Carly Fiorina talks tough

In a Fortune interview, the former Hewlett-Packard chief talks about what she learned during her tumultuous tenure.

By Matthew Boyle, Fortune writer

(Fortune Magazine) -- Carly Fiorina didn't just break the glass ceiling, she obliterated it, as the first woman to lead a FORTUNE 20 company. But her fall from stardom was just as dramatic, and she remains a controversial figure, with opinion split on whether she deserves credit for HP's success since her firing in 2005. Fortune's Matthew Boyle talked to Fiorina - who now serves on several advisory boards, including the CIA's - about CEO pay, Dell's woes, and what she's learned from her tumultuous time at the top and, more recently, on the sidelines.

Editor's note: After this story went to press, Fox News announced that Fiorina would be a paid contributor to its Fox Business News, which launched Oct. 15.

Former Hewlett-Packard CEO Carly Fiorina looks to the future.
Fiorina's interests range from medieval history to national intelligence to Beethoven.
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Random fact
Fiorina wrote her Stanford honors thesis on the medieval practice of trial by ordeal.
First job
Secretary at a commercial-property brokerage firm, located one block from HP's headquarters in Palo Alto
Glass-ceiling buster
Named president of Lucent's largest business division in 1995 after spinoff from AT&T
Biggest feat
Orchestrating the $24 billion HP/Compaq merger
Board positions
Taiwan Semiconductor, Revolution Health, Centers for Disease Control, MIT

What do you think was the most important reason for your ouster from Hewlett-Packard? Was it performance or politics? - Saied Rafati, Saratoga, Calif.

Politics. No question there. And events have played out since I left that make it pretty clear that the boardroom was very politicized.

Does the current HP stock price vindicate your actions or your ouster? - Steve Calandrella, Incline Village, Nev.

Well, financial statements are generally lagging indicators. Those are indicators of decisions already made. What you see is tremendous financial performance. I take nothing away from the current management team, but I think it's pretty clear that HP (Charts, Fortune 500) is now taking advantage of the competitive positions that it has - the fact that it's both printing and computing. I stand by the decisions I made, and I think the stock price is reflective of them.

Do you ever see yourself at the helm of another large public company? - Robert Bartsch, Hartsdale, N.Y.

I'm doing what I choose to do right now. On the other hand, I've learned to never say never.

What is the worst mistake you ever made in your career, and how did you try to fix it? - Thomas Keenan, San Jose

The mistakes are always about people. And sometimes people think I'm copping out when I say that, but not at all. A leader's most important decisions are about people. Who do you put in which jobs? How long do you leave them in a job? You misjudge people.

Fortune: Can you give us an example?

Well, I let someone [Kleiner Perkins co-founder Tom Perkins] on the HP board whom I shouldn't have.

What is the biggest lesson you learned as CEO of Hewlett-Packard? - Mark Bailey, Milledgeville, GA.

To build a great company, which is a CEO's job, sometimes you have to stand up against conventional wisdom. The HP-Compaq merger is a classic example. The context in which we did it colored people's views. The AOL Time Warner (Charts, Fortune 500) merger was failing. You had Tyco (Charts) and Enron and all the others where a board had been hoodwinked. So the conventional wisdom was that a merger was a bad idea and the board was hoodwinked. But in fact it was a necessary move to build a great company, and the board was in agreement. A merger is hard to pull off under any circumstances. It's harder when everybody is against you.

What advice would you give Michael Dell right now? What about Pat Russo of Alcatel-Lucent? - Gregg Iocco, Knoxville, Tenn.

Michael Dell needs to focus on leading indicators. They are customer satisfaction, the rate of innovation, diversity of the management team, and ethics. If you look at those indicators, you can predict what happens to Dell (Charts, Fortune 500). It seems that he is concentrating on those things now. Alcatel (Charts) is in a different situation. It seems to me to be a company that is not yet fully integrated and restructured. HP could not focus solely on leading indicators until our merger with Compaq was digested. [Russo] hasn't finished the heavy lifting of integrating two companies and getting the cost structures right.

Do you think CEO compensation is out of whack? - Terry Irish, Hudson, Mass.

Sometimes. CEO compensation needs to be voted upon by shareholders in terms of the policies that will be used. There can't be any hidden surprises, like, Whoops, we forgot to tell you about a $200 million retirement package. What we ought not to do is regulate or legislate CEO compensation.

What do you see as the next great leap forward for the technology industry? - Paul Macke, Houston

When I was at HP, I talked a lot about technology and life becoming more digital, mobile, virtual, and personal. I think what we see happening now is really the virtual, versatile part. This is all about technology becoming totally intuitive and totally seamless in the way we live our lives, and virtual reality becoming as compelling as reality.

Would you ever run for office? - Joseph Chiusano, Washington

I don't have any current plans, but I still get approached. One of the things I enjoy now is I'm living exactly the life I want to live. I have great opportunities to leverage my experience to learn new things and great opportunities to give back and make contributions, and I travel all over the country and the world. But I've lived long enough to know that sometimes an opportunity comes along that is unexpected and perfect.

Fortune's Matthew Boyle asks:

We'd like to know more about your role on the CIA's new advisory board. What does it entail?

To his great credit, [CIA director] Mike Hayden is a leader who seeks outside perspectives. All organizations face common challenges around change and resistance. One of the things I do a lot of, whether it is for government agencies, nonprofits, or traditional businesses, is advise on the challenges leaders face in making important, difficult, but necessary changes. The challenges are all the same. I also serve on the Defense Department business board and the State Department advisory group for transformational diplomacy. These are groups of people who are focused on organizational change.

If you could sit down with one person from history, who would it be?

I would like to sit down and talk to Beethoven, my favorite composer. That would be amazing. I suspect what would be most fascinating is the discovery that these people are human too.

Which leaders do you admire?

I admire what Jeff Immelt is trying to do at GE (Charts, Fortune 500). Running a company is always a work in progress. I think he's reshaping that company, not just financially but also in terms of the role GE plays in the world. And Steve Jobs is doing a fantastic job at Apple (Charts, Fortune 500).

What is on your iPod?

I have very eclectic tastes. I'm on a jazz kick right now.

What bothers you most about your experience at HP?

How I left bothers me. It's behind me, and frankly I'm tired of talking about it. But it wasn't the way it should have ended. And not the way I would have wanted it to end. Top of page