Forget Hillary Clinton. Carly Fiorina is the most powerful woman in the United States. John Naughton reports on the woman who has snatched the top position at Hewlett-Packard
A strange noise reverberated through the boardrooms of corporate America recently – the sound of a glass ceiling shattering. Hewlett-Packard, the venerable computer and electronics giant, announced that it was appointing Carly Fiorina as its president and CEO. Although a handful of women have attained the upper reaches of a few Fortune 500 companies in recent years, Fiorina’s elevation was hot news not just because Hewlett-Packard is a very big company (123 000 employees and revenues of $47,1-billion last year), but because it enjoys iconic status in the high-tech business. Put simply, Hewlett-Packard was the company that created Silicon Valley.
It all happened 60 years ago when two Stanford engineering graduates – William Hewlett and David Packard – heeded the advice of an esteemed professor, Fred Terman.
Instead of taking up jobs with East Coast engineering firms, the professor suggested that the young men stay in California and build their own future. With $538 between them, the two lads started making electronic kit in a rickety Palo Alto garage. Unable to think of an imaginative handle for their venture, they put a hyphen between their surnames and launched into business.
If the garage is not already preserved in the Smithsonian, then it ought to be, for the success of the company it once housed persuaded Stanford University to set aside some of its land for industrial development – which is how Silicon Valley came about.
In due course, Hewlett and Packard built a company which became a byword for innovation, dependability and quality.
In the process, they also invented a new kind of management style which was egalitarian, decentralised and humane and which eventually came to be called “the Hewlett-Packard way”, a corporate culture which, according to economist Lester Thurow, “set the standard for the kind of flexible, humane work environment that fosters both effective teamwork and individual achievement”.
Hewlett-Packard was – and remains – an employer which rarely lays off staff. And its egalitarianism is real: for a long time, there were only three private offices in the whole of the corporate headquarters – one for each of the founders and one for a man called Paul Ely, who was allocated an office because his telephone manner drove his colleagues crazy. Everyone else had an open-plan cubicle.
The founders have moved on, but the corporate ethos remains. Hewlett-Packard is still a dominant player in its chosen markets. Its products are legendary for their quality, durability and reliability.
But by the cut-throat, nail-biting, frenetic standards of the rest of the computer industry, it has come to seem, well, a bit staid.
Which is why Hewlett-Packard’s decision to break corporate ranks and appoint a woman to the top job has come as such a surprise. This is the kind of thing one expects from Apple or Amazon – not from boring, dependable old Hewlett-Packard.
“It’s a statement that the company is willing to make changes and, more importantly, take chances, which they’re not used to doing,” says Tim Barajin, who runs a Silicon Valley market research firm.
The industrial logic of appointing Fiorina is impeccable, as Wall Street recognised when it pushed the company’s stock up $2,75 to $116,75 after the news of her appointment broke.
Last March, the board decided to split Hewlett-Packard into two independent companies – one focusing on the measurement and instrumentation businesses, in which its products enjoy dominance; the other concentrating on its computing, printing and imaging businesses, where the competition is tougher.
The plan was to float 15% of the measurement company’s shares on the stock market within a year, which, if it happens, will be by far the biggest flotation that Silicon Valley has yet seen.
The consequences of fluffing such a huge initial public offering (IPO) are so unthinkable that the company had to find an expert to shepherd it through. Enter Fiorina, whose greatest claim to fame is that she did precisely that for her previous employer, the telecommunications giant AT&T.
In 1996, AT&T decided to spin off its research and development wing as a separate company – called Lucent – and Fiorina managed the entire project. The flotation was one of the biggest and most successful IPOs in history, and spinning it off was one of the best decisions AT&T ever made.
In the past three years, Lucent shares have risen tenfold in value and the new company has become a key supplier of data networking services to big telecommunications companies. The Lucent division run by Fiorina has dramatically increased its growth rate, expanded its international revenues and gained market share in every region and across every product line. If ever there was a square peg for Hewlett-Packard’s square hole, Fiorina is it.
Her Lucent colleagues describe her as an intense and inspiring leader who is good at the hearts-and-minds stuff (thank you notes, get well cards, and so forth) but with the customary low threshold for mediocre performance.
Her unwillingness to suffer fools may be inherited from her father, Joseph Sneed, a former deputy attorney general of the United States who now sits as a federal appeals court judge in San Francisco and is famous for his enthusiasm for awkward truths.
“He is,” Fiorina told The New York Times, “intellectually rigorous and intellectually honest, no matter what the consequences.”
Fiorina’s rise to corporate prominence was rapid but not entirely effortless. At any rate, she had a couple of false starts.
Having read medieval history and philosophy at Stanford, she went on to the University of California in Los Angeles to study law, like the dutiful daughter she wanted to be. But the law’s obsession with precedent turned her off and she dropped out after one semester. (History does not record what her father thought of this.)
Then there followed a period when she got married (and divorced) and taught English in Italy before picking up the obligatory MBA (from an unfashionable school) and joining AT&T’s Washington office selling telephone services to Uncle Sam. From then until Lucent was launched, Fiorina worked for AT&T.
As with the careers of most successful women, there have been trade-offs between the demands of work and those of family life.
Fiorina has two daughters from her first marriage and in 1985 she married Frank Fiorina, a senior AT&T executive, who also had two daughters from a previous marriage.
The interesting twist is that when it became clear that his wife was destined for the corporate stratosphere, Frank Fiorina took early retirement so that they could have more time together.
Is Carly Fiorina just “the best man for the job”, as one industry cynic puts it? Answer, probably yes. Hewlett-Packard’s corporate ethos and engineering culture have many admirable features, but they do tend to make the company slower on its feet than it should be. If it’s going to compete at Internet speed – where one chronological year equals about seven “Web years” – then it will have to change. Much the same might be said of AT&T.
“Carly has seen the dark side of being slow at the old AT&T and also the benefits of speed at Lucent,” says Mark Anderson, a technology consultant and media commentator. “Picking her is not about technology or strategy. It’s about culture.”
Will the fact that she’s a woman make any difference? Again, probably yes. Women are not only better Networkers than men, they are also better at what computer folk call “multi-tasking” – doing several different things more or less simultaneously.
Males, laden down with all that evolutionary, hunter-gatherer baggage, are more accustomed to focusing on one thing at a time. In pre-Internet times, industries could just about afford that kind of single-mindedness. But not any longer. For the second time in its history, Hewlett- Packard is leading the way.