June 6, , at a press conference, despite recent poor performance, Ms. Fiorina projects 10—12 percent growth in revenues and earnings. HP share price hovers in low thirties.
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September 4, , Ms. HP share price falls 19 percent and an additional 3. Carly Fiorina may not have been around long enough to have learnt her lesson about projections of future economic performance—under promise and 24 Portraits of Women CEOs over deliver. Alternatively, her background was in industries telecommunications, high tech and fields sales to which those lessons were thought not to apply and optimism was the order of the day.
But, surely, in her cadre of advisers, Ms.
Fiorina must have had someone who could have given that advice and schooled her on the lessons of financial history. The Big Dumb Acquisition? Fiorina, representing Hewlett-Packard, and Michael Capellas, representing Compaq Computer, announced their plan to merge the companies, to be consummated in early The merger seemed to make no strategic sense either to casual onlookers or industry analysts. Fiorina indulged in her penchant for rosy forecasts, predicting 20 percent earnings growth in the year following the combination of the two companies.
The fee made it very difficult for HP to abandon the merger or for individual directors to oppose it. Last week she announced that H.
Both H. But Fiorina insisted that uniting the two firms would solve their problems, creating a company with the size and scope to dominate existing markets. This was about as smart as betting all your money on a long shot after a bad day at the track. Projections of 20 percent earnings growth for the merged entity seemed irresponsible.
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Eighty percent of its assets were invested in HP shares. The Hewlett Foundation was similar. It would be better if it ends sooner. Noting that under Fiorina HP had already laid off 6, employees, Mr. Packard keyed in on the human dimension: [M]r. Packard strongly suggested that the merger was a cruel departure from the values and corporate culture nurtured by the founders, William Hewlett and David Packard.
The last male bastion : gender and the CEO suite in America's public companies
While he acknowledged that the founders never guaranteed job security, Mr. True to the HP Way, a majority of them agreed to do so. Fiorina herself, Walter Hewlett announced that he planned to solicit other HP shareholders to vote in opposition to the merger with Compaq—an extraordinary happening a sitting director publicly opposing his own board of directors in corporate America. Walter Hewlett also filed suit in the Delaware Chancery Court, alleging that, in order to get the Compaq merger approved by a majority of the HP shares, Fiorina had engaged in illegal vote buying from Deutsche Bank and had made misleading statements in urging HP shareholders to vote for the merger.
He lost in his bid to obtain an injunction. The last representative of the founding families disappeared. HP and Compaq consummated their merger on May 6, More Promises, More Misses and Removal Carly Fiorina did give a justification for the Compaq merger: the scale size that would come with it. A combined HP Compaq could bargain, achieving considerable cost savings and rack up large earnings gains. HP under Fiorina never captured the synergies the merger portended. HP again missed projections Fiorina had made, in the third quarters of and again in Board members and analysts praised Fiorina as an architect of corporate strategy but wondered about her ability to oversee execution of that strategy.
Fiorina refused, however, to countenance employment of a chief operating officer COO , who could pay attention to details while Fiorina traveled, gave speeches, and developed strategy.
Her public persona, her travel, her speeches, and her overweening egoism, at first a novelty, had become a distraction. Hurd took office. Retailers sold out of HP computers in the —08 holiday shopping seasons. The merger for which analysts and the press maligned Carly Fiorina worked as she said it would work. HP became a much larger and more profitable corporation.
The drawback is that it occurred not in or , as Fiorina predicted, but in , , and , after the HP board had removed Fiorina. It is also not quite accurate to say, as Fiorina does, that she designed and put in place the platform upon which HP has achieved such good results.
The farther from headquarters you get. Fiorina is disingenuous. She talks of the media invitations she turned down69 but never about all those she accepted, the countless feature stories about her, the magazine covers which featured her, the 60 or more off-campus speeches she gave each year, her monthly telecasts to all HP employees, and more. At time her ego knew no bounds. She set herself up for a comeuppance.
The Last Male Bastion: Gender and the CEO Suite in America's Public Companies
Be Assertive Again there is a ying and a yang about everything. The yang is to be a poppy, just one that is not too tall. Corporations need symbols and alter egos, especially as a company is a fictional being which needs humans to act for it. Often the alter ego is a celebrity spokesperson Ronald Reagan for General Electric. Sometimes it is the CEO. Advice books urge women in business careers to take on speaking engagements while on the way up.
Appear on magazine covers or in feature stories if you can. The public persona that comes through, and that it does come through, in speeches or the media, give higher ups confidence that a rising executive has the right qualities.
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Carleton Fiorina overdid it, like no other CEO in the current era. Avoid being Lopsided Learn about revenues, profits, forecasts, and share prices, as well as sales. She was interested in making herself the image of Hewlett Packard. She was interested in being the architect of business organization and strategy. But both women failed to give the necessary attention to revenues, profits, forecasts, and share prices, and this deficiency led to their downfalls.
The stock price has to take care of itself. A rising executive, as well as one who has arrived, must learn about such matters, and put them in the proper perspective. Any woman who aspires to be a CEO has to develop a feel for that. Fiorina is similarly casual about missing forecasts. Further it is up to the board, not the CEO, to make that judgment.
Her lack of understanding about forecasts and share prices, combined with her blaze approach to them, contributed to her fall from grace. Parents have to dole out tough love on frequent occasion. So, too, for managers rising through the ranks. Carleton Fiorina regarded the HP-Compaq merger vote as a litmus test for her popularity. Fiorina won the battle, but lost the war. Her failures to listen or consult fostered undying enmity among key HP employee sectors, contributing greatly to her downfall.
Besides, it is poor management style, for a CEO or for a manager who aspires to become one, to ignore extreme displeasure or unhappiness in some segment or quarter of the operations under their supervision.
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