The chair shuffler is gone.
When history looks back on the tenure of Carly Fiorina as the CEO of Hewlett-Packard, the conclusion will likely be that she was a charismatic personality who tried to compensate for the lack of a consistent vision through a lot of acquisitions and management changes.
Corporate reorganization has been the dominant constant in the past five and a half years at HP. First came the attempted buyout of PriceWaterhouseCoopers for $18 billion in 2000, in an attempt to better compete with IBM. High-end consulting services—that was the thing that would boost HP's profits. IBM later grabbed the company for about a third of the price.
Then came the Compaq Computer acquisition of 2001 to 2002. The deal would allow HP to gain heft and better compete with Dell. It would also let HP compete in the lower end of the services market, which HP execs said was actually more attractive than the high-end market they attempted to enter only a year before.
Even at the start of the long acquisition process, HP couldn't resolve the contradictions. Months before the merger was announced, HP executives said buying a PC maker wasn't a good idea. When the Compaq deal was unveiled, HP said Compaq really wasn't a PC maker, though half of the company's revenue came from PC servers and desktops.
When HP passed Dell in PCs because of the merger, HP trumpeted that it had brought competitiveness back to the marketplace. When Dell surpassed HP and the gap grew, HP claimed that it wasn't really interested in being No. 1 in PCs, anyway. The margins were too low.
Along the way, a painful pattern began to emerge. HP would have a terrible quarter, missing earnings because of a shortfall in one division or another. Fiorina would then vow that heads would roll. Some executives—voluntarily and involuntarily—such as Howard Elias, Mary McDowell and Jeff Clarke, would then depart while the company reorganized into new divisions.
Two to three quarters of recovering revenues and profits would return. HP executives and some analysts would declare that the turnaround had begun.
Then a dismal quarter would follow. Layoffs and reorganizations would be announced while a new way to gain higher margins (industrial printing, patent licensing, enterprise servers, a good No. 2 to IBM, a good number No. 2 to Dell), would be announced. It was like hearing the reading of the same MBA class project over and over.
There was a cultural dimension to Fiorina's often rocky tenure as well. To paraphrase Rudyard Kipling, she showed how East Coast was East Coast and West Coast was West Coast, and never the twain shall meet.
Fiorina came from Lucent Technologies, the AT&T spinoff. Not only was AT&T a giant, but it was the last bastion of feudalism in the Northern Hemisphere. (Ironically, Fiorina majored in medieval history.) The company ran on a rigid hierarchy. Competitive battles were won through financial heft and strength, and a lot of energy was dedicated toward internal company battles.
By contrast, the HP of the time seemed to be run from the bottom up. The founders used to eat in the cafeteria. Engineers were continually reminded about their importance to the company. The complaint heard most from executives and analysts was that HP moved slowly because decisions were made by consensus.
So when HP started increasing the number of corporate jets, and rumors surfaced about how Fiorina traveled with a security detail and hairdressers, conflicts between management and the rest of the company began to emerge. And the lack of consistent performance certainly wasn't going to silence the grumbling.
I obtained an insight into Fiorina's management style on the November 2002 day former Compaq CEO Michael Capellas resigned. We all sat at a small, circular table. We asked Capellas why he resigned. "I can answer that," she said, speaking for him.
On the other hand, HP could have been a lot worse off. Without the Compaq acquisition, HP wouldn't have the server market share it has now. Fiorina had to have something to do with the fact that it went much smoother than most other acquisitions.
She also had to balance the insistence of Wall Street and the public that HP distinguish itself from competitors with the painful reality that somebody has to be No. 2. For five and a half years, she kept the company from getting too depressed about that fact.
Fiorina also brought a celebrity quality to HP. She could carry an audience in keynote speeches and was always a great person to interview, although she was occasionally vague. "Before Fiorina, HP was two steps ahead of Burroughs," said one executive this morning, referring to the faded business machines giant.
Finding a new CEO is never easy, either. At about the same time that Fiorina became HP's CEO, Gateway had put its future in Jeff Weitzen's hands. Then again, Hector Ruiz turned Advanced Micro Devices from being a one-man show with a history of hiccups into a consistent performer.
In further analysis, Fiorina's record will have to stand on tangible accomplishments, not on whether she helped HP avoid potentially bigger problems that never occurred. And the tangible record is somewhat sparse.