Backfire: Carly Fiorina's High-Stakes Battle for the Soul of Hewlett-Packard

Backfire: Carly Fiorina's High-Stakes Battle for the Soul of Hewlett-Packard

3.6 3
by Peter Burrows
     
 

"In detailing the last hurrah of the ’90s merger mania, Peter Burrows has written what will become a classic read in modern corporate governance. It is the quintessential story of managerial versus shareholder prerogative, superbly related, which will certainly garner a wide popular and scholarly following."
–Charles Elson, Director, Center for

Overview

"In detailing the last hurrah of the ’90s merger mania, Peter Burrows has written what will become a classic read in modern corporate governance. It is the quintessential story of managerial versus shareholder prerogative, superbly related, which will certainly garner a wide popular and scholarly following."
–Charles Elson, Director, Center for Corporate Governance, University of Delaware

Hewlett-Packard, the venerable computer maker, was seeing hard times for the first time in its six-decade history. In an effort to shake things up, the company brought in an outside CEO–the daring and charismatic Carly Fiorina.

Fiorina brought style and new thinking to HP, but she also brought change. Her efforts at rapid reform frequently collided with the familiar "HP Way," the egalitarian corporate culture and integrity that Bill Hewlett and Dave Packard had instilled in the company from its very beginning. Many say her initiatives brought little immediate improvement in the company’s fortunes. Then came the single biggest move that would change HP forever: a proposed merger with Compaq. Rubber-stamped by the board, it seemed the deal would go through without a hitch. But board member and family scion Walter Hewlett saw HP’s merger with Compaq as potentially disastrous.

With the board firmly entrenched behind Fiorina, Hewlett faced a stark choice: accept what he knew to be a strategic error, or fight and potentially expose the company to a divisive, destructive public fray. Hewlett chose to fight and what followed was the biggest, most costly proxy battle in American corporate history.

Backfire tells the inside story of HP’s struggle to regain its former glory, and of the high-stakes battle between Fiorina and Hewlett over how best to achieve that goal.

Top BusinessWeek journalist Peter Burrows presents the controversial and gripping business story behind the epic battle in a tale that reads like a great novel of intrigue. Backfire offers the first blow-by-blow account of the corporate struggle that will eventually decide the fate of two computer-making giants. Burrows uncovers how Fiorina’s greatest victory might lead to her ultimate downfall.

With revelations about:

  • Fiorina’s time at Lucent
  • Over-aggressive sales practices that could spell failure
  • The courtroom drama
  • A behind-the-scenes look at what HP doesn’t want you to know

Editorial Reviews

From the Publisher
"...Backfire, by BusinessWeek computer editor Peter Burrows...offer fresh insights about the epic battle and about Fiorina's ultimately successful purchase of Compaq." (Business Week, February 17, 2003)

Burrows, who reported on the merger of technology rivals Hewlett-Packard and Compaq for Business Week during late 2001 and early 2002, turns the notes from his day job into an uncompromising look at the deal and the woman who set it in motion, HP CEO Carleton Fiorina. Although George Anders's Perfect Enough (Forecasts, Jan. 20) covers the same territory, this account distinguishes itself with a deeper portrait Fiorina. Beginning with her childhood as Cary Carleton Sneed, Burrows traces Fiorina's ascent through a second-tier MBA program to early positions at AT&T and Lucent, uncovering former associates who shadow her success story with tales of ruthless ambition and a tendency to abandon ventures before she could be tainted by their failure. Burrows also depicts the discord within HP ranks over Fiorina, whose marketing-honed strategies were seen as a betrayal of the "HP Way," the leadership principles establishe d by the company's founders. Walter Hewlett, the second-gene ration director whose opposition to the merger intensified the shareholders' vote, gets substantially less play here than in Anders's version, and Burrows is much less accepting of Hewlett's version of events. But his skepticism also applies to HP's enthusiasm for the Compaq deal, which many industry experts scorned as a recipe for disaster. HP executives eventually stopped cooperating with Burrows once they determined they wouldn't be able to spin his reportage, but the book still manages to provide a richly detailed version of the legal wrangling that finally brought the deal to a close Although the prose is somewhat hurried, the comprehensive and near-instantaneous analysis will impress business readers. Agent, Martha Millard. (Feb.)
Forecast: This book and Perfect Enough have already been getting media coverage and will surely show up in the pages of every business magazine. Those curious enough will buy both books, though our preference lies with Burrows's account. (Publishers Weekly, February 10, 2003)

Backfire: Carly Fiorina's High-Stakes Battle for the Soul of Hewlett-Packard by Peter Burrows:
Suggests Fiorina's three-year tenure has not reversed H-P's decline and intimates H-P culture and traditions have been lost.
Explores Fiorina's personal life (childhood, two marriages) and professional background (specifically her moves at AT&T and Lucent) to identify character traits that drive her business dealings and "let them eat cake" reputation.
Gives ample space to Fiorina's detractors, weighing in with, "There was almost no mention of her relative lack of qualification for the CEO job. Few asked questions about her role at Lucent, which had begun its headlong fall by early 2000."
No other female CEO (and there have been only six CEOs of Fortune 500 companies to date) has elicited such strong positive and negative feedback.
No matter what either camp says about Fiorina, she is clearly poised to make history. (USA Today, February 24, 2003)

"...a good grounding in the background to the company and its key players-an interesting read..." (IT Week/www.vnunet.com, 19 March 2003)

"...a fascinating behind the scenes peek at one of the most powerful IT companies-some useful intelligence for IT managers..." (VNU Net, 19 March 2003)

"...more meaty, more colourful and generally a much more enjoyable read...the book also goes much further..." (Infoconomy, 11 April 2003)

"...riveting, colorful, fast-paced account of the Compaq battle". (New York Times Book Review, May 18, 2003)

"...This gripping, ongoing story includes fascinating personalities and dramatic boardroom and courtroom drama..." (Computer Consultant, April/May 2003)

"paints a nuanced and enlightening portrait of the leader of one of the most important high-tech companies". (The Boston Globe, June 8, 2003)

"...realistic and objective.... Backfire is definitely a must-read for investors, executives..." (The star online, 12 August 2003)

bn.com
Carly Fiorina is the bold and unflinching CEO who masterminded HP's $19 billion purchase of archrival Compaq Computer. Fiorina's audacious maneuver was enacted against the active opposition of Walter B. Hewlett, the son of the company co-founder. BusinessWeek's Peter Burrows tells the inside story of a boardroom and courtroom battle that transformed a corporation and American business.
The New York Times
Taken on its own, Backfire is a riveting, colorful, fast-paced account of the Compaq battle. It is informed by a deep empathy for rank-and-file employees and retirees, who felt a profound nostalgia for a simpler era when the founders, ''Dave and Bill,'' could manage the company by just ''walking around.'' — Diana B. Henriques
Publishers Weekly
Burrows, who reported on the merger of technology rivals Hewlett-Packard and Compaq for Business Week during late 2001 and early 2002, turns the notes from his day job into an uncompromising look at the deal and the woman who set it in motion, HP CEO Carleton Fiorina. Although George Anders's Perfect Enough (Forecasts, Jan. 20) covers the same territory, this account distinguishes itself with a deeper portrait of Fiorina. Beginning with her childhood as Cary Carleton Sneed, Burrows traces Fiorina's ascent through a second-tier MBA program to early positions at AT&T and Lucent, uncovering former associates who shadow her success story with tales of ruthless ambition and a tendency to abandon ventures before she could be tainted by their failure. Burrows also depicts the discord within HP ranks over Fiorina, whose marketing-honed strategies were seen as a betrayal of the "HP Way," the leadership principles established by the company's founders. Walter Hewlett, the second-generation director whose opposition to the merger intensified the shareholders' vote, gets substantially less play here than in Anders's version, and Burrows is much less accepting of Hewlett's version of events. But his skepticism also applies to HP's enthusiasm for the Compaq deal, which many industry experts scorned as a recipe for disaster. HP executives eventually stopped cooperating with Burrows once they determined they wouldn't be able to spin his reportage, but the book still manages to provide a richly detailed version of the legal wrangling that finally brought the deal to a close. Although the prose is somewhat hurried, the comprehensive and near-instantaneous analysis will impress business readers. Agent, Martha Millard. (Feb.) Forecast: This book and Perfect Enough have already been getting media coverage and will surely show up in the pages of every business magazine. Those curious enough will buy both books, though our preference lies with Burrows's account. Copyright 2003 Cahners Business Information.

Product Details

ISBN-13:
9780471267652
Publisher:
Wiley
Publication date:
02/07/2003
Pages:
312
Product dimensions:
6.32(w) x 9.29(h) x 1.05(d)

Meet the Author

PETER BURROWS has been a technology journalist for BusinessWeek for nine years, during which time he has written several cover stories on Hewlett-Packard. As the department editor for BusinessWeek’s computer coverage, he has been the principal chronicler of Fiorina’s tenure at Hewlett-Packard.

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3.7 out of 5 based on 0 ratings. 3 reviews.
Anonymous More than 1 year ago
The book did not cove many of the challenges of the HP Board. Nor were the post merger challenges addressed.
Guest More than 1 year ago
Peter Burrows offers insights into high level business, where personality matters more than economics, as he explores the mammoth HP-Compaq merger. Most mergers fail to make money or to produce the promised ¿synergies¿ so, he asks, why ¿ other than ego ¿ do CEOs pursue them? Though stylistically somewhat trite, this book successfully explores the HP Board¿s decision to approve the merger, with Walter B. Hewlett¿s vote in favor, and his subsequent lonely, ultimately quixotic battle against it. The most contentious issues in contemporary business are all here: shareholder rights and value vs. CEO power; employee-oriented cultures vs. ¿re-engineering;¿ corporate integrity vs. sharp practice; and the interesting spectacle of a ruthless, hard-headed female CEO pitted against a sensitive, cello-playing man. The author says Hewlett-Packard executives were told not to speak with him after he quoted merger critics in Business Week, so there is an inevitable Walter Hewlett bias. We found this to be a very good read, even a must read, for corporate warriors.
Guest More than 1 year ago
I still remember opening the newspaper during the proxy battle, and seeing that full-page ad that labeled Walter Hewlett as ¿an academic and musician¿. That cemented it for me. I wasn¿t even a shareholder and I was P-O¿d. I thought ¿Who could be so foolish as to make this kind of transparent personal attack?¿ The answer of course: The same folks who thought merging HP with Compaq was a masterstroke. It was far from the only gaffe by Carly¿s team. And Peter Burrows vividly details the key steps ¿ and mis-steps ¿ before and during one of the most expensive and divisive proxy battles in corporate history. At first, I thought ¿Backfire¿ was a pretty bold name for a chronicle of the merger fight. After all, the jury¿s still out on the ultimate fate of the merged entity. But the weight of the evidence confirms the author¿s thesis: Today, even with the bounce of the last few weeks, HP¿s stock is down 70% from its 2000 highs. That¿s far worse than the S&P 500, so the board can¿t blame the drop on the general market malaise. Since the announcement of the merger that was supposed to revolutionize HP and restore it to its glory days, the better part of $100 billion of shareholder value has been destroyed. And employee morale, as Burrows shows with a combination of solid stats and pointed anecdotes, seems to have been decimated. Indeed, key elements of the much-vaunted HP Way ¿ the collegial, egalitarian atmosphere, broad access to management, and decentralization of operations ¿ were trashed in the path of what could be called Carlita¿s Way (sorry, Al Pacino), or perhaps My Way or the Highway. Carly Fiorina is like a force of nature who seems to wield power more confidently than most heads of state (appropriate she spoke at Davos this past week). She¿s almost a larger-than-life figure, and people in her past seem to either worship or despise her. Not only is Burrows more than fair to Fiorina ¿ he really manages to humanize a woman who too often to the public seems like a one-dimensional, presentation-making, business-building machine. His chapter on her background is more than worth the price of the book by itself, for its vivid detail and its insights. At times, the depth of reportage is stunning. Burrows is a great name for this author because he really digs! His achievement is especially impressive considering that HP management, according to his Note about Sourcing, stopped taking his calls during the writing of the book. The book¿s greatest strength: It lays out just enough dots in just enough of a pattern to allow the reader to make all sorts of connections that wouldn¿t otherwise be possible. For instance, Fiorina¿s ex-husband retells a scene where Fiorina, having packed her bags after ten years of marriage, calmly and coldly informs him on their front lawn: ¿We will never speak to each other again¿. Just like that! Yikes! (And she¿s made good on that pledge). A few chapters later, Fiorina departs quite suddenly from a teetering Lucent, and issues an eerily similar ¿Good luck to ya, I¿m outta here¿-type remark to her team. Jeesh. While Burrows doesn¿t bop you over the head with this parallel, it¿s fascinating to observe this kind of ¿never look back¿ aspect to Fiorina¿s opportunism. If I may indulge in a little armchair psychologizing: Her ¿never look back¿ dynamic clashed headlong with the ¿honor the past, and remember where you came from¿ dynamic that informed the HP Way. It didn¿t take long for the proverbial chip to hit the fan: When Fiorina injected herself into a TV ad that used, as a prop, a mock-up of the original garage where the company was founded, David Packard fumed and most employees gasped at her brashness in co-opting the founders¿ story. This was one of several mini-backfires in Fiorina¿s reign, but the big one was her underestimation of Walter Hewlett, particularly his integrity and persistence in defending his father¿s legacy, and the degree to which HP¿s employees and