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By daring to imagine a merger between Hewlett-Packard and Compaq, Carleton S. Fiorina ventured into hostile territory that surprised but did not dissuade her, she said recently at Harvard Business School.
In her remarks to about 300 students on March 5, Fiorina--one of the most prominent chairman/CEOs in the United States, and one of the rare women in that post--proudly defended the controversial merger of May 2002 as the right thing for do for practical business reasons. She pointed to targets that have been reached and others that she expects will be reached soon, and also shared some career advice with the students.
"Change is always hard. There is always resistance" within a company anticipating change, she said. A critical mass of support has to suffice when you are making important decisions for your company because 100 percent support is not possible, she said.
Fiorina quickly went to work remaking HP after succeeding Lew Platt as CEO in July 1999. First, she guided the $13 billion spinoff of Agilent Technologies, which had been started under her predecessor. Then Fiorina attempted to acquire PricewaterhouseCoopers in an $18 billion bid to expand HP's services business. That deal didn't come to fruition, but her biggest move came in acquiring Compaq, a battle that ultimately drew the ire of the families of company founders David Packard and Bill Hewlett.
| Change is always hard. There is always resistance. |
| — Carly Fiorina |
The merger was "incredibly controversial" when it was first announced, she admitted. One reason: It was the largest merger ever attempted in technology. But it was the right thing to do because, according to Fiorina, it fulfilled HP's goal to extend its position as a leading provider of computing and imaging services. What's more, tech spending was not likely to go back to the levels reached in the 1990s, she said, and technology as an industry was maturing.
Fiorina had to assess whether a merger would heap more change on HP than it could handle, she said. Her more important question, though, was whether it would serve as a catalyst for HP to accomplish more in the long run. She was determined to discount conventional wisdom about what the right or wrong business move should be. Conventional wisdom is frequently wrong, Fiorina said, reminding students that the AOL-Time Warner merger had once been hailed as "brilliant."
Business advice
In their careers, she told the students, they will need to forge ahead using business fundamentals, not relying on stock price or headlines to guide them. Every manager also needs a strong "internal compass," she said. This compass can be calibrated in three ways:
- Constant interaction with colleagues at all levels of the organization.
- Talking with customers. "They tell you the truth," she said. And don't just talk with the CEO of a customer company, she advised. "Talk with the vice president who runs the data center. I ask, ‘How are we doing?'"
- Actively encouraging an environment at your organization in which people speak up. Employees tend to soft-pedal their remarks when the CEO enters the room, Fiorina acknowledged. That is why companies need to foster an atmosphere in which employees at all levels can broach difficult topics.
Ultimately, however, the buck at her company stops with her, Fiorina said. While it is essential for a CEO to build a strong team around her, when it comes to decision making, "the most difficult decisions are the ones you make alone." "Business is about more than facts," she added. "It's also about powerful emotions and how people react to them."
| You can learn from every interaction. You can learn from absolutely everybody. |
| — Carly Fiorina |
One of her learning experiences in the power of emotions at work, she said, was that she "did not appreciate how radical and different" she appeared when she took the helm at Hewlett-Packard. "I stopped thinking of myself as a ‘woman in business' 20 years ago. The scrutiny and the depth of emotion caught me by surprise."
She added that despite her role as a female CEO, she could not speak for all women in business. Asked if women executives in general were more likely to choose career over family, she responded, "I think generalizations are really unfortunate. Every family, every woman has to make her own choices. And every choice is different."
Learning from everything
Mentors are wonderful, she added. She has had many. But again, conventional wisdom is not always right, according to Fiorina. "Some of my mentors were not mentors in the classic sense," she said, referring to the standard picture of the seasoned executive and green protégée. "Maybe [my mentor] was a peer; maybe I was higher in the chain. But mentors are honest: they appreciate your good qualities and they know where you need help."
"You can learn from every interaction. You can learn from absolutely everybody," she added.
Many people she's observed spend so much time gunning for their next opportunity that they neglect the job they're currently in, Fiorina added. Focusing on the future is fine, but not if it interferes with you doing your best to contribute within your current post, she said.
"People can be leaders no matter where they are," she told the HBS students. "Leadership is not about a title, degree or level. Anybody can lead at any time."