Carley Fiorina, CEO, Hewlett-Packard I tell people inside HP that leadership requires a strong internal compass. A company can get thrown off course if it isn’t clear about its goals. It can get thrown off its moorings in terms of ethics and standards if it is tempted by the wrong things. A person can get buffeted by conventional wisdom that is frequently wrong. Remember, at the time of the proxy battle, AOL Time Warner was a ‘brilliant’ deal and HP Compaq was a ‘stupid’ deal. Both are examples of conventional wisdom being dead wrong. So you have to learn to ignore a lot of conventional wisdom and a lot of talk that isn’t core to the purpose of what you’re doing. I knew what we were doing was the right thing for the company. Therefore, I had no alternative but to keep doing it. Sure, [there were dark moments]. It is very hard on some days not to take criticism personally and not to have moments of self-doubt. Those are moments when having a tremendously strong and supportive board, who brought me in, not the other way round, helped; when having tremendously supportive customers and partners helped; when having a management team and employees who would buck me up helped, and I could go home and talk to a wonderfully supportive family. I would think back to my mother and father and what they would say: ‘You have to be who you are and do what you think is right.’ They never pointed me in a particular direction because I was a girl. They were very demanding in a positive way, because of what they thought I was capable of. My mother had a lot of zest for life. 

She was very positive. From her I get fundamental optimism. Both my parents [had] very high standards of integrity. Watching them I learnt that authenticity is everything. I have never thought about the next job. That’s probably because most of the time when I started in the business world, I was scared to death. I was scared I was going to fail. I didn’t think I knew enough. Until I was in my early 40s, and opportunities started to come along, I had never really thought about [being a chief executive]. One of the things that I was very naive about when I first came to HP was that I was totally unprepared for and quite caught off-guard by the amount of publicity and scrutiny, in particular around my gender. It remains one of the most difficult parts of the job. I am disappointed to have to say: Yes, [I am treated differently as a woman]. I would not have said that four years ago. I thought we had gone beyond that. But I think it did make a difference during the proxy battle and it does make a difference still. In the end it’s irrelevant to the job I have to do. I don’t spend a lot of time worrying about it. But I think there is a real difference in media treatment. I think in some ways the media is behind the reality of the business world. I don’t think there is a particularly male or female way to lead. I think there are common elements of leadership and common stresses and strains of being a CEO that both men and women can understand. One of the reasons organizations like the Business Roundtable and the Business Council work is that not only do CEOs talk about issues that are common to them, or form public policy positions, but it is also lonely in these jobs and there are some things – dilemmas, or pressures, or choices – that only other CEOs understand. Certainly, there’s an opportunity to commiserate with other female CEOs. Marjorie Scardino [chief executive of Pearson, the FT’s owner] and I have laughed about press coverage of the two of us. I have never felt the need to act like a man or look like a man. I’m proud of being a woman. I don’t believe in trying to be someone I’m not. But I also think that you have to speak to people in language they understand. In the case of the Lucent acquisition of a company called Ascend [when she went on stage with three socks stuffed down the front of her trousers], these were guys who, to be direct, thought a lotabout the size of their balls. They were sales guys. It was a very macho kind of culture. They thought they’d been taken over by a bunch of wimps and that they were going to run the place, and I needed to tell them who was in charge. I was trying to make a point and I made it extremely effectively and in a way that made them laugh. You’ve got to have a little humour sometimes too. I found a way to laugh throughout the proxy battle. Humour, and humanity, are part of being able to keep going, and part of life. No change programme is unanimously supported. The proxy battle in many ways became not about a merger. It became about: ‘Are we standing still or are we moving ahead?’ HP was such a great company, but it was almost frozen in time. That is to take nothing away from the legacy of my predecessors. However, this was a company that in some ways had lost its ambition. Its rate of innovation had declined dramatically. It was growing in single digits in the middle of the biggest technology boom in history. There were real danger signs. But this was a company that had not ever brought in an outsider at the top. When I arrived, 50 per cent of our employees had been there less than five years, but not in the senior ranks, which were generally built from within. We had to find a common language. 

One of the first things I did was not tell people what we were going to do, but ask our customers, our leaders and our people what we needed to do. I was reasonably certain that people did know what needed to be done. I was also reasonably certain that without real leadership, and alignment around purpose and goal, we weren’t going to get it done. Because I was an outsider I couldn’t dictate, knowing this was a strong and deep culture and I was only one person. I know that big companies can thwart a CEO. The organization had to decide its vision, its goal and its willingness to change. Then I could lead. If you looked at our company values today, you would find they are the exact same values that have guided HP for 60 years, except that we have added ‘speed and agility’. We don’t want to change the fact that trust and respect are part of our value system, that contribution is important and that passion for customers is important. Those basic values originally were referred to as ‘the HP way’. 

Over time, the phrase came to mean any defense against any change. I would go into meetings where somebody would bring up a new idea and someone would say: ‘We don’t do it that way, that’s not the HP way.’ Especially for a technology company, it is death if you stop trying new things. HP tended to be very process-intensive, which is really important when you’re dealing with big, complex systems and problems. The downside is that sometimes HP processed endlessly and never decided. Compaq tended to be fast and aggressive, which is good in a fast-moving market. The downside was [that] sometimes Compaq lacked judgement. Sometimes they had to do things over and over because they hadn’t thought it through. We said: ‘The goal is to be fast and thorough.’ That’s how we got through the integration. I don’t think the timing was luck, I think it was choice. People asked me: ‘Why would you do this in a downturn?’ We chose a downturn because it gives us time. Customers and competitors aren’t moving as fast. We will spend our time doing the tough things we have to do, so when the economy begins to recover we will be ready.

 I do believe in learning by mistakes. We did our first lay-off in HP before the merger was announced. I knew it was going to be very traumatic. I was concerned the organization didn’t have the skills, experience or stomach to do what needed to be done and so we moved very fast. We provided a lot of outside support and we didn’t involve middle and first-line supervisors in the process enough. I learnt two things from that: I learnt that I had underestimated in many ways the people of the company, their appetite for change and their ability to do hard things. And I learnt that sometimes you have to go slow to go fast.

 1. In what ways would you describe Hewlett-Packard as a learning organization?

2. What role did or could culture have played in aiding or hindering effective learning at Hewlett-Packard?

3. Describe the importance of knowledge integration and organizational boundaries. How should Hewlett-Packard have set the right balance of knowledge integration characteristics?