By By JOHN EBY / Dowagiac Daily News
BENTON HARBOR – In her ascent from secretary to CEO of an $87 billion company with 160,000 employees in 176 countries, law school dropout Carly Fiorina learned some valuable lessons about leadership.
Fiorina, who for six straight years edged Oprah Winfrey atop Fortune magazine's "clearly ridiculous" list of the 50 most powerful women in business, as of 2005 remained among the top 10 most powerful women in the world.
"Don't number us," Fiorina said. "Let us play with the big boys. Business ought to be a game everybody can play. When we compete against each other it's a better game."
Fiorina, who paced back and forth before The Economic Club of Southwestern Michigan without a podium Thursday night at Lake Michigan College, distinguishes between leadership and management.
Leaders change the order of things. "Leadership is about seeing – and seizing – possibilities," Fiorina said. "Management is about production of acceptable results within constraints."
It's human nature to resist change, said the former chairman and chief executive officer of Hewlett-Packard, who led its reinvention as a global technology solutions provider, brought H-P back to its innovative roots and spearheaded a controversial joining of H-P with Compaq Computer Corp. that came to be recognized as one of the most successful high-tech mergers in history.
From that pinnacle, where she commanded a $21 million salary, she was fired and is now the author of her memoir, "Tough Choices."
Her husband Frank accompanied her to southwestern Michigan. She said her suitcase was lost and she appeared in her traveling clothes.
Change became habit for her, attending five high schools in four years. She was always the new kid. "When I became a manager for the first time, my boss introduced me to my new team as 'our token bimbo.' Eventually I became a CEO and I got sacked."
Change is "always resisted, even when people know it is necessary" she said, "because the natural momentum of any organization is to preserve the status quo because the people who have positions of influence and power want to keep them. Change is a little like heaven. Everyone wants to go there, but nobody wants to die. Change takes time" and a balance between urgency and reasonable expectations.
Leaders – "change warriors" – must recognize both danger and opportunity. They must see something that is not yet obvious.
Fiorina used Kodak as an example. From 1999, when its name was synonymous with photography and cameras, it resisted "making a dramatic strategic turn" toward the growing influence of digital imagery.
Similarly, Hewlett-Packard as a technology company had fallen further and further behind, missing its goals for nine quarters, yet paying out record bonuses. It lost $900 million in 2002 and rebounded to $3.5 billion profit for 2004 under Fiorina.
"The day before we announced the Compaq acquisition, I predicted Hewlett-Packard stock would drop." It did, by 23 points. "I knew it would because the market did not yet understand what was happening in the economy," Fiorina said. "I used to quote Charles Darwin to (H-P) employees: It's not the strongest of the species that survive, but the most adapted to change."
Fiorina recalled a lecture at a university where students posed typical questions, from whether she'd ever thought of starting her own business to could the law school dropout help break the same bad news to his parents. All in flawless English. And she was in China.
"This century is unlike any other ," Fiorina said. "I tend to think about history. What's different? What caused Kodak to miss the turning point? What's different is the demise of the physical chemical process that defined the industry for a century."
No more taking film to a drug store for development and taking the prints home and slipping them into photo albums.
While Kodak hesitated, cell phones became the most ubiquitous tools for digital photography.
Not only is it mobile, but it's "virtual," removing time constraints.
"Individuals are more and more in charge," she said. "Blogs, My Space, YouTube," communities springing up in cyberspace.
"The implication is that everybody wants to play. Technology has erased the barriers. This digital, personal century means that it's all about people and brain power. We have to think about this as a nation. Political leadership leads economically. If we're to continue to lead economically, we need new 21st century rules. We're not investing enough in education and we need to invest more in innovation. Immigration needs to be regarded as a source of strength.
Business is about products and profit, but it must also be about people.
"We don't talk enough about values," Fiorina said. When scandals erupt at Enron, Tyco, WorldCom or Adelphia, "We ought to be talking about a breakdown in ethics and a loss of perspective. Leadership requires balance between confidence and humility. Confidence to stand up for what we believe is right. To make a positive difference and to change the order of things. But leadership also requires the humility to say, 'I can't do it alone.' Leadership requires a balance of empathy and dispassion. To lead people we have to know them, respect them, feel for them. I laid off, during the course of my tenure, 36,000 people, and every time I made that decision I went home and cried."
Another tough choice is removing someone from the business who produces results, but is less than honest. "People watch the walk. They don't listen to the talk" about values. "You have to act on them."
Leaders must strike a balance between realism and optimism. The Compaq decision came after nine months of analyzing every conceivable possibility.
"But leadership also requires optimism," she said. "Optimism is the faith that people will have the courage to undertake change. I can attest that most people want to do right and that given enough time and information will make the right choice. Leaders must trust their people."
"It is a leader's job to think in years – not quarters," Fiorina said.
"Never sell your soul," she counseled. "One of the tough choices I faced in this very dysfunctional, very emotional two-week period" before H-P sacked her, "I was asked to position the news" to make it look like leaving was her decision, not the company's.
It would have been easy to do after posting $3.5 billion profits, but she had pledged to her employees that she was with them "for the long haul."
The difficult decision "left me at peace," said the woman who lists her parents as her heroes.
She said reforming education should center on common ground, like H-P and Compaq found, but the dialogue usually dwells on areas of disagreement.
Though she would earn a master's degree in business administration in marketing from the University of Maryland and study management at MIT, Fiorina's bachelor's degree from Stanford University was for a double major in medieval history and philosophy.
"I was educated, but unemployable," she recalled. Her parents urged her to attend law school. "I was a parent-pleasing middle child and goodie two-shoes. I hated law school. I discovered that pleasing my parents wasn't a sustainable life goal. I also learned that if I didn't have my heart in it and passion for something, I couldn't do it" – so she became a secretary, typing, filing and answering phones until it was suggested she might be capable of more.
It was the first time a business career had occurred to her. She tried teaching English in Italy.
Fiorina became a management trainee with ATT in 1980. Fortune anointed her in 1998. In 1999, she became H-P CEO. In 2005, she was dismissed.
"The grace with which she bore herself after such a very public loss of a job did nothing but to improve admiration for her," President Michael Cook said, joking that Fiorina benefited from "what is known throughout the speaker industry as the 'Economic Club effect.' When this audience extends an invitation to a person, they are looked at in a whole different light. Your invitation constitutes a ratification."
Cook tongue-in-cheek took credit for Fiorina's book becoming a bestseller, Forbes "resurrecting" her and "60 Minutes" clamoring to interview her on a recent segment.