Fiorina, Carly 1954–
Chairwoman, chief executive officer, and president, Hewlett-Packard Company
Born: September 6, 1954, in Austin, Texas.
Family: Daughter of Joseph (a law professor and judge) and Madeline (a painter; maiden name unknown) Sneed; married Frank Fiorina (a former AT&T executive), 1985; children: two stepchildren.
Career: AT&T, 1980–1989, for Long Lines, sales representative, then various senior leadership positions, then executive vice president, then CEO; 1989–1992, head of North American operations for Network Systems; 1992–1998, officer in Network Systems, then executive vice president for corporate operations; Lucent Technologies, 1998–1999, president of Global Service Provider Business, then president of Consumer Products; Hewlett-Packard Company, 1999–2000, CEO and president; 2000–, chairwoman, CEO, and president.
Awards: America's Most Powerful People, Forbes; Most Powerful Woman in American Business, Fortune, 1999; Honorary Fellow, London Business School, 2001; Top 25 Executives, CRN, 2002; Appeal of Conscience Award, 2002; Seeds of Hope Award, Concern International, 2003; Leadership Award, Private Sector Council, 2004; Alliance Medal of Honor, Electronics Industries, 2004.
■ Carleton S. Fiorina, well known as Carly, made her mark as the chairwoman, chief executive officer, and president of the prestigious technology and computer-peripherals company Hewlett-Packard (HP). The first woman to head a Dow 30 company, Fiorina arrived at HP in 1999 to become the first
outsider to fill a lead executive position in the company's 60-year history. Time magazine declared her "best line" to be, "My gender is interesting but really not the subject of the story here" (http://www.time.com/time/digital/digital50/17.html). Once she signed on as CEO, her challenge was to maintain HP's image as a reliable American engineering company and to propel the company into an age dominated by the Internet—a challenge that she would face with success. She recrafted HP's image from that of a mere printer manufacturer into that of a provider of a comprehensive lineup of Internet products. She overcame formidable obstacles in venturing to merge HP with Compaq Computer Corporation, weathering the public-relations storm and managing to heighten HP's standing in the technology industry.
JUST WHAT HP NEEDED?
During her time as a student at Stanford University, Fiorina worked as a secretary typing bills of laden for Hewlett-Packard's shipping department. After graduating from Stanford with a degree in medieval history and philosophy, Fiorina attended law school for a semester while holding a variety of odd jobs. Before long she left law school and found her comfort zone in corporate America; she would spend 20 years at AT&T and Lucent before returning to HP to become the CEO.
During the process of consideration for the position of CEO at Hewlett-Packard, the company's leadership team was especially impressed by Fiorina's achievements at Lucent, AT&T's communications-equipment spin-off. At Lucent she launched a $90 million brand-building campaign that transformed and modernized the company. As group president of Lucent's Global Service Provider business she was responsible for over 60 percent of Lucent's revenue, providing systems for network operators and service providers; she increased the company's growth rate, international revenues, and market share. She built up a reputation for taking risks and assuming leadership of unpleasant but potentially fruitful projects. HP also evidenced interest in Fiorina's ability to implement sweeping corporate changes while still paying close attention to quarterly earnings.
Fiorina was committed to product innovation and the ongoing improvement of technology systems at HP. She consistently sought out ways to improve HP's image and its ability to deliver high-tech products to consumers. During slow periods she looked to consumer markets, as opposed to business markets, for growth, seeking to increase consumer awareness and use of HP networking, storage, software, computers, and printing products.
Prior to Fiorina's taking the helm, Hewlett-Packard had developed a reputation as a reliable but stodgy company; the new CEO was widely touted as just the fresh face to revamp that tired image. When she arrived in 1999, the company had 87 different product divisions, each with its own CIO and system of production. The company bureaucracy was overwhelming, and managers were sometimes required to clear their decisions with dozens of executives. During her first few months at HP, Fiorina worked to streamline the company's modes of communication and systems of production. She conducted a systematic review of the company's business units, trimming superfluous products and personnel in the process. Through her initial reorganization of the 60-year-old company Fiorina whittled the number of divisions down to 12.
THE COMPAQ CONTROVERSY
Fiorina faced a period of backlash, however, soon after the novelty of her appointment had faded. Less than two years into her term at HP, company profits slumped 89 percent during the big technology dip in 2001, prompting a period of sharp criticism of her leadership. Subsequently, after guiding the $13 billion spinoff of Agilent Technologies, in early 2002 Fiorina initiated plans for a controversial $18 billion merger with the personal-computing giant Compaq Computer Corporation. The goal of the merger was to solidify HP's position as a leading provider of computing and imaging services. The move would be the largest in information-technology history and was initially viewed with deep skepticism.
The potential unification with Compaq sparked very public resistance: Fiorina had to convince government regulators in both Europe and the United States that the move was not anticompetitive. Possible workforce reduction was a bone of contention for both shareholders and employees. The most prominent reason for trouble was the opposition put forth by the families of the company founders. Within HP Fiorina faced an organized no-vote movement—led by Walter Hewlett—while working to narrowly gain stockholder approval for the purchase; she also faced a court challenge from Hewlett, who claimed that she had bought votes from stockholders. Media and employees eagerly followed the courtroom drama, and for a time Fiorina's previously winning image was tarnished. She allowed the arguments to play out and adhered to her original plan, adamantly insisting that a buyout of Compaq would be the best decision for Hewlett-Packard. Fiorina managed to override Hewlett's complaints in court and came out on top; the merger was completed in May 2002.
Later in 2003 Fiorina made a statement in the San Jose Mercury News in reference to the merger offering a glimpse of her management style: "You cannot manage a company by the daily stock price. You cannot manage a company by the conventional wisdom. Leadership by definition means you are out in front" (April 13, 2003). She acknowledged that HP's stock prices dropped after the merger but looked back and remembered, "People increasingly understand that the technology industry was consolidating. Our choice was do we lead it or follow it. We chose to lead it" (April 13, 2003).
CREATING NEW PUBLIC AND PRIVATE LEADERS
Fiorina noted that among her responsibilities as a leader, she dared to redefine the role of the company, openly vowing to use its profits to benefit communities in need around the world. This approach of redefinition extended to her perception of her company's role in society. Fiorina was recognized and known for her commitment to the use of business in furthering citizenship and human rights around the world.
Fiorina emphasized that leaders in science and technology had the responsibility to participate in public discourse on social issues in both the private and public sectors. In her 2004 commencement address to the California Institute of Technology she told the audience, "The people most responsible for making change—the scientists and technologists—don't have a voice, because they have chosen not to represent their views in a public forum" (June 11, 2004). As an example she noted, "The Silicon Valley of the 20th century has given way to the scientific canyon of the 21st century, with scientists on one side, the general public on the other, and too few guides who can help bring us safely across from one side to the other" (June 11, 2004).
She promoted this view of scientists as guides and as leaders in a speech to the Electronic Industries Alliance, telling policy-makers in D.C., "Use us more" (May 25, 2004). She exemplified her call for cooperation through her advisorship to the U.S. Space Commission and in her work with the secretary of the Department of Homeland Security Tom Ridge, who turned to her for help in managing the technological challenges faced by that department.
Under Fiorina HP was a leader in "corporate citizenship" and created educational initiatives around the world. In accepting the "Seeds of Hope" award from Concern International, she declared, "Contribution to community has always been one of our corporate values" (November 4, 2003). Through Concern International HP worked with underprivileged groups needing assistance striving to improve their social situations through the use of technology. Local citizens created their own microbusinesses and, with the help of technological equipment provided by HP, made strides in communication, energy use, and other areas.
In a region of India with infrequent, sporadic electricity HP provided solar-powered digital cameras and printers to help citizens start up their own businesses. HP also provided help in southern India for 320,000 people across five rural villages; the company's goal was to transform the region into a self-sustaining economic community in terms of literacy, employment, and income, with improved access to government, education, and healthcare services.
In October 2003 HP presented a $10 million Technology for Teaching grant to schools in the United States, from kindergarten through the university level. The grant followed $3.3 million in previous HP technology grants that were provided to 20 American universities that same year. As reported by PR Newswire, the Concern International chief executive Tom Arnold noted, "It is important to recognize corporate leaders like Carly Fiorina who have demonstrated extraordinary leadership on issues of corporate and social responsibility. Ms. Fiorina puts her words into action, forming partnerships with the international humanitarian community" (November 6, 2003).
Fiorina, who traveled extensively to Native American reservations during her time at AT&T, led an effort to digitally wire reservations in Southern California as a way of increasing communication among tribal entities and fostering a shared understanding of their heritage and history. Fiorina and HP also worked with UNESCO to modernize computer systems in universities in Eastern Europe.
Fiorina spoke extensively on these broader topics of leadership at conferences, forums, and other gatherings. Fiorina once addressed a number of women business owners assembled by the U.S. Small Business Administration along with U.S. president George W. Bush. She was called on regularly to offer remarks on information technology and digital media.
A WAY WITH PEOPLE
Fiorina inspired admiration and loyalty both within and without her company. BusinessWeek dubbed her as bearing a "silver tongue and an iron will" and highlighted her ability to connect with employees: "As a leader, she has a personal touch that inspires intense loyalty" (August 2, 1999). She sent balloons and flowers to employees when they landed big contracts. She also brought an understanding of people to the organization; she explained to Working Knowledge, a publication of Harvard Business School, "Business is about more than facts. It's also about powerful emotions and how people react to them" (March 17, 2003). She summed up her style of managing human beings in BusinessWeek : "First, you reinforce the things that work. Then, you appeal to their brains to address what doesn't" (August 2, 1999).
Her marketing and sales techniques were as calculated and successful as her approach to managing technology systems. BusinessWeek noted that "her coddling of customers at Lucent was legendary" (August 2, 1999). Later the publication complimented her "marketing savvy, energy, and single-minded conviction" and called her the "most-watched woman in business" (May 29, 2003).
Fiorina's success was of course also largely based on her ability to master advanced ideas in technology. In another interview with BusinessWeek Fiorina explained how product innovation was a systems approach rather than a process of creating one product at a time. Such an approach flavored her leadership at HP. She noted, "Technology isn't a silver bullet. The innovation that is going to be most important is the kind that weaves systems and networks together. Security, mobility, rich media would be examples. These require systems approaches. They also require scope and scale, which is why we have been so convinced that the industry will consolidate into fewer, bigger players" (August 25, 2003).
A MODEL WOMAN
Part of Fiorina's celebrity and appeal, in addition to her aggressive leadership at HP, was the example she set as a female CEO of a prestigious company. In her contribution to the mentoring book Hard Won Wisdom, Fiorina shared her views on the importance of confidence in life and in business: "Having self-possession and self-awareness is important. No one learns who they are or what they are capable of without risk and without mistakes. In the end, you have got to be happy with who you are. You've got to be proud of who you are. You've got to like who you are" (2001).
Through 2004 Fiorina continued to integrate and organize her merged entities. By that time Hewlett-Packard was a $75 billion company with 140,000 employees in 176 countries, billing itself on the company Web site page entitled "Carly Fiorina: Chairman and Chief Executive Officer of HP" as a "leading global provider of computing and imaging solutions and services, which is focused on making technology and its benefits accessible to all." On the site's "Executive Team: Carly Fiorina" page, the company declared that Fiorina "led the reinvention of the company many associate with the birth of Silicon Valley."
See also entry on Hewlett-Packard Company in International Directory of Company Histories.
sources for further information
Anders, George, Perfect Enough: Carly Fiorina and the Reinvention of Hewlett-Packard, Portfolio, 2003.
Burrows, Peter, Backfire: Carly Fiorina's High-Stakes Battle for the Soul of Hewlett-Packard, John Wiley & Sons, 2003.
Burrows, Peter, and Peter Elstrom, "HP's Carly Fiorina: The Boss," BusinessWeek Online, August 2, 1999, http://www.businessweek.com/1999/99_31/b3640001.htm.
"Carleton S. Fiorina," Forbes.com, http://www.forbes.com/finance/mktguideapps/personinfo/FromPersonIdPersonTearsheet.jhtml?passedPersonId=218157.
"Carly Fiorina: Chairman and Chief Executive Officer of HP," Hewlett-Packard, http://www.hp.be/aesummit/fiorina.html.
"Carly Fiorina: Makeup Artist," Time, "Digital 50" listings, http://www.time.com/time/digital/digital50/17.html.
"Concern Worldwide U.S. Presents 'Seeds of Hope' Award to HP's Carly Fiorina," PR Newswire, November 6, 2003, http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=SVBIZINK10.story&STORY=/www/story/11-05-2003/0002052003&EDATE=WED+Nov+05+2003percent2C+01percent3A25+PM.
"Executive Profiles: Carly Fiorina," CEO Central, http://www.surferess.com/CEO/html/carly_fiorina.html.
"Executive Team: Carly Fiorina," Hewlett-Packard, http://www.hp.com/hpinfo/execteam/bios/fiorina.html.
Fiorina, Carly, "Catching Up with Carly Fiorina," interview by Dean Takahasi and Vindu Goel in San Jose Mercury News, April 13, 2003, http://www.siliconvalley.com/mld/siliconvalley/5624255.htm.
——, Commencement Remarks, Massachusetts Institute of Technology, June 2, 2000, http://web.mit.edu/newsoffice/2000/fiorinaspeech.html.
——, Concern International's "Seeds of Hope" Award Reception, New York, N.Y., November 4, 2003, http://www.hp.com/hpinfo/execteam/speeches/fiorina/concern03.html.
——, "A Conversation with Carly Fiorina," Forbes Fifth Annual CIO Forum, Dallas, Tex., December 2, 2003, http://www.hp.com/hpinfo/execteam/speeches/fiorina/forbes04.html.
——, "Dare to Dream," Commencement Address, California Institute of Technology, Pasadena, Calif., June 11, 2004, http://www.hp.com/hpinfo/execteam/speeches/fiorina/caltech04.html.
——, "Speaking Out: Hewlett-Packard's Carly Fiorina," BusinessWeek Online, August 25, 2003, http://yahoo.businessweek.com/magazine/content/03_34/b3846632.htm.
——, "Use Us More," Electronic Industries Alliance Government and Industry Dinner, Washington, D.C., May 25, 2004, http://www.hp.com/hpinfo/execteam/speeches/fiorina/eia04.html.
Germer, Fawn, Hard Won Wisdom: 50 Extraordinary Women Mentor You to Find Self-Awareness, Perspective, and Balance, Perigee Books, 2001.
Lagace, Martha, "Carly Fiorina: Heed Your Internal Compass," Working Knowledge, March 17, 2003, http://www.hbsworkingknowledge.hbs.edu/pubitem.jhtml?id=3384&t=leadership.
Malone, Michael S., "Failure to Communicate? HP Chief Carly Fiorina Needs to Explain Compaq Merger," ABCNEWS.com, February 12, 2002, http://abcnews.go.com/sections/business/SiliconInsider/SiliconInsider_020212.html.
"Profile: HP's Carly Fiorina," BBC News, September 4, 2001, http://news.bbc.co.uk/1/hi/business/1524555.stm.
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Zarley, Craig, "Carly Fiorina," CRN, November 12, 2002, http://www.crn.com/sections/special/top25/top25_02.jhtml?articleId=18822010&_requestid=331815.
September 6, 1954 • Austin, Texas
Chairman and CEO, Hewlett-Packard
As chairman and chief executive officer (CEO) of Hewlett-Packard (HP), a technology company worth $72 billion, Carly Fiorina is the most powerful woman in American business. Many give credit to the savvy businesswoman for leading the technology titan into the twenty-first century. In 2002 Fiorina cemented her reputation as a risk taker when she engineered a controversial merger between HP and Compaq Computers. After expanding her empire, Fiorina was sitting at the helm of the second largest computer company in the world. By the mid-2000s, however, given HP's shaky numbers, critics wondered if Fiorina's reign would continue. Regardless, her role in history as a trailblazer would remain. When she joined Hewlett-Packard in 1999, Fiorina became the only woman to head a large, publicly held company in the United States.
Steers toward business
Businesswoman Carly Fiorina was born Cara Carleton Sneed on September 6, 1954, in Austin, Texas. Her unique name was the result of family tradition. All the male members of the Sneed family who were named Carleton died while serving in the Civil War (1861–1865). To honor them, one child in each subsequent generation was named either Carleton (if a boy) or Cara Carleton (if a girl). Fiorina's father, Joseph Sneed, was a lawyer and at one time served as deputy attorney general under President Richard M. Nixon (1913–1994). He also served for more than thirty years as an appeals court judge in San Francisco, California. Fiorina's mother, Madelon, was an abstract painter. In 2003, during a ceremony honoring her father's longstanding career, Fiorina credited her parents for inspiring her to excel. "In times of hardship and uncertainty," she observed, as quoted on the OCE Public Information Office Web site, "people need a strong internal compass to find their way." Fiorina specifically thanked her father for "always being my true north."
"Progress is not made by the cynics and doubters. It is made by those who believe everything is possible."
Although Fiorina was raised primarily in the San Francisco Bay area, her father's job caused the family to move quite a bit. She attended at least five high schools all over the world, including Ghana (in Africa) and London, England. Fiorina eventually returned to California to attend Stanford University, located in Palo Alto. Strangely enough, Hewlett-Packard's corporate headquarters are located in Palo Alto, and the future CEO worked in HP's shipping department during a summer break from college. After graduating with a degree in medieval history and philosophy, Fiorina decided to follow in her father's footsteps. She entered law school at the University of California at Los Angeles in 1976. After one semester, however, she dropped out, deciding that a career in law was not for her.
Do You Want to Be Carly Fiorina?
Carly Fiorina has graced the top of Fortune magazine's annual list of the most powerful women in business since the ranking was launched in 1998. But in October of 2003, when the magazine polled the other honorees and asked them whether they would like to be in Fiorina's shoes, the answer was consistently "no." Many seemed uncomfortable with the word power. As Ann Fudge, CEO of Young & Rubicam (and number 46 on the list), told Fortune, "We need to redefine power!" And according to Jenny Ming, president of Old Navy, "Power is in your face and aggressive. I'm not like that."
Definitions aside, according to Fortune, by the mid-2000s the trend was that women were regularly being offered positions of power but were not accepting them. And more and more women were leaving their top-level positions or taking short- or long-term breaks. One reason cited was that women were not willing to sacrifice their personal lives, especially time with their children, in order to work a staggering number of hours at their companies. As Jamie Gorelick, former vice chairman of Fannie Mae, commented to Fortune, the "secret is that women demand a lot more satisfaction in their lives than men do."
Of course it makes it a lot easier to devote time to a career if one spouse stays at home. Interestingly enough, according to Fortune, more than one-third of the women who appeared on the list in 2003 had husbands who were stay-at-home dads. In fact, Carly Fiorina's husband Frank, a former AT&T executive, took an early retirement in 1998 to help focus his energies on his wife's career.
Not only were women turning down or leaving upper level positions in the business world, but business schools were having a difficult time attracting female students. According to a 2002 study by Simmons College of over four thousand teenagers, only 9 percent of girls interviewed expressed an interest in going into business. In addition, women made up only 36 percent of students heading toward a master's degree in business administration (MBA). As Judy Rodin, president of the University of Pennsylvania, explained, young women on her campus regularly commented that "You [career-focused] women work too hard. You're too strung out." Considering that Carly Fiorina starts her day every morning at 4:00, maybe they are right.
Fortune did offer some hope. Young men appeared to be changing their attitudes toward the business world. They, like women, seemed to want a balance between their personal lives and their careers. According to Brenda Barnes, who teaches at the Kellogg School of Management in Chicago, her students have told her that they saw their parents "dedicating themselves to their companies" and that they are not willing to "give their lives over to their jobs." Women executives see this as good news. They predict that if business attitudes change, equality between men and women in the top business spots may become a reality. That reality may be some time coming, however, considering that in 2003 only 8 percent of the top level jobs in corporate America were held by women.
Not sure what to do, Fiorina tried her hand at a number of jobs. She even taught English in Bologna, Italy. It was while working as a receptionist at a New York brokerage firm that her interest in business was sparked. Fiorina decided to go back to school to get a master's degree in business administration (MBA), and in 1980 she graduated from the University of Maryland. Fresh out of graduate school, Fiorina landed a job at the telecommunications giant AT&T as a sales representative. She was quickly promoted to the position of commercial account executive, and was responsible for selling long distance telephone service to federal agencies in the U.S. government.
Lights up Lucent, then snagged by HP
Fiorina's aggressive sales record did not go unnoticed by her employers, who decided that she was definitely management material. As a result, in 1988 she was sent to the prestigious Sloan School of Management at the Massachusetts Institute of Technology to earn a master of science degree in business. While at Sloan, Fiorina met the head of AT&T's Network Systems Group, a manufacturing division of the company that was viewed as sluggish and outdated. Against the advice of colleagues, she decided to transfer to Network Systems, even though it was a low profile area and the move seemed almost certain to stall her career. However, quite the opposite happened. In 1995 Fiorina was appointed as the first woman officer at Network Systems when she was put in charge of North American sales. She became instrumental in carving out new markets for AT&T in the Far East, well before it became commonplace for U.S. businesses to expand on a global scale.
In 1995 AT&T decided to spin off into three separate companies and Fiorina was at the center of the whirlwind. One company would focus on long distance, while NCR Corporation would be the computer company and Lucent Technologies would concentrate on telecommunications and networking equipment, essential for running the Internet. Network Systems was folded into Lucent, and Fiorina was put in charge of revamping the new company. She coordinated Lucent's $3 billion initial public offering (IPO), which is the offering of stock on the open market to the public for the first time. She was also responsible for creating Lucent's flashy marketing image, including its red swirl logo. Lucent quickly became a leader in the networking industry, and Fiorina was given most of the credit. In 1998 she became president of Lucent's Global Service Provider Business, and by year's end Lucent had chalked up $19 billion in revenue. That same year Fiorina was placed at the top of Fortune magazine's list of the most powerful women in business.
Other corporations soon took notice of the knowledgeable young professional, including Hewlett-Packard, the grandfather of all computer companies. In July of 1999, HP announced that it had hired Fiorina to be its president and chief executive officer (CEO). The move was remarkable for several reasons. One, HP was a family-owned business, and for the first time it was hiring a president from outside its own ranks. Second, the corporation became the first large U.S. company to place a woman in charge. Third, Fiorina was breaking into Silicon Valley, a region south of San Francisco where there is a concentration of high-tech industries, and until Fiorina came along, the industry had been strictly male-dominated. Although Fiorina was sad to leave AT&T after almost twenty years, she explained to Electronic News, "This is a once-in-a-lifetime opportunity for me. Hewlett-Packard is a company of great accomplishment and even greater potential.... I will strive to strike the right balance between reinforcing HP's values and working to reinvent its business."
A house divided
Since its formation in 1939 by Bill Hewlett (1913–2001) and Dave Packard (1912–1996), Hewlett-Packard had grown into one of the preeminent leaders in the computer industry, noted primarily for cornering the printer market. But by the late 1990s it was starting to lose ground, especially to personal computer (PC) giant IBM. The company looked to Fiorina to help it reenergize. As Sam Ginn, a member of HP's board of directors told Electronic News, "The board unanimously agreed that she is quite simply the ideal candidate to leverage HP's core strengths in the rapidly changing information-systems industry and to lead this great company well into the new millennium."
Fiorina lost no time cleaning house. She streamlined operations by combining several different divisions into fewer, more manageable units. She also shook up the HP sales staff, telling them to shape up or leave the company. This was a harsh mandate, but at the same time Fiorina was also known for her exceptional leadership skills and for maintaining a loyal employee following. By 2001, however, analysts were wondering if HP's ambitious new CEO had been too aggressive. True, Fiorina had struck some very lucrative deals with Ford Motor Company and Delta Airlines to purchase exclusively from HP, but the corporation's PC sales were still lagging and there had been no major inroads into the world of e-business, as promised. HP remained optimistic. As board member George Keyworth explained to USA Today, "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."
The board was divided, however, when Fiorina made a daring announcement in September of 2001. In a further effort to overtake IBM, she proposed to buy Compaq Computers, another faltering leader in the PC industry. The proposed merger could cost up to $25 billion, but Fiorina claimed that the combined assets of the two companies would create an information technology dynamo. Members of both the Hewlett and Packard families balked at the idea, and initially refused to go along with the deal. They eventually relented, and on May 3, 2002, Fiorina successfully engineered the $19 billion consolidation.
Carly claims victory with Compaq
A year-and-a-half after the merger, Fiorina was claiming victory. She told Fortune magazine that "the strategy has been vindicated." She also announced that HP "leads in every product category, every geography, and every customer segment in which we participate." The company did look different, and it launched a new ad campaign with the tag line "Everything is possible." It was also branching into new consumer electronics markets, like Tablet PCs and MP3 players, hoping to give new industry leader Dell Computers a run for their money.
But according to business analysts the numbers told a different story. In October of 2003, writer Stephanie Smith observed on the CNN Web site that the "new HP looks a lot like the old HP," and revealed that 80 percent of the company's $4.4 billion profit still came from printer sales. In addition, the morale of HP seemed to be suffering. By January of 2004 seven of HP's top managers had left the company. Some retired, some migrated to the competition, and at least one quit suddenly and without notice. Fiorina remained unfazed, telling Fortune that "only 1.7 percent of executives at the vice president level and above have left HP since the merger. That's a pretty small percentage."
Numbers aside, there is no doubt that Fiorina has ranked as a visionary. While at AT&T she helped usher in the era of global business; at Hewlett-Packard she has been at the forefront of new technological ventures. Fiorina has also helped HP become a leader in giving. She launched HP's Technology for Teaching program, which each year awards $10 million in technology grants to U.S. schools from kindergarten through college level. She has also established programs in other countries, including India, to "help bridge the digital divide between technology empowered and technology-excluded communities," as quoted in PR Newswire. As a result, in November of 2003 Hewlett-Packard was honored by the international nonprofit humanitarian organization Concern Worldwide for "its commitment to spearheading educational initiatives around the world."
For More Information
"Carly Fiorina Biography." Business Leader Profiles for Students. Vol. 2. Farmington Hills, MI: Gale Group, 2002.
"Concern Worldwide US Presents 'Seeds of Hope'Award to HP's Carly Fiorina." PR Newswire (November 5, 2003).
"Fiorina Named HP President and CEO." Electronic News (July 26, 1999): p. 14.
Lashinsky, Adam. "Power 25: No. 19 Carly Fiorina, Hewlett Packard." Fortune (August 11, 2003): p. 78.
Lashinsky, Adam. "Wall Street to Carly: Prove It! HP Talks Up a Turnaround, but Investors Don't Buy It—Yet." Fortune (January 12, 2004): p. 36.
Scardino, Marjorie. "Carly Fiorina: Inventing a New Hewlett-Packard." Time (April 26, 2004): p. 72.
Swartz, Jon. "Another Thumbs Down for H-P Deal." USA Today (November 8, 2001).
"Carly Most Powerful Woman—Again." CNNMoney.com (September 29, 2003). http://money.cnn.com/2003/09/29/technology/fortune_women/index.htm (accessed on May 21, 2004).
"Court of Appeals Honors Judge Joseph T. Sneed." OCE Public Information Office (December 9, 2003). http://www.ce9.uscourts.gov/web/OCELibra.nsf/0/bc0e84a3abe7cc0688256df9000124fa?OpenDocument (accessed on May 21, 2004).
La Monica, Paul R. "Fiorina Strikes Back." CNNMoney.com (November 21, 2002). http://money.cnn.com/2002/11/18/technology/comdex_fiorina (accessed on May 21, 2004).
Smith, Stephanie. "Can HP Find Its Way?" CNNMoney.com (October 2003). http://money.cnn.com/best/magazine_archive/2003/10/SEL-02.html (accessed on May 21, 2004).
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.
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.
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
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.
Sources of Information
Ackerman, Elise. "Silicon Valley Girl." U.S. News & World Report, 2 August 1999.
Argent, Lindsey. "Glass Ceiling Shattered at HP." Wired News, 19 July 1999.
McDougal, Chris. "The 50 Best CEOs: Carleton Fiorina." Worth.
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Swartz, Jon. "Another Thumbs Down for H–P Deal." USA Today, 8 November 2001.
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."
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