Knowledge@Wharton is running a dual interview with me and fellow Wharton professor Michael Useem discussing Carly Fiorina’s ouster at HP.
A snippet of my comments:
We need to step back and look at the reasons why HP and Fiorina sought to do something as radical as the merger with Compaq. There was a widespread feeling at that time that although HP had a very strong reputation, it was out of step with the industry. PCs and IT in general were becoming very difficult businesses, and companies like Dell were pushing margins down. HP’s merger with Compaq was supposed to solve that problem. It was controversial, but Fiorina sold it as something that would help HP get out of the doldrums. It hasn’t done that. Critics of the merger have said that the merger was like tying two stones together and believing they would float. The merger didn’t solve HP’s problems; it just added Compaq’s problems to its own.