Former Hewlett-Packard (HPQ-$$37.95)
CEO Carly Fiorina criticized preordained
2016 Democratic presidential contender Hillary
Clinton in prepared remarks at the Iowa Freedom Summit in Des Moines last
month.
"Like
Hillary Clinton, I too have travelled hundreds of thousands of miles around the
globe. But unlike her, I have actually accomplished something," said
Fiorina. "Mrs. Clinton, flying is an activity not an accomplishment."
Before officially announcing her run for the White House top gig,
however, the potential
2016 GOP presidential candidate might want to check her hubris at the door: an
examination of her performance during her tenure as chief executive of the tech
titan suggests the erstwhile “Most Powerful Woman in Business” has little to
brag about - and accomplished very little in that leadership role.
True, Fiorina’s
official HP bio paints the picture of
a visionary leader:
In July 1999, Carly Fiorina joined HP as chief executive
officer, and was named chairman a year later. She resigned from her position on
February 8, 2005. While at HP, 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. As part of that reinvention, Fiorina led
the company's 2002 merger with Compaq Computer, one of the largest high-tech
mergers in history. As chairman of HP, she also worked to build on HP's
historic commitment to social responsibility, taking global citizenship to
another level by leveraging HP's worldwide presence to make a difference in the
lives of millions of people.
Albeit, as Mark
Twain noted, “Truth is stranger than fiction, but it is because Fiction is obliged to stick to
possibilities; Truth isn't.”
And
the truth reveals a lackluster legacy: under her tutelage, net income from
continuing operations at HP stagnated – slipping from $3.6B in 2000 to $3.4B in
2004 – and shareholder value declined 38 percent (falling from $28.30/share to
$17.56/share).
Looking
not through Fiorina’s prism of the past, but actual history, the $25B
acquisition (which includes acquisition-related charges) of Compaq Computer was
a dismal failure too: A name makeover to “Personal Systems Group” (PSG) couldn’t
hide the fact that Fiorina bough a low-margin, personal computer manufacturing
business which suffered from sequentially lower average selling prices (due to
competitive pricing pressure) and declining volumes in both commercial and
consumer desktop PCs.
PSG's earnings from operations as a percent of net revenue amounted
to 0.9% in fiscal 2004 - and even this anemic profit resulted mostly due to cuts in operating expenses (such as headcount and lower R&D spending).
In May 2012, HP closed the book on this failed marriage with
a $1.2bn write-down in the value of the Compaq trade name.
Her
vainglorious promulgations to the contrary, Fiorina did little to “to make a difference in the lives of millions of
people.”
Fiorina did, however, prove the adage that there is no such thing as failure
in the corner office. She left in 2005 with a severance
package worth an estimated $42 million.
Ed. note: this commentary should ot be construed as an endorsement for the likely candidacy of Hillary Rodham Clinton
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