Magazine

"Wonder Woman With An MBA"


By Tom Perkins

TOUGH CHOICES

A Memoir

By Carly Fiorina

Portfolio -- 319pp -- $24.95

(Readers'

Reviews below)

Editor's Review

The Good An engaging, Horatio Alger-like memoir, with juicy tales about HP.

The Bad More than occasional "inspirational" language may turn off some readers.

The Bottom Line A "must read' for those who are interested in HP.

When Carly Fiorina parachuted into the corner office at Hewlett-Packard (HPQ) in July of 1999, the fabled "HP Way" was little more than a memory. Not much remained of the founders' entrepreneurial spirit. HP was dead in the water, divided into what Fiorina calls "a thousand tribes." The company was run by engineers who had little marketing savvy: The joke of the day was that HP would sell sushi as "cold dead fish." In choosing Fiorina, the board sought to transform the place--and she sure did that!

Although more comfortable speaking at a Davos conference than writing for an engineering publication, and never very popular with the geeks in the technical departments, this Wonder Woman with an MBA had vision and strategy galore. She faced enormous problems. Breaking through the comfortable torpor of the corporate culture was a huge challenge. In the end, she laid the foundation for Mark Hurd, her successor, to lead HP to a position where it rivals IBM (IBM) and has humbled Dell (DELL). The keystone to Fiorina's strategy was the acquisition of Compaq, the Texas outfit roughly the size of HP at the time. The merger was bitterly opposed by the family heirs of Dave Packard and Bill Hewlett, and only a leader of Fiorina's stamina and power of persuasion could have pulled it off.

However, though excellent at the "vision thing," Fiorina created an organizational matrix so complex that only she seemed to understand it--but maybe that was the point. Perhaps the worst disappointment of her tenure was the resignation of Michael Capellas, the former CEO of Compaq, who left only a few months after the merger. The intention was to have him serve as "Mr. Inside" running the business, while Fiorina wowed customers and Wall Street as "Ms. Outside." Fiorina's failure to find another Capellas and to delegate significant operational responsibility prompted the board eventually to dump her. HP stock rose 7% on the announcement of her departure.

Fiorina recounts all of this history in her just-published book, Tough Choices: A Memoir. It is a very engaging read. If Horatio Alger had written a gender-correct sequel to Tom the Bootblack, this is what you might expect. Admittedly, she gives little space to such personal matters as the divorce from her first husband and her huge compensation and severance packages, which triggered bad publicity and even a shareholder class action. But many readers will identify with Fiorina as she describes her rise from a solid middle-class background and her life as a loving and dutiful daughter. Her brilliance as a student is evident, and we discover that she has an innate flair for marketing. Chapters dealing with her meteoric rise through Lucent (LU) are excellent: Women will find them particularly interesting as she lays to rest the myth of the glass ceiling. Along the way we meet her second husband, Frank, an executive in his own right who sidetracked his own career to become a rock-solid foundation for hers. The book makes it clear that they have a most loving and successful relationship.

Not unexpectedly, half of Tough Choices deals with HP, and it will surely be a must-read for employees and friends of the company. As at HP, Fiorina here seems to pay more attention to inspirational words than to the numbers: The volume is freighted with sentences like "I deeply believe that every person has more potential than they realize." Still, the volume is a vindication of her performance, though the numbers that HP is currently achieving provide vindication enough.

There are some errors in fact--Dave Packard returned from his stint as Deputy Defense Secretary in late 1971 not 1990, for example. But Fiorina carefully documents her struggle with the HP board. She is, rightly, still outraged over the leaks to the press that so complicated that relationship. Such disclosures can be very damaging and are certainly indicative of deep divisions at the top. Overall, in my view, she fails to understand the board's frustration over HP's deteriorating performance and her style of management. Probably not enough time has elapsed for the book to be called Lessons rather than Choices.

Fiorina says some unpleasant things about me. She is downright nasty toward her successor as HP chairman, Patricia Dunn, who also has aimed some criticism in my direction in recent weeks. Maybe they are both right. I probably am too easily bored with board process, and too preoccupied with customers, growth, market share, and the bottom line. It is my own interpretation of the HP Way.

Perkins is a Silicon Valley venture capitalist, a former HP board member, and the author of a satirical novel, Sex and the Single Zillionaire


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