http://www.technologyreview.com/articles/05/02/wo/wo_pontin021005.asp?p=0
Carly's Gone. HP Celebrates.
By Brad King and Michelle Delio February 10, 2005
NOTEBOOK
Rejoice! She's Gone
By Jason Pontin, Technology Review's Editor-in-Chief
In January 2002, when I was still Editor of the technology
business magazine Red Herring, I conceived an open letter from the editors
of that magazine to Carly Fiorina, the CEO of Hewlett-Packard. It's first
line: "Dear Ms. Fiorina, Please Resign."
Wednesday's announcement that Fiorina had been pushed from the
executive suite provided only the grimmest of pleasures. I was gratified to
be proven right. But the company will probably never be what it once was.
That's as close to a tragedy as business offers.
The letter was written during the contentious debate over
whether HP should purchase the ailing computer manufacturer, Compaq. I felt
sure the merger was a terrible idea. But my beef with Fiorina went beyond
the Compaq merger. She represented all that was wrong with celebrity CEOs
and their fixation on Wall Street. More, her management style was horribly
incongruous with the traditions of HP.
I love Hewlett-Packard because the company founded by Bill
Hewlett and David Packard was egalitarian, technologically minded, and
geeky. For decades, HP was the ideal of Silicon Valley entrepreneurialism to
which all other companies aspired.
(continued on next page)
Related Stories:
Just after the official announcement came down that CEO Carly Fiorina
would be sacked, corks were popped and bottles were opened.
There was little time for empathy. No pangs of sadness. Inside the
company, workers openly celebrated their liberation from "Her Royal
Horribleness," a nickname bestowed upon Fiorina for her abrasive treatment
of line workers.
There was little love lost between the CEO and the 151,000 HP workers
who have, almost consistently since 1999, made hating their boss a very
personal, full-time mission.
"When the news was officially announced this morning, people were
dancing -- literally dancing -- around their cubicles," an employee in the
business division writes in an email.
There is always some discord between upper management and line
workers, but the level of frustration felt by the various HP teams had
reached an almost unimaginable apex. And while those feelings oftentimes
played out as personal attacks on Fiorina, the underlying issue was
something far deeper.
In the midst of the revelry, excited employees openly talked of their
frustrations with Fiorina's management style, which seemed to place Wall
Street expectations ahead of nose-to-the-grindstone innovation, the very
bedrock upon which HP was built. This is, after all, the company that is
credited with developing the first personal computer in 1968, a string of
scientific calculators, and the desktop ink jet and laser printers.
Fiorina's obsession with Wall Street pushed much innovation to the
side, and eventually led to a rather unsettling change in the HP work
environment: the company's very first layoffs. When it was all said and
done, 15,000 of the then 85,000 workers found themselves without a job by
the end of 2003.
Gone were the company's days of conservative growth, replaced instead
by the go-go mentality that bigger was better -- a sentiment not shared by
those who came to HP as much for its history as for its future.
"How do you expect people to make good products when you're
constantly -- constantly -- working under the assumption that you'll be laid
off soon," asks an employee from the personal computers division. "Every
time we knew the quarterlies were close to being announced we'd brace
ourselves for the latest round of layoffs.
"You were always been told your team, your project, your division was
next on the chopping block but you might be able to escape it if you worked
harder than anyone else. Her Horribleness sucked the life out of us."
As Technology Review's Editor-in-Chief points out in The Notebook (see
right sidebar), much of the dissatisfaction with Fiorina stemmed from her
disconnect with the company's original mission -- which most notably played
out in her clash with Hewlett over the company's decision to merge with
Compaq.
TEBOOK
Rejoice! She's Gone (continued from previous page)
True, it had floundered in the years before Fiorina's
appointment as CEO in 1999; it needed a CEO who would help it return to its
glory days as a developer and manufacturer of new technologies that
dominated markets.
But Fiorina's impatience with HP's traditions, her preoccupation
with her own fame, her celebrity perks -- it was all wrong, wrong, wrong.
She once said, "Leadership is a performance." I discerned this
idea in the merger with Compaq. The deal was better suited to create the
appearance of a company with "scale," thus impressing Wall Street analysts,
then to renew HP. Throughout her leadership, she was all "message,"
confusing selling -- to the board, to investors, to financial analysts, to
the press -- with the real business of technology.
During her time, HP lost 55 percent of its market
capitalization. But that's the least of HP's problems. She leaves a company
demoralized, uncertain, with no clear identity. By failing to invest in
research and development, and by pursuing the Compaq deal, she threw away
HP's one chance of surviving, unbroken, into the 21st century: that is, by
drawing upon the company's history of engineering excellence to become a
leader in new markets for wireless, consumer, and handheld devices.
She's gone. Good riddance. Let's hope it's not too late.
Related Stories:
Those sentiments, which Pontin first discussed back in 1999, were
echoed repeatedly today by both current and former HP employees.
"HP used to be a good place to work back when Mr. Walter Hewlett and
Mr. David Packard's attitudes about corporations having a real
responsibility towards employees, customers and their communities were still
in place, " says Keith Abrams, an engineer who left the company three years
ago. "Hewlett and Packard believed that if you made a good product and
treated people right you'd profit."
Fiorina, though, insisted that diversifying the company's business --
which led to doing many things okay, but nothing great -- would reinvigorate
the company's bottom line and boost its flagging stock price.
Rarely, though, did she speak with any passion about the research on
emerging technologies. In what would be her last annual report to
stockholders, Fiorina's introduction stressed that cost reductions and
market diversification were the keys to HP's future.
"After a period of integration, cost-cutting, returning our businesses
to profitability and returning to top line growth, we enter fiscal year 2005
knowing that we have the right strategy, play in the right markets and offer
the right portfolio of products and services," Fiorina writes. "We are now
focused on consistency of execution and consistently delivering financial
performance, great customer experiences and shareowner value."
And her reluctance to embrace research and development of emerging
technologies, consistently creating new and better markets as only
Hewlett-Packard could, alienated her from the company.
Back in the HP offices, though, as the day wound down, the bottles
emptied, and the music began to fade out, a twinge of reality -- that the
company may not be strong enough to pull itself out of the quagmire -- muted
the celebrations.
Whoever takes over the reins will be, to some extent, handcuffed by
past decisions that may be too time-consuming and costly to unmake.
And that, for all the hype and press that Fiorina brought to HP, is
the legacy that she leaves.
"Steve Jobs used to say that HP was the inspiration for Apple's
emphasis on innovation," says a former HP Labs employee. "Fiorina never
understood that you have to spend a little money to make money.
"That's why HP went from a respected, innovative company that made
quality products to one that makes most of its profits off printer ink."
5400.47755282201
begin 666 xnotebook.gif
M1TE&.#EA& `>`( ``-S{at}Y'J;LR'Y! ``````+ `````8`!X```)8A(^IR^W?
M{at}IRT!B#3A1CO * Origin: MoonDog BBS, Brooklyn,NY, 718 692-2498, 1:278/230 (1:278/230)
SEEN-BY: 633/267 270 5030/786
@PATH: 278/230 10/345 106/1 2000 633/267
|