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An Engineer's View of Carly Fiorina's Leadership
prostoalex writes "There is a pretty damning look at Carly Fiorina's leadership while at HP on TechnologyReview.com. The author was working for HP Labs, the center of invention and innovation for the company, only to be told that nothing exciting will happen in the tech market since it's a mature industry. He left the company in 2003. "The lab was never packed with genius marketers. Carly told us we had no business sense, and that every project needed to make a profit within three years or less. She usually said that right before the research budget got slashed again and more lab employees were laid off."" Update: 03/19 03:13 GMT by Z : As detailed on the TechnologyReview page, they have retracted the story on the grounds that they can no longer vouch for it.
In mid-2002, HP's labs became solely focused on finding ways for other businesses to save money.
Seems like this kind of backfired on HP's "We re-did NASA" marketing campaign, shortly before the Columbia crash.
Check out the sidebar to that article, printed back in February. You know you're doing a bad job if your ex-employees open champagne upon hearing of your leaving. Wow.
I'm posting anonymously because my father works at HP and I have done some work for them and they continue to be a client of my company.
Basically Carly's main failure was a total lack of vision. Her main changes were branding and cost-cutting. And in order to cover her major failing, she undertook the merger which would make success impossible to benchmark for about 3 years or so.
There were also countless re-orgs which also serve to make goals impossible to benchmark. While re-branding HP 'Invent' she did her best to ensure that no actual inventing occured... tying HP closer to Microsoft and pushing the actual inventing to other vendors (the HP iPod anyone?) while trying to eck out a living on those thinner margins by cost-cutting.
Now most business units are facing a 10% budget cut in order to finance Carly's kiss off. I don't need to say that morale is a huge issue and HP is largely rudderless (after being firmly steered in the wrong direction for so long this may be an improvment though)
And there is talk of having her run the world bank. I suppose it is typical in the US this day and age to continuously reward failure as long as it's big enough (Bush, Rumsfeld, CIA, Condi etc.) so Carly fits that bill perfectly.
The whole thing disgusts me really...
yup, american companies gotta show a profit or the CEO will find his ass on the street, whereas the Japanese companies who stole alot of industries away from us are in it for the long term. Nno profit this quarter? Oh well, we'll make it up.
Your hair look like poop, Bob! - Wanker.
Google goes out of its way to spend a significant percentage of its time on technology that is innovative first, that they don't know yet how to make profitable. Google News and just about all the stuff in Google Labs only cost them money, but they're smart enough to think longer term than that.
- Allen Pike
Altering time, one time at a time.
The last things I can remember HP doing right were their laser printers with single digit numbers. (EG. Laserjet II, III, 4 series, and even the 6P - which is a teriffic "small office workgroup" type printer.) The old scanners with single digit numbers were equally well-made and respectable (ScanJet 4 and so on).
But somewhere around the time they decided these products needed numbers in the thousands, quality took a nosedive and then came the parade of garbage "consumer desktop PCs".
Nowdays, I rarely recommend anything with the HP logo on it. Their inkjets have the most outdated print-nozzle technology out there for photo printing. There's still nothing noteworthy about their Pavillion PC line, and even their laptops seem like they're generally the size of bricks. (Those HP laptops with 17" displays are just HUGE compared to something like an Apple Powerbook 17".)
After ruining HP, the Bush administration has suggested her for rui^H^Hnning the World Bank. Read it here. 'Top executives' like herself like to tell us that they need their huge salaries because they take such risks, and if they screw up they are done in the business. Yeah, right. The truth is, it doesn't matter how much they screw up, their own will take care of them anyway.
If you don't understand your own products, you are going to suck as a leader. I don't care what the current nonsense is, but that's something I really believe - perhaps it explains the success of lawyers as politicians?
This is a theme you see in education all the time - you don't need to understand or have a degree in, oh, say physics in order to teach physics. Yeah, right. You can't teach something you don't understand at a fundamental level.
This goes to show that people with pure business backgrounds are not automatically assumed success in any field. Mr. Hewlett and Packard made wonderful products, by and for engineers. You can see it clear as day in what they produced. I love my HP48 calculator. I own oscilloscopes and function generators made by HP that dates back to the 70's and the gear still works flawlessly and looks great.
Watch for intel to make the same kind of mistakes - the best leaders for tech companies are those with BOTH business acumen and technical backgrounds.
Hopefully this Carly FIASCO will scare some brains into those who make the big decisions, but maybe I'm just dreaming. Short term profits, damn the cost!
..don't panic
It's funny, but having grown up in the 80's and having matured into computing in the 90's, by then HP had already started to fade. Their computers were notoriously crash-prone, their inkjet printers were slow, and their calculators seemed badly out of date compared to the very user-friendly TI stuff (I know about the power of the HP, no need for a flame war). And since then they've only gotten worse. My entire impression of HP, for my entire life, has been negative.
It's really kind of heartening to think back to what HP had done, and why so many companies and people still foolishly hold it in high regard. They really were a tech powerhouse in the 70's and early 80's, before they started rebranding iPods with the slogan "Invent." People gave HP a break for a very long time because they had built up a degree of cred, cred which they have been shamelessly squandering for many years.
But people still care about them. It's kind of heartening that way. Like thinking about your Grandfather when he was young, energetic, and happy, rather than the grumpy, senile jerk he has become.
The ______ Agenda
And now HPs calculators from the 70's and 80's sell for hundreds of dollars on EBay, while their current flagship product is a bug ridden POS with a bad keyboard. It's not only a matter of lack of interest at the fundamental R&D level, but a policy of making it as cheaply as possible, regardless of the quality level the market really wants. It is sickening to see the current product, feel the tacky keyboard and the gaudy painted plastic shell that the paint chips off easily and read reports of keypress detection problems, while that 25 year old model has keys that still work perfectly, with no sign of wear on key labels.
Marketing is fine as a tool for finding products people want. But it's useless for determining if a completely new technology might create or revolutionize a market.
Marketing is much, much worse than that in a technology driven company because the marketers do not understand even the current products and how they are used.
Bigger cars were "better", right?
Were? A lot of people still believe that crap. In part this is due to Detroit's misleading statistics that in front impact collisions a larger vehicle is safer. What they fail to tell you is that if you hadn't been in such a large vehicle to start with chances are you would never have been a collision! Smaller cars have much better handling, much shorter break distances and less likelihood of roll over. Just read the stats, for example if you drive an SUV you are much more likely to be involved in a rollover.
That seems to sum up the "new HP". Before they were pretty much doing thier own thing making specialized computers, test equipment and some damn fine laser printers.
Now 2/3 of thier profits come from ink and toner sales, thier systems are very unsupported, I know I just talked to a really friendly techie from India who couldn't answer my problem (I have just discovered are due to thier thier latest BIOS...grrr).
From what I saw when I booted this machine is that HP is cozying up to any company with money: Microsoft (XP, only XP), Apple (iPod), Symantic, AOL and other services (spyware/adware/Internet/etc). They seem to be using thier PCs hard drive capacity for garnering advertising, tie-in and lock-in revenue.
Certainly sounds like HP has been reduced to a me-too company, they should expand into the ringtone business, I hear there are big bux there now.
"Enjoy what you're doing! If it becomes drudgery, you're doing it wrong!" - Jim Butterfield
Nor was this story remarkable by Loomis' standards. She covered her own corporate employer, AOL Time Warner, for several years and her reports were characterized by withering sarcasm in reviewing their strategies, finances, and internal politics.
Fiorina may no longer be one of the most powerful women in American business, but Loomis still is.
It's basically a modern get-rich-quick scheme for CEOs and shareholders etc. Get in, cut out any costs that only pay off in the long-term (i.e. R&D), report increased profits, pay out huge bonuses, get out. Company may collapse or suffer badly afterwards, possibly putting thousands out of work
In fact, most of the time this is pension funds fault which owns much of the corporations today; they are asking companies unreasonable return on investment, about 10%, or even 15% or 20% sometimes, this is completly crazy ! trees don't grow to to the sky as they say. To make such huge profits, CEO are obliged to offshore all what can be offshored, cut their workforce and especially their R&D.
Fortunately Carly spun off the test and measurement instrument group into "Agilent". They have always produced the best instrumentation in the industry and continue to do so. It's a shame that they've lost the HP name, but they are still a top notch company.
I just noticed today that Acer (of Taiwan) has become the 4th largest computer maker in the world.
"Only in their dreams can men truly be free 'twas always thus, and always thus will be."
--Tom Schulman
I'm going to go anonymous here...
;-). I am convinced that any one of Apple's senior VP's could run any other fortune 500 company.
I'm an Apple employee, and I can tell you that every single Apple VP I've met (six of them so far), is freakin' brilliant. Bertrand Serlet actually reads just about every bug report for any part of the software that falls under his responsibility (that is, the whole OS.) Ron Johnson knows more about selling products in stores to the public, than I had any idea there *was* to know. Sina Tamadon could do the job of any engineer who works for him.
One thing that people haven't given Steve Jobs enough credit for, is the amazing job he does when it comes to executive recruitment (he learned his lesson with Sculley
Carly Fiorina was pushed out for one reason---HP fell from its top market share spot it earned in the 4th quarter of 2003. Dell beat HP during all of 2004. Fiorina couldn't perform numbers-wise. This is the primary reason why CEOs step down.
Do you really think that they are going to hire 200 PhD's in India or Indonesia?
Somehow I really doubt it. I actually really doubt that they will hire even 50.
There are very good reasons why 50 PhD in US cost 200 PhD in India. It is the cost of living and quality. Once the quality of engineers will match (and it will match, the companies are spending a lot of money to train all those Indian software developers and call center employees) the cost of living will have to equalize. The cost of living will rise in India but it would also mean that the cost of living in US will drop. Perhaps significantly. You know it is a zero sum game and India and Indonesia have significantly bigger population then US (about 15 times bigger if you count China as well) . It would mean that the quality of life in US will nosedive.
IMO, Palmer's job was to make DEC an attractive take over/merger candidate. In that particular aspect, he was quite successful. ;-(
Say what you will, transational corporations are freaking *rich*. It's not entirely clear that a rogue startup could potentially topple an American-based corporation with deep, deep pockets. I suppose innovation is a powerful thing, but then, so is having billions of dollars.
I cannot disagree fully with you, however, Carly was the hatchet man doing something that every company of size bends to:
Demands by Wall Street analysts to fit specific criteria, and profits are only part of it. There must be certain profit per employee, the number of "real" employees (vs. contracted workers), the amount and types of benefits offered, and more metrics than I care to know. If you didn't fit this, you were not rated as well in the industry.
Over 100 years old, The Upjohn Company pharmaceuticals, $5B/yr. and profitable, you know, Kaopectate? Motrin? Halcion? Xanax? among many others, was bent by those same forces, ripping a familial workplace and history. The company doesn't really exist any longer, it's R&D taken apart in the two merger/acquisitions.
It all sucks.
..on the bright side, some of what Confucius said was quite compassionate and noble-minded.
You know, interestingly enough, even though I don't have much against globalization, I still hate the world bank! Amazing, huh?
Globalization, short of virtually every gov't in the WORLD passing laws against multinational corporations, WILL happen. It is inevitable. At some point, governments will do the same thing (EU, perhaps), and eventually, someone will find a way to create a TRULY effective multinational gov't.
The US was an attempt at such. The concept was largely independent states united in an effort to protect themselves from more powerful enemies, such as (at the time) England. Originally (as I understand it), the concept was for states to retain most of the power, but the fed to have power for defense against foreign powers, and to make sure that no state did anything to violate the constitution.
How far we have strayed...
"We don't know what we are doing, but we are doing it very carefully,..." Wherry, R.J. Personnel Psychology (1995)
Dobro pojalovat k moemu miru
(welcome to my world)
Nobody really thought Carly was topdrawer. It was affirmative action. I mean that in the sense that she didn't have the chops to get that job.
She was a marketer at Lucent who did okay for a short period of time.
The board hired her because they enjoyed basking in the glow of the press telling them what a great choice and "isn't it time a woman was the head of a large company?"
But I heard the woman talk at 2 separate Gartner Symposiums in Orlando... a couple things were clear...
First, in comparison to Balmer and McNeally, *she was simply out of her league*. She was at best VP material. You could tell this with her grasp of HP, what she thought the strategy should be (which were always vague in that corporate-speak way).
Second, when asked pointed questions, Carly would get pissed off. She would glare at the interviewer. Take a drink of water, all to let this person know that Carly didn't appreciate being asked questions like that. By contrast, no matter how outrageous he question, Balmer chuckled, and would say stuff that made you think "Holy shit. Balmer may be the spawn of Satan, but the guy is smarter than anybody I know". Same for McNealy. Not Carley. She clearly thought that common folk had no business asking her questions that were uncomfortable.
Third, when Carley was asked about HP's business strategy, she made a point of saying all the enterprise computer stuff was not making as much money as she'd liked, but really seemed to like printer ink. An unkind person might suggest it was because she didn't have a clue about complicated computers. But I suspect if Carley had her way, they would have dumped everything and made computer ink, just because the return was a little better.
I had no opinion until I heard her speak. Then I knew that HP was doomed. And if I could pick that up, then certainly the board did know. But she was a women, so they hired her anyway. Its really outrageous. And it makes it worse that people like you defend her by comparing her to the 2 biggest crooks in corporate history. As if pointing to Bernie Ebbers suddenly makes it okay that HP's board hired a senior VP to be a CEO.
"An outside firm was hired to make sure that the correct percentage of men, women, older, younger, ethnic, etc. workers were let go so "
As a women who got her job via political correctness, it would make sense that she'd like to pass that "gift" down to the rank and file workers.
Do you only have your vet engineers and a bunch of bright-eyed and bushy-tailed kids? I would figure you'd have everything in between too... bring in young talent, get them experience and train them up. The good ones coming into their own as the old ones retire to tinker in their garage.
:)
The rot can be in engineer core too....
My dad was a great tool engineer at Boeing (with it was owned by MacD&D before that). He was brilliant at finding ways to save that companie's butts. But there were engineers there, in other departments, who resented that because it could often make them look bad.
My dad would see problems and find unbelieveable solutions. For example, they used this very expesnive and dangerous process of pumping molten metal under pressure to create custom bushings per screw hole in parts the F15. My dad, in our basement, created a jig to do the same thing with inexpensive and entirely safe hot glue. A simple hot glue gun and a wooden rig.
It took forever to convince them to even try it. He had to get everyone to sign off on the thing, from the materials guys (what the hell good is hot glue?) to the people who would look foolish if it worked. Eventually he managed to get a trial setup. They'd use his system to create a bushing and drill a hole with it and see if it meet the extreme tolerances required.
While doing the experiment, one of the engineers who'd end up looking foolish for "inventing" the molten metal process reached up and nudged the drill as it was making the hole. He tried to be sneaky, but everyone saw it. Never-the-less, the experiment was a success and the whole was perfect, even with the attempt at sabotage.
He ran into that sort of thing all the time. Management was less of a problem than just bad, don't-rock-my-career engineers. Of course in this case, management just shelved the idea anyway and didn't use it. At least not at first.... one day, a few years into retirement, my dad gets a call for boeing asking if he'd ressurect that process. They suddenly needed to be able to do things cheaper, get the winning bid on whatever-the-heck, and his process would be key. My dad, being the kind of guy he was, created a detailed how-to for them and mailed it off never asking for anything in return (despite the millions this meant to their bottom line).
Not sure if they ever ended up using it, but it was just one of many things he inveted there. Some of them had far reaching affects on how they built their aircraft. I wasn't able to follow his adventures in engineer after they moved him into Black World and he couldn't talk about what he did, have visitors or even bring home anything. But I'm sure it was exciting.
-- David
David Whatley
Chilling. This means she had a key role in the sinking of two of the great American private research institutions.
Let's send her to IBM next. I am sure she can accomplish great things there.
Now before I get modded down, I be to remind whoever might read this that what I am saying is FACT. - bogaboga