Femme Fatality
A celebrity CEO takes the fall, but will it revitalize a Silicon Valley icon?
The new joke about Carly Fiorina, sacked last week as CEO of Hewlett-Packard, goes like this: After Fiorina passes on, she stands in front of a celestial judge and jury. She's a great salesperson and argues her way into heaven. But when Fiorina heads down the hall and opens the first door, all she sees are flames and demons. "There must be some mistake," she complains to an angel. "I'm supposed to go to heaven, not hell." The angel dryly responds, "Oh yeah, forgot to tell you. We merged."
It was time for a little cyberschadenfreude across the message boards and blogs as current and former employees of the once idyllic HP--many of whom lost jobs because of such controversial moves as Fiorina's merging HP with Compaq Computer in 2002--took devilish delight in her dismissal. Indeed, whatever the legacy of her 5 1/2 years at HP's helm, Fiorina has at least one notable achievement--uniting workers and Wall Street. HP shares soared 6.9 percent on news of her ouster. "Let's just say no one is too broken up about it," says Michael Blatt, portfolio manager at Chemung Canal Trust.
Not true. The editors of business magazines might be a little shaken up. As the nation's most high-profile female CEO, Fiorina frequently graced their covers. And she provided plenty of news--not just because she was a woman. In addition to the Compaq deal, there was a failed run in 2000 at buying the consulting arm of PricewaterhouseCoopers, a unit later purchased by IBM. More recently, the company began selling an HP-branded version of Apple Computer's iPod, an irksome move to some in a company where innovation is supposedly a core value.
Family feud. But it will be the Compaq deal that defines Fiorina's tenure at HP. Many Wall Street analysts questioned the $19 billion move, a bet on HP's ability to sell services as well as high-end PC s and servers to Compaq's corporate customers. And pulling it off required Fiorina--the first HP chief executive to come from outside the fabled Silicon Valley firm--to engage in a bruising proxy battle against forces led by Walter Hewlett, son of one of HP's cofounders. He viewed the merger as a distraction from the company's core printer business. To John Challenger, whose Challenger, Gray & Christmas tracks CEO turnover, "the old guard, led by the Packard family, which lost the battle on the Compaq merger three years ago, came back and won the war."
Of course, that's not the story HP is putting out. In a statement, new board chairman Patricia Dunn thanked Fiorina for her "significant leadership over the past six years." Fiorina said that while she regrets that "the board and I have differences about how to execute HP's strategy, I respect their decision." There had been hints recently that Fiorina's position at HP was deteriorating, including reports last month that board members wanted to shift some of Fiorina's day-to-day management responsibilities to others. And her departure isn't the first shake-up at HP of late. In August, three top executives were fired after HP did not meet earnings estimates.
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