GILD Leadership Stories:

Carly Fiorina | The Art of Making “Tough Choices”
– By Jack Lott

“When people have stereotypes of what you can’t do, show them what you can do. When they have stereotypes of what you won’t do, show them what you will do. Every time you resist someone else’s smaller notion of who you really are, you test your courage and your endurance. Each time you endure, and stay true to yourself, you become stronger and better.”
— from a speech by Carly Fiorina, May 2005

Carly Fiorina, former chairman and chief executive officer of Hewlett-Packard, was named the “Most Powerful Woman in Business” for six consecutive years by Fortune magazine beginning in 1998 and, since then, her career has been extremely open to public examination. In July 1999, she was selected for the top position at Hewlett-Packard, the first woman to head a Dow 30 company and the first person in a major leadership role at H-P hired from outside the company’s executive roster.

She arrived with a new perspective and a completely fresh and innovative method of doing business in a tech world that needed to quickly move the global consumer into the Internet age. Prior to joining Hewlett-Packard as the CEO in 1999, she had already spent a successful two-decade career at AT&T and Lucent.

Developing the Leader
During her childhood, she lived with her family in numerous exotic locations around the world, which helped establish many personal traits that nurtured an awareness to distinguish the significance of various events around her and develop a knack of pushing forward when her peers did not. Fiorina explained, “Success is a combination of many things. Some of it is the intrinsic motivation that I learned from my parents. But, a lot of it is about people expecting big things from you. People taking a chance on you and, of course, some portion of success is being in the right place at the right time. At an early age, I realized the impact of a message that was thrust upon me; ‘What you are is God’s gift to you and what you make of yourself is your gift to God.’ To me that says so much about making the most of whatever gifts we have, and striving to make a positive difference in whatever circumstance we find ourselves involved in.”

Tough choices is a book that is not so much about business or a specific product, but rather a book about the people who create the product. “I wanted to write a book about business, as I see it,” said Fiorina. “Business to me is the story of people, people doing things together. It’s also the story of all the things that motivate and drive people. Some of those things are noble and others are ignoble and emotional. Of course, business is also about profits and products but if you want to change profits and products you have to first change what the people within the business are doing.”

Over the past few years, we have seen the ugly side of business through corporate entities like Enron, WorldCom, Adelphia and even at Hewlett-Packard recently. Fiorina said she thinks greed, fear and personal agendas can turn into problems in any human endeavor. “I think that perhaps we have become a bit cynical as a society and as businesspeople. I hope I’m wrong about that. We sometimes think that rules are going to take care of everything. We believe that things would be better if we could just develop the right policies. Of course, that’s naïve. The truth is nothing substitutes for ethics. Nothing substitutes for values. Nothing substitutes for judgment. Values are what you do when nobody is looking and you think no one is going to find out. If the leadership of an institution lacks basic values and good judgment, then bad things are going to happen. Cynicism and pessimism are easy; they take no energy to produce. All you have to do to develop those attitudes is sit on the sidelines and throw rocks. Developing an optimistic approach takes energy, will and discipline.”

Managing the Tough Choices
Whether in a management or leadership role, Fiorina said she believes that many at the top are missing the point as it relates to the decision-making process and she believes managers and leaders often neglect making healthy choices in today’s business climate. “I think management and leadership are two different things. Management is the production of acceptable results within known constraints, while leadership is about change. It’s about changing the order of things and making a positive difference. That’s not to say that managers can’t lead or leaders can’t manage, but we must accept the fact that they are different. Particularly, I believe leadership needs to think about the long term, not just the short term. Lengthening your perspective requires some investment in the future, not just cost cutting in the present. Leaders must take some risks to create innovation and corporate leadership needs to create opportunities for conversations about ethics and values. Many business decisions have an ethical component to them, and if people don’t highlight the ethical component, it gets missed. For example, in my book, I wrote about having the option of selling customer data to outside sources. This is an opportunity that businesses take advantage of all the time. And yet, there was an ethical component attached to my final decision. I didn’t allow that component to get lost in the mix. If we didn’t focus on the ethics of the situation it could have been glossed over in favor of something else. Maybe, the short-term bottom line would have become the priority if we hadn’t considered the ethical component.”

I personally have always believed that natural leaders exist and while that may be true, Fiorina said she definitely believes that leaders can be created. “I would put myself up as exhibit A. There was nothing in my background or expectations that caused me to inevitably become a business leader. So, I do think that leaders are made through their experiences. They are also made through the expectations that other have of them and they are made when people expect them to step up and lead. We taught leadership at Hewlett-Packard. We revamped our leadership development curriculum and I think more and more business schools are focusing on how to best teach leadership. It definitely is a trait that can be taught.”

People and the Touch Choices
I think the toughest decision leaders have to deal with is making decisions concerning people. For instance, what will a company decide to do with employees who might have to lose their jobs because the company now has too many or because individuals are not performing to standards? The toughest of all is what to do if someone is producing results but not behaving ethically. We must never forget that leadership requires both empathy and dispassion. You have to be empathetic for what people are going through, but you still have to be dispassionate to be able to make the tough call, when required. One of the interesting things that comes to mind when I think about leadership are these balance points: empathy and dispassion. But other important factors are debate, disagreement, dissention, diversity and yet, after all that tough conversation, the ability to find a common ground. If you never debate or disagree, you create a poor decision-making process. On the other hand, if you never find common ground you never move forward.”

One of the major challenges of any corporate boss is making the time to stay close to the people in the business. Fiorina agreed, “It takes discipline every day to make the time necessary to spend with the employees. One of the reasons I traveled away from the headquarters as much as possible was because headquarters isn’t where the real ‘action’ is in the business. Headquarters is where the politics are but the crucial factors that push the company forward are the people doing things every day to build products or satisfy customers. If you want to stay in touch with what’s really happening, you have to be out there on the ground talking to customers and employees. And as the leader, you must create an environment that will allow people to stay in touch with you too. I used to get hundreds of emails every week and I read them all. You have to set the expectations that you are listening to them and then actually listen to them. You also need to create an environment where the expectation says ‘we will put the tough issues on the table and talk about them, disagree about them and then solve them.’ Ultimately, the goal is to solve these issues that can drag the company down. People understand an environment in which tough issues are meant to be talked about. When people stop putting the real issues on the table, bad stuff happens. That’s called dysfunctional and that’s what I found when I came to H-P originally. No one talked about the real issues. Everyone was polite and everyone agreed but nobody was solving anything.”

I asked Fiorina if she enjoyed her tenure as the chairman and CEO of Hewlett-Packard. She simply said she enjoys working with people. “I have enjoyed my entire business career. There were things about being the CEO at Hewlett-Packard that were extremely difficult. We had many tough issues to solve and ultimately accomplish and we were trying to do them in a very challenging time – a technology recession, a bear market, a down global economy – it was a challenging time. But yet, I took enormous pride and satisfaction in finding common ground with 100,000 plus employees and moving the company forward in some important ways and transforming a laggard into a leader.”

Growing the Company
The Compaq acquisition is just one example of how she moved Hewlett-Packard forward by accomplishing something that was totally “outside the box” and for the most part, not supported by the company as a whole. “If you understood what was really happening in the industry and understood the robust decision-making process that we went through, looking at every alternative and every risk and every down side, it was in so many ways a very logical move. But, of course, it was hugely contentious, demonstrating that sometimes leaders have to see things that other people can’t yet see. It is interesting to me that virtually everyone today believes the deal with Compaq was the natural progression of H-P’s business and it happened because it was inevitable. That was definitely not the case when it was actually occurring. “

The tech bonanza that we experienced in the late 1990s introduced a lot of people to the investment community and made many of them very wealthy. Fiorina said she believes that this period of massive tech growth, mainly in the stock market, was an aberration. “I am of the point of view, and have been for many years, that 1999 and 2000 were the anomaly. So, I think it’s the wrong expectation to think that the days of the dotcom boom were normal. They were not normal. The technology industry is not just about sexy gadgets; it’s literally about transforming every aspect of business and life. So, when an industry becomes so central to how business conducts business, by necessity, that industry takes on more responsibility. The requirements of customers become more onerous and the requirement for ethical leadership becomes more important. In other words, technology isn’t a startup any more. Technology is now woven into the fabric of every business and every life.”

Commitment to Others
If there’s anything at the top of her list to accomplish, she said all she wants is to be useful to others every day. “I must feel like I’m making a positive difference to those around me. As long as I feel I’m accomplishing that and interested, then I feel the day has been well spent. I’m not a person who has had a plan for the next step in my career, but I am a person who knows an opportunity when I see it. I have turned down some opportunities to work full time that I just didn’t think were quite right for me at this point in my career. I suspect one of these days I’ll find one.” And when I brought up the possibility of politics in her future, she laughed but said, “I admire people who put themselves out there and serve the public interest, whether they are in appointed or elected positions. It’s a tough gig!”

Creating a New Life
Since her departure from corporate responsibilities, Fiorina said her life has changed, but she is still extremely busy and explained the fundamental difference is that today she’s busy with more than just one thing. “I now apply my energy and my passions to many things. In addition to writing books, I work with a number of technology companies, not-for-profit organizations and government agencies; I now have more freedom to choose how I spend my time. I suspect one day, I will commit myself to one thing again but right now I’m enjoying this period of freedom and an opportunity to look more broadly at all the different things that are going on in the world today.”

One thesis that she adheres to is that “In the end, business isn’t just about numbers; it’s about people.” Her story transcends a simple representation that depicts a powerful woman in 21st-century American business. Fiorina’s story can help us all discover our personal direction --both in and out of the business environment.