When Leadership goes astray

In my last blog post I detailed the leadership of Alan Mullaly and how it was key to the transformation and turnaround at Ford Motor Company.  In this post I would like to go in the other direction and discuss how bad leadership can destroy a company.  Carly Fiorina, former Senate Candidate and HP CEO, is a prime example of this. 

Carly Fiorina took over HP in 1999 after completing the split between AT&T and Lucent Technologies, a split that was bound to lead to the demise of Lucent Tech.  There were high hopes for Fiorina, after all it was the height of the tech bubble and HP's stock price was skyrocketing.  Fiorina was a charismatic leader, she gave speeches praising the employees and labeling them the 'shining star' of HP.  She had a way of making her employees feel like what they were working for actually mattered. 

Fiorina completely altered the culture at HP when she took over.  She was a big believer in positive reinforcement.  Employees were give gold stars to wear on their name badges, the more gold stars an employee had the better benefits they got.  For instance, one employee recalls getting his first gold start 6 months after being hired, he was given free lunch for the week.  Employees strived to get gold stars.  Fiorina, in this aspect, was also a believer in extrinsic motivation.  She motivated employees through lunches, vacations, and bonuses. 

But as the tech bubble burst, Fiorina had to alter her strategy.  6000 employees were fired as part of a cost savings initiative, followed 2 weeks later by the announcement that HP was going to be buying Compaq at the cost of $21 billion.  Fiorina, during those fiery speeches that made her so popular and inspiring, made promises to not cut jobs.  She had to break that promise.  She spent lavishly on corporate jets, high end clothes, and bonuses for high level employees.  Fiorina also eliminated many of the positive reinforcement programs that had made her popular. 

Fiorina had lost all the trust that she built up and was then completely ineffective as a leader.  Employees all blamed her for the troubles HP had.  The layoffs followed quickly by a merger completely dissolved all motivation Fiorina may have been able to conjure up.  She was not respected and only followed because of her position.  Employees did not want to work for Carly Fiorina, they had to.  Fiorina may have been a transformational leader in that she had a larger view for HP, but her decisions as CEO did not reflect this.  She made many mistakes, appearing on Oprah with Gwen Stafani during the merger for one.  Her refusal to see long term indicates more of a transactional leader.  Fiorina, when she left in 2002 after 3 short years, was cheered by many as she walked out.  It's not surprise why; Fiorina was as bad as it gets in terms of leadership.

Article based on http://www.businesspundit.com/10-reasons-people-hate-carly-fiorina/2/

Chase Behrendt