Fiorina, Carly

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Fiorina, Carly

(1954-)
Hewlett-Packard Co.

Overview

President and CEO of Hewlett–Packard Company since the summer of 1999, Carleton S. Fiorina, better known as "Carly," is the highest–ranking female executive in the United States. HP, the world's second–largest computer company after IBM, stands to grow even larger if the company's proposed acquisition of Compaq Computer—engineered by Fiorina—goes through. Fiorina has shaken up the corporate culture at HP, setting aggressive sales goals and assigning a new priority to rapid technical innovation. To accomplish her goals for HP, she has moved aggressively to streamline the company's structure by consolidating its more than 80 units into four basic groups. Under Fiorina, HP has put a whole new emphasis on services and has discontinued marginal operations. However, the ambitious sales goals set by Fiorina have yet to be reached, casting something of a shadow over prospects for her future at HP.

Personal Life

Fiorina lives in California with her husband, Frank Fiorina, a former AT&T executive whom she married in 1985. Her husband, who served as chief information officer of AT&T's corporate business unit, opted for early retirement in 1998 to let his wife concentrate on her career. Fiorina has two stepdaughters, her husband's children from a previous marriage. In addition to managing the family's home, Frank Fiorina serves as a volunteer fireman. Both Fiorinas enjoy boating in their spare time.

Born Cara Carleton S. Sneed on September 6, 1954, Fiorina is the daughter of Joseph (a federal judge) and the late Madeline (an abstract painter) Sneed. She experienced a fairly nomadic childhood, attending five different high schools, because of her family's frequent moves. Prior to becoming a federal appeals judge in San Francisco, her father taught law and served as a deputy attorney general. Fiorina's mother instilled in her "a great zest for life," Fiorina told the New York Times.

There's an interesting story behind Fiorina's unusual first name. Because all of the men named Carleton on her father's side of the family died in the Civil War, the family decided to honor their memory by naming one member of each family unit for the fallen Carletons—Carleton for males or Cara Carleton for females.

After graduating from high school, Fiorina attended Stanford University in Palo Alto, California, where she majored in medieval history and philosophy. Interestingly, Stanford is located in the same California city that serves as corporate headquarters for Hewlett–Packard, the company Fiorina now heads. Planning to follow in her father's footsteps, Fiorina began studying law at the University of California shortly after her 1976 graduation from Stanford. After only one semester, she decided that a career in law was not for her and dropped out of law school. She worked in a variety of jobs, including teaching English in Bologna, Italy, before deciding to head back to school. This time, she decided to focus on a career in business, and in 1980 she earned her M.B.A. from the University of Maryland.

With her M.B.A. in hand, Fiorina landed a job as an account executive with AT&T, working first in Washington, D.C., in the company's long–distance phone service operations. Her responsibilities involved selling the company's long–distance services to government agencies. Impressed by her performance, AT&T executives identified her as a likely candidate for a management position and sent her in 1988 to the Sloan School of the Massachusetts Institute of Technology to earn her master of science degree.

Career Details

It was at the Sloan School that Fiorina first met the head of AT&T's Network Systems Group, an equipment division that many considered stagnant. Sensing an opportunity to demonstrate her sales abilities, Fiorina—against the advice of friends—decided to make the switch from long–distance operations to Network Systems. Almost immediately, she was dispatched to the Far East to put together complicated joint ventures for the division. Although business negotiating in the Far East is almost exclusively an all–male preserve, Fiorina found a way to fit in.

Years later, she told Elise Ackerman of U.S. News & World Report of one particular incident in South Korea. Foreign businessmen visiting South Korea traditionally are invited to visit a kisaeng house, where they are treated to entertainment by the South Korean equivalent of geisha girls. Anxious to avoid offending their female visitor, her hosts escorted Fiorina to one of Seoul's finest kisaeng establishments but apologized profusely that there were—regrettably—no kisaeng boys. Fiorina assured her nervous hosts that the usual kisaeng treatment would be just fine with her. So off they went for an evening of food, drink, and flattery. To accommodate the establishment's unusual female guest, Fiorina said later that the hostess "just changed some of the adjectives."

Chronology: Carly Fiorina

1954: Born.

1976: Graduated with B.A. from Stanford University.

1980: Graduated with M.B.A. from University of Maryland.

1980: Joined AT&T as an account executive.

1985: Married Frank Fiorina.

1988: Graduated with Master of Science degree from MIT's Sloan School.

1998: Named president of Lucent Technologies' global service provider business.

1999: Named president and CEO of Hewlett–Packard.

2000: Named chairman of Hewlett–Packard.

2001: Hewlett–Packard announced plan to buy Compaq Computer Corp.

Well before most American businesses began to fully exploit opportunities outside the country, Fiorina pushed her colleagues at AT&T to adopt a more international perspective on business. Before she reached her 40th birthday, Fiorina had been put in charge of Network Systems's North American sales. Shortly thereafter, AT&T broke itself into three separate companies, one of which was made up of the company's long–distance service operations, Lucent Technologies, and NCR Corporation. The focus at Lucent was on telecommunications and networking equipment, much of which is essential for the operations of the Internet. Network Systems was folded into Lucent. Fiorina was chosen to manage Lucent's $3 billion initial public offering (IPO) of stock, one of the largest and most successful IPOs ever. In 1998 Fiorina was named president of Lucent's Global Service Provider Business. Later that same year, Fortune magazine named her the most powerful woman in business.

In late July of 1999, Hewlett–Packard, breaking precedent by looking outside its own ranks to fill the top job, tapped Fiorina as its new chief executive officer. Her predecessor in the job, Lew Platt, had been widely criticized for his lack of strategic vision, a failing that kept HP from reaping the full benefits of the Internet boom. Somewhat belatedly, in the spring of 1999, HP had announced plans for its "E–speak" programming language, akin to html or Java. "E–speak" was positioned as a "universal language of services on the Net," according to Allison Johnson, head of brand strategy and communication for HP. Shortly after Fiorina came on board at HP, she spoke enthusiastically about the outlook for E–services and vowed to accelerate "the speed and pace of the business as well as intensify the competitive will to win."

In a statement released upon her acceptance of the job at HP, Fiorina said, "Leaving Lucent was a very difficult decision, but this is a once–in–a-–lifetime opportunity for me. Hewlett–Packard is a company of great accomplishment and even great potential." Despite its potential, it was clear from the start that the transformation of HP from a somewhat stodgy engineering company into a fleet–footed Internet competitor would be a formidable challenge for Fiorina. However, she wasted no time in taking steps to shake things up at HP. Among her first moves was an ultimatum to HP sales staffers: produce or leave. She also helped to negotiate exclusive purchasing agreements with Ford Motor Co. and Delta Airlines and consolidated the company's many decentralized units. She also made clear to HP employees that it was going to be her way or the highway. "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," she told Worth.

Fiorina's appointment as CEO at HP was welcomed by feminists as a hopeful sign that Silicon Valley, long a male–dominated corporate society, may be ready for a change. Karen Eriksson, CEO of Women in Technology International, a women's networking association, said of Fiorina's appointment: "It shouldn't be an anomaly. We're seeing the fruition of all the years that women have been in management. Between the number of women–led IPOs, board appointments, and the increase in access to capital for women, this is an indication of things to come. . . . this is just another step ahead."

In a bold move, Fiorina announced in September 2001 plans for HP to buy Compaq Computer in a stock offer initially valued at about $25 billion. (This figure tumbled sharply in the wake of the September 11, 2001, terrorist attacks on the World Trade Center and Pentagon.) Under the terms of the proposed agreement, the combined company would carry the HP name and retain Fiorina as its CEO. Michael D. Capellas, chairman and CEO of Compaq, would become the new company's president. With the addition of Compaq's assets, the combined company would rival IBM in size. The Hewlett family, which owns slightly more than 5 percent of the company's stock, announced in early November that it would vote against the proposed merger on the grounds that Compaq is not the right partner for HP. However, in response to the Hewlett dissent, HP released a statement indicating that company management and the HP board of directors remained firmly committed to the merger plan. Only days later, David W. Packard, son of HP cofounder David Packard, announced that he too would vote against the proposed merger, casting more doubt about Fiorina's ability to push it through.

Social and Economic Impact

Although Fiorina has been unable to achieve all of her goals for Hewlett–Packard, she has managed to jolt the company out of its stagnation, making it once again a real competitor in the race with IBM and Sun Microsystems to capture a bigger share of the market for E–business machines and software. Hope is fading, however, for Fiorina's promise to reinvigorate HP's flagging sales, at least in the short term. In the face of a cut–throat price war in the PC market, HP's hardware sales have slipped, and the company has yet to make any significant inroads into the market for services, one of Fiorina's key goals. Two years after her appointment, Fiorina acknowledged the economic climate was hardly favorable for all that she had hoped to accomplish. "Think of all geographies as weak," she told CNET News. "There are no exceptions. I don't think we can call when a recovery will occur."

For its part, HP's board seemed inclined to give Fiorina more time to accomplish her goals. Board member George Keyworth II explained: "In the early summer of 1999, when we were interviewing Carly, we discussed it would take a minimum of three years to turn things around and there would be lots of ups and downs. We are absolutely behind her and know there will be challenges."

One major disappointment came in November 2000, when a proposed HP acquisition of PricewaterhouseCoopers fell through. HP's plan to acquire the giant consulting business was first announced in September 2001 and touted as a way for the company to move more aggressively into the services market. It was hoped that with PricewaterhouseCoopers folded into the company HP could offer customers everything from e–commerce and Internet systems to software, servers, and services. The board was so encouraged by the proposal that it elected Fiorina to a seat only two weeks after the first announcement of the planned acquisition was made.

Almost a year later, Fiorina announced an even bolder plan—the acquisition of Compaq Computer in a deal that could cost up to $25 billion. Members of both the Hewlett and Packard families announced their intention to vote against the proposed merger, opposition which could snowball and eventually derail Fiorina's master plan and spell her undoing.