LIANE HANSEN, host:
This is WEEKEND EDITION from NPR News. I'm Liane Hansen.
In one of those moments of serendipity the publishing industry loves, the current scandal over boardroom spying at Hewlett Packard erupted just as its former CEO, Carly Fiorina, published her autobiography. Tough Choices covers Fiorina's rise and fall as America's most powerful female executive. In the book, Fiorina talks about Hewlett Packard's controversial merger with Compaq and why she thinks she was fired last year.
NPR's Jim Zarroli reports.
JIM ZARROLI: Carly Fiorina had a strange and memorable conversation with her mother right before her unexpected death in 1998. Her mother had asked her, wouldn't it be nice if you lived in California near me?
Ms. CARLY FIORINA (Former CEO, Hewlett Packard): I said, Mom, you know, my job is on the East Coast, our family is on the East Coast. And she said, I know, it would be so nice though if you were here. Then she got this kind of far away look in her eye and she said, you know, someday maybe you'll be the CEO of Hewlett Packard.
ZARROLI: Fiorina, who was then a senior executive at Lucent Technologies, laughed at the idea.
Ms. FIORINA: I said, Oh, mom, that's never going to happen. And she said, well, you never know, Carly.
ZARROLI: Yet within a few months her mother's prediction had come true. In corporate America it was a milestone. Never before had a woman been picked to lead such a big company. Fiorina says the press coverage took her aback.
Ms. FIORINA: It sounds so naïve. But you know, the thing that frankly surprised me the most was how much attention people paid to the fact that I was a woman. I thought people would want to know about my objectives, what I thought my role was, where we were going. So that was a huge surprise, the woman-CEO thing.
ZARROLI: From the beginning, the 44-year-old Fiorina faced scrutiny. There were rumors that she traveled with her own hairdresser, that she built a pink marble bathroom in her office. She was poised and engaging, someone gifted at navigating the political waters of a major corporation. But she was a polarizing figure and an outsider in Silicon Valley. Inevitably, she made enemies. Hewlett Packard was a legendary company, but, she says, it had become a mausoleum, a cocoon. In workaholic Silicon Valley, HP's parking lot emptied out by five.
Ms. FIORINA: When we would go into rooms to discuss issues, and someone would raise an idea that people who'd been there a long time hadn't thought of, the reaction would frequently be, well, we don't do it that way, it's not the HP way.
ZARROLI: HP also had a Balkanized structure with 87 lines of business and 150 brands. Here was a leading high tech company where employees couldn't send e-mail directly from one unit to another. Fiorina set about redesigning the company. It was controversial, and so was what came next. To give the company more scale, she backed a plan to acquire computer maker Compaq.
Ms. FIORINA: My prediction to both my board and the Compaq board was that our stock would drop 20 percent. It dropped 23 percent. So we knew it was going to be a tough sell.
ZARROLI: She didn't know the half of it. A bruising, highly public fight ensued with shareholders opposed to the plan, including Walter Hewlett, the son of one of the company's founders. In the press coverage, Fiorina became a brash publicity-seeking outsider with no respect for the company's values.
Ms. FIORINA: I was sustained by the same things that have always sustained me, a knowledge that we're doing the right things, not based on gut but based on deliberative reasoning. We're doing them for the right reasons. We're doing them in the best way we can, and that sustained me.
ZARROLI: The merger was ultimately approved by shareholders, but just barely. One day in early 2005, Fiorina was unexpectedly called to a board meeting and fired after five and a half years on the job. She says she never got an explanation. BusinessWeek computer editor Peter Burrows, who wrote a book on Fiorina called Backfire, says that in the wake of the merger, the company had missed its earnings forecast and its share price was down.
Mr. PETER BURROWS (BusinessWeek): The company was not doing well. I mean, it was doing a little bit better. It was not doing as well as it rivals, like Dell and IBM. And a lot of people on the board felt that her plans were not really going to fix that.
ZARROLI: Burrows says Hewlett Packard is now doing much better, and the Compaq merger looks like a success. He says Fiorina deserves some of the credit for that. But he says most people he talks to believe the rebound would never have happened, if not for current CEO Mark Hurd.
Hewlett Packard's success has been overshadowed by the recent revelations that management spied on board members and journalists. Among those whose records were searched was Fiorina. Fiorina says the whole scandal is sad.
Ms. FIORINA: This to me was a breakdown in judgment, perspective, ethics. And it was also a breakdown in direct conversation about tough issues. You got to bring the tough problems up on the table and talk about them directly. I don't care if you're sitting around the kitchen table or you're sitting around the boardroom.
ZARROLI: Now 52, Fiorina is taking what she calls a pause from the business world. In the seven years since her appointment, there have been a few more female CEOs, but not many. Fiorina says she may one day rejoin their ranks, if she gets the right offer.
Jim Zarroli, NPR News, New York.
HANSEN: More on Carly Fiorina's tenure at the top of HP, including an excerpt from her book, at our Web site, npr.org.
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