Wednesday, February 09, 2005

Fiorina Out: HP

Carly Fiorina is stepping down as chairman and CEO of Hewlett-Packard after three years. She led the company through the challenging merger with Compaq, which has not gone quite as swimmingly as hoped for.

Carly Fiorina was named Fortune Magazine's most powerful woman in businees for six years in a row until 2004, when eBay's Meg Whitman supplanted her.

The proximate causes are 'operational and performance differences with the HP Board'. The HP bio page for Carly was off the web - now it's back with the epithet 'former' added

Robert Wyman, the CFO of HP will be the interim CEO. Patricia Dunn, a director will be the non-executive chairman of the board.

In her statement, Carly alleges she was fired

Was she good, or bad for Hewlett-Packard?

The market welcomed the news, but felt that this action alone was not enough to address the strategic problems faced by HP in their core markets. Has HP lost its way?

THe Economist actually asked this question "Has HP Lost it's way?" in 2004 - excellent article.
Her problem ever since has been to justify the beast she thereby created. HP's shares are worth less today than on the day before the merger was announced or on the day it closed. A consensus has emerged in the industry that the new HP, the tech industry's most sprawling conglomerate, has lost its focus and is being squeezed between two formidable rivals with much clearer business models, Dell and IBM. Where Dell stands for cheap, simple boxes in an industry that is commoditising, and IBM stands for patching together lots of fiddly subsystems in an industry that remains ridiculously complex, HP seems a lukewarm compromise.
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Her problem, in a nutshell, is that HP is trying to be all things to all kinds of customers, and is leaving more and more of them plain confused.
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It is unlikely that Ms Fiorina, who in her previous career oversaw the spin-off of Lucent from AT&T, is a stranger to the theory of corporate clarity. Could it be that years of conflict in testosterone-filled rooms have left her afflicted with that psychology so common among bosses of the other gender: the compulsion to rule the roost?

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