Fiorina, Carly

Carly Fiorina

Carly Fiorina (born 1954), chief executive officer of Hewlett–Packard Company (HP) before its board fired her early in 2005 amid a power struggle, was one of only three women to head a Fortune 500 company. She drew praise for her streamlining and cost–cutting at HP, and was criticized for some controversial business decisions, most notably a 2002 merger with Compaq Computer Corporation. Fiorina had been ranked number one on Fortune magazine's list of the 50 most powerful women in business in the United States six times.

Fiorina was born Cara Carleton Sneed on September 6, 1954, in Austin, Texas. Her father, Joseph Sneed, was a law professor who also served as a federal appeals judge and a deputy attorney general under President Richard Nixon; her mother, Madeline Sneed, was an abstract artist. Fiorina was named for several men on her father's side of the family named Carleton who had died in the Civil War. Fiorina's parents and other relatives decided that the boys named in their honor would be called Carleton, the girls Cara Carleton. Fiorina was raised primarily in the San Francisco Bay Area, although the family also lived in North Carolina, Texas, Connecticut, and New York, as well as Ghana and England, due to her father's career. Fiorina attended five high schools on three continents, influencing her ability to thrive in new situations, according to a 2002 interview in Fortune. "I learned that people are fundamentally the same wherever you go," she said. "Connecting, and always being the outsider, which I was, is about adapting."

Launched Lucent Technologies

After graduating from high school, Fiorina attended Stanford University in Palo Alto, California, where Hewlett–Packard is based. While a student there, she kept the books and answered phones at a hair salon and, coincidentally, worked for a time in HP's shipping department. Following her graduation from Stanford in 1976, she entered law school at the University of California, Los Angeles, but dropped out after only one semester. She worked a series of jobs over the next several years, including teaching English in Bologna, Italy. She became interested in business while working as a receptionist at a brokerage firm in New York, and enrolled in graduate school at the University of Maryland, College Park, where she received a master's degree in marketing.

Following graduate school, Fiorina entered a management training program at AT&T and stayed with the company after she finished it. Her duties there included overseeing a portion of the company's government contracts. Fiorina became involved in the sale of $25 billion in telecommunications equipment to the United States General Services Administration, establishing herself in handling large deals. Fiorina was promoted several times and became an executive in the network systems division, which handled the manufacturing of telephone equipment. She helped set up joint ventures with Asian companies and by 1990 became the first women to be appointed an officer in the division. She married fellow AT&T executive Frank Fiorina, who is now retired, in 1985, and earned a master's degree in business from the Sloan School of Management at the Massachusetts Institute of Technology. Fiorina helped raise her husband's children from another marriage; she was previously married as well.

By 1991, Fiorina had been named vice–president of network systems, and by 1995 she was running its North American sales division. In 1995, she headed AT&T's creation of a spinoff company, dictating strategy, managing the initial public offering, and developing a new name and corporate image. That company became Lucent Technologies, and Fiorina headed its global services provider division, which provided networking equipment to telecommunications companies and internet service providers. She became president of global services in 1998, and the division achieved $19 billion in revenues that year. Lucent became a well–known name in the field of telecommunications equipment manufacturing, and Fiorina was largely credited with the company's success. In 1998, she was named number one on Fortune magazine's inaugural list of the 50 most powerful women in American business, a ranking she would maintain annually until 2004. Fiorina bristled at the designation, according to a quote in a 2002 issue of Fortune. "Business shouldn't be like sports, separating the men from the women," she said.

Chosen to Head HP

In 1999, following an intensive search that involved lengthy interviews and a 900–question psychological test, Fiorina was hired as the chief executive officer of the computer and imaging company Hewlett–Packard, becoming the first person from outside the company to take this position. Fiorina took on a bureaucracy–laden company whose corporate culture reflected the paternalistic vision of William Hewlett and David Packard, who founded the company in a Palo Alto garage in 1939. "People were so busy building consensus that things didn't get done," Quentin Hardy wrote in a 1999 issue of Forbes. "Under the David Packard approach, new product lines split off into autonomous units, and scores of disparate operations populated the four main businesses—ink–jetprinters, laser printers, servers, and PCs [personal computers]. HP wound up with multiple product logos and a hundred different brand names, such as OfficeJet, Pavilion, and Vectra. It ran a thousand different intranet training sites, 40 internal help desks and 34 unlinked customer databases."

Fiorina took a hard–edged approach to change, intimating that layoffs were eminent soon after taking charge. Responding to a rumor that up to 25 percent of HP staff might be dismissed, Fiorina responded, according to Forbes in 1999, "I'm not sure about that, but if one–quarter of the people in HP don't want to make the journey, or can't take the pace, that's the way it has to be." By 2001, Fiorina planned to lay off 3,000 managers and had replaced 30 percent of the company's highest–ranking employees. "People should depart with dignity, but don't confuse that with the departure being an inappropriate choice," she said, as quoted in a 2001 Forbes edition. She also issued an ultimatum to HP sales staff: if they could not produce, they, too, should leave. Fiorina tended to operations and sales as well. She consolidated several disparate units and masterminded a unified corporate identity, under a new, simplified "HP" logo. She negotiated exclusive purchasing agreements with Ford Motor Company and Delta Airlines. Later major clients included General Electric, the Walt Disney Company, and the United States Department of Homeland Security. Fiorina's charge–ahead tactics upset many on her team, however; Forbes in 2001 reported that a survey of 8,000 employees revealed widespread dissatisfaction, citing poor communication and inefficient implementation of changes.

In 2000, Fiorina attempted a buyout of the 31,000–person consulting firm Pricewaterhouse Coopers, in an effort to boost HP's computer consulting arm. The deal fell through, however, after HP tried to lower its original $17.5 billion offer. "So instead of being a leading–edge services provider, this division still gets half its revenue from traditional product support, like fixing broken disk drives," Eric Nee wrote in Fortune. "Fiorina still hopes to build HP's rapidly growing consulting and outsourcing services . . . But without a major acquisition, HP will need to slogon for years before it can mount a serious challenge to IBM, the market leader."

Oversaw Compaq Merger

Fiorina made an even more controversial move in 2001, when she announced HP's plans to acquire Compaq. The sons of the company's founders, who sat on the company's board, opposed the $19 billion purchase but it narrowly passed, with 51 percent of the company's shareholders voting infavor of the deal. Walter Hewlett, son of founder William Hewlett, unsuccessfully sued Fiorina and HP, alleging manipulation in the vote.

While the merger signaled a victory for Fiorina, HP's performance in the wake of the deal was erratic. "HP shares are worth less today than on the day before the merger was announced or on the day it closed," the Economist said in 2004. "A consensus has emerged in the industry that the new HP, the tech industry's most sprawling conglomerate, has lost its focus and is being squeezed between two formidable rivals with much clearer business models, Dell and IBM." But even Fiorina's detractors would have trouble denying her work ethic, however. According to a 2002 issue of Fortune, her workdays typically began at 4:30 a.m. and ended at 10 p.m.

Ousted by HP's Board

The company doubled sales over five years, but its traditional printing business had still accounted for about 80 percent of the company's operating profits, mostly from selling replacement ink cartridges. Fiorina and HP's board, meanwhile, continued to battle over the direction of the company. "Several Wall Street analysts have called on HP to spin off its highly profitable printing business or sell its PC unit, arguing that the company was being squeezed between IBM's high–end services strategy and Dell's low–cost PC manufacturing," Scott Morrison wrote in the Financial Times.

On February 9, 2005, Hewlett–Packard's board fired her. Fiorina, Morrison wrote, "had drawn criticism for what was seen as an imperious leadership style." While she assembled a capable leadership team that was marketed better, according to Cliff Edwards of BusinessWeek, Fiorina had difficulty getting top executives to work together. "While I regret the board and I have differences about how to execute HP's strategy, I respect their decision," Fiorina said in a statement widely published in the media. She received a severance package estimated at $21 million.

In rise and fall, Fiorina made headlines. "If Carly Fiorina hadn't come along, the media would almost have had to invent her," Bruce Horovitz wrote in USA Today. "For years, the media and Fiorina danced a celebratory dance." That Fiorina was a female in the trendy, male–oriented, high–tech business, combined with her own public–relations savvy, intensified the media's fascination with her, Horovitz added.

Women executives saw one of their own in Fiorina. "She can go out and tell the story of what its like. We need to see other women in positions of success," Delia Clark, owner of Baroness Coffee in Denver, said at a conference of female business owners in that city, according to Kimberly S. Johnsonin the Denver Post. "CEOs climbing the ladder is one thing; surviving is another."

Books

Business Leader Profiles for Students, Vol. 2, Gale Group, 2002.

Periodicals

Economist, December 15, 2001; August 21, 2004.

Financial Times, February 10, 2005.

Forbes, December 13, 1999; June 11, 2001.

Fortune, July 23, 2001; November 18, 2002.

Time, December 2, 2002.

Online

"Carly Fiorina," Biography Resource Center Online, http://galenet.galegroups.com (December 1, 2004).

"Media Always Fascinated with Fiorina," USA Today, February 9, 2005, http://www.usatoday.com/money/industries/technology/2005-02-09-cool-carly–x.htm (February 10, 2005).

"Where Fiorina Went Wrong," BusinessWeek online, February 9, 2005, http://netscape.businessweek.com/technology/content/feb2005/tc2005029–1044–tc024.htm (February10, 2005).

"Women Talk of Fiorina's Rise," Denver Post, February 10, 2005, http://www.denverpost.com/Stories/0,1413,36%257E33%257E2702736,00.html (February 10, 2005).