Magazine

Two Close-Ups of HP's Carly Fiorina


BACKFIRE

By Peter Burrows

Wiley -- 296pp -- $27.95

PERFECT ENOUGH

By George Anders

Portfolio -- 248pp -- $24.95

Hewlett-Packard Co. (HPQ) is the legendary corporation that helped spawn Silicon Valley. Ever since its humble beginnings in a Palo Alto (Calif.) garage in 1938, HP has managed to balance outstanding financial performance with engineering excellence, teamwork, conservative bookkeeping, and a paternalistic relationship with employees. But by the late 1990s, the egalitarian culture known as "the HP Way" was under assault. HP's reputation as an innovator was quickly slipping as rivals superseded it. Sales growth and morale tanked. To jumpstart the moribund company, the board brought in an outside CEO: the charismatic Carlton S. Fiorina. Shake things up she did. The controversial $19 billion acquisition of rival Compaq Computer Corp. led to one of the biggest proxy fights in corporate history.

For much of last year, the soap opera over the future of HP captivated the high-tech industry. Two seasoned business journalists have written books chronicling the contest that pitted Fiorina against Walter Hewlett, a philanthropist and the eldest son of William R. Hewlett, who co-founded the company with his Stanford University pal David Packard. Both Backfire, by BusinessWeek computer editor Peter Burrows, and Perfect Enough by George Anders, a senior editor at Fast Company, offer fresh insights about the epic battle and about Fiorina's ultimately successful purchase of Compaq.

The authors don't always take the same path in telling their tale. In Backfire, Burrows profiles Fiorina and devotes a good deal of attention to her turbulent first two years at HP. In Perfect Enough, Anders examines the philanthropic work of the Hewlett and Packard families and spends much time on the Compaq deal. The two have different conclusions. Anders believes Fiorina's HP may have a shot at regaining its faded greatness. Burrows is more skeptical about the company's future, and he worries that management has lost its special bond with workers.

Burrows recounts Fiorina's life story, from her family's Texas origins and her first marriage to her triumphs and failures at Lucent Technologies (LU), the formerly dowdy AT&T (T) research arm that she helped make into one of the hottest companies of the Internet boom. For Burrows, however, Lucent provides a cautionary tale about Fiorina's aggressive salesmanship and how that may have helped create an atmosphere where easy loan terms were given to companies with iffy credit. After she left Lucent to take the HP job, Lucent has restated earnings, laid off thousands of workers, and suffered billions in losses.

In Perfect Enough, Anders provides a behind-the-scenes account of the battle for HP, putting the reader inside the minds of several key players. It is clear that Fiorina and Dick Hackborn, an HP director, are kindred spirits. Hackborn was a hero at HP, having earlier in his career pushed the company into the enormously profitable printer business. From the initial discussions of the Compaq deal, both Hackborn and Fiorina were absolutely convinced that acquiring Compaq would help HP grow again.

Anders also explores the Hewlett and Packard families. He details how HP's stock slide affected the foundations that both founders' families created to distribute their wealth. The David and Lucile Packard Foundation, Anders points out, felt compelled to slash the amount of its annual grants from $600 million to $200 million.

Today, HP is blowing past its cost-cutting goals, and there's momentum building for the company on Wall Street. Still, it's too early to tell whether the Compaq deal will backfire for Fiorina, or if the company that is emerging is perfect enough.


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