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Tuesday, October 20, 2015

Carly Fiorina and HP: The Bad and the Ugly

When I first heard of Carly Fiorina running for senate in 2010, I thought I knew her backstory. The embattled, ousted CEO of Hewlett Packard who worked her way up from secretary, to become one of the youngest, most powerful, female CEOs of her time. Ultimately, she would succumb to one of the worst mergers in history. But how much of it was her fault, really? Was the merger ever her choice? Wasn't she just along for the ride, like everyone else? Did she do all she could to stop the damage, but it was just too much? Even though I knew she got a huge golden parachute from HP, I felt sorry for her, in some way, to have her career derailed early like that. I mean really, what else could she do, at this point, besides write books and run for public office?

Well sadly, the real Carly is a bit more calculating. I feel what happened to her and her company, is a direct result of the known consequences of her actions. The real Carly came to HP in 1999 as an outsider, after nearly 20 years of ladder climbing at ATT/Lucent. Certainly, her accomplishments were admirable, but she had no CEO experience. And why HP needed to hire an outside CEO, when they already have 50 years of rich corporate history, I'll never know.

Now think to yourself. You're a new Tech CEO. You are the helm of a company that is a great success story, and has decades of high employee satisfaction. You know you are about to hit hard times, and things are not going to be as smooth, as they once were. Things are going to have to change. Do you try and minimize the bleeding, and preserve the company, employees, and culture, as much as possible? Or do you fight tooth and nail against the employees and founders, and go on a massive spending spree, buying companies that are in worse shape than yours-ensuring massive layoffs, and turning the corporate culture on its head! You gotta ask yourself, what type of person would chose the latter? Who thinks like this? It doesn't make moral nor economic sense.

To be honest, I don't know if the merger with Compaq was Carly Fiorina's idea; but to say she was all for it, would be an understatement! I feel it was certainly within her power to stop it. Carly fought against the founding family and employees to push the merger through, by courting enough shareholders to squeak out a majority. Everyone knew the personal computer market was contracting and this point, and to buy another worse-off PC business is just doubling-down on stupid. You can't tell me that spending a lot of money on some crappy company, that duplicates a lot of what you do, is a cost saving measure in a contracting market.

The results of the merger were as you have might imagine-disaster! Somehow, HP survived, but I feel the good corporate culture, did not. I feel the culture destruction was willful, unnecessary, and a direct result of Carly's actions. Yes, HP was going to hit hard times anyway, but you don't nosedive your plane into an oncoming storm. 

Myself and many other Californians know people who can recall of the glory days at HP. People remember the high employee satisfaction, and even bragged about who had the lowest employee number. Even though I was never an employee, I did take computer classes at the HP facility in Roseville in the 90's., and got to know some of the fine employees there. The classes and instructors were excellent. Even though I had to fight traffic and pay good money, I looked forward to going there. The HP facility I knew in Roseville, is now a shell of its former self. I heard stories of people being told to train their foreign visa worker replacements. Now HP is yet again announcing more mass layoffs, no doubt from the enormous duplicity created by the merger. You gotta wonder what could have been if HP played a little defense, instead of being guided down a path of destruction.

If you want further evidence of Carly's character, you can look at how she stiffed payment to her staffers and vendors who worked with her during her 2010 campaign. According to Reuters, many staffers and vendors were not paid for years; and some even not paid until she announced her 2016 campaign. Keep in mind this is a woman worth between 30 and 100 million dollars, according to Wikipedia. Ask yourself, is this they type of character that you want for your president?