Hewlett-Packard Case Study

Hewlett-Packard Case Study

Hewlett-Packard (HP) is a company unlike any other. They serve everyone from consumers to small and mid-sized businesses to enterprises to public sector customers with an extensive portfolio of market-leading solutions specifically designed to meet the needs of each customer segment. In July 1999, Carly Fiorina joined HP as chief executive officer, and was named chairman a year later. A computer maker, HP was the largest business in the country run by a woman. But her initial success at Hewlett-Packard began to falter with the $19 billion acquisition of Compaq Computer in 2002, referred to by some as “Fiorina's Folly.” The deal was vehemently opposed by the heirs of HP's founders. Fiorina prevailed, but most industry analysts considered the acquisition a mistake, and HP's stock stagnated in the two years following the merger. Fiorina was also faulted for not fostering HP's long tradition as an innovator. In Feb. 2005, her six-year tenure at Hewlett-Packard ended when she was abruptly ousted. According to HP, the departure stemmed from disagreements over how to execute the company's strategy. Within that time, Fiorina led the reinvention of the company many associate with the birth of Silicon Valley by returning HP to its roots of innovation and invention, reorganizing it to be more agile and competitive, and charting a new strategy to use HP's depth and breadth to help customers and consumers prosper in the digital age. She also led the company's 2002 merger with Compaq Computer, one of the largest high-tech mergers in history. Fiorina not only brought leadership to HP but also savvy marketing and sales techniques. Her coddling of customers at Lucent was legendary.

During her time at HP, Carly Fiorina made some very bad career decisions that more than likely lead to her fall from CEO. The first and in my opinion the worst mistake that Fiorina made was that she fired or scared away good executives in droves. She drove away the great executives that once helped HP become what it is. Without the talented execs in HP , the corporation was bound to flounder. Once Fiorina got ride of those talented people, those top executives became HP’s competition. A great CEO is measured by the great people they choose to help them run their

empires. Referring to the movie that we watched in class on Tuesday March 22, Jack Welch admits that he is only as good as the people around him. CEO’s that think that they can be successful on their own are naive. Carly didn’t develop enough effective managers, even passing up twice on having a Chief Operating Officer, the executive who is responsible for the day-to-day management of a company. If Carly had allowed a COO to be hired she would have had more time to invest in what she was hired to do. Carly was overconfident in her ways and wanted to much control . In my opinion , the way she scared off executives and did not want the board to hire a COO shows that she was threathened by talent and did not want anyone to maybe succeed her. Some CEO’s need to let their pride down for just a minute and realize that surrounding themselves with the right and talented people is what makes themselves a better CEO. The lack of a COO greatly angered the board and they were not sure why Carly would not have The COO could have greatly helped her succeed. I have read many business related books and all of them swear that the number one rule in being successful is surrounding oneself with the right people. Fiorina was unpopular with the Hewlett-Packard board from the start. When you combine the brashness with under-performance, it leads to a CEO getting fired. Yet, think of the underperforming companies that have brash male CEOs. At the same time, I think Fiorina made a mistake in not paying more attention to her in-house relationships. In the business world relationships are everything. If there's contention, you have to fix it and not keep pushing.

Almost from the day she took over the job, Hewlett-Packard officials and people in the financial community said, Fiorina was obsessed with making Hewlett-Packard bigger, which led to another mistake that Carly Fiorina made by buying Compaq. HP Compaq Computer Corporation for $25 billion, winning a highly contested shareholder proxy vote but alienating some members of the company's founding families with her tactics. Many saw the company's 2002 Compaq merger as the beginning of the end. The merger, which aimed to build the company's consulting services arm, wasn't as successful as Fiorina had hoped. Last year was especially rough, with HP losing market share to computer maker Dell on the one hand and to technology services giant IBM on the other. Hewlett-Packard lost the lead in the PC market to Dell in 2004 as its PC shipments rose 9 percent in the fourth quarter compared with 21 percent for Dell and 14 percent