News

Fiorina book gives peek at characters in HP drama

Michelle Quinn and Therese Poletti [San Jose Mercury News]

SAN JOSE, Calif. -- It all began before Carly.

When Carly Fiorina took the helm of Hewlett-Packard as chief executive in 1999, HP's board was dysfunctional, riven by animosities, and passive-aggressive, according to Fiorina's new book "Tough Choices," (Portfolio/Penguin Group) which will be released Monday.

The highly anticipated 309-page autobiography, purchased by a San Jose Mercury News reporter Thursday, reads like a business soap opera, with Fiorina casting herself as the misunderstood, embattled but earnest heroine. Fiorina, who was fired from HP in February 2005, peppers the book with inspirational aphorisms like "Don't think about the next job."

But "Tough Choices" also dishes. It is part Kitty Kelley tell-all, part CEO autobiography. The book casts fresh light on the personalities currently embroiled in the scandal over HP's investigation into boardroom leaks, which has resulted in criminal charges. Most do not fare well in this book.

There are the memoir chapters about childhood (didn't have a television until 10), education (Stanford, dropped out of UCLA law school then got an MBA), first marriage (Todd, not at work when he said he would be) and years of rising success at Lucent.

Then, "Tough Choices" zeroes in on them -- the HP board. Fiorina had to fight from the beginning. Lew Platt, the former CEO, thought she was changing the company too fast. Walter Hewlett, the former board member and son of a company co-founder, initiated a shareholder proxy battle in 2001 over the purchase of Compaq Computer.

After the deal went through, and the company's financial performance faltered, divisions on the board widened, with some members eventually turning against Fiorina.

In the book, Fiorina notes an alliance between board members Tom Perkins and George "Jay" Keyworth that echoes comments from now-ousted HP board chairwoman Pattie Dunn. Perkins and Keyworth (now both off the board) bonded together over the loss of their respective wives to cancer, and turned to HP to fill a void. They huddled during breaks in board meetings, criticized staff members and lobbied to change HP's structure.

Some revelations include:

  • Michael Capellas, the former CEO of Compaq, suffered mood swings, calling her up one night after midnight screaming at her for refusing to accept a retention payment as part of the Compaq deal. (Capellas gave up his as well) "He thought I would make him look bad," she writes.

  • Dunn, who joined the board in 1998, said the Compaq deal was an opportunity "to quit talking about the HP Way once and for all."

  • On the day of the shareholder vote on the Compaq merger, HP and Hewlett reached an agreement for him to rejoin the board. The company prepared a press release. The next day, Fiorina learned that Hewlett had sued the company to stop the merger. The press release was torn up.

  • Keyworth was "always opinionated about everything." He was "derisive of Dunn's capabilities and routinely complained that she didn't understand the company and relied on process as a crutch." He encouraged Fiorina to replace her.

    The HP board of 1999, Fiorina observed when she arrived, did not communicate directly with each other or with top management. She was aghast that before her arrival at HP the board had allowed then-CEO Platt to reorganize the company simply because no one wanted to challenge him.

    "People did not confront issues at Hewlett-Packard," she writes.

    The last few chapters delve into the events leading up to her ouster.

    Fiorina suggests that Perkins and Keyworth colluded to get the board to remove her when she dismissed their suggestions to condense HP into two big business groups and put Shane Robison, HP's chief strategy and technology officer, in charge of one of them.

    After a board meeting in San Francisco in January 2005, certain directors leaked boardroom discussions to the press, prompting Fiorina to initiate a leak investigation herself.

    Fiorina's reaction to the leaks eroded her increasingly tense relationship with some directors.

    The board asked HP's outside counsel Larry Sonsini to look into the leaks. Fiorina said that Sonsini concluded two or three directors were leaking to the press and that Perkins admitted to being a "second source." (In his documents submitted to Congress for hearings on the HP scandal, Sonsini said he did not find the leaker).

    At a board meeting in Chicago in February 2005, Fiorina started to realize her time was up. She read a statement to the board and then was dismissed from the room. She waited three hours.

    "When I opened the door and realized all but two board members had left, I knew I had been fired," she writes. "In the end, the board did not have the courage to face me."

    Only Dunn and Bob Knowling, a board member, remained in the room.

    In a report about the leakers, Sonsini used the word "dysfunctional" to describe the board, Fiorina writes. "I agreed with his assessment," said Fiorina. "Navigating through the thicket of personalities, ambitions and emotions had become both draining and counterproductive."

    It appears those same seeds of discontent and rivalry continued to be sown after Fiorina left.

  • © 2006, San Jose Mercury News (San Jose, Calif.). Distributed by McClatchy-Tribune Information Services.

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