The Leadership Style of Carly Fiorina and How it Failed

Table of Content

  AbstractLeaders have been looked upon for guidance for many years. While the world has seen the rise and fall of many leaders, some of them stand out for their personality while others for their leadership style. Myers Briggs, Jung or MTR-i defines eight different leadership styles.

According to the US Army Handbook, 1973, there are normally three styles of leadership: Autocratic, Democratic and Free Reign. Some leaders follow one particular style while others follow a combination of styles. Leadership style is the manner in which leaders help to motivate, advice and lead their subordinates. The situation can be a war, a corporate organization or a civilian setting.

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This case study is about the corporate leader of Hewlett-Packard, Carly Fiorina and her leadership style.               The Leadership Style of Carly Fiorina and How it FailedLeadership style is the manner in which leaders help to advice, lead and motivate their subordinates. According to Kurt Lewin, there are three distinct leadership styles:1)      Autocratic Style2)      Democratic Style3)      Laissez-Faire StyleThis paper will explore one particular leader and her leadership style in the corporate world.Brief HistoryWhen people have stereotypes of what you can’t do, show them what you can do.

When they have stereotypes of what you won’t do, show them what you will do. Every time you resist someone else’s smaller notion of who you really are, you test your courage and your endurance. Each time you endure, and stay true to yourself, you become stronger and better.-From a speech by Carly Fiorina, May 2005Born in 1954, Carelton S.

(Carly) Fiorina grew up in Austin, Texas (USA). Her father taught law at Stanford University and her mother was a painter. Carly attended school in different parts of the world. Her educational qualifications include B.

A. in medieval history and philosophy from Stanford University, an MBA from the University of Maryland and an MS from MTs Sloan School of Management.She started her career as an English teacher working in Italy. She then moved on to becoming a receptionist in a brokerage firm in New York.

During this time, she did a course on business and marketing management. Her career progressed when she acquired her MBA degree and joined the sales department at AT;T.Carly had previous leadership experience working for twenty years in AT;T and Lucent Technologies, where she held a number of senior leadership positions before joining Hewlett-Packard. Carly was president and chief executive officer of Hewlett-Packard Company from 1999 to 2005.

She served as Chairman of the board for five years (2000-2005).Fortune named her as “The Most Powerful Woman in Business”. She was looked upon as an icon for women in the business world (Mullin R., 2006).

Carly’s previous experience includes turning over Lucent Technologies from just an ordinary communications-equipment business to a New Age Internet company. She was known for completely turning around Lucent’s image with a bold $90 million brand building campaign that was highly successful and gave her a permanent place in the hall of fame in the corporate world.Criteria for Selection at HPThe recruiter who interviewed Carly for Hewlett-Packard, mentions that after speaking to Carly about her career challenges and triumphs, it struck him that Carly was always selected to take charge of troubled situations. And she has never failed to do so.

She has a methodology. She was a listener. She believed that organizations already contained many of the right ideas. People just did not feel as though they had the authority to get them done (FastCompany.

com, Issue 67).Hewlett-Packard’s leaders chose Carly from 300 applicants based on four essential criteria that were Carly’s strengths (Burrows P and Elstrom P (Aug 2, 1999) :1) The ability to conceptualize and communicate sweeping strategies2) The operations savvy to deliver on quarterly financial goals3) The power to bring urgency to an organization4) The management skills to drive a nascent Net vision throughout the companyA key director and retired Hewlett-Packard executive guided Carly through some of the company’s initial challenges. At the time, Carly was selected Hewlett-Packard was losing to competitors like Dell, Sun Microsystems and Lexmark. No doubt, that Carly had a big task in her hands.

Hewlett-Packard was considered to be “stodgy” in its ways. The culture until then was about teamwork and respect for co-workers. Over the years, it had changed to a bureaucratic style. This was in contrast to Lucent’s changed culture of the Information Age brought about by Carly that was all about being in pace with the Internet Age.

Carly was aggressive in bringing change and she inspired intense loyalty in her subordinates. She was known for rewarding hardworking employees and when one of the employee’s spouse became ill, she helped make sure medical advice and emotional support was given. She was involved in every aspect of the business and was controlling in nature.With her leadership skills, Carly was also an accomplished sales and marketing person.

Customer was king in her opinion and she was always finding ways to keep them happy.The inheritance of Hewlett-Packard came at a time when the company’s quarterly growth had nearly ground to a halt. Internal bureaucracy was high and the culture had almost halted any innovation in progress.Organizational ChangesSome of the moves that Carly made brought a lot of criticism internally and externallySome of the controversial initiatives undertaken by Carly include:1)      Changing the Hewlett-Packard ‘s working culture2)      Re-structuring of Hewlett-Packard3)      Acquisition of Hewlett-Packard’s competitor Compaq Computer Corporation that resulted in the Hewlett-Packard biggest proxy fights in corporate history (ICFAI, n.

d).HP had a working culture where employees had a say in what was going on. Nothing was done without consensus and bureaucracy was high. Carly had already changed Lucent from its old image and she set about doing the same with Hewlett-Packard.

When analyzing these changes, Carly had her own vision that did not match with Hewlett-Packard’s overall vision. She proved to have a more autocratic style of leadership that did not match with Hewlett-Packard’s democratic working culture. She decided there was a problem in Hewlett-Packard’s democratic culture and decided to change it without consensus from either the employees or the founders. This lead to strong criticism from Hewlett-Packard’s employees and the media.

Another change that she undertook was the total reorganization of Hewlett-Packard’s structure. Less than a month in her new job, Carly decided she wanted more centralization of the various departments in Hewlett-Packard. In doing so, she collapsed 83 units into six centralized divisions and to create a more effective selling organization. She tried to create new rules and regulations without thinking through the entire process.

The result was missed financial targets and some market-share slippage (BusinessWeek Online,2001). In the face of the public, Carly seemed to have support of all the managers. However, in reality, they were just too afraid to speak out. As a result, Carly did not really achieve what she set out to do and created an unsatisfied workforce.

She could have listened more and been more intuitive when introducing new measures. The disadvantage that she faced was that she was the newcomer bringing along so many changes to the organization. The employees did not have time to understand it before she implemented it. Carly could have had more communication with the team to gain their support and been slower in introducing new strategies.

The third change that Carly brought about was the acquisition of Compaq. This was the boldest move of all. Acquiring a company as big as Hewlett-Packard was a major move. One that was not endorsed by some of the directors.

She forced it through the Board of Directors in spite of their opposition because she believed that it was good for Hewlett-Packard’s future. The acquisition was a failure and Hewlett-Packard lost considerable value. It did not solve any problems but brought fresh problems from Compaq in addition to Hewlett-Packard’s problems. (KnowledgeWharton, 2005)Management StrategiesCarly created some strategic alliances along the way.

From the first time, she persuaded Hewlett-Packard’s retired executive to become the Chairman and be her guide to the acquisition of Compaq. Carly had good relationships with all the decision makers except Walter Hewett. She used the media to her benefit. Carly also used the company’s founder’s dialogues to further her causes that won her many admirers.

Carly may have gotten away with some of the changes. However, she went too fast and too hard and rubbed a lot of investors and employees the wrong way. She miscalculated and the results were cost-cutting actions like forced vacations, pay hikes put off for three months and HP eventually had to lay off 1,700 people.Carly’s problems started with disgruntled employees and this made investors doubt her decision-making skills in mergers.

Carly was accused of micro managing and being a celebrity CEO. She was in the news for all the wrong reasons. Apart from being in the media eye constantly due to her status as one of the few powerful women in the corporate world, Carly became famous for her impulsive and bold decisions to turnaround Hewlett-Packard in the six years of her tenure. The result of her decisions concluded in Carly’s firing.

The Board of Directors felt that she was not doing a good job and wanted to address the problem by moving up some executives. Carly resisted and she was asked to resign from her post. (Loomis.J.

C, 2005).Carly Fiorina is a strong willed, autocratic leader that the corporate world had ever seen. She is known as the woman with the iron will and the silver tongue.She has published a book “Tough Choices” in which she talks about her time in Hewlett-Packard and defends it saying that she was not fired based on her performance.

She takes credit for bringing a transformation of Hewlett-Packard in the face of opposition. She was an outsider in many ways – the first CEO from outside, the first woman leader, a marketing expert in a company that worshipped engineers and an easterner in Silicon Valley. (Carly Fiorina, Tough Choices).AnalysisAn analysis of the four criteria that were laid out for her selection at Hewlett-Packard shows that Carly was a perceptive and smart CEO but she was too caught up in her vision to make Hewlett-Packard a force to be reckoned with.

She played all the games from forming strategic alliances with board members to convincing them that a complete image makeover is what was best for the company. When it came down to management, she failed in her bid to get the employees on her side. Employees who were profit sharing and partly made decisions for the company were stripped of their decision-making powers and therein started her slide downwards when they withdrew support. Over time, Carly’s mergers, makeovers and restructuring finally caught up with her.

To add to the confusion, the industry was also facing the worst technology slump. Coming to the four criteria that she is selected on, she failed to deliver on the conceptualizing and communication strategies. Hewlett-Packard’s quarterly estimate was down 23% during her tenure. The company had to fire several employees after a pay-cut because of Carly’s decisions.

Employee morale and customer satisfaction was low and she failed to drive HP to the Internet age speed that was her ultimate goal. Carly believed that given enough time, she could turn around the company. In her defense, Carly says that it takes four to five years to see what the results of the changes that she made but unfortunately, she will not be around to take credit for it. Her biggest themes was business is not about numbers, it is about people.

Nevertheless, in the end, unhappy people caused her downfall. It will be a long time before anyone forgets the ex-CEO of Hewlett-Packard.  ReferencesBurrows P and Elstrom P. (Aug 2, 1999).

HP’s Carly Fiorina: The Boss. BusinessWeek          Online. Retrieved April 12, 2007 from    http://www.businessweek.

com/1999/99_31/b3640001.htmBusinessWeek Online, (Dec 24, 2001). Carly’s Last Stand? Retrieved April 12, 2007 from             http://www.businessweek.

com/magazine/content/01_52/b3763001.htm), Issue 67. Retrieved April 12, 2007 from                http://www. C. (May 2005), Carly’s website.

Retrieved April 12, 2007 fromwww.carlyfiorina.comHP website (n.d.

) from

Retrieved April 12, 2007ICFAI, Carly Fiorina, The Change Leader. Retrieved April 12, 2007 from              http://www.icmr.icfai.

org/casestudies/catalogue/Leadership%20and%20Entrepreneurs            hip/LDEN026.htm)KnowledgeWharton (March 30,2005)HP After Carly: What Went Wrong? Retrieved            April 12, 2007 from                http://knowledge.wharton.upenn.

edu/article.cfm?articleid=1144;CFID=8659637;C            FTOKEN=93443749;jsessionid=a8301665629344e0593d)Loomis.J.C, (March 7, 2005).

How the HP Board KO’d Carly. Retrieved April 12, 2007         from    

     htm)Mullin R., Computerworld. (Oct 19, 2006).  Fiorina defends her tenure at HP.

Retrieved        April 12, 2007               eId=9004279&intsrc=article_more_bot)

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