Josh's Weblog

There was little love lost between the CEO and the 151,000 HP workers who have, almost consistently since 1999, made hating their boss a very personal, full-time mission.

“When the news was officially announced this morning, people were dancing—literally dancing—around their cubicles,” an employee in the business division writes in an email.

The ousting of Ms Fiorina therefore does not automatically mean that a break-up is now likely. The same board that has decided against it three times already, and this week pledged allegiance to HP’s strategy—whatever that is—will now be looking for a new chief executive.

Fiorina's obsession with Wall Street pushed much innovation to the side, and eventually led to a rather unsettling change in the HP work environment: the company's very first layoffs. When it was all said and done, 15,000 of the then 85,000 workers found themselves without a job by the end of 2003.

“After a period of integration, cost-cutting, returning our businesses to profitability and returning to top line growth, we enter fiscal year 2005 knowing that we have the right strategy, play in the right markets and offer the right portfolio of products and services,” Fiorina writes. “We are now focused on consistency of execution and consistently delivering financial performance, great customer experiences and shareowner value.”

And her reluctance to embrace research and development of emerging technologies, consistently creating new and better markets as only Hewlett-Packard could, alienated her from the company.

Sure, she had dazzled directors and many investors with her passionate work in pushing through the controversial merger with Compaq Computer in 2002. And the immediate integration of the two companies bested expectations, silencing even her fiercest critics. But by late 2003, investors began shifting their focus from the Compaq deal to HP's ebbing position against key competitors IBM and Dell. They bored in on the ragged financial performance that led to the swooning stock price.

“[Fiorina's] good with marketing. She's a good speaker for the company,” says a former HP executive. “But this is a company that doesn't need a statesman. It needs a hands-on operations person.”

The management ouster at HP gives the company a chance to rebuild trust with investors. During Fiorina's 21 quarters atop HP, it missed profit expectations eight times. Sure, that's better than the 21 quarters before Fiorina arrived. But it's also more than double the combined misses of IBM and Dell over the same period.

While it's convenient for HP's leaders to blame poor execution for their problems, what ails the company runs much deeper than replacing a few top executives. In enterprise computing, HP has failed to improve its lot. While it is still narrowly holds the market-share lead in storage and in key server markets, including Unix and PC servers, it's losing ground to EMC in storage and Dell and IBM in servers. In some cases, its technology just hasn't kept up. In others, it has made bad bets.

Dick Hackborn, the HP director and former executive responsible for creating the company's hugely successful printing business, probably played a key role in the behind-the-scenes manoeuvrings that led up to Carly Fiorina's removal, according to close observers of the company.

Other boardroom moves have also served to weaken Ms Fiorina's position. Sam Ginn, who had led the search committee when she was hired and had been one of her staunchest supporters, left the board a year ago, along with Phil Condit, the former Boeing chairman who had also been a supporter. Mr Ginn and Mr Condit had also steered the board's nominating and governance committee, a key inner group with influence over the composition and workings of the board.

Recent signs pointed to a more rapid shift in the balance of power in the boardroom that finally stripped Ms Fiorina of support. Sandy Litvack, who as a former general counsel of Walt Disney had shown strident public support for embattled CEOs in the past, quit unexpectedly as an HP director at the start of this month - just weeks before he was due to retire.

Then this Monday, the day before Ms Fiorina was dismissed, Tom Perkins, a former Compaq director and one of Silicon Valley's most eminent venture capitalists, rejoined the HP board a year after retiring allegedly for age reasons.

HP is a crazy place to work in, since the merger I have survived 24 rounds of layoffs - the rumour is the merger didnt complete until 2006. Most the people I knew are gone, people are very stressed and its very difficult as a result of this to work. I think I will look back at HP as an example of a company I dont want to work for.