I started this post a month ago, shortly after the second Republican debate.  I was not able to complete it before going on vacation.  Now I return to it the day before the third debate.  Carly Fiorina was the clear winner from the second debate and her standing in the polls skyrocketed.  Since then, she has lost much of the momentum from this debate.  

She has been subject to a relentless attack. Liberals attack her for being a firebrand conservative.  Conservatives attack her for being a closet liberal.  More than anything else, she has been attacked for her business record at Lucent and Hewlett Packard.   In particular, she has been savaged for her championing of the merger between HP and Compaq computers.  This leads to two questions:

• How valid are the charges against Fiorina.  Was she truly a “disaster” as CEO?
• Regardless of the validity of the charges, will they be an effective political weapon against her?

Fiorina began her career with six months as a receptionist for a real estate firm, moving up to broker before she left.  After a stint teaching English in Bologna Italy, she joined AT&T in 1980 at age 25 as a management trainee, selling telephone services to federal agencies.  In 1990 at age 35 she became the company’s first female officer as senor vice president.   In 1995 at age 40 she headed North American Operations when AT&T spun off Lucent Technologies.  She had a major role in Lucent’s IPO, described as one of the most successful IPO’s in US history.  Lucent’s price increased 10-fold by the time Fiorina left.  In 1998 Fortune magazine named her “The most Powerful Woman in American Business”.

In July 1999 Hewlett-Packard named Fiorina as its new CEO, making her the first woman to lead a Fortune 20 company.  She was hired with the mission to change Hewlett-Packard’s culture to make it more innovative.  Her changes, however, were fiercely fought and she made her many enemies at HP.  The Tech bubble burst shortly after her arrival and HP’s stock plummeted.  HP had to layoff over 30,000 people during her tenure.

Her most controversial move was the merger with Compaq computers, which at the time was the second largest producer of personal computers after Dell.  There was heavy opposition to this merger including from HP founder William Hewett.  At the time, many considered the merger a disaster and HP’s stock plummeted further.  In February, 2005, she lost a power struggle with the board of directors and was fired.

Her rise from secretary to becoming the first woman CEO of a Fortune 20 company was undoubtedly spectacular.  Her record at CEO is certainly up to interpretation.  She was unpopular with many HP employees.  On the other hand, she was hired to shake up the company culture, so resentment was inevitable.  Her critics condemn her for Hewlett Packard’s price decline under her tenure and say that the tech crash is no excuse.  The same credits, however, refuse to give her credit for the stock rise at Lucent, stating it was due to the tech bubble.

Bloomberg did an interesting analysis of HP’s stock performance.  This chart illustrates the value of HP stock along with comparable companies till five years after her departure.

This chart shows that from the time Fiorina became CEO of HP until five years after her departure, HP stock did better than its key competitors.  One can argue that this shows that her strategy was a success.  One can also argue that the credit would go to her successor but not to her.  Alternatively one could argue that HP might have done much better had she remained and been able to execute her strategy herself.  In short, her grade as CEO can only be incomplete.

The other question is whether the Democrats could use her business record as a weapon against her.  They certainly will try.  Barbara Boxer used attacks against Fiorina’s business record to defeat her in their Senate race.  No matter who the Republicans run, the Democrats will have an attack line to use against him or her.  If the Republicans refuse to nominate a candidate because they can be attacked, there will be nobody to nominate. Fiorina has had since her defeat in 2010 to come up with a strategy to counter these attacks.  She certainly will have plenty of opportunity to demonstrate her strategy over the months ahead, possibly in the debate tomorrow.