Doing her best Trump "you're fired!" impersonation.
Posted on 09/16/2015 5:06:30 AM PDT by RC one
Fresh from strong debate quips, Carly Fiorina has improbably raced from 14th to fifth place in the New Hampshire Republican primary polls and now enjoys a 70% favorability rating in Iowa, ahead of such career politicians as Jeb Bush, Marco Rubio, John Kasich, Rand Paul, Chris Christie, Rick Perry, George Pataki, and Lindsay Graham.
It is time to take her candidacy seriously and examine her leadership record. Having never held elected office, she has staked her reputation on her business career.
...with a scant 5% of Fortune 500 firms employing women CEOs, her leadership of a huge global enterprise in the macho field of IT is impressive. But how did she do?
The answer in short is: Pretty badly
In 1999, a dysfunctional HP board committee, filled with its own poisoned politics, hired her with no CEO experience, nor interviews with the full board. Fired in 2005, after six years in office, several leading publications titled her one of the worst technology CEOs of all time. In fact, the stock popped 10% on the news of her firing and closed the day up 7%.
Arianna Packard, the granddaughter of HP’s founder, commented when discouraging voters from supporting Fiorina in her 2010 senatorial run, “I know a little bit about Carly Fiorina, having watched her almost destroy the company my grandfather founded.”
However, before Conservative Political Action Caucus in February, Fiorina proclaimed that under her HP command, “We would double its revenues to $90 billion, triple its rate of innovation to 11 patents a day, and go from a laggard to a leader in every product category and every market segment in which we competed.”
Sure, she doubled revenues—through a massive, ill-conceived, controversial acquisition of Compaq Computer in 2002—but Fiorina did nothing to increase profits over her five-year term, with the S&P 500 showing net income across enterprises concomitantly up 70%. Furthermore, shareholder wealth at HP was sliced 52% under her reign against the S&P, which was down only 15% in that bearish period. She modeled the old joke of “making it up in the volume.”
Fiorina rammed the Compaq deal through despite intense opposition by analysts, employees, and shareholders. When it appeared that she would lose the proxy vote, the balance was tipped back the other way using hardball tactics that would make Donald Trump wince.
In proxy voting, Deutsche Bank originally voted against the transaction with the massive HP shares it held in various fiduciary accounts—representing the interests of its investment clients. Enraged, Fiorina threatened in a recorded voicemail, “we may have to do something extraordinary” to bring Deutsche Bank over the line. In a conference call with Deutsche Bank commercial bankers eager to do business with HP, she stated “This is obviously of great importance to us as a company. It is of great importance to our ongoing relationship.”
After such coercion, Deutsche Bank’s commercial bankers intervened; apparently fearing lost business then, supposedly independent Deutsche Bank fund managers reversed their vote. This was immediately challenged in Delaware Chancery Court. The court saw the danger of such alleged vote-buying, but ultimately it allowed the deal.
In the 10 years since Fiorina’s ousting from HP, most of the acquired obsolete Compaq device businesses have been shuttered with the remainders divested this year. This Compaq “heavy metal” strategy was not even her expressed plan just months before the acquisition. Her stated goal was not to build up hardware but just the opposite, to emulate the revival of competitor IBM ramping up HP’s service revenues.
In 2000, Fiorina failed to close a deal with Pricewaterhouse Coopers consulting business worth $18 billion. A few months later, PwC happily sold the business for $3.5 billion to IBM ( IBM 1.29% ) . Interestingly, this deal was skillfully executed by IBM’s current CEO Ginni Rometty. To add to the irony, Fiorina’s doubling down into the device business took HP into the exact opposite direction of IBM. IBM was exiting this commoditized space, selling its laptops and ThinkPads to Lenovo.
The lost shareholder wealth and lost strategic direction at HP are only part of Fiorina’s legacy. Also lost during her reign were 30,000 U.S. tech jobs, the company’s revered employee morale, and the egalitarian, humble HP way culture. A new defensive, finger-pointing style of leadership led to waves of firing. Dissent was equated with disloyalty as discovered by Walter Hewlett, a board member and son of HP’s co-founder, when he questioned Fiorina’s misguided Compaq acquisition strategy and refused to be bullied into a board statement of unanimous consent, suffering legal and personal threats.
Despite such carnage, Fiorina pocketed over $100 million in compensation for her short reign—including a $65 million signing bonus and a $21 million severance. I have studied comebacks from adversity, but she’s not shown the required contrition nor earned the needed exoneration, and she’s not served as a CEO since. Upon leaving Taiwan Semiconductor’s board, the firm disclosed she only attended 17% of the board meetings. Under Meg Whitman’s brilliant leadership, HP’s character and performance have recovered, but we have not seen Fiorina’s parallel resilience just yet.
Given her record of failure, it would be more appropriate for her to run as a DIM.
However, since the GOP has morphed into DIM-lite, her running for the Republican nomination isn’t all that far-fetched.
Great quote for the Donald
Hope he uses it
Once thing is for sure, she’s fired more people than Donald Trump ever has.
<< Don’t look at her face, look at her record. >>
Ooooo. Priceless, RC! Priceless. I hope we all remember that line.
I Like the “Carly has fired way more people than Donald Trump ever did” line too. LOL
Not a Fiorina backer by any means. But I do have knowledge of HP’s problems.
Problem 1) very politicized management, absolutely no entrepreneurial thinking allowed.
Problem 2) Aging work force, it is just not hip to work there.
Combine these two you just stop organic growth as a company. That is why she probably went then M&A route.
BTW this the quoted piece fails to mention the IBM has just reinvented itself again.
There is another excellent soundbite.
She has fired tens of thousands more real people than I ever have on a reality TV show.
Or “who gets paid $100 million for getting fired”?
From Wikipedia:
On September 30, 2010, the Board of Directors of Hewlett-Packard announced the election of Apotheker as the company’s Chief Executive Officer and President, effective November 1.[12] He succeeded Cathie Lesjak, who served as the company’s interim CEO since August 6, following the abrupt departure of former CEO Mark Hurd. Hurd had been forced to resign after an internal investigation into a sexual harassment claim (that found him not guilty) uncovered expense-account irregularities.[13]
During Apotheker’s tenure at HP the stock dropped about 40%. It dropped nearly 25% on 19 August 2011, after HP announced a number of seemingly abrupt strategic decisions: to discontinue its webOS device business (mobile phones and tablet computers), to begin planning to divest its personal computer division, and to acquire British software firm Autonomy for a significant premium.[14] Over the months following Apotheker’s departure, HP eventually spun off the remaining webOS assets into a new subsidiary, Gram; backtracked on any plans to spin-off its personal computer division; and wrote-down almost $9 billion related to the Autonomy acquisition, which it indicated was due to a lack of due diligence during the acquisition process under Apotheker.[15]
On September 22, 2011, the HP Board of Directors replaced Apotheker as chief executive, effective immediately, with fellow board member and former eBay chief Meg Whitman.[16] Though Apotheker served barely ten months, he received over $13 million in compensation: a severance payment of $7.2 million, shares worth $3.56 million, and a performance bonus of $2.4 million,[17] although the company lost more than $30 billion in market capitalization during his tenure.
Also not her biggest fan by any means but there’s a lot of revisionism going on.
First, following IBM might not have been the right thing anyhow. It’s not like IBM is knocking the cover off the ball now either.
The purchase of Compaq can be rightly criticized since the move to services was more likely to be a better strategic move.
HP’s culture at the time was atrophying and Fiorina spent a lot of time working on bringing a modern competitive feel to it. HP was very patrician and they were losing out on the new technology. The note about raising the number of patents was very telling as HP had fallen into the same trap Xerox did. Xerox senior management failed to capitalize on arguably the greatest invention cycle of the computer era because senior management’s paradigm was photocopying.
HP had a similar internal feel to it and any CEO coming in from the outside would have to fight to evolve it.
In the end, she was not able to transform the company properly but she did seed the culture with the ability to start to accept outside thought and that was not a small thing then.
On balance a negative reign but the long term effects of her efforts were not zero.
Not only that, but surely people can look at the last time she ran for public office against Barbara Boxer. She was NOT a conservative then, either. I don’t understand why people are talking about what a great president she’d be. Like you, I believe she’d be a better democrat.
Doing her best Trump "you're fired!" impersonation.
“Don’t look at her face, look at her record.”
That should be some kind of slogan or bumper sticker - it’s ‘catchy’ and gets the point across.
Maybe Trump can use that or something similar going forward.
I wonder if all those people she fired got a $100 million severance package too?
yeah, we want to be talking about records tonight for sure.
In the last 15 years there have been six people listed as CEO of HP, including Carly, who served six of those. It looks to me like the problems at HP are more the fault of the Board of Directors that the CEO. But none of them are running against Trump so it doesn’t matter.
She’s the one running on her record at HP and that’s basically all she is running on so that’s basically all we have to look at which, I suspect, is why she would prefer we all look at her face.
Hence, Trump’s remarks about CEO pay last week. A small leak of his strategy?
Then we should look at her record in the context of what was going on at the company, and the entire industry. at the time.
Her record is that she has been the longest serving CEO since 1999.
Much has been made of the fact the company lost value during her tenure, which is true. This was around the time of the “Tech Bubble” bursting and most, if not all, tech companies lost value.
HP, with her as CEO, survived where some others did not.
The layoffs at HP during her time were only a small percentage of the totals across the industry.
I am not a Fiorina supporter but I do get tired of “excerpt” journalism. If someone wants to tell a story, they need to tell the whole story. otherwise it is just partisan spew.
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