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Fallen Star: Carly
E S O P E W Fiorina
C SN W S N
E B S
Feb 10, 2005 12:00 AM EDT

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Hewlett-Packard Co. appointed an interim chief executive Thursday to

Share replace Carly Fiorina, who was ousted Wednesday amid differences
with the computer company's board. A report on Fiorina's rise and fall.

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SPENCER MICHELS:
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As the most visible and powerful woman in American business, PBS iPhone App
Carly Fiorina, the CEO, president and chair of Hewlett-Packard,
PBS iPad App
was a Silicon Valley superstar whose luster carried all the way to
Wall Street, and some people thought perhaps even beyond. YouTube

Facebook

PETER BURROWS:

There were a lot of people who thought this woman could be

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At BusinessWeek Magazine, computer editor Peter Burrows

followed her career and wrote a book about her. He says at first
her prospects were unlimited.

PETER BURROWS:

Seriously, you know, and I've heard — I've talked to people in the
PR, public relations community, who say they were told "come to
HP, you'll end up in Washington."

SPENCER MICHELS:

Those prospects dimmed considerably when the HP board ousted

her yesterday after nearly six years on the job, citing strategic
differences. A graduate of Stanford in medieval studies, with
additional degrees elsewhere in business, Fiorina rose through Trending Now
the ranks at AT&T and then Lucent Technology before being hired

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in Silicon Valley, the 11th largest American corporation with
revenue last year of $80 billion. It was founded in 1939, in a garage

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printers and an assortment of other high tech equipment.
Burrows said she excelled at selling products and ideas.

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PETER BURROWS:

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A fabulous salesperson and marketing person. I think she is a very Prosecutors say California judge
polarizing figure. Initially people almost always, you know, sort of informed court staff via text after
shooting his wife
think the world of her and are sort swept away with her charisma
and her good ideas and her passion. But I think that over time, a

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lot of people at HP particularly I know, lost faith when it became Report reveals Justice Thomas
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clear that her ideas just weren't working. wealthy patrons

CARLY FIONA:

This is a massive integration effort.

SPENCER MICHELS:

One idea that didn't work was her push for a merger with Texas
computer maker COMPAQ. In a contested and controversial deal
in 2002, HP acquired COMPAQ for more than $20 billion.

Subsequently, HP's market share of printers, personal computers

and servers failed to grow.

PETER BURROWS:

Fundamentally, HP was a great printer company and a very

average to poor computer company. She went out and did a
merger that doubled the size of the poor business, and now
they're stuck in a lousy — a very challenging PC industry.

She got that deal done against all odds, and sort of against the
market's wisdom. Investors hated the deal. They took 17 percent
out of the stock immediately when it was announced.

SPENCER MICHELS:

That deal, plus a move to diversify HP's products and offer

business services instead of concentrating on a few profitable
lines, may have sealed Fiorina's fate.

At HP Headquarters in Palo Alto, near Stanford University, the

official word was simply that Fiorina had stepped down and
departed. Neither staff nor board of directors would talk about it.
Unofficially, there was plenty of chatter on employee message
boards, most of it not sorry that she was leaving.

The company released a statement from Fiorina saying: "While I

regret the board and I have differences on how to execute HP's
strategy, I respect their decision…"At the Haas Business School at
the University of California at Berkeley, where Fiorina had
appeared several times, graduate students were not expecting
her firing.

MALE STUDENT:

I was pretty surprised about it, but then as I read more

information about the reasons for it, it seemed to make sense.
Apparently they hadn't been able to get many synergies out of this
merger with COMPAQ.

FEMALE STUDENT:

As a woman at Haas, you know, she's a great figure and a great

leader. So it'll be interesting to see what plays out and where she
goes from here.

MALE STUDENT:

I don't think it was a male-female thing necessarily, but you never

know. I mean, it's all about leadership.

SPENCER MICHELS:

At Haas and elsewhere, the word was that Fiorina didn't respect
the employee-first culture of HP. Many workers lost their jobs in
the merger. David Levine teaches corporate culture at Haas.

DAVID LEVINE:

I grew up in what's now called Silicon Valley, and before there was
Apple and before there was Intel, Hewlett Packard was already a
great company; that its founders were famous people, at least
locally, because their dedication was not to build just great
products, but truly a great company based on respect for the
people at the company. You don't build a great culture by laying
off 10 percent of the people who hold it.

SPENCER MICHELS:

Peter Burrows says HP was a paragon of corporate integrity, and

never had a layoff in the 50 years before Fiorina arrived.

PETER BURROWS:

It introduced a lot of the perks that we all now enjoy: The cubicle,
which maybe is a mixed bag — but flex time, profit sharing, these
were all developed by this company that was based on the belief
that, you know, your people are your greatest asset.

And here comes Carly Fiorina, who is a salesperson. It's about the
results, a culture of money. There was something special about
the relationship between management and employees. It's called
the HP way. And, you know, that's pretty much gone now.

SPENCER MICHELS:

Also gone, or at least buried for now, Burrows believes, is HP's

historic and relentless push for invention. He cites the recent
decision by HP to distribute an Apple Ipod music player with an
HP label.

PETER BURROWS:

So they basically are reselling Apple's Ipod. Now this made old
HPers just, you know, hit their… they couldn't believe what they
were hearing. One analyst I talked to said, "The logo doesn't say
distribute. It says invent." I think the lesson is that it's really
about innovation.

SPENCER MICHELS:

Still, even some critics, including Berkeley's Levine, saw Fiorina

as effective some of the time.

DAVID LEVINE:

As I was growing up, the female world leaders were Golda Mier,
Indira Gandhi in India, Margaret Thatcher. These women all lead
their countries into wars and won them.

There's not a sense in which succeeding in rules that are rigged in

favor of men is going to mean the women who succeed are
particularly feminine and gentile. Carly didn't win any wars, but
she was one tough cookie and was perfectly willing to fight under
men's rules and almost always win.

SPENCER MICHELS:

But in the end, Fiorina didn't win. During her tenure, HP stock fell
more than 50 percent. Nevertheless, on her dismissal, the 50-
year-old CEO walked away from HP with an estimated $21 million
in exit pay, stock and pension benefits. The company itself has
launched a search for a successor.

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