Wednesday, February 09, 2005

Carly is out

Carly Fiorina is out at HP. Hurray!!!! In an old Firesign theater skit there was a bit about "our generated veneered" leader. She was such a leader. She had a great press agent but absolutely no business skills. As an HP shareholder I have watched her leadership miss a couple of big opportunities, overpay by a factor of something like the national debt of several developing nations for Compaq, cut a sweet deal with the former CEO and then claim she had an idea about how to execute business strategy. All the time HP languished to the backwaters of both stock performance and technology - an 8% dump last year, for example.

HP, at one time, allowed its people to innovate. It made some great products - but always with an attention to engineering. Let's hope the board has some ideas about how to revitalize this once great company. The market understands what the resignation means - HPQ jumped $2 almost immediately - or about 10% above its prior sluggish performance.

There are a couple of messages here. First, beware of a CEO who spends more on publicity than on the business. Second, watch out for "big" deals - even though the integration of HP and Compaq proceeded pretty well - the premium paid and the loss of focus was an important stall.

There are a couple of promising developments - the open source initiative seems especially ripe. But getting back to the key business elements that made the company strong in the past seems job 1.

I taught the HP merger case at two universities in Mexico in 2003 and was amazed that the students got the issues quite well. It was a wonder that the board did not get it. Maybe now they will get back to the core.

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