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Forget the handshake

CNET News.com's Charles Cooper says that the last thing HP CEO Carly Fiorina needs to do in the first flush of victory is extend a phony olive branch to Walter Hewlett.

Back in the days when I covered sports for a living, the old-timers were fond of instructing press-box newbies never to root for one team over the other. Their advice: Always root for the better story.

And so, if we can trust the accuracy of Hewlett-Packard's unofficial proclamation of victory over the opponents of the Compaq acquisition, the better "story" indeed has won.

Why? Depending on management's skill, the story will evolve in one of two ways:

Scenario A: After three years, the digerati have crowned Carly Fiorina as one of the greatest corporate leaders in modern times. Because many in this fickle flock of big thinkers earlier questioned her acumen--if not her sanity--after the announcement of the Compaq deal, the bestowal of the honor is that much sweeter. But Fiorina has stuck to her vision, creating a smoothly running mega-power that has ultimately squashed pesky Michael Dell and caused Sam Palmisano to order a major overhaul at IBM.

Scenario B: Walter Hewlett was right about this idea turning out to be dumber than a sack of hammers. Things have gone from bad to worse, and Fiorina has been pegged as the second coming of the Emperor Nero after word has leaked of an obscenely huge compensation package. Investors go ape as they watch the HP-Compaq integration descend into disaster, and they call for Fiorina's head on a pike. All the while, wiseacres in the peanut gallery endlessly revel in her public humiliation as she slowly twists in the wind.

The truth is that both sides in this overwrought feud have been running a lot of jive about a post-merger world.

Even the most dyed-in-the-wool supporters acknowledge that Fiorina is sticking her neck out. This is a huge gamble, and the odds against a flawless integration are long. Plus, the critics are absolutely right when they point out that big tech mergers often flop. Remember the forgettable pairing of Sperry and Burroughs to create Unisys? More recently, Compaq purchased Digital Equipment, a deal that once looked great on paper but failed in practice. The cliche about the devil being in the details contains much truth.

Better to bet on Fiorina and hope the shake-up bears fruit, rather than to wait around for the inevitable rot to take hold.
But the deal's opponents blew it when they underplayed the risk of doing nothing in a fast-changing tech market. Resurrecting the legend of Bill Hewlett and David Packard, they essentially argued it was preferable to stand pat than to slash and burn. The best they could offer was a proposal to spin off the printing business sometime in the future. The smarter shareholders knew that was a losing hand. The "HP Way" may once have worked wonders, but the company employs 36,000 people in businesses that lose money. Better to bet on Fiorina and hope the shake-up bears fruit, rather than to wait around for the inevitable rot to take hold.

Where should Fiorina take it from here? That depends on how magnanimous you think she needs to be in victory.

In a recent column in The Wall Street Journal, Kara Swisher suggested the winner should place the first call to the loser. "What everyone has to find--and very quickly--is common ground," she quotes "corporate strategy expert" Nick Donatiello as saying.

Fiorina is going to sink or swim on the strength of her ideas about how to reconstitute HP for the 21st century...That means being ruthless. That means not looking back.
With all due respect to Boom Town's mayor, forget that. I'm all for the George Patton, scorched-earth approach. The only common ground between Hewlett and Fiorina is that they both envision a stronger future for HP. But the paths they propose to take to this Promised Land are miles apart.

Fiorina is going to sink or swim on the strength of her ideas about how to reconstitute HP for the 21st century. There's no place for phony olive branches or mollifying her opponents by adopting halfway measures. That means being ruthless. That means not looking back.

If she pulls it off, Fiorina is entitled to the big fat payday and all the associated kudos. If not, the board of directors knows it can find Hewlett at the Bohemian Grove, playing a slow dirge for a company that once was synonymous with the glory of Silicon Valley.