Carly Fiorina, the only woman to break into the all boys club of the CEOdom in the Fortune 500... was ousted today. BBC says it was do to the failed merger with ComPAQ. BusinessWeek is reporting that hp shares are up in the wake of Carly's resignation. On HP's site, Carly says:
While I regret the board and I have differences about how to execute HP's strategy, I respect their decision. HP is a great company and I wish all the people of HP much success in the future.
In addition, one of the executives on the board had this to say:
... we look forward to accelerating execution of the company's strategy ...
Is the board saying that Carly didn't do good enough job? From what I understand of business, "differences in strategy" is just a euphemism for lack-luster performance. But that doesn't jell with my perception of HP. When they bought ComPAQ (a flailing company that was only being kept afloat by largely out-of-touch IT managers in the government who believed in the StupidStart system) Carly tried to keep the best of ComPAQ (the iPAQ) and dump the worst (their entire PC line). Of course she left the StupidStart in place because for some reason it was still selling. The merger did take a long time, my guess is that it was difficult to oust many of the useless middle-managers that had been building an empire at ComPAQ. She eventually did oust them... but maybe some of them slipped into the board room?
So HP will now accelerate it's business. I wonder what that means. Was Carly too slow? Perhaps the board was excited about the deal with Apple, and wanted it stepped-up? HP makes the Media Centers / Media Center Extenders. HP makes iPAQs. HP brands iPODs. Maybe the board sees a lucrative entertainment business sliding by? Or maybe they are pissed that HP wasn't involved in the consolidation of the Plasma TV market? I certainly don't know... but I wonder what HP will look like in a year without Carly's leadership.
Carly during her tenure appears to have cut costs, streamlined the business, introduced a slew of new products, and led the largest merger in the PC world (bigger than a Dell-Gateway merger, which I suspect will happen in a couple of years). The HP image was even starting to grow beyond that of a printer company. I think she did an excellent job. If my perception would allow her to keep her job then she'd still be employed. I mean, aren't you lusting over one those new Media Center PCs?
UPDATE: Reuters has reported on the ousting, and brings to mind the founders complaints about the ComPAQ merger. I seem to recall them trying to "rally" the troops to tackle Carly at a stockholder meeting recently. Looks like they may have succeeded. If I understand correctly they wanted HP to remain a printer-only company, which is incredibly short-sighted. Maybe now they can spin off the printing business as HP Printers or maybe HP Laser?
Critics of the merger with Compaq, including family members of HP founders William Hewlett and David Packard, decried the merger, argued that it diluted the value of HP's crown jewel, its profitable printer and imaging business.
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Peter Sorrentino, chief investment officer of Bartlett & Co. in Cincinnati, also expressed relief at the management change.
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Sorrentino said, "HP has never had a cost-effective model in terms of the PC business, they've frittered away their lead in imaging, and their move to services never really panned out even with the addition of Compaq," he said.
UPDATE: MIT's Technology Review reports "Worst. Ceo. Ever." Apparently Carly actually cared about the bottom line. She cared about making HP profitable as a non-printer company. It's called diversification. HP essentially owns the printer market, and she was looking to grow revenues in new areas. Carly's management style apparently was one of production: Produce or get out of my way. I like that, and wish their were more managers who required people to do their jobs. Nothing upsets me more than Government workers (like the one's I personally saw at DIA) being paid to sleep and read the newspaper, because it was easier to retire them in place than to fire them.
Fiorina's obsession with Wall Street pushed much innovation to the side, and eventually led to a rather unsettling change in the HP work environment: the company's very first layoffs. When it was all said and done, 15,000 of the then 85,000 workers found themselves without a job by the end of 2003.
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"How do you expect people to make good products when you're constantly -- constantly -- working under the assumption that you'll be laid off soon," asks an employee from the personal computers division. "Every time we knew the quarterlies were close to being announced we'd brace ourselves for the latest round of layoffs.
It's music to my ears. Accountability.
posted @ Wednesday, February 09, 2005 11:50 PM