Carly Fiorina’s Business Record: Triumph or Disaster

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.  Carly_Fiorina

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.HP Stock Values

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.

Way to Go Carly!


Carly Fiorina first drew my attention early in her campaign when nobody ever heard of her.  Whenever I saw her interviewed, I was extremely impressed by how she would answer every question with a display of directness, in-depth knowledge, sound logic, and clear reasoning.  She answered questions most politicians would dodge.  While I believed she had no chance and she certainly was not my first choice, I began rooting for her and wanted to see more of her.  Here is an example in an interview she did with Katie Couric on climate change.

I was hoping she would make the cut and get into the first debate.  I was disappointed that she did not make the cut for the top ten in that debate and was relegated to the “kiddie” second string debate.  I thought she totally dominated that debate.  I wasn’t the only one who thought that, with over 80% of the polled viewers picking her as the winner, a percentage highly unusual for a five person debate.  After seeing her in this debate and her follow up interviews, she surprisingly became my first choice as a presidential candidate.  Here is an example of Carly in the first debate addressing Iran and ISIS.  Notice how she gives very specific examples of steps she would take.

I look for three things in a presidential candidate in the primaries.  First, I look for a political philosophy that is compatible with mine.  Second, I look for strong personal characteristics such as leadership, competence, and honesty.  Finally, I want to back a candidate who has a good chance of winning the general election.

Carly Fiorina scores high in each of these categories.  She believes in limited government, the free market, and a strong defense.  She rose from secretary to chief executive of a major company.  She shows a tremendous grasp of the issues, and where other candidates speak in generalities, she gives specific after specific after specific when asked how she would handle a problem.  In her rise from total obscurity to qualifying for the first debate, she has shown herself to be an outstanding candidate.

In the second debate, she was magnificent.  Here are two examples.  The first shows Fiorina responding to Trump’s comments insulting her face.  The brilliance here is that she is using Trump’s words from the question before, where he attacked Jeb Bush, against him.  In other words, this was not a scripted response.  She showed how deftly she can think on her feet.

For the other example, I would like to show examples of how Trump and Fiorina handled the same question on how they would handle Putin.  I think these show a great contrast.

Trump basically is saying that we can handle Putin basically due to the superiority of Trump’s personal skills.  He does not give any specific examples.  This is basically the same argument that Obama used in 2008.  We can see how well that worked (although to be fair I would expect that Trump’s negotiating skills would be vastly better than Obama’s).   Fiorina takes a very different approach, including giving multiple examples of steps she would take.

After Fiorina’s success in the debate, the naturally became a target for attacks.  The attacks focused on two areas.  One was her business record.  I will write a separate blog entry, hopefully soon, that looks at her business record.  The other attack is that she lied/misrepresented on her attack on Planned Parenthood in this sequence:

In the video, a woman tells a story about how she watched as Planned Parenthood harvested a brain from a moving just aborted fetus.  The charge is that Fiorina lied because the footage of the fetus in the video was stock footage and it was not the fetus that was being described.  I would argue that this is standard practice and is not a misrepresentation at all.  Using stock footage is a standard practice in documentaries.  For example, a holocaust survivor is telling her story.  As she tells her story, we see pictures of skeletal figures and mounds of dead bodies from concentration camps.  There is no no claim that these concentration camp scenes are what this survivor actually saw.  They give the viewer a vivid idea of what is being described.  There is no difference in this video about Planned Parenthood that Fiorina describes.

Fiorina is currently my top choice as a candidate.  There are other very good candidates out there, notably Marco Rubio.  She has had two amazing rises.  Her first was going from secretary to CEO.  Her second is going from a political nobody to a major candidate for president.  This may be her peak.  She may be like Michelle Bachmann and Herman Cain in 2008, who each topped the polls for a week or two before disappearing off the charts.  On the other hand, she might be the next president of the United States.  Right now, I just want to congratulate her for a job well done.

If you have the time and want to get a better feel of who Carly Fiorina is, I am enclosing a very long (almost one hour) video from her talk to the college republicans at Dordt College in Iowa.  I thought it was quite enlightening and is worthwhile if you are a Carly Fiorina enthusiast.