Thursday, October 14, 2010
“The Job-Killing Touch”: How Carly Fiorina Wrecked Hewlett-Packard and the Bell Labs, and Set American Science Back By Decades
by Richard Rapaport
Wednesday, 29 September 2010 09:50
That Carly Fiorina was a one-woman wrecking crew during her tenure as CEO of Hewlett-Packard is a scandal that the Republican Senate standard bearer is spending millions to try and blunt. Running on her executive experience, it is hard to see how Fiorina can square her professed executive aptitude with the fact that as H-P CEO between 1999 and 2005, she single-handedly came near to sinking what was widely considered the world’s best technology company.
At Hewlett-Packard Fiorina was responsible for the ill-fated merger with Compaq, as well as firing nearly 30,000 employees and sending tens of thousands of jobs oversea. Never lacking in chutzpa, Fiorina celebrated the latter coup as “Right Shoring.” Things got so bad for H-P that in 2002, Arianna Packard, granddaughter of founder David Packard joined with Bill Hewlett, Walter Hewlett’s son, in a proxy fight to oust Fiorina. That moved failed, but in 2005, Fiorina was finally fired, and given a $20-million dollar settlement to just go away. In response H-P’ stock price bounced back by 10% in a single day. About Fiorina’s service at H-P Arianna Packard wrote, “I know a little bit about Carly Fiorina, having watched her almost destroy the company my grandfather founded.”
While the H-P episode is better known, Fiorina was involved in a much more damaging business disaster, one that America will continue to pay for for generations; the destruction of the Bell Laboratories. Beginning in 1995, Fiorina took over as the head of corporate operations of the AT&T spinoff, “Lucent Technologies” which included the Bell Labs.
That is where the trouble began.
For those unfamiliar with the Bell Labs, it was Ma Bell's gift to America, a place where monopoly telephone service was offset by a research business that employed over 25,000 scientists, engineers, mathematicians and researchers.
At the Bell Labs, research was considered an end unto itself, where, according to one executive, “you did something useful or you do something very beautiful.” The realm of the former included such immensely important breakthroughs as the transistor, the silicon microprocessor, the laser, fiber optics, the communications satellite, the UNIX and C++ computer operating systems. In the pursuit of improved communications, serendipity occurred such as in the form of the confirmation of the “Big Bang” theory which won physicist Arno Penzias a 1977 Nobel Prize. Penzias, the retired Bell Labs vice-president for research, put it best when he told this writer that “one of the great luxuries of the Bell Labs is that we don’t always need to get it right.” The Labs did get it right enough to amass more than 25,000 patents.
That all began changing in 1995 when a corporate team that included Carly Fiorina descended on the Bell Labs and began to pull the plug on pure research. According to Penzias, then clearly on the way out, “today we have an environment of interaction, while it is still collegial you now live with business-people.”
A key member of that latter group was Carly Fiorina who lead the housecleaning which let the scientists at Lucent know that they had better start looking for ways to “productize” their research. In 1997, Fiorina was appointed group president for global services and two years later, joined Hewlett-Packard.
What she left behind at Lucent/Bell Labs was a smoking ruin of what had been the world’s most important and productive research lab, an entity largely responsible for giving America the post-World War II boost that helped make the nation the world technology leader, contributing mightily to the prosperity that Americans took for granted but which came in no small measure from the pure research as practiced at the Bell Labs. By insisting that every piece of research be tied to a product, Fiorina and her ilk helped prevent a new generation of scientists from looking out over the far horizon and bringing back the kind of benefits that have come from such then-seemingly useless technologies including the transistor, laser, fiber optics.
The correlation between Fiorina’s tenure at the Bell Labs and the decline of American technology is tragic and is not coincidental. Despite the millions being spent on media to convince voters otherwise, Fiorina is one of those one-dimensional corporate bottom feeders whose only answer to fixing the bottom line is to fire thousands of people rather than finding creative ways to use the immense brainpower that could be used to grow a company and a nation out of economic hard times.
Voters, pay attention! Carly Fiorina’s purge at Lucent and disastrous tenure at H-P highlights her as the kind of retrograde executive a struggling California economy cannot afford to elect to higher office. Fiorina has already proven to be an uncreative corporate drone and a sheer catastrophe for American business and technology. So far she has not shown herself capable of mastering the long-term strategic thinking necessary to truly succeed in American business. That creativity was never apparent when Fiorina was at H-P and certainly not when she was at the Bell Labs. It is a similarly tough stretch to imagine a Senator Fiorina bringing anything but her "killing touch" to politics and governance.
Cross-posted from Writing for Godot