Tech News: Did Carly Fiorina really ruin HP?

Did Carly Fiorina really ruin HP? Introduction

Donald Trump likes to insult people. It's sort of his thing, you could say. The jabs roll right off his cuff too, as if he spends his downtime just thinking up affronts, only to sling them at whomever happens across his path, like a bully with a snowball.

But in the most recent GOP primary debate, the man with the golden coif made a dig at one of his opponents that for many in the tech industry could not go ignored. Trump slammed Carly Fiorina, and in this instance, his jeering rant had nothing to do with her looks.

"The company is a disaster," Trump said, referring to Hewlett-Packard. Fiorina had just boasted her remarkable achievements as CEO of HP, which she captained from 1999 until 2005. "[HP] still hasn't recovered," Trump continued. "In fact, today, on the front page of The Wall Street Journal, they fired another 25, or 30,000 people, saying, 'We still haven't recovered from the catastrophe.'"

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The sad truth

It's true that on September 16, the day of the debate, WSJ ran a story called "H-P Outlines Up To 30,000 More Job Cuts." The article indicated that the company was entering the end of a long period of layoffs.

Score one for Trump? Not so much. He jumped the gun on the takeaway. HP's history is complicated. Let's consider what major events happened under Fiorina's leadership:

July 1999: Fiorina is appointed CEO of HP, replacing former CEO Lew Platt, who retired several months earlier. Fiorina was 44 years old at the time and a rising star. She'd served as president of Lucent Technologies' Global Service Provider Business, and had led the company's IPO.June 2000: HP establishes Agilent Technologies, the spin-off of its "Medical Products and Instrument Group." It's IPO makes Silicon Valley history, raising $2.1 billion.October 2000: HP announces it will acquire Bluestone Software, a provider of software for enterprise interaction managementJanuary 2001: At this time, the company says it has 88,500 employees worldwide and total revenue from continuing operations of $48.8 billion in its 2000 fiscal year.March 2001: HP creates HP Services, a new wing of business focused on consulting.May 2001: HP introduces the Itanium chip, in collaboration with Intel.September 2001: HP announces it will acquire Compaq for $25 billion in stock. The merger was seen as one that could bump HP into a position of total dominance in the computer world.May 2002: The deal with Compaq is sealed. The HP ticker is changed from HWP to HPQ.May 2003: Fiorina outlines HP's new "adaptive enterprise" marketing strategy.January 2004: HP Announces Digital Entertainment Strategy with New Products and Partnerships Across Music, TV, and MoviesAugust 2004: Fiorina fires three top executives: Peter Blackmore, EVP; Jim Milton as CSG SVP; Kasper Rorsted XSG SVP and managing director for the Europe, Middle East and Africa region. The reasoning is that these leaders failed to bring in the big bucks to meet expectations.December 2004: HP abandons its Itanium development efforts, handing the torch over to Intel Corp. HP also ditches plans to integrate Compaq's Tru64 Unix tech into its HP-UX OS.January 2005: HP announces organizational realignment, in which HP's Imaging and Printing Group (IPG) and its Personal Systems Group (PSG) are combined.February 2005: Investors and HP board members are deeply unhappy with Fiorina, who is abruptly forced to resign by the HP board, of which she was the chairman. When she goes out, company stock goes up.

Clearly, Fiorina's track record shows that she wasn't a stellar CEO. She failed to make the company thrive against its main rivals at the time, Dell and IBM, respectively. She bought growth via the acquisition of Compaq, but didn't stimulate growth organically. Her top people were screw-ups, or so she made them appear to be, and that reflects almost as badly on the boss as it does on the fired employees. But there's something more essentially wrong with Fiorina as a leader. She wasn't likable to the people that worked for her.

What do former employees have to say?

"When Carly joined HP, she was billed as a next-gen visionary and we all were supportive," says Bill Van Eron, CMO of Innovation & Market Value Creation at Headwaters Marketing. Van Eron worked at HP for 23 years, from 1978 through 2001.

Notice the year he quit coincides with a certain someone's command.

"That had to be around 1998 or so as I noticed a sense of continuance initially but by the year 1999 or 2000, it was like most managers were deer in the headlights," says Van Eron. "Thankfully I never relied on managers to do my strategic work so I was still breathing life into the human attributes that still defined a better HP empathy, quality/value, integrity.

"I also understood the ecosystem that now defines markets and was able to realize some of the best ROI ever in HP's history. They seemed to only see the huge financial returns whereas I recall when I defined the strategy for an HP Education Program around 1995, I got a letter from Dave Packard thanking me that reflected greater strategic and values alignment that offered between education and HP. That association is lost today and [it] died when Carly took over."

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How's this different from her predecessors?

Van Eron goes on to discuss what great people HP's founders were and how wonderful it was to work with them.

"I started in HP in early 1978 and witnessed firsthand the enormous positive impact Bill Hewlett and Dave Packard had on the company," said Van Eron. "They were visionary, humble, personable, trustworthy and trusting. It would be hard back then to have found one employee that was anything less than passionate about working there. One hundred percent [of employees] bought in and that extended out to how the world saw HP as America's most admired company."

But Van Eron brings up an interesting point, noting that even though Fiorina was an unpleasant presence at HP, Van Eron doesn't hold her accountable for the company's decline.

"Saying that she ran HP into the ground is an overstatement and it isn't true," says Van Eron, adding that if we promote that message we risk "having the real issues not heard."

But it's not just personality Carly

The other real issues responsible for HP's decline have little or nothing to do with Fiorina, like the burst of the dot com bubble, which was happening at full speed when she signed on. And let's not forget Léo Apotheker, who ran HP for barely a year between September 2010 and September 2011. During his turbulent tenure, HP's stock fell by nearly 40%. You can't rightly blame Fiorina for those numbers. She was already five years out the door.

"Bottom line: No, Carly Florina did not ruin HP. The CEO who got the company into its current mess is Leo Apotheker, but Meg Whitman was on the board during his tenure and her 'turnaround' has not been effective," says Silicon Valley-based management consultant Steve Tobak. "I don't see how Whitman's technical tactic of splitting HP in two will benefit the company's core problem: that virtually all of its businesses are undifferentiated and essentially losing market share to a long list of heavy-duty competitors – Oracle, Amazon, and Microsoft, to name a few – that are all growing, not contracting."

Fiorina rocked the boat in unsteady waters, but she didn't sink the ship.