|HP Management Failures: Carly Fiorina||Back to Letters|
From Fortune Magazine:
The largest significance of the third quarter is that Fiorina summarily fired—within hours—the head of enterprise sales, Peter Blackmore, and two of his senior executives. The speed and visibility of the move caused the tech industry to view the firings as an unnecessarily cruel public hanging, and criticism of Fiorina flared. She argues back, saying that a hanging it wasn't and that in truth these people were treated, in the usual HP manner, with "respect, candor, and compassion." But she also says that some of the European problems had been ripening for a time and that these three very senior executives clearly "dropped the ball." She believes in accountability, she says, so the men are gone. Reached by phone, Blackmore declined comment because, he said, he and the company had mutually entered into a nondisparagement agreement (to which he appears to be sticking a little more strictly than HP).
And thus it was that three more executives left HP, which under Fiorina has lost —via firings, resignations, and retirements—a noticeable number of its top people. Here's one indicator of what some people call the "brain drain": Of the 11 "direct reports" that Fiorina had in October 2003, one died and five others are gone. Michael Capellas, CEO of Compaq when the merger was done, left early. Former HP employees can also, without much effort, list another 20 well-placed executives who have departed, a few of them going to competitors Dell and storage company EMC.
Fiorina does not agree, naturally, that there's been a brain drain. In fact, she believes that one lesson she's learned while running HP is that she should have moved more quickly in ejecting certain people. Smartened up now, she says, "I would have done them all faster. Every person that I've asked to leave, whether it's been clear publicly or not, I would have done faster."
Baloney. When Carly arrived at HP, if she'd asked any of several hundred people then at HP what the problems were, most of them would have answered, "middle management." If Carly had staged public hangings for a few dozen "PermaFrosts", as we called them, not only she, but HP would have had a much greater chance of success and improvement in the marketplaces HP played in, long before or after the Compaq merger.
Unfortunately, as it has recently be said, "Carly is very, very aggressive in how she sets her goals, and she doesn't like to hear 'no'. I think people try to tell her about the problems, but you don't get anywhere. That kind of percolates its way down to the rest of the company and is sort of a disease."