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Fiorina says board let emotion trump reason

Former HP chief executive talks about the dynamics of HP's board and lessons learned from its tribulations.

As they say in politics, timing is everything.

Former HP Chief Executive Carly Fiorina has shown impeccable timing. Her book "Tough Choices" hits shelves this week, just as her former company has found the spotlight over its controversial probe of unauthorized media disclosures.

Fiorina said leaks are a problem but told CNET News.com on Monday that they are just a symptom of a dysfunctional board.

Now, 18 months after being shoved out of HP's doors, Fiorina is looking to not just talk up her book but also to figure out what to write in the next chaper of her life. And a political career is a definite possibility.

"I think it is certainly something I would consider," she said, adding that "public service is an option that has been of interest to me."

In a wide-ranging interview, Fiorina offers her thoughts on HP's board, being spied on and how it's still a man's world in business.

Q: In the past, you seemed to avoid discussions of gender politics and the role it was playing in your career, but in the book, you talk quite a bit about the ways in which your career has been different as a woman. How big a role do you think gender plays in business?
Fiorina: When I was a CEO, my job was to be a CEO. My job wasn't to focus on or talk about the things that were personal to me. My job was to talk about and focus on the things that mattered to the company. The reality is, as I talk about in my book, that business is not yet gender-blind. And so, as a result, my experiences were different as a woman than a man's experiences are. Those are facts.

How big a role do you think that played in the fact that you are not still CEO there?
Fiorina: I think first, as I try to say in the book and as I think subsequent events may have punctuated, my ouster at HP had nothing to do with performance. My ouster at HP was an abrupt emotional decision that was explained after the fact.

You talked quite a bit about the board and its inner dynamics in the book. Given all of that and the experience you have had with them, what did you make of it when this whole leak investigation came out?
Fiorina: On the one hand, I was shocked and sad about how these things and why these things would happen. It strikes me as a breakdown in judgment at many levels. On the other hand, it lifted a veil on the dysfunction of the board and some of the same players. So, in some ways, it may help people appreciate what I was dealing with.

Listen up

On the leak scandal
Carly Fiorina calls it a "breakdown at many levels."

Download mp3 (291KB)

On the Compaq merger
Merger was essential, Fiorina says, in transforming the company from laggard to leader.

Download mp3 (624KB)

Don't call it a turnaround
HP's transformation has been a long time in the making, and Fiorina says she deserves more credit.

Download mp3 (450KB)

One of the things that has come out is that among the phone records they went after were yours. What were your thoughts, personally, when that came out?
Fiorina: My first thought was to be angry about it. Now I just find it sad.

In the book, you talk about, particularly after a January 2005 Wall Street Journal story, being upset about the leaks. Do you share the feelings the board had, in terms of being upset about the leaks?
Fiorina: I think leaks out of the boardroom are a symptom of dysfucntion that has to be dealt with. Dysfunction occurs in a boardroom when people's personal agendas overcome their set of responsibilities. That's what was going on. My focus was to repair the board dysfucntion. The leak was a symptom of this dysfunction. We had to deal with it.

We were focused not simply on who leaked but also on an assessment process. Let's talk about how we interact as a board. Without trust and the ability to have open give-and-take--disagreement absolutely but disagreement in confidence--a board can't function.

Two of the questions I think a lot of people are asking are, "How much of this is commonplace? How much of this goes on at every company?" Are there only a couple of techniques that were used in HP's leak probe that are outside the bounds of what corporations should be able to do? Or was it all kind of out of bounds?
Fiorina: It appears the investigation got completely out of hand both in terms of the techniques and the tactics used, but also in terms of forgetting what the real issue was, which was board dysfunction.

In the book, you point to a lot of things that were going on on that board, one of which was a personality clash between Jay Keyworth and Pattie Dunn. How much do you think that contributed to the eventual situation?
Fiorina: The veil has been lifted on a set of personal animosities and personal agendas that created dysfunction that got worse after I left. Personal agendas create dysfunction when people can't put them aside.

Obviously, you are going to be talking about the book for some period of time, but what's next?
Fiorina: Time will tell. I'm very busy right now, though I have freedom. I enjoy the work that I do right now, in addition to the book, the boards that I serve on, the causes that I am engaged in, the speaking that I do. I haven't made a determination yet in terms of what the next full-time commitment is. I think I will know it when I see it.

What do you think the chances are that a political office would be among the things you would consider?
Fiorina: I think it is certainly something I would consider.

Do you have an interest in that area?
Fiorina: I think public service is an option that has been of interest to me and I assume will continue to be.

Turning back for a bit to the proxy fight, I'm curious about which things stand out the most to you from that period of time.
Fiorina: The merger was an absolutely essential move to make to transform Hewlett-Packard from a laggard to a leader. It was a tough set of choices. Those choices were made in a very difficult time--technology recession, bear market, terrorist attacks, economic downturn. The context was horrfic. But the moves that had to be made, frankly, saved Hewlett-Packard.

This was a company that was lagging further and further behind. It was a company that had become a bureaucracy. It was a company that was so internally focused, it had forgotten about customers. It was a technology company that no longer innovated. The merger had to happen. Did it create resistance? Change always does, and the resistence to change at HP was particularly intense, but it was a move that had to be made.

In terms of the battle, is there anything, looking back, that you'd do differently, or did things go about as well as they could go?
Fiorina: Change always is resisted. When you have the kind of situation that we were dealing with--an inconic company, mythic founders, fear of what such a fundamental change would mean to the Valley and the company, the context of a very negative environment in which people were distrustful and pessimistic--of course there is going to be a battle. Of course it is going to be intense. I am proud that we fought that battle with honor. I am proud that we made the tough choice. And I am proud, now, to see Hewlett-Packard as the leader it should be because of those roads.

HP, especially prior to the leak scandal breaking, had been getting a lot of credit for its turnaround. Not all of that credit was being given in your direction. How much of the credit for HP's turnaround do you think you deserve?
Fiorina: First, it's not a turnaround. A company doesn't turn around in 12 months, it's not the nature of the beast. Hewlett-Packard is a company that has been transformed from where it was in 1999 to where it stands today. A large part of that transformation occurred on my watch.

I certainly do not deserve all the credit for what has happenned. But I do deserve my fair share.

How much of that work, and of that effort, do you think has been put in jeopardy by the leak scandal?
I think one of the reasons that the current events are very sad is because they distract employees. They impact the reputation of the company, and there is a board and management team that now have a substantial set of issues to deal with that is not about the performance of the company in the marketplace. It is about the ethics and the character of the company.

Do you see HP being able to handle it as a bump in the road, or do you think this is going to be a pretty significant negative event?
Fiorina: All companies are sometimes faced with issues of ethics, character, how things get done. I talk in my book a lot, as I did while I was at HP, that how things get done is as important as what gets done. When issues around character and conduct occur, real conversations have to take place about it. You can't brush it under the carpet. You can't pretend it didn't happen.

In the book, Michael Capellas comes in for a fair bit of criticism. I think that may surprise some people. Outwardly, it seemed like happy merger partners, complementary strengths. What was going on?
Fiorina: When you decide to write an authentic book about business, which was my goal, I decided I had to talk about my experiences as they really occurred and people as they really behaved. You can't walk away from it just because people happen to be well-known.

As I point out, early on in my career, I do not believe people should be abused by others in the business world. It's not consistent with treating people with respect and dignity. When that behavior becomes counterproductive, that's another tough choice that has to be made.

We still do not yet have a color-blind or a gender-blind world, and certainly, it's not yet the case in business.

So the key issue--was it the way he was treating you or the way he was treating other employees?
Fiorina: I'm pretty tough, in the sense that how people treat me, as I think I illustrated in the book. Early on in my career, there was this lawyer who abused everyone around him, including me. He could yell and scream at me all day long.

That's not what finally caused me to take action. It was when he yelled and screamed at others who had no power. When someone in a position of power abuses those who are powerless, it has a double impact. I can stand up for myself. Others can't always.

When you look at the business world and gender in particular, what are the things you see that need to change in order to make things more equitable?
Fiorina: I think I have strived my whole career to play by the same rules. I think everyone should have an opportunity to play by the same rules. I don't believe that women should be given special treatment or an easier ride. I do believe they should be given the same treatment and judged by the same standards. And we still do not yet have a color-blind or a gender-blind world, and certainly, it's not yet the case in business.

How much of the problem is an early-education problem versus the way business works? Do we have enough women in science and business and technology?
Fiorina: If you just looked at the statistics, clearly, no. I think we are engaged in an evolutionary process, and it takes time, but maybe one of the conversations that this book motivates, I hope, is about business and how it operates.

I hope it will motivate a conversation about character. I hope it will motivate a conversation perhaps about board governance. I hope it will motivate a conversation around, "Why is it that we characterize and caricature women differently than men, and why is it that they play by different rules?"

In terms of the book, what is it most that you hope people will take away from it?
Fiorina: I hope they will say, if they are in business, "Gee, that is what it is really like." I hope people will get an appreciation for both the difficulty of change and the necessity of change. I hope people will step back and think about the importance of character and ethics. And I hope they will come to know me not simply as a caricature but as a person.

It sounds like the weeks after you left HP were particularly hard in that respect.
Fiorina: It was a shock, what happened. It happened very abruptly. It happened without conversation or explanation. I got beat up pretty bad out in the public space for many weeks thereafter. That's not a pleasant experience. Yeah, it was a tough time.

Do you think you are different, and if so, how, as a result of having gone through that experience?
Fiorina: I hope I am not different. I hope I am still a very optimistic person. I had things that I believed about human nature, both in its best form and its worst form, reinforced for me.

I think that in many ways, as I try and say in the epilogue, all the things that I have believed all my life and the toughest choices that I had to make at HP--those things have been validated and reconfirmed for me in the last 18 months. I said at the close of the book what I believe. I feel blessed. In many ways, this period of time for me has been a gift.

You mentioned that you haven't settled on what that next challenge is, but are you feeling pretty close to ready? Would you expect, in the next year or so, to be doing something new and different full-time?
Fiorina: I have been doing lots of new and different things for the last 18 months, and I feel pretty busy. I will make the decision when it is timely, and I think I will know when that is. And yes, I think it is probably sooner rather than later.