Failing Ever Upward

Thursday, September 04, 2008

Well, if you can't get Bernie Ebbers:

Carly Fiorina Live at the RNC
photo: AP/Paul Sancya

Carly Fiorina, who has been headlining with the McCain campaign -- and was even discussed as a possible running mate -- is being touted as a super-successful vagina-person. A reigning authority on big business and the tech world, or so we're told. Last night she spoke to the convention audience about the wonders of John McCain and with reporters about the travesty of sexist attacks on Sarah Palin.

These days, Fiorina is usually described as a former CEO of Hewlett-Packard. Sounds impressive, but it leaves out a few things. Like the fact she's the former CEO because she was fired, loathed by many board members and shareholders, and handed a golden parachute worth over $21 million that resulted in a lawsuit against the company. On the day Fiorina was given her walking papers, HP's stock jumped 7 percent. That's a whole lotta hate.

The HP board of directors asked Carly Fiorina to resign last week, ending the six-year reign of the highest-profile woman in American business. HP's dismal financial results provide the easiest explanation for the dismissal: while its revenues are climbing slowly, its stock is down 50 percent since her tenure began, and her poorly conceived and contentious takeover of Compaq has done little to strengthen HP's balance sheet. (The poor performance perhaps justified the board's particularly harsh public statement, which didn't contain the usual excuse of a suddenly demanding family.)

But the problem wasn't just the substance of Fiorina's leadership--it was also her style. She had plenty of it. Fiorina brought panache to HP: she combined the showmanship of Steve Jobs with a dash of Donald Trump's ostentatiousness. Instead of working quietly for the first few years to fix the company, she believed that building buzz for herself--including appearances in early TV ads--was key to re-energizing staff and exciting customers. Tech CEOs named Jobs, Ellison and Gates can get away with this; as founders, they seemingly have more leeway in cultivating a cult of personality. But Fiorina's style clanged dissonantly off HP's wonky products and the staid corporate culture that HP founders Bill Hewlett and Dave Packard initiated 65 years ago in a Palo Alto, Calif., garage. Some employees loved her--but many disliked her and were no doubt glad to see her go. Last week, interim CEO Robert Wayman told NEWSWEEK that senior executives "were very pleased with the reaction of the employees to all the communication. They were way more comfortable than [senior execs] had worried they would be."

But, Fiorina picked herself up, dusted herself off, and reinvented herself as a political mover and shaker. Thus were we treated to her compassionate words last night about the concerns of average Americans.

Today, Americans are concerned about keeping their jobs. They're concerned about keeping their homes; about the rising price of food and fuel. They are concerned about whether they will able to find and afford the right kind of health care. They are concerned about whether they or their children with have the skills and education they need to compete in the 21st Century.

Yes. I'm guessing the thousands of workers HP laid off, under her tenure, had many such concerns.

At HP, Fiorina developed the reputation of a manager who knocked heads together—or who chopped them off. And there were massive layoffs during her tenure. In 2003, the company announced it would dismiss almost 18,000 people. (That year, the firm posted a $903 million loss on $56.6 billion in revenue.) When the outsourcing of jobs turned into a national political issue, Fiorina became the poster-girl for an industry campaign aimed at blocking any legislation that would restrict a company's ability to can American employees in favor of workers overseas. She and executives from seven other tech companies issued a report that argued that any such measures would hurt the U.S. economy. The best way to increase American competitiveness, they declared, was to improve schools and, yes, reduce taxes. At a Washington press conference, Fiorina said, "There is no job that is America's God-given right anymore. We have to compete for jobs." The remark did not go over well with critics of outsourcing, who have ever since used it as an indicator of corporate insensitivity.

Such detached perspective is a whole lot easier when your own fuck-ups net you a $21 million severance. Most of us average folk don't get to make soft landings on big piles of money, when we're shit-canned.

Last night she also talked about the importance of corporate transparency and accountability. Hmmm.....

In March 2004, after HP shareholders voted 1.21 billion to 925 million to expense stock options, she opposed the move, essentially opting to stick with accounting practices (that were used by other corporations) that did not reveal a company's true value. That same year, Forbes reported that Hewlett-Packard was "among many other U.S. companies that kept offices in Dubai and were linked to Iranian traders there." The article suggested that HP and other countries were skirting export controls to trade with Iran.

But, no one should be surprised that Fiorina's star is rising within the Republican Party. She could be its poster child. She embodies the ethic that has driven them since the glory days of Ronald Reagan and the era of greedy excess he ushered in.

We have reached escape velocity and launched into the No-Consequences Economy. To pause for a moment of overgeneralization: America used to be about exceptionalism and optimism, a place where anybody could try anything and make it work. Across the business and political spectrum, it's now about entitlement, where everyone deserves a shot but no one gets blamed for screwing it up. Stuff happens, as Donald Rumsfeld said, referring to another affair with no consequences for the architects. (Read more about the consequences of no consequences.)

When Bob Nardelli said in September 2006 that he took "full responsibility" for manhandling Home Depot, how was he to know that he'd be kicked out four months later with an extra $210 million in the bank? Or that he'd end up at the wheel of an American icon, Stan O'Neal, who also mouthed the responsibility platitude, received $160 million when he was dumped after billions of dollars of bets went bad and word leaked out that he had toyed with selling the company without talking to his board.

Other disgraced Wall Street executives are hot commodities in the job market, valued for their perceived ability to walk through fire and survive. Private equity firms are turning away from deals signed mere months before. J.C. Flowers & Co. even managed to leave Sallie Mae at the altar and not pay the contractually negotiated breakup fee. Housing-industry shills who championed a rising market are keeping their jobs. Banks that made disastrous loans are cutting in line to borrow at below-market rates from the Federal Reserve. "It's amazing, the lack of shame," says Lawrence Mitchell, a George Washington University professor and author of The Speculation Economy: How Finance Triumphed Over Industry. "The guys on Wall Street claim they believe in free markets and are entitled to enormous compensation because of their risk taking. But when they lose, do they say to themselves, 'I'm going to take my losses'? No, they go running to Uncle Ben"—Ben Bernanke, the Federal Reserve chairman—"and he, in a grotesquely irresponsible move, bails them out.

After all, we've endured nearly eight nearly 8 years of an incompetent CEO President Portfolio once compared to Fiorina.

Fiorina didn't know the industry or the company, and she announced the day she arrived that she had her strategy.

No, Fiorina was right at home on that stage and will, no doubt, be right at home in a McCain Administration.