u2019s concerns, according to these people, include the mediocre performance of the PC business, which ekes out thin profits, and the perception that H-P holds weak market positions against IBM and Dell. Three H-P directors discussed these issues with Ms. Fiorina during a meeting to set the agenda of the planning sessions several weeks before they were held, these people said.<\/p>\n Under the reorganization plan discussed by the board at San Francisco\u2019s Park Hyatt Hotel, three H-P executives would gain more day-to-day control. They are Vyomesh \u201cVJ\u201d Joshi, who leads H-P\u2019s printing and personal-computing division; Ann Livermore, head of services and enterprise computing; and Shane Robison, the chief technology and strategy officer, people familiar with the matter said. One person close to the situation said Ms. Fiorina initially had resisted the moves, but by the end of the session had agreed with directors and was on good terms with them.<\/p><\/blockquote>\n This leak outraged Fiorina, and outraged the board members (except, of course, for those who were responsible for the leak, and feigning outrage), but, what\u2019s more, \u201cCarly\u2019s regally indignant reaction to the leak poisoned her relations to the board to a fatal level of toxicity\u201d (Bianco p. 119). \u00a0 Even so, Bianco says that when the board met of February 7th, in a hotel in Chicago for secrecy reasons, the majority had not reached the firm conclusion to fire her.<\/p>\n Fiorina had written a lengthy document, intended, in Fiorina\u2019s telling, anyway, to be a summary of prior conversations to ground the continuing discussion. \u00a0When she arrived at the meeting and discovered that she was there as an outsider and put on the spot, she read the document as a statement. \u00a0It was received with \u201ccomplete silence\u201d (Fiorna) or \u201cstony silence\u201d (Bianco); Fiorina was dismissed and, after three hours of discussion, which was more about trying to get the recalcitrant board members to agree to a unanimous decision than about achieving a majority, the board left, except for two who remained to give her the news.<\/p>\n