Tough enough

Former HP chief Carly Fiorina opens new chapter with her memoir and shares her leadership ideals with Kellogg audience

By Romi Herron

Update October 31, 2006: Video of Carly Fiorina's talk is available here.

October 27, 2006 - “A global company is a battleship, not a jet ski. It takes time to turn it,” said Carly Fiorina, former president and CEO of Hewlett-Packard and the author of a new book, Tough Choices: A Memoir, which highlights her experiences leading the technology solutions giant through a period of intense change.

Fiorina spoke to hundreds of faculty, students and staff in the Owen L. Coon Forum at the Kellogg School of Management during her Oct. 25 visit. In her remarks, she touted collaboration, character and capability as three essentials for leaders, while encouraging the audience members to have optimistic but realistic timeframes for effecting change.

A law school dropout at 23, Fiorina would eventually be dubbed “The Most Powerful Woman in Business” by Fortune, a title she held for four years. In 2002, she was at the center of a merger with rival Compaq, a move some viewed as controversial. Fiorina told the Kellogg audience that she wrote Tough Choices to give readers an approach to business from the perspective of those who make companies succeed.

“Nothing gets accomplished in business with one person working alone,” said Fiorina, 52, who served as HP’s chief executive and president from 1999 to 2005 and chairman from 2000 to 2005, after holding several senior leadership positions at AT&T and Lucent Technologies over the previous two decades. “Collaboration means you have to find common language and cause with people who are sometimes very different from you.”

Diverse cultures, she added, present natural challenges best addressed with a willingness to consider others’ perspectives.

Describing her own efforts to build business relations internationally, Fiorina discussed a 1980s encounter in Korea when she met with the president of another technology company. At the time, the Korean corporation had exactly zero female employees in leadership roles.

“The only women who worked there wore white gloves as elevator attendants, or they were secretaries,” said Fiorina, recalling the discomfort the company’s president showed when meeting with her in the executive boardroom.

To ease the awkwardness, Fiorina sought common ground with her host and accepted his invitation for an evening of traditional Korean dining with other senior executives where they were able to bridge some of the cultural gap between them, she explained. As a result, the next day’s meetings were much more successful than the first encounter. Though diversity can present challenges — such as potential unfamiliarity with customs and communication styles — Fiorina said it is an irreplaceable strategic tool in the global marketplace.

“Diversity is a business imperative, because no one can know it all, and the more ideas you can bring to the table [through diversity] the better the decision-making process will be,” she said.

But diversity was not engrained in HP’s culture during the early 1990s, when Fiorina assumed her role in an effort to turn around the struggling company. In fact, she said, the firm was “iconic” in Silicon Valley and regarded as “the gray-haired lady who had seen her brighter days.”

Founded in 1939, HP had a long history that influenced how it approached business transactions and change. In addition, 85 percent of the employees were men.

“History becomes mythology and mythology becomes religion,” Fiorina said, suggesting how difficult driving change can be in such an environment. Yet, practices were inefficient, with 87 product divisions, each with its own information technology and human resources systems, she said.

To build her case for change, Fiorina asked hundreds of customers and employees what was ineffective about the company. The company filmed interviews with both groups and presented them to HP employees, who recognized how similar the complaints were.

“Customers said, ‘You’re too slow, too fat, not proactive,’ and then we had employees telling us the same things,” Fiorina said. “[The presentation] was a way to find common cause and language.”

But the case for change was met with mixed reactions.

There were those who accepted that change was necessary, those who resisted it, and those “in the middle.”

“To accomplish change, you need change warriors, those who like to take risks and know it is required,” she said, acknowledging that change always invites the skeptics and the supporters, as well as those undecided.

“Your goal is to move those in the middle to the warrior side, and know that change is resisted because people in positions of power and influence want to keep it,” she added. “Fear causes people to stop in their tracks and hunker down.”

To overcome fear-based resistance, leaders should provide their people with all the intellectual material to support the change, but also deal with the emotional aspects of such transitions, Fiorina said.

Beyond the diagnosis of the company’s maladies, Fiorina created a plan of what HP could become if it implemented effective solutions, setting realistic goals that took time to put in place. Innovative, efficient and customer-oriented frameworks were central to the strategy.

“Leadership requires balance between understanding and executing the details, and then painting a vision of change,” she said. “Plan for every risk that can possibly go wrong and know that people can be trusted to make changes.”

For HP’s turnaround, Fiorina led the company to consolidate its 87 product divisions to 16, and also changed its focus to customer satisfaction with a service framework called “Total Customer Experience.”

Along the journey, Fiorina found terminating employees among the most difficult parts of her role.

“During my tenure, 36,000 people lost their jobs and it’s not because they weren’t performing; it was because they weren’t walking the walk, representing the values and vision of the company.”

Respect, integrity and innovation became the “new HP way,” she said, adding that character is a must in business.

“That culture is the software of business, not the soft stuff of it,” Fiorina concluded. “When I hear people discussing corporate scandals and new rules that should be created accordingly, I believe you can’t write enough rules to substitute for personal ethics.”