Nation & World

As a boss, Carly Fiorina was a contradictory figure at Hewlett-Packard

Compaq Chairman and CEO Michael Capellas and HP Chairman and CEO Carly Fiorina chat during an announcement of the strategic merger of their companies to create a $87 billion global technology leader, Tuesday, September 4, 2001.
Compaq Chairman and CEO Michael Capellas and HP Chairman and CEO Carly Fiorina chat during an announcement of the strategic merger of their companies to create a $87 billion global technology leader, Tuesday, September 4, 2001. MCT

At Hewlett-Packard, Carly Fiorina avoided the employee cafeteria, eating lunch in her glass office despite pleas from aides to mingle with rank-and-file workers. But in what turned out to be her last week as chief executive, she attended the funeral of an HP employee’s wife, lingering at a reception afterward to console his son.

She swore allegiance to the values of the company’s humble, Ford Taurus-driving founders, reciting their words at meetings. But she traveled in a chauffeured car — and when introducing herself in the employee newsletter, she highlighted her 52-foot yacht.

She showered workers with affirmation, once inviting an executive to meet the board of directors and placing a fake crown on his head. But she oversaw the layoffs of 30,000 employees in waves of downsizing that seemed gratuitously impersonal at times; some were fired over the phone.

As she seeks the Republican presidential nomination, Fiorina’s tenure as chief executive of HP is largely treated as the story of a misguided corporate merger, boardroom espionage and the stunning ouster of a Silicon Valley celebrity.

But lost in those dramatic accounts is a textured understanding of how Fiorina ran the technology behemoth day to day for six years. Her distinct style of management was revealed in unglamorous strategy sessions, casual interactions with subordinates and motivational talks to the company’s far-flung global workforce, which stood at 122,000 when she took over in 1999.

Those who worked with her described an exhilarating, blunt, self-punishing figure who stayed in the office until 1 a.m. (and expected aides to do the same) — a boss who could be warm, even nurturing, but who could abruptly turn cold and unforgiving.

Executives who struggled to meet financial projections — “stretch objectives,” in her parlance — got a stern warning: If they failed to deliver, she would find someone who could. But she also relished the chance to rescue employees, telling anxious staff members of an HP division that “your funding’s not going to get cut off, and I’m going to make you famous,” according to an internal document.

From the start, Fiorina collided with the entrenched reality of a proud workforce steeped in the philosophy and tradition of HP’s founders, Bill Hewlett and Dave Packard: a decentralized, paternalistic and slow-moving culture that was nevertheless treasured for its autonomy and egalitarianism.

As the company’s first chief executive to be plucked from outside its management ranks, she went out of her way to convey sensitivity to the founders, reminding executives that she had read Packard’s book, “The HP Way,” five times. But her mandate, handed down from the board that hired her, was to shake up the company’s stodgy ethos, and she found it difficult to mask her distaste for the rhythms of the workplace she had taken over.

Just a year after arriving, in 2000, she offered a pointed critique of the company in an interview for the employee newsletter. “The list of negatives is too long,” Fiorina said. “This is what customers tell us: HP is inflexible and hard to do business with. We don’t meet commitments. We don’t listen to our customers very well.”

In the end, poor financial results and disagreements with the board to which she answered undermined Fiorina. But it was a recurring clash — between a leader determined to transform and a workforce chafing at the scale and pace of change — that defined and ultimately consumed her at HP, according to interviews with 25 former colleagues who described their interactions with Fiorina and provided internal communications involving her. (She declined a request to be interviewed for this article.)

Fiorina’s time at HP, a $42 billion business operating in 130 countries when she started, is perhaps her biggest credential as a candidate and an important basis for voters as they take the measure of the first female chief executive to seriously pursue the presidency.

Today, she frames her candidacy as a campaign against complacency and self-interest in Washington, the same forces that, in her telling, opposed her at HP, which fired her in 2005.

A Gifted Orator

As a boss, Fiorina put a premium on inspirational oratory, all but an afterthought to her HP predecessors, a succession of engineers who relied on the language of computer code and financial analysis.

In meetings, she was fond of telling the story of the building of a nearby landmark, the Golden Gate Bridge, using the intricately woven strands of its suspension system as a metaphor for teamwork.

Inside the glass offices of HP’s headquarters in Palo Alto, Calif., aphorisms tumbled out of her mouth. “Faster is always better than slower, and sooner is always better than later,” she counseled her staff. To end deadlocked debates, she labeled solutions “perfect enough,” a phrase she encouraged managers to adopt as a motto.

Her messages could be aggrandizing. “They will write books about our reinvention journey,” she wrote to senior executives in a 1999 memo, a few months after taking the chief executive’s job.

Eyes rolled in certain corners of the company, but the new urgency and stabs at lyricism struck many longtime workers as gratifying and overdue.

“She could hold an audience on an emotional level,” said Bojana Fazarinc, who oversaw HP’s branding when Fiorina arrived. “She used a lot of powerful phrases that made us believe she understood the culture.”

For Fiorina, it was by design, according to a memo written by an HP employee about how to draft her speeches.

Before addressing a room, Fiorina wanted “a complete audience analysis,” the employee wrote, after interviewing Carl V. Kelly, Fiorina’s speechwriter at her previous employer, Lucent Technologies, in preparation for her arrival at HP. (The memo went on to outline Fiorina’s preferences for font sizes at Lucent: 14-point Arial, double space.)

But no matter who was in the crowd, according to the memo, Fiorina would find a way to connect. Kelly, the memo said, “says we have a winner.”

Leaving Out Niceties

She seemed to manage time down to the minute.

Scott Cooper, who managed policy for the company in Washington, was frequently summoned to a tarmac for meetings, mounting the stairs of HP’s corporate jet, stepping inside and finding Fiorina at a table, waiting to be briefed. Cooper spoke; Fiorina listened and responded. After 15 minutes, he would leave, and she would take off for her next destination.

“She would do a lot of that,” Cooper recalled. “It felt like the most useful 15 minutes I’d had that month.”

Employees who were used to small talk, the lifeblood of many offices, found Fiorina’s style to be abrupt but efficient.

Bill Mutell, a senior executive at the company and a supporter of Fiorina, recalled slipping into a waiting car with Fiorina already in the back seat as they prepared to meet a customer. She smiled and cocked her head.

“Well?” she asked him. It was her signal: She was ready for her briefing.

Mutell remembers the message: “OK, I acknowledge you are in the back seat. We are not here to chitchat. Let’s get to it.”

Back in Palo Alto, an aide was assigned to leave her an early-morning voice message, of no more than a minute, summarizing how HP and its rivals had fared in European markets while she slept, so she could listen to it on her way into the office.

It was a new and, for some, dispiriting approach for a company whose founders prized impromptu conversations with employees, so much so that they gave it a name that caught on in the industry: MBWA, or management by walking around. Fiorina’s predecessor, Lewis Platt, liked to have a lunch of chicken fingers in the cafeteria, encouraging workers to stop by and talk about their latest projects.

Fiorina, aides said, preferred prepared talks to large audiences. HP managers tried their best to persuade her to adopt a more intimate style.

Brad Whitworth, who was a manager at the company, recalled how he and his superior requested that she walk around HP’s large office in Cupertino, Calif., for an hour after delivering a speech, to build goodwill.

“We’d heard the complaints,” Whitworth said.

Avoiding Obstacles

Fiorina was a keen student of power — and how to use it — at HP.

When Fazarinc, the branding executive, tried to create a companywide advertising campaign not long after Fiorina arrived, she warned her new boss of a potential obstacle. Under HP’s decentralized system, Fazarinc predicted, the powerful business units that would need to provide money for the campaign would resist it as an expensive corporate initiative outside their parochial interests.

Who, Fiorina asked, might be the biggest opponent? Fazarinc identified the head of HP’s highly profitable consumer business, Antonio Perez.

Fiorina said she had a solution: Perez would run the ad campaign. You cannot oppose what you are in charge of, she reasoned.

“She co-opted him,” Fazarinc said. “She thought of it immediately. She didn’t undermine him. She gave him a bigger umbrella to carry. It was very clever. And it worked.” (Perez, in an interview, said he had never opposed the marketing effort.)

Those who worked closely with Fiorina recalled similar feats of internal jujitsu. Joseph Beyers, an intellectual-property expert and negotiator, had impressed her with his ability to settle long-festering disputes with HP’s competitors over patents and licenses.

Sensing a new way to centralize operations, Fiorina hatched a plan to make him vice president of intellectual property, a position that did not exist. She encouraged him to attend the next meeting of HP’s board of directors and to ask for the new title, coaching him on his presentation. He got the new title. And HP’s revenue from intellectual property surged under his watch.

She was quick to protect loyal, high-performing aides, ferociously at times. Beyers recalled a meeting in which his unpopular view of how to handle a delicate negotiation prompted a senior executive to lash out in anger and recommend that Beyers be fired.

Fiorina refused, he said. “I trust him,” she said.

“It created a real sense of loyalty,” Beyers said.

That protection did not extend to all. Fiorina summarily fired high-ranking executives after their divisions reported quarterly performances that missed internal goals, a Darwinian tactic that startled many managers used to a genteel corporate culture.

It was unpleasant but necessary, Mutell said.

“If you are part of her staff and a senior executive working for Carly,” he said, “you are expected to meet those lofty goals. If you don’t, you are not going to be around.”

Assuming ‘the Worst

She was capable of unexpected moments of compassion.

Fazarinc was home sick one day when the phone rang. It was Fiorina, asking how she was feeling.

“I had no other CEO ever do that,” Fazarinc said.

When Beyers’ wife died of a heart attack, he was surprised to see Fiorina at the funeral in February 2005. HP’s chief executive and her husband, Frank, stayed throughout the service and approached Beyers and his son at the reception.

They wanted to take father and son out on their boat to get their minds off the tragedy, Beyers recalled.

“That’s Carly,” he said. “The people who contributed to her in the company, she had empathy for them.”

But many felt left outside that circle — a fact Fiorina acknowledged. The changes she was imposing and her style of leadership had alienated sizable segments of the workforce.

By May 2000, her own public relations team felt the need to debunk the growing myths surrounding Fiorina inside the company, conducting and distributing an interview in which she addressed them one by one.

Were trees cut down at an HP office to make way for a helicopter ferrying Fiorina? Yes, but she did not request it, and asked that the trees be replaced. Did she install a custom bathroom with pink marble at HP’s headquarters? No.

“I think some people have assumed the worst about me,” Fiorina said in the interview.

Many employees, however, insisted that they had assumed the best, but over time were disillusioned.

Even some touched by her kindnesses started to question her judgment. After overseeing a major marketing campaign for Fiorina, Fazarinc, a second-generation HP employee, was forced out of her branding job in a reorganization, she said.

Offered a different position, she decided to leave HP after 26 years. As Fazarinc’s time wound down, Fiorina invited her onto the patio outside her office for a final talk. She gave Fazarinc a hug.

But Fazarinc ultimately felt disappointed by Fiorina. Old friends kept losing their jobs. HP was becoming a place she no longer recognized.

Fiorina, she said, “had people in her hands, ready to help her. But she lost their support.”