Observers split on impact of Fiorina ouster
SAN FRANCISCO — Carly Fiorina’s ouster from Hewlett-Packard on Wednesday wasn’t totally unexpected, but for some it was a disturbing end to an otherwise encouraging chapter in U.S. women’s corporate progress.
On Wednesday, the number of Fortune 500 companies with female chief executives declined 12.5 percent — from eight to seven, according to Catalyst, which tracks women in business.
Fiorina was one of the most powerful and closely watched chiefs in the country during her 5 1/2-year tenure at the top of the prominent Silicon Valley computer bellwether, known for its humble garage beginnings, printer business and the corporate mantra “Invent.”
Embattled H-P squeezed her out of her roles as chairwoman and chief executive after continuing disputes over the company’s controversial 2002 acquisition of Compaq, which she led and vigorously supported.
Career experts and women’s business groups are divided as to how they see Fiorina’s departure affecting future board decisions, the career paths of other women executives and of those entering the corporate ranks.
Some view it as a setback, underscoring the notion that companies are apt to scapegoat women leaders for taking legitimate business risks or that women can’t cut it in the executive class. But others see Fiorina’s tenure and her aggressive strategic pursuits in the ultra-competitive technology industry as signs of equality — that women are treated as harshly as male chief execs under the same kind of pressure.
“I do think it’s a big blow to women,” said John Challenger, chief executive of Chicago outplacement firm Challenger, Gray & Christmas.
“Carly Fiorina was in many ways the most visible (female chief), more so than Martha Stewart, an entrepreneur who built her own empire,” he added. Fiorina “is one who fought the political battles to make it up to the top in corporate America, which means really breaking down all kinds of barriers … within a company.”
Fiorina’s fate is likely to be remembered as simply a case of director-executive disagreement that made it impossible for her to be effective, according to a source familiar with the company who asked not to be named.
“It’s almost like this is a good thing; she’s having the usual CEO problem. It’s not about the woman thing. It’s really about the strategy,” the source said.
The seven women chief executives of the largest U.S. companies run businesses ranging from energy and banking to retail and tech, according to Catalyst. They are S. Marce Fuller of Mirant; Andrea Jung of Avon Products; Anne Mulcahy of Xerox; Pat Russo of Lucent; Mary Sammons of Rite Aid; Marion Sandler of Golden West Financial; and Eileen Scott of Pathmark Stores.
In 1995, the first year of Catalyst’s census, there was only one female chief at a Fortune 500 company — Sandler of Golden West Financial, who shares the post with her husband, Herbert.
Women make up 46 percent of the U.S. work force but make up just 5.2 percent of top earners and 13.6 percent of board directors in the Fortune 500, Catalyst reported.
Women report the biggest obstacle to advancement is still stereotypes — that they don’t want to travel or relocate, that they’ll choose family over work or be unable or unwilling to manage effectively. Some still believe they don’t belong in the workplace at all, said Catalyst President Ilene H. Lang.
Those barriers to success don’t get eliminated passively, she added. “We see in companies that are voted best for women and where women advance the most that they work very hard to eliminate those kinds of stereotypes.”
While some may revel in a high-profile, powerful woman’s fall from grace, others will view the situation as another case of dashed short-term financial expectations from shareholders, according to Judy Olian, dean of the Penn State’s Smeal College of Business in State College, Pa.
“The perils are there for a male,” Olian said. “Look at (real estate mogul Donald) Trump; people gloat whenever he falls. He’s much more out in front than Carly ever was, but there’s no doubt that her leadership was signified by a much more personal imprint on the company than a lot of chief executives have.”
Like many fired male executives, Fiorina is likely to turn up again at another company, the source who requested anonymity said. “I would bet that she takes a small hiatus in government, something high-profile, but that she ends up running something else pretty fast.”
Meanwhile, the next chief executive of Hewlett-Packard Co. will need to decide whether to stick with Fiorina’s two-pronged strategy of trying to beat the company’s rivals in what they do best — IBM in premium computers and services, Dell in business and consumer systems. Or the Silicon Valley icon could effectively concede defeat in its current multifront war and break itself apart into separate businesses that can focus their employees, management and research resources on specific markets.
Chief Financial Officer Robert Wayman is serving as interim CEO until a successor is named.
Though HP is giving no hints as to a permanent successor, observers have mentioned Michael Capellas, the current MCI Inc. CEO and former Compaq chief who helped arrange 2002’s HP-Compaq merger, and Ed Zander, the former Sun Microsystems Inc. president who now heads Motorola Inc.
The Associated Press contributed to this report.