04.15.2008: McCain picks Carly to be his economics advisor???? --- Bad reflection on his ability to make choices or decisions.
When links like these show up, you should know that someone is doomed... maybe us.

From the Metro in San Jose, CA, commenting on Carly Fiorina's fitness to advise on economic themes to the McCain campaign,
much less run a large company like HP (into the ground).

'nuff said.

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01.26.2008: Carly at MIT.

If you believe anything she says, I pity you. Her efforts completely misread HP and its core values and her actions completed the destruction of the culture which began with John Young and continued with the late Lew Platt. If you at all can, talk to HP retirees [or refugees] and ask them about the "changes" she wrought within the Company during her tenure. It will be an eye-opener for you. Here's a link.

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Carly's First Law

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06.28.2007: [the 5th anniversary of my retirement from HP....]

This is bullcrap: If you're smart, you won't believe a word of it....

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Good-Bye, Carly

Many people have written about Carly and her successes [or lack thereof] with Lucent and HP. I've also written about her. I've also written to her. Most, if not all of my writings to her have been roadblocked, edited or flat-out deleted by her staff before she could ever see them. Once, I personally gave her a small CD with my writings on it, and I can only conclude that she never read or understood or believed its contents, because if she had, the evidence would have been obvious, and the results visible and positive for HP.

Contrary to the beliefs of many people today, including reports of claims by the Board of Directors, she was not solely responsible for the decline of Hewlett-Packard. She does not even deserve sole credit for that.

It began very innocently, as a friend of mine wrote to me before I even joined HP in 1978: "John Young scares me," he wrote in 1977 or so. "He recently gave the quarterly update and forecast, and one thing he said really troubled me: he forecasted the next quarter's growth to be "9.04%". Not "about 9%", not "over 9%", but "9.04%". When a CEO forecasts future growth to two decimal places, there's only one thing to expect: his people will do anything and everything to make sure they make those numbers."

That John Young was a "numbers man" actually marked the beginning of the down-slope for HP. Every quarter, he'd report the company's numbers over HP's world-wide systems, so all divisions would get the information at the same time, just as the Company's Founders had done. But the "did you or didn't you make the forecast" tone from him was always there. This became a classic combination of the "law of unintended consequences" combined with "tell me how you're going to measure me and I'll tell you how I'm going to behave." John apparently wasn't thinking about second-order effects. If you're measured for "making the numbers," you'll do everything in your power to "make those numbers," even if that's the wrong thing to do for the long term success of the Company.

Lew Platt took over in 1992 after John Young retired. Lew is an easy-going guy; very kind and very "people-oriented" -- a bit unusual for CEOs today. He showed a great sensitivity to women, minorities, etc., but didn't seem to have any aggressive [or even "assertive"] vision for the company. In my not-so-humble opinion, he didn't push HP strongly forward when he could have and should have.

One example was under-investment and lack of market aggressiveness in the '90s when IBM's mini-computer products were consistently falling behind HP's in price/performance terms, and HP had a good window of opportunity to increase its industry position. Lew didn't believe, apparently, that strong pricing initiatives at that time, when IBM was "on the ropes" could cement a strong long-term position in that market for HP. Wim Roelandts, for all of his charm and wisdom, did not go to Lew and say, "We must cut prices, take market, and lay the groundwork for owning the market in the future, and in the short term, we will not meet your goals for minimum acceptable profit percentage." Lew didn't offer him that goal, either.

Those were also the early days of the Internet, and Lew later publicly admitted that he didn't see the future importance of that market, so HP under-invested at that critical time.

Finally, Lew fell into a trap that had snared many other managers at HP: he did not "get" that the best sales representatives are "coin operated." If you reward them correctly, they'll work their butts off to get more rewards. The result of a good reward system is that your sales people will sell more and more. Of course you also need the right products for the marketplace, but the part that Lew missed was: don't put limits on rewards. If a sales rep sells more, don't ever "reward" them with a declining commission rate.

When some top sales reps actually began to make more income than some HP managers (and more than some high-level managers, too!), the HP antibodies went into overdrive to "adjust" sales reps' compensation schedules, essentially capping their income. Sales reps buying boats and private planes!? Horrible! We must do something to prevent that! They did. After that, sales reps didn't sell as hard, or as much.

Then combine that with a few years when the HP "Profit-Sharing" formula created large rewards for all employees. The profit-sharing percentage could go up into double-digits, and once hit, as I recall, over 12-14%. This was the equivalent of an "extra" paycheck once or twice a year for all employees!

Someone sold Lew the idea that this was exorbitant, and he bought the tale. The decades-old [and legendary and successful] Profit-Sharing calculations were changed. After several modifications, it was boiled down to a range which I predicted, accurately, would virtually never be lower than 3-4% or higher than 7-8%. Employees, hired as bright people to start with, were quick to discover that not only would they be protected from "lean years" when the bonus checks dropped below 3%, they were also "protected" from the very successful years, when the percentage could hit double-digits. This was another in the coffin-nails of HP "management" mis-compensating and mis-rewarding employees, and then acting surprised when the employees weren't happy with the new plans.

These were also some of the first days when Wall Street's focus on short-term results began to have stronger influence, and, as with the unintended results under John Young, managers began to do stupid things in order to meet quarter-to-quarter numbers, even if that meant making mistakes that would be long-term detriments to the Company.

July, 1999, Carly was hired. She left Lucent for HP. A quick look at Lucent's track record showed that she had not had a stellar leadership record there. Mismatch between her style and the internal culture at Lucent was one issue we'd heard of, and it struck fear into many hearts at HP. We [and I say "we" because I'd been with HP for 19 years by the time Carly appeared,] had a strong corporate identity, strong sense of business and customer ethics, and were still admired in industry for it. HP was strong in technology but weak in marketing our strong points.

Carly was supposed to improve all that.

In the beginning, nothing happened. We generally regarded that with the very reasonable expectation that a new leader would "scope out" the environment and its problems for about six months, and then roll some heads when she found who was impeding success. Carly came down to Cupertino from Palo Alto to meet the troops and tell us what she'd found and was going to do.

By the time she'd arrived, I'd already been very impressed by her. An articulate, clear, intelligent speaker, she seemed to have a great understanding of customers, organizations, and even HP. When I heard that she was a bit of a sci-fi buff and really liked the movie 2001, I bought a copy of the DVD and mailed it to her as a "welcome to HP" gift.

The first bad telltale sign for me was that I never got a reply. Not a "Thank You," not a "No, Thank You," not a "Don't Do That Again" .... nothing. Not a good sign. This might be a leader who didn't get her hands dirty talking with the "masses." Or at least, by listening to them...

When she arrived in Cupertino, I had big hopes for would happen: she'd show up, and in the courtyard in the middle of campus, there would be erected about a dozen gallows, or maybe guillotines, and there would be the head of one our so-called "PermaFrost Manager" in the appropriate position of each one. On her signal, the traps would be sprung, and HP could move ahead without the weight of dozens of managers whom most of the "worker bees" knew were a major block to HP's progress and success.

Alas, no gallows, no guillotines, and no heads were even demoted, let alone rolled. Many glowing statements, great speeches. The speeches continued and the PermaFrosts stayed on. More and more focus on short-term results again pushed poor managers into trying to meet the wrong goals, and they did stupid things to reach those short-term goals, rather than stand up to Carly and say, "No, this may be good short-term, but in the end it will damage HP." Carly's goals were always short-term and always focused on meeting Wall Street's measurements. The opposite of Dave Packard's view of Wall Street.

And on, and on, and on, as long as she was with HP.

While Carly said glorious things about reaching for high goals, she never checked with the "real people" to find out if the goals were attainable or listened to anyone who thought the goals were too high. She was still dealing with many managers who'd been around since the John Young days, and if Carly said we'd hit an "aspirational goal," by gum, they'd tell her they'd reach it. Even in a recession. Even without new products. Even with internal problems that would easily derail any possibilities of reaching those goals.

In the end, rather than encourage innovation and improved profits through improved products and sales, Carly focused on cutting costs to improve profits. First, she trimmed skin and muscle, not fat, and when those were gone, she hacked at the bones. Much of the fat remained. But she did not look, listen, or see.

She rewrote the HP Way as "The Rules of the Garage."

They didn't need to be rewritten. We knew how to operate the HP Way. It was in the blood of most of us, and we knew who they were inside HP who didn't bleed HP-blue when stabbed. Many of those guys and gals were still there.

Stories spread about how customers thought some of our managers acted like idiots. And how many employees felt the same way about those same managers.

And the managers still were not fired.

Carly continued to live her lifestyle, causing resentment after resentment by increasing the corporate jet fleet while figuring out how to rename and reduce "Profit Sharing" to meaninglessly-low levels. Every downsizing of personnel ended up with the loss of some of the best [read: highest-paid and/or most-experienced] people.

Top sales reps were "Work-Force Reductioned." Secretaries were off'd as cost-containment measures, which meant that the people that they'd supported could do the photocopying, faxing, typing, etc., etc., down to ordering office supplies. When administrative assistants [the new title for "secretaries"] were fired, leaving engineers and managers making 2-5 times their salaries to take over those time-consuming chores, it became a real head-scratcher to try to understand how the top of the org chart could be so out of touch with what really made money for the company. "Downsizing to Success" is one of the ways I described it, with more than a touch of sarcasm. Success was expected; failure was punished. Layoffs were designed, in part, to prevent or avoid lawsuits from those laid off, not to eliminate excessive expenses, resulting in the phrase I coined: "Drive-by Layoffs©."

The general atmosphere within HP became one of fear.

In the past five or so years, the goal became that of eliminating the highest-paid, most experienced people, under the guise of eliminating redundant positions. The result, as one wag put it, was to leave only "inexperienced people in place, so they could reinvent the problems we'd solved years ago."

Carly behaved as royalty, rubbing elbows with the proletariat at times, but never letting them into her soul. She was surrounded by people who honestly wanted to do the right things to make HP successful, but could not take input from them. It was like trying to get an AM radio to pick up an FM station. You can broadcast as hard as you can, but that receiver won't even notice the signal's there.

I personally supported the merger with Compaq, for only one reason: in the hope that, by merging the two organizations, the PermaFrosts would be flushed out; a searchlight would shine on them and they'd be exposed to the light of day and be gotten rid of. I felt that that would have the biggest, most positive effects on HP [and maybe Compaq, too.] It never happened. You never read about that in the media, either. You won't. There's so much they really don't understand about HP or Carly.

To me, the saddest part is that, even with Carly leaving HP, the PermaFrosts are still there, and unless the new CEO, hopefully with the aid of a COO this time, will realize that it's not lazy Individual Contributors that were keeping HP back from success; it was layers and layers of bad managers who were allowed to persist, and upper management that wouldn't listen to anyone who was not of their caste.

I think the same problems may be found in virtually every large corporation, and neither the USA nor HP has a lock on the supply for that problem. HP has just been one of the most visible examples in the past ten years or so, and for me, the closest one.

The only thing I want to add at this time is a cautionary note to whoever appoints or hires Carly Fiorina next. Here's your heads-up: take care in what you hire her to do and what responsibilities you give her. She is a wonderful speaker. She, I believe, may truly care about people of the Third World and their needs. Just be careful if you hire her to lead any organization where the morale of subordinates can impact the organization's success. Let her talk to the world for you. Just keep her out of the decision-making loop.

....All of this is just My Not-So-Humble Opinion.