The Fiorina Perfomance: A Post-Debate Critique

MILWAUKEE, WI - NOVEMBER 10:  Republican presidential candidate Carly Fiorina speaks during the Republican Presidential Debat
MILWAUKEE, WI - NOVEMBER 10: Republican presidential candidate Carly Fiorina speaks during the Republican Presidential Debate sponsored by Fox Business and the Wall Street Journal at the Milwaukee Theatre November 10, 2015 in Milwaukee, Wisconsin. The fourth Republican debate is held in two parts, one main debate for the top eight candidates, and another for four other candidates lower in the current polls. (Photo by Scott Olson/Getty Images)

Vocal Criticism

Jeff Sonnenfeld at Yale has been vocal about his feelings for Fiorina's time at HP and her political aspirations. As Sonnenfeld noted in his September 2015 piece, entitled, "Why I still Think Fiorina Was a Terrible CEO," he wrote:

If the board was wrong, the employees, wrong, and the shareholders wrong--as Fiorina maintains -- why in 10 years has she never been offered another public company to run? Now, Fiorina wants to run the country.

Commenting on Carly's political aspirations, Jason Burnett, grandson of HP co-founder David Packard didn't hold back. He has been quoted as saying, "She did damage to a great company and I don't want to see her do damage to a great country."

These are prominent people and vocal words which have been added to help the public understand Carly. While the history of Carly Fiorina's career has more than a few critics scattered along her career path, I continue to feel that Carly's positioning for the presidency involves great "balls." To me, the devil is in the details. And we need more of them to assess the viability of Carly's bid for the oval office.

While it's doubtful that Carly's "damn the torpedoes" approach to things would be effective at leading the free world, she continues to demonstrate great "balls" by pursuing that stature.

The Devil is In The Details

I am concerned as to why the Fiorina camp has not published written policies, including a detailed tax plan. Carly stated firmly during the debate that yes, that plan exists, but if so, where is it? What are the details? This far along into the election cycle, most of the other candidates have sketched out and defended their tax plans.

It's important to see the details -- including specific tax rates and whether or not there will be allowable deductions for mortgage interest, charitable contributions, and depen- dent tax deductions. Fiorina wants to simplify the code from about 73,000 pages to three, and to "lower every rate and close every loophole." So if it exists and it's only three pages, let's see it already. The devil is in the details. On this topic, the Fiorina camp is running out time to be considered credible.

As a member of the financial community, it's my belief that investors do not give a company credit when it provides less detail than it could. Nor should they. It's been my experience that investors assume the worst. The same holds true for politics. The voter does not give a candidate credit for providing fewer policy details. Indeed there are rules requiring corporations to provide timely and fair disclosure to all investors, and there needs to be fair disclosure of detailed candidate policies -- including that of Carly Fiorina. Again, where are the details of the proposed tax policy?

An "Innovation and Entrepreneurship" Leader?

During the fourth debate, Carly lauded her history and experience in relation to "innovation and entrepreneurship," harking back to her business experience ten years ago as CEO of HP and her time previously as a senior executive at Lucent Technologies. In the case of the former, she was fired. In the case of the latter, the company had an ugly and painful demise -- beginning just after she left to join HP.

While the companies themselves issued many patents, make no mistake. Carly is not a technologist, engineer, nor did she head Bell Labs. Rather, she has a degree in Medieval History, and spent the majority of her career in sales and marketing type roles for AT&T. It's important for us to review the history of each candidate.

After AT&T, Carly briefly led Lucent's Consumer Products unit which made telephones, answering machines, and cell phones and was sold; and ran its largest division, the Service Provider group. This latter division had all kinds of issues, in my view as a former staffer. They've been detailed, to a small extent, in a previous blog post right here on Huffington Post. History, and facts, are indeed important.

There Was No True "Growth" At HP

The Fiorina website continues to state that while Carly was at HP, "Her successful efforts led to doubling revenues, tripling innovation and quadrupling growth." Really? By my standards, there was no appreciable "growth" during this time frame for the company, despite these ongoing statements that there was. By my reason, corporate growth is based on operational improvements undertaken to increase revenues or profit.

To somehow consider the merger of two companies as reflecting "growth" is an "apples and oranges" comparison. The statement just feels wrong to me. Yes, HP's revenue numbers were larger after it's acquisition of Compaq, but why call it growth? Because it sounds better than declaring:

During her time at HP, revenues continued to decline, there were layoffs, and a brutal proxy fight between her and those which disagreed with her desire to acquire struggling PC maker Compaq -- including the HP descendants which voted their shares against the deal. The board ultimately fired her. After not winning a California Senate seat, she's now seeking the office of the U.S. Presidency.

Bad Business Strategy, Going Against The Grain

Carly had the right political strategy: Secure a Senate seat as a prerequisite to a White House bid. But having failed at a previous attempt, time is kind of running out to establish a viable political track record.

While at HP, the business strategy decision to put two struggling companies together, HP and Compaq, wouldn't seem to be a wildly successful undertaking, and it wasn't. At the time this strategy was being pursued, it was clear that PCs were an increasingly commoditized, and low profit, market segment.

Buying a struggling PC maker such as Compaq was also counter to the direction set previously by IBM, as it sold its PC unit to the Chinese, as Lenovo. Buying Compaq was a bad strategy decision, a costly decision which was largely unwound over time.

Indeed, there was an extraordinarily contentious opposition to the Compaq merger, culminating in a lengthy proxy battle by Walter Hewlett, son of co-founder Bill Hewlett, and Fiorina. Walter Hewlett led the opposition effort on behalf of the Hewlett and Packard families, trying to stop HP from acquiring Compaq.

Ultimately Walter's opposition failed and the deal went through. But with such a close vote, with just over half in favor of the deal, shareholders were clearly not overwhelmingly in favor of it. Walter's instinct, and the 18 percent ownership controlled by the Hewlett and Packard families, was valuable intuition.

It's worth noting that this history of AT&T during Carly's tenure of large tech acquisitions included NCR (1991), Olivetti (1999) followed by Lucent's acquisition of Ascend Communications (1999). Without much success, each of these demonstrated that acquiring and integrating large tech companies is very risky, as market projections and forecast projections and synergies rarely come true.

For this reason perhaps, the most well-run companies in their segments, such as Cisco Systems and Apple, never made large acquisitions to 'buy' revenue. They were smart -- they made smaller acquisitions as complements to internal R&D efforts. These tech leaders didn't make acquisitions to solve larger structural or market issues.

The desire to buy Compaq was counter to tech history, and should have included previous lessons learned by AT&T and Lucent. For its part, Lucent turned out to be one of the greatest disasters in tech history. I was glad to have left when the stock was in the $80s.

HP, Sometimes Lessons Are Expensive

Perhaps HP's board made the mistake of bringing in an executive without oversight of corporate functions such as CFO, corporate treasury, investor relations, and public relations. It was as Walter Hewlett said, a learning on the job. Sometimes lessons are expensive.

As others have pointed out many times, during the challenging times and amid layoffs, Carly chose to purchase Gulfstream corporate aircraft. While it's a relatively small cost to a multi-billon dollar revenue company, it doesn't seem like the right thing to have done. This seems like a particular bad move, not to mention an operational cost that could have perhaps saved a few extra jobs at HP. Saving extra jobs during that time frame by forgoing corporate aircraft seems to have been a "no brainer."

This doesn't sound like great judgment. Now we're being asked to open up the office of the presidency.