By Leslie Shedd, CARLY for America National Press Secretary
December 15, 2015
By the late 1990s, Hewlett-Packard was in trouble. They had gone from a tech giant to a stagnant bureaucracy that lacked vision. HP was not meeting profit expectations at the height of the tech bubble, when its competitors were growing by leaps and bounds, and operating expenses were up while earnings were down. HP needed to change if it was going to survive.
FACT: “[HP] had now missed Wall Street’s profit expectations for nine consecutive quarters. Revenue in the first quarter of fiscal 1999 had grown just 1 percent. The company’s stock-market performance had gone from troubling to pathetic.” (George Anders, Perfect Enough, 2003, p. 41)
FACT: In the first quarter of 1998, “HP shocked analysts with an 18% jump in operating expenses and a 12% dip in earnings.” These numbers “sent the stock spiraling downward 26% where it is stuck at around 60.”
FACT: By 1999, HP’s growth had “dropped to roughly half” of what it was through much of the 1990s.
FACT: While HP was falling short of expectations and seeing a dip in earnings, across the board at all tech companies “PC and printer sales pushed annual growth over 20%.”
FACT: “During the tech boom of the late nineties, Hewlett-Packard (HPQ) was bumbling along with stagnating, single-digit revenue growth, run by a notoriously dysfunctional board.”
FACT: Before Carly, HP was a bureaucratic nightmare. They had 83 different divisions and 87 different supply chains with more than 150 brands under the HP umbrella. The bureaucracy at HP was so over-the-top, it was discovered there were “1,500 internal Web sites devoted to employee training.” (Carly Fiorina, “Perfect Enough”)
That’s why the HP Board focused on finding a CEO who could reinvent the company and bring it back to the forefront of Silicon Valley. And boy did Carly Fiorina meet those goals.
FACT: During Carly’s tenure, HP revenues doubled, the rate of innovation tripled, and growth quadrupled. Under her leadership, HP became the 11th most profitable company in the United States.
FACT: Because of Carly’s leadership in the Compaq merger, by 2007 HP became the first $100 billion IT company and the largest PC maker in the world.
FACT: Carly consolidated HP’s 83 divisions into 17 divisions and consolidated HP’s 87 supply chains into five supply chains.
FACT: By November 1999, just a few months into her tenure as CEO, Carly had “identified almost $2 billion in achievable cost reductions by eliminating redundancy and duplication.” (Carly Fiorina, “Tough Choices, Page 196)
In other words, Carly Fiorina was exactly the change agent HP hired her to be.
SHOT: In 1999, Carly Fiorina was hired as a “change agent” to “turn Hewlett-Packard into a one-stop shop for all of a company’s computing needs.” (emphasis added)
CHASER: Under Carly’s leadership, the HP-Compaq merger gave HP a “commanding presence in the PC and server markets and allowed it to become a one-stop shop for many companies’ computing needs.” (emphasis added)