Fiorina’s fall scratches Stanford

 

By ILIAS CHRISSOCHOIDIS, Ph.D.

Submitted on February 10, 2005 to the Stanford Daily

 

The firing of Carly Fiorina, Hewlett-Packard’s controversial CEO, reverberates through corporate America and well beyond. A grandiose yet gambling merger with Compaq, which she had engineered three years ago, backfired: The company’s stock tumbled and shareholders lost control of some 40% of the lucrative HP printers. All this at a cost of $24 billion. Would you keep the executive or execute the keeper?

 

Fiorina was controversial on yet another front, as the protested choice for Stanford Commencement speaker in 2001. Ignoring a tradition of co-responsibility, a new University leader bypassed student input to hand Ms Fiorina this most prestigious appointment. Still in her mid-forties and with only two years at Hewlett-Packard’s helm, Fiorina elbowed out candidates far more suitable for Stanford’s caliber. Many at the time wondered what could explain such an awkward decision. A $24-billion merger perhaps?

 

High-profile moves in corporate America demand public support. Their undertakers must have a positive, if not glossy, image. One of corporate media’s functions these days is to build and manage these profiles. Here’s an example: “we will acknowledge straight out that FORTUNE played a role in putting [Fiorina’s] name in lights.” Placing her at the top of its US women executive ranking in 1998, the magazine effectively ended her “quasi-obscurity. Less than a year later she was named CEO of Silicon Valley’s famous Hewlett-Packard .... Her reputation bloomed, heading toward rock-star celebrity.”[1] With a cover story “Why Carly’s Big Bet is Falling,” FORTUNE wants to take full responsibility both for the rise and the fall of Fiorina. But it was not the only one who helped built her public profile.

 

Since Fall 1999, Stanford University has launched a campaign to make Fiorina one of its icons. At Convocation, Stanford’ incoming Provost spent a beefy paragraph in his speech on her background, informing clueless parents that “if your daughter comes home and tells you that she wants to major in medieval history and philosophy, recall that this double major was the undergraduate major of Carly Fiorina.”[2] This wouldn’t have raised eyebrows had it not been for two facts: the new Provost was also a businessman[3] and Carly Fiorina was the only Stanford alumnus mentioned in his speech. Soon, the Fiorina bug infested similar presentations in public.[4]

 

Alas, the statements of a university officer draw limited attention beyond academia. At the time when Fiorina was contemplating the merger with Compaq,[5] she needed the maximum of public attention. And Stanford was there to help.  After a single-year as Provost, John Hennessy moved to the University’s Presidency.  And lo, Carly Fiorina, a name he casually added in the nominee list for Commencement speakers became his final choice. The decision caused an outrage at Stanford.[6] Things could have been worst had students known that weeks after her mediocre Commencement speech Fiorina would fire some 6000 HP employees.[7]

 

But the point was to place her in the national spotlight as the favorite model for Stanford graduates. And because Chelsea Clinton was to be one of her addressees, national coverage was assured. With Bill and Senator Hillary Rodham Clinton in the crowd, it was indeed “A day of pomp and paparazzi.”[8] Flushed in publicity, Carly would then push for the merger with renewed confidence and prestige.[9]

 

In painful terms, Stanford’s 2001 Commencement was used to help raise Fiorina’s public profile ahead of a major business deal. And now that this very deal has caused her fall, there are questions to be raised and answers to be exacted. Suppose, for instance, that Stanford has invested (or received donations) in HP stocks.[10] If a university official helped Fiorina in a risky deal that depressed HP stocks, did he act against Stanford’s interests? In any case, is championing CEOs one of Stanford’s missions? Is Stanford a franchise for its elites to boost the credentials of their corporate friends? Is this how the Stanford of the 21st century will be like? A paradise for business executives, who regardless academic achievement they come and go as they please, shaping their public image with our academic powder, and milking our research cows for cheap?

 

Embracing corporate America is as doubtful a deal for Stanford as the Compaq merger proved to be for HP: one gains, the other feels the pain. Fiorina leaves Hewlett-Packard with dozens of millions in compensation.[11] What about Stanford? What does it take from corporate love-making? Freedom or dependence? Michael Crichton wrote recently that “Those who fund research...always have a particular outcome in mind.  Research funding is almost never open-ended or open-minded.  Scientists know that continued funding depends on delivering the results the funders desire.”[12] In the end, it matters the whole world whether academia welcomes big business with open arms or open legs.[13]

 

© 2005 Ilias Chrissochoidis.  Al rights reserved.

 


[1] FORTUNE, 7 February 2005: 50, 52.

[2] “Thank you for the opportunity to share this journey” (Provost John Hennessy’s remarks to parents at a luncheon on September 17, 1999), Stanford Report Online, 22 September 1999.

[4] “So, if your daughter comes home and tells you that she wants to major in medieval history and philosophy -- recall that this double major was the undergraduate major of Carly Fiorina, the chief executive officer of Hewlett-Packard, the second largest computer company in the United States” (text of President John Hennessy’s Speech at Opening Convocation Friday, Sept. 22, 2000): Stanford Report, 27 September 2000.  “So, if your daughter comes home and tells you that she wants to major in the unusual combination of medieval history and philosophy, recall that this choice was the undergraduate major of Carly Fiorina, the chief executive officer of Hewlett-Packard, the second largest computer company in the United States”: “I hope your time here transforms your lives” (text of remarks by President John Hennessy delivered at Opening Convocation on the Main Quad Sept. 19, 2002), Stanford Report, 25 September 2002. The bug infected also Stanford’s Number 2, Philosophy Professor John Etchemendy.  In his first public address as University Provost, he joked “if suddenly I become an unemployed philosopher, I may amble over to Hewlett-Packard and ask Carly Fiorina, the CEO who majored at Stanford in medieval history and philosophy, for a job”: “A time of intense growth and exploration” (address given by Provost John Etchemendy at the Parent Barbecue Friday, Sept. 22), Stanford Report, 27 September 2000.

[5] In May 2001, during the quarterly meeting of HP’s Board of Directors, Fiorina dated the first glimpses of a merger with Compaq 18 months ago: Peter Burrows, Backfire: Carly Fiorina’s High-Stakes Battle for the Soul of Hewlett-Packard (Hoboken, NJ: John Wiley & Sons, 2003), 2.

[6] “This year the [selection] process was neither democratic nor transparent….it appears that Hennessy alone selected Fiorina as the speaker, with only cursory input from the student body. In the past, the president has always relied on student input for this important selection”: “Secrecy, irresponsibility shadow Fiorina choice,” Stanford Daily, 3 April 2001.

[7] Daryl Savage, “HP to cut 6,000 jobs worldwide,” Palo Alto Weekly, Wednesday, 1 August 2001.

[8] Barbara Palmer, “A day of pomp and paparazzi,” Stanford Report, 20 June 2001.

[10] According to George Parker, chairman of the Advisory Panel on Investment Responsibility, “When it comes to understanding how the Stanford Management Company invests the university’s $12 billion endowment, it helps to assume that the university owns or has owned stock in just about every publicly traded company”: Ray Delgado, “University’s investment responsibility discussed at town hall meeting,” Stanford Report, April 13, 2005, 1.

[11] The post-merger payment of the Compaq and HP CEOs was supposed to be a combined $115 million: Burrows, Fiorina’s…Battle, 228.

[12] Michael Crichton, State of Fear (New York: HarperCollins, 2004), 572-73.

[13] On the problem of corporate influence on American academia, see Jennifer Washburn, “The Kept University,” The Atlantic Monthly, 1 March 2000, and her summa on the subject, University Inc.: The Corporate Corruption Of Higher Education (New York: Basic Books, 2005).