Saving Hp

Can Anyone Save HP?

Seminar

March 24, 2005

In today's world of corporate America, mergers, acquisitions, takeovers, scandals, immoral business practices, poor management, etc., are issues we hear and read about everyday. For the most part, it seems that the scandals and negative issues over shadow the beneficial and positive activities in the business world since they are more often than not given more media attention. For instance, immoral business conduct within ENRON, and insider trading issues that swirled around Martha Stewart were headline news for months. CEO's aren't safe from the media barrage either. Michael Eisner, former CEO of the Disney Corp. was in charge of the corporate mega-giant and wanted to make the company so over-diversified only out of self interest. By doing so, he thought he would be issuing himself job security, because for Disney to find a successor, that was as knowledgeable about all of Disney's holdings lime Eisner was would be an impossible task. And for Disney, finding a successor will be difficult, yes, but they are doing everything in their power to remove Eisner completely from the company for his shortcomings. With that said, there has been another high profile CEO that has been in the news an awful lot lately, and that's Carly Fiorina.

Carly Fiorina made headline news many years ago, in a good light, by becoming the first woman CEO of a major corporate company. Life for Fiorina couldn't get much better. She was in control of one of the world's largest imaging and printing giants, traveling all over the globe, and presented herself as this very well educated, and highly successful business woman. In the beginning, Fiorina had huge plans for HP, but a number of miscalculated business deals, numerous character flaws, and other untimely miscalculations ultimately lead to her demise and firing from HP. One of the main miscalculations that Fiorina made was that upon arrival at HP, she was battling HP's deep rooted company culture everyday. Since Fiorina was the very first outsider to ever head HP, she made the critical error of letting her Lucent Technologies based company culture clash with that of HP's, and ultimately favoring her former employers culture rather than try to adopt and perhaps slightly modify the culture that was already in place at HP. While battling against the HP culture, she took it upon herself to take 80 plus autonomous business units HP had in place, and thus streamline them into 4 divisions, laying of tens of thousands of employees in the process. So after witnessing that, it gave HP employees the crystal clear picture that Fiorina really meant business. It was mentioned in the article that Fiorina was one of the absolute boldest gamblers in the tech industry, and to me that was a huge gamble on Fiorina's part right off the bat. Another mistake that Fiorina made, which ties in with the first mistake that I mentioned, was the fact that Fiorina took yet another gamble of taking the layoffs to the next level. After ousting tens of thousands of workers, she then set her sights on many executives and top level managers. People, who in HP's eyes were great assets to the company, but sadly they were expendable in Carly's eyes. These were individuals, who upon elaving HP, went on to become top level execs at other major HP competitors. So by this time, employees at HP were most likely feeling that they had no sense of job security at all, since Fiorina ruled with such an iron fist, and with the knowledge of her strict game plan for heading HP. And whatever needed to be done, would be done. She was so infatuated with her strategy, she would not let anything get in the way of her accomplishing exactly what she wanted to with HP. That brings me to Fiorina's last really big gamble that went super sour for HP, and that was the acquisition of Compaq. Granted, in the early stages of the acquisition it seemed to be a great idea: combine the industry leader in printing/imaging with one of the most recognized and dependable computer makers. Fiorina anticipated for the possibilities, as well as the profits to be endless. But Fiorina was sadly mistaken. Upon the acquisition, there were setbacks and people who didn't quite agree whole heartedly with the deal. Many insiders at HP felt that with Compaq now in the mix ,efforts would be taken away from Hp's core competency, which obviously is printing/imaging, and would be shifted over to the PC division. This became such a problem, that director Walter Hewlett actually raised so much of a fight, that the case was brought into court. Fiorina had so much power and clout, that she actually had the courts find Hewlett to be wrong, and then had him ousted from the company that his grandfather founded. Moving forward,