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Fiorina Comments On Public Firing

If it sounds like Hewlett-Packard's board was dysfunctional during Pattie Dunn's tenure, it was just as bad over a year ago when Carly Fiorina was CEO and Board Chairman, and considered the most powerful woman in American business. Last February, Carly was fired - abruptly and very publicly - with striking parallels with what happened to Pattie Dunn.

That they're both on the Oct. 8 edition of 60 Minutes is due to a quirk of timing in that Dunn's criminal charges and Carly's memoir have come out at the same time. And it's ironic that both women were forced out of HP and are lashing out at some members of the male-dominated board.

So why was Carly Fiornia fired? She tells her version of the story in her book called "Tough Choices." She talked about it for the first time with correspondent Lesley Stahl.


Asked why the board fired her, Fiorina tells Stahl, "You know, Lesley, I wish I could answer the question: 'Why did the board fire me?' I can't. They never had a conversation with me."

"It was just (clap) out the door," Stahl asks?

"That's right," Fiorina replies.

"It was that cold?" Stahl asks?

"That's exactly what happened," Fiorina says.

She says she felt devastated and hurt by the sudden firing.

One reason she was so blindsided, she says, is because after five years of her leadership, the company was on a roll.

"A company that went from not being in the top 25 innovators in the world, to leaping up to number three," Fiorina says. "A company that was profitable in every business line. A company who's brand had gone from stodgy, white, man, honestly - that's what the research said - to leading edge, relevant. This was a company transformed, from a laggard to a leader."

And transformed, she says, because of her strategies, her vision, and her management skills. So when the board of directors showed her the door, she hadn't seen it coming.

"None of the normal business reasons apply, I know that. There were no improprieties. There were no ethics issues," Fiorina tells Stahl. "So I can only conclude that it was personal in some way. Certainly, the way it was done was personal."

Carly's book documents it all: from her hiring, to the firing, which was like a public beheading - a devastating rebuke after an almost flawless career. By her own telling, she was always driven. First, when she wanted to be a concert pianist and practiced every day for hours and hours; then at Stanford, where she graduated with honors.

In college, she took classic Greek so she could read Aristotle in the original; on top of that, she also took German and Italian.

"Once I dive in, I dive in all the way," she says.

That's what she did at AT&T, where she started out as an entry-level sales rep. She worked her way up, eventually directing the then largest initial public offering in history, the $3-billion dollar spin-off of Lucent Technologies.

That deal put her on the map, turning her into a celebrity CEO who everyone just called "Carly." And it led to her hiring at Hewlett-Packard in 1999. She was just 44, the first woman to lead a company that big.

Founded in a garage during the depression by Bill Hewlett and Dave Packard, the once-dominant HP fell behind in the 1990s and the board of directors wanted Carly to come in and shake things up. But she came up against a culture that didn't want to be changed.

"If someone offered a new idea, people would say, 'Oh, we don't do it that way. It's not the HP way.' So it became a shield against change," Fiorina explains.

She persevered, though, and in time orchestrated a huge change: the merger with Compaq.

The board backed the deal 100 percent. But merging with the more trendy, edgy Compaq was seen by some insiders as an attempt to kill off the old "HP way." It didn't help that she had made herself the face of the company or that she had starred in a commercial in front of the old sacred garage.

Thinking about the commercials, Fiorina says, "I mean, if I had it to do over, I probably wouldn't have gone into those commercials because I think it made me perhaps even more of a target."

It couldn't have helped with the founding families, the Hewletts and the Packards. They turned against the merger with Compaq, and against her.

"The families took out an ad at one point and they said that you were incompetent, unethical, unfit," Stahl remarks.

"Oh look. I think the fight got very ugly. Very ugly things were said about me," Fiorina says. "And my job was to set that aside and get done what I had to get done."

Asked if she was able to put those difficulties aside, Fiorina says, "Except when I came home at night. You know, you have to have a safe place you come home to."

That safe place was home with her husband Frank Fiorina. Four years earlier, when he was 49 and a vice president at AT&T where they had met, he retired, in order to support her career.

Frank says he never asked his wife, "Why don't you retire," because it would have been "futile, and it would have been a waste of time."

"That was not in the cards?" Stahl asks.

"No," he says.

What Frank did was watch her back by attending board functions and senior leader meetings, and he would tell her the unvarnished truth. He was at her side at the brutal proxy fight against the merger with Compaq that lasted eight months, including a lawsuit to try and stop it. Carly had to testify.

But in the end, the shareholders approved the deal and she threw herself into marrying the two huge companies. With that came tough decisions, like laying off 23,000 people. Grumbling about her intensified: that she spent too much time hobnobbing with movie and rock stars, which she says was part of her campaign to appeal to a younger market. And there were complaints that she was weak at the day-to-day operations.

"Do you acknowledge that you weren't running the nuts and bolts?" Stahl asks.

"No, I won't acknowledge that," Fiorina replies. "I absolutely won't acknowledge that. I was running the nuts and bolts of this company along with a lot of other people."

"But, do you acknowledge that the board felt you weren't?" Stahl asks.

"No, that's not factual," Fiorina says.

Yet early last year - three members of the board approached her with a proposal to restructure the company in a way that, in part, would've stripped her of some of her day-to-day responsibilities. Then someone leaked the plan to the Wall Street Journal.

Furious, Fiorina called a conference call with the board, and by her own account in her book, was cold as ice.

"I was very, very distressed," Fiorina recalls. "But as I also say in the book: when I get very angry, I get very quiet."

Asked if she scolded the board or talked down to them, Fiorina says, "I didn't talk down to them, but I was plain in saying: 'This is unacceptable behavior.' A line had been crossed, and when no one would fess up, I said, 'We have to have an investigation.'"

Fiorina wanted a leak investigation, since no one would admit that they had talked to the press.

She says her investigation didn't use pre-texting or any other controversial tactics, but it didn't find the original leaker, though Tom Perkins admitted he was a second source who confirmed the story for the Wall Street Journal. At the next board meeting, Carly says she intended to clear the air and move forward. But when she showed up, she was fired - effective immediately and Pattie Dunn was elected chairman of the board.

"In the book you said, 'The board did not have the courage to face me. They did not thank me. They did not say goodbye.' Do you think it was nasty? Mean? Meant to hurt?" Stahl asks.

"I think the way this was handled was heartless in some ways and disrespectful in other ways," Fiorina replies.

"Almost as if they meant to take you down a peg or two, that kind of thing," Stahl asks.

"Well, if that was there intent, they certainly succeeded in that. Maybe they took great pleasure in seeing me beat up publicly for weeks and weeks and weeks. I don't know," Fiorina says.

60 Minutes wanted to hear the board's version of that story, but no one would talk to us. Looking back, Carly now believes that the leak investigation she ordered may have prompted some of the board members to turn against her.

"Perhaps, there were people who thought they would lose their job and they loved being part of the HP board," Fiorina wonders.

"You mean, lose their job as a board member?" Stahl asks.

"Yes, because of their own behavior. They loved being on the board," Fiorina says.

As she writes in her book, they may have thought it was them or her, so they decided to fire her first. She believes the ringleaders were Tom Perkins and his best friend, Jay Keyworth.

Asked if they colluded and forced this ouster, Fiorina says, "Clearly, both of them were aligned in how they thought I should reorganize the business. But these were also people who really for all their gifts and all their accomplishments didn't understand what running an $85 billion business was all about."

But there were industry analysts who said it was Carly who didn't understand: that her merger was "failing" and that she had missed her own earnings projections.

"You missed a big quarter. But, you don't just miss it. You miss it by 20 percent. Some huge amount, right, percentage?" Stahl asks.

"Yeah, I'm not sure it was that. But, anyways, a big miss. There's no question," Fiorina acknowledges.

"As you admit, the stock price was down and down considerably. Aren't those enough reasons to fire a CEO?" Stahl asks.

"Well, they could be," Fiorina says.

"But, you would think, if those were the reasons, that after all this heavy lifting, and after all this work, at least the board would sit me down and say, 'You know, Carly, we think, unfortunately, that it's time to make a move because dot, dot, dot. Let's talk about these things.' That conversation didn't happen," Fiorina says.

In fact, Carly describes the firing as a last minute, seat-of-the pants decision.

"After I was fired, they put the CFO in charge. They paid him $3.5 million for 45 days of worth work, and then they hired my successor in apparently ten days. That's not a very well thought-through succession plan for an $85 billion company," Fiorina says.

"A prominent Wall Street Journal reporter said to me very recently, 'It would never have happened if she weren't a woman.' This is a male," Stahl remarks.

"I think somehow men understand other men's need for respect differently than they understand it for a woman. I'm disappointed to have to say that, but I think it's undeniably true," Fiorina says.

60 Minutes asked officials at HP to talk to on or off camera, but they decided against it. Today the company is thriving in financial terms: profits and stock value are up and Carly says she deserves the credit.

"Is it you or is it the new CEO? Because there's a debate," Stahl asks. "He's changed several things that you put in place."

"The company was transformed under my leadership," Fiorina says. "The battleship was turned. And now, my successor will establish his own momentum and, in a couple of years, we'll know where he's taking the ship. But I know where I took the ship."
Produced By Richard Bonin

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