Search for a Successor
Frank Gillett, an analyst with Forrester Research Inc., in Cambridge, Mass., suggested that if the directors decide to keep the company intact, it might need to reorganize along printer, commodity and premium lines. Patricia Dunn, an HP director since 1998 who was named to replace Fiorina as chairman, said the board would immediately launch a search for a successor.Two top internal candidates are Ann Livermore, executive vice president of the Technology Solutions Groupwhich includes enterprise hardware and servicesand Vyomesh Joshi, executive vice president of the Imaging and Personal Systems Group. Livermore had been considered a candidate for the CEO job before Fiorina came on board in 1999. Other names that surfaced soon after the resignation include former Compaq CEO and current MCI Corp. Chairman and CEO Michael Capellas and former Oracle Corp. President and Chief Operating Officer Ray Lane. Neither Dunn nor Wayman would talk about the qualifications necessary in the next CEO, although Dunn did say the person would be expected to be "more hands-on" in executing the companys strategy. HPs board will replace a high-profile executive who put her plan in place to rapidly grow a stagnant company but was unable to capitalize on it. Fiorina may have overseen the largest corporate merger in the IT industry, but it was difficult to move the company forward after the purchase. In the end, that proved to be her downfall. Click here to read more about Fiorinas ouster. "The fact is that, although the merger certainly wasnt the disaster a lot of the naysayers said it was going to be, the company has struggled since the merger," said Illuminatas Haff, in Nashua, N.H. "There have been operational issues and no consistent results. By all appearances, the HP board didnt have the confidence in Carlys abilities going forward."
Indeed, the board of directors had been discussing a change for several weeks and on the afternoon of Feb. 8 finally came to a decision, asking Fiorina to step down, Dunn said.
"It is not a sudden decision," Dunn said. "We have had a series of deliberations over the course of weeks and longer. It may seem precipitous, but it was a well-deliberated decision."
Fiorina agreed that she and the board differed on HPs direction. "While I regret the board and I have differences about how to execute HPs strategy, I respect their decision," she said in a statement.
Fiorina had big plans for HP after the companys acquisition of Compaq and believed she had the pieces in place to challenge IBM.
Fiorina, at the time an executive at Lucent Technologies Inc., came to HP in 1999, charged with the job of reviving a company heavily reliant on its profitable printer business but with an enterprise business stuck in neutral.
Fiorina streamlined the company, whittling down the dozens of business units to a few, increasing profits and growing its product portfolio.
In 2001, she announced HPs intention to buy rival Compaq, and after a bruising proxy fight with director Walter Hewlett, the son of one of the companys founders, HP completed the purchase in May 2002.
Next Page: A smooth acquisition.
Dunn said all qualified candidatesboth internal and externalwould be considered, but she hinted that the next CEO will likely come from outside HP.