Laurent Gillieron, Keystone/AP
Carly Fiorina addresses a plenary session during the annual meeting of the World Economic Forum in January in Davos, Switzerland. Fiorina has stepped down as chairman and chief executive of Hewlett-Packard Co.
Posted on 02/09/2005 12:09:21 PM PST by NormsRevenge
BERKELEY, Calif. (MarketWatch) -- The fact is that Hewlett-Packard before Carly Fiorina (nee Cara Carleton S. Sneed) was probably less dynamic than it is today. She managed to bring some marketing savvy to the company and managed to shake up that stodgy corporate culture known as "the H-P way."
That said, H-P slowly evolved from an engineering-centric company to one that makes many of its products offshore and has become a commodity provider too ensnared in the world of humdrum PC's when companies like IBM have bailed out of the business as Dell continues to effortlessly dominate.
While there will be a lot of analysis as to what exactly was the straw that finally broke the camel's back regarding her ouster, I think there are a few things that were contributory. First of all you should know that Carly was never really liked in Silicon Valley.
The locals generally saw her as an outsider and had a few choice names for her with negative implications. And this wasn't just about her being a woman, since many believed that Ann Livermore should have had a shot at the job. Livermore, who runs H-P's technology solutions group, was a local and knew the culture.
Carly when first hired began to immediately shake things up in the company. H-P probably needed it but it didn't make her any friends or allies. This was exacerbated during her early tenure when she decided to do TV commercials starring herself as the spokesperson representing H-P. The complaints about that were deafening.
Still, H-P was a big ship that no one person could ruin overnight, so nothing she did mattered that much in the short term. That was until 2001, when she used every resource she had to buy Compaq for around $20 billion over the objections of company director Walter Hewlett, the son of co-founder William Hewlett himself! And she threatened to quit if she didn't get her way. I'm not sure if she stomped her foot when she said she'd quit, but I imagine she at least wanted to.
The Compaq deal made H-P a PC-centric company just as the center of the PC universe was shifting from here to China.
DEC distractions
But perhaps there was more to the Compaq deal than met the eye. At the time Hewlett-Packard (HPQ: news, chart, profile) one of the top large scale server companies competing with Sun (SUNW: news, chart, profile) , IBM (IBM: news, chart, profile) and the inventors of the minicomputer Digital Equipment Corporation.
DEC was like the old H-P -- engineering driven with reputable products and questionable marketing. The founder of the company Ken Olsen once said that the only reason to advertise was so your mom could know you worked for a real company.
Along the way DEC developed one of the most formidable service organizations in the world as well as the most powerful microprocessors available for heavy-duty use, the Alpha chip.
In 1998 Compaq bought DEC for $9.6 billion. By buying Compaq, so Fiorina's argument went, H-P would get hold of one of its major competitors, DEC. This would include the Alpha chip team.
But what a difference three years of Compaq management had meant. Essentially DEC was ruined by the time H-P came around. Over time H-P would lose what little talent was left at DEC merger and the fabulous Alpha chip would go into hibernation as H-P chose to stick with the over-hyped Intel Itanium architecture for its new servers.
Ink wars
Then the cash cow or what the company began to call the "crown jewels" came under attack. This is the H-P printer business. The real money here is the ink game. Cheap printers use expensive ink.
After the merger with Compaq, Dell began to look askance at the motives of H-P. Until then Dell had been a reseller of the H-P printer line. In 2002 Dell said it was going to brand its own printers. Then in July 2002 H-P cancelled its reseller agreement with Dell and in September 2002 Dell did a deal with Lexmark. Since then Dell has been low-balling its printers and is expected to start giving the printers away with machines as the profits from the ink business are blooming. This is lost revenue for H-P and I believe that this -- the unintended consequence of the Compaq merger -- is largely what got Carly fired. But I also think they were gunning for her.
Since the publication of the damning Peter Burrows book, "Backfire," in 2003 when Carly was taken to task by a company insider her days were numbered. This is not a flattering book and it re-emphasized the message to the shareholders that they all got screwed by dilution from the Compaq merger. Shareholders hate that and complain incessantly.
While the company's shares rose on Wednesday's announcement the fact is that H-P needs fixing more than ever. Meanwhile, Carly will walk away a rich woman.
Now she will have more time to spend fixing California.. seeing as she did such a bang-up job and had 'her way' at HP.
Well, amazing how things turn out!
Now if we can get the Shareholders at CNN disturbed, we could see some good things happen there.
I've seen some of this craziness up close and personal, and I have to ask if the biggest corporate troublemakers aren't liberals who refuse to place reality over their desire to see the world as they want it. In my own experience, it has been liberal dems who elevated their personal whims way above the dictates of common business sense.
Someone we know who works there said it was like working for a rock star because she was never actually there and there was no sense that she was even involved with the company. She was always busy traveling around giving speeches.
The only reason for buying Compaq should have been to move HP's PC division out of California to Houston. There's no way HP can compete in the low margin PC business by operating in California. Housing prices are much more reasonable in Houston.
The Peter principle.
When I saw Spock whip out his tricorder, I assumed it carried the H-P logo.
Now they're just another PC company, as far as I'm concerned. I'm sure Carly thinks she did a great job and was treated unfairly by mean nasty men.
Maybe Walmart will buy them.
(steely)
Dvorak bump.
Funny thing, I've been saying for the past several years that I wished Carly Fiorina could be forced to spend 30 days trying to run a small business using H-P pile of c*** printers. Dell is one smart company.
Compaq - HP's greatest mistake.
A subject dear to my heart. Have you ever noticed that the people LEAST effective in managing others always seem to go to the top? They are inevitably the ones who rant and rave and get great SHORT TERM results, but are miserable for the long haul. They ride into a company like a gunslinger, shake things ups and leave a mess behind when they ride out, much richer for themselves only, of course. It hasn't changed one bit since I entered the business world many years ago.
HP used to be too. I worked for them when Bill and Dave were still there and cooked burgers and the company picnics. It sure has changed.
Carly Fiorina addresses a plenary session during the annual meeting of the World Economic Forum in January in Davos, Switzerland. Fiorina has stepped down as chairman and chief executive of Hewlett-Packard Co.
http://www.mercurynews.com/mld/mercurynews/business/10855541.htm
Fiorina steps down as Hewlett-Packard CEO
STRATEGIC DIFFERENCES WITH BOARD CITED
By Vindu Goel
Mercury News
(EXCERPT)
Hewlett-Packard announced early Wednesday that Carly Fiorina has stepped down as chairman and chief executive after nearly six years at the helm of the Palo Alto computer giant.
In a statement, Fiorina suggested that her departure wasn't voluntary: ``While I regret the board and I have differences about how to execute HP's strategy, I respect their decision,'' she said. ``HP is a great company and I wish all the people of HP much success in the future.''
HP's board said that Chief Financial Officer Bob Wayman, will become acting CEO while the Palo Alto company searches for a successor. Board member Patricia Dunn will become non-executive chairman.
Wall Street cheered the news, with HP's stock up more than 10 percent in early trading.
I don't know about that. Dell doesn't wait. I ordered a new computer at 11 Monday night and it was at my door by seven on Thursday night.
she could care less. she has walked off with bags of money, and that's the goal. the "me generation" has risen into the ranks of corporate leadership in the US, they are looting these once great american companies and filling their own pockets.
I owned an overpriced HP printer that never worked reliably despite being replaced twice by HP. I swore I would never own another ever.
Got a Brother multi function printer that works flawlessly and is, by comparison, fairly good with stretching the ink.
I have had HP printers for years, currently own an Office Jet (g85). Never had a problem with any of them.
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