Carly Fiorina’s disastrous record as HP’s CEO

The snowballing trend is voters’ growing contempt for politicians. A troika now tops the Republican race, with over 50% combined support, and they’re the only three candidates who have never held elective office.

The new issue is Fiorina’s record as Hewlett-Packard’s CEO, the centerpiece of her case for why she’d be a good president. That record will now attract much closer scrutiny than it has received so far. Here’s how to sort out what we’ll be hearing.

Fiorina argues her case clearly and strongly. She says that what she did at HP was “double its revenues to $90 billion, triple its rate of innovation to 11 patents a day, and go from a laggard to a leader in every product category and every market segment in which we competed.” She also boasts of doubling employment. And much of that is true.

The many, many people who believe she was a disastrous CEO—and that group would include me—observe that she doubled revenue and employment simply by buying a large company, Compaq, in a deal that was a huge loser for HP shareholders. Her claim of going “from a laggard to a leader in every product category” is distinctly odd, since HP was already the overwhelming leader in printers when she arrived, and by the time she left, the company still didn’t dominate any other business. Increasing patents is nice, but only if it pays off for shareholders, which it didn’t. Neither did anything else during her tenure. The stock dropped, and while she likes to point out that her time was a tough period for tech firms, it was a lot tougher for HP shareholders than for those of IBM, Dell, or the S&P tech index. She underperformed them all.

If you want the withering details of her performance, the best analysis by far was written by the great Carol J. Loomis in a 6,700-word 2005 Fortune cover story called “Why Carly’s Big Bet Is Failing.” Here’s Loomis’s conclusion:

“It is right to ask whether this whirlwind [Fiorina] has succeeded. And inevitably that question must be answered in two parts. First, under the only lens that matters, did the famed merger that Fiorina engineered between HP and Compaq produce value for HP’s shareholders? Second, with that merger nearly three years past, is HP in shape to thrive in a brutally competitive world?

“The answers are no and doubtful.”

A few weeks after that article appeared, the HP board fired Fiorina. The company gained almost $3 billion of market value on the news that day. She was only 50 years old and has not run a publicly traded company since.

It may well be that, as Chris Christie said during last week’s debate, the voters don’t really care how well or badly she did at HP. But it’s hard to see how Fiorina avoids talking about it, since it’s the only record she has to present to the voters. And the more closely they examine it, the worse she’ll look.