Carly Fiorina, former CEO and chair of Hewlett-Packard, is a keynote speaker at ICBA’s Community Banking LIVE conference in Orlando.
Photo by Timothy D. Easley
ICBA convention keynote speaker Carly Fiorina, a former Hewlett-Packard chief, shares her perspective on business innovation and leadership
Carly Fiorina made headlines in 1999 as the first woman to lead a Fortune 500 company. Considered the most powerful woman in business at the time, Fiorina served six years as chair and CEO of Hewlett-Packard Co. Before she helped lead the blue chip technology giant through the turmoil and doubt of the dot-com boom and crash, Hewlett-Packard was widely acknowledged as falling behind its competitors in profitability and innovation. However, Fiorina spearheaded a high-profile comeback that doubled the company’s revenues to $90 billion and more than quadrupled its market growth to 9 percent. The company also tripled its pace of patent filings to 11 a day.
A keynote speaker for ICBA’s national convention, Community Banking LIVE 2015, this month in Orlando, Fla., Fiorina published an autobiography, “Tough Choices,” about her life and rarified corporate career. She shared her perspective and experiences with Independent Banker, including how community bank leaders can succeed in a highly competitive and regulated business environment.
IB: Your accomplishments at turning around Hewlett-Packard were quite impressive. How were you able to achieve this feat?
Fiorina: When I first arrived at H-P, I thought the most important thing we should do together as a leadership team was to determine what our assets were and determine what our ambitions should be. And so we went about it—the leadership team, the top 50 people in the company—surveying everything the company was doing, all of the assets we had.
Then we asked ourselves some hard questions, starting with the most fundamental question of all: Should we be a leader? That was an important question. H-P had always been a leader, but in the last 10 years it had become a laggard. It lagged behind on everything.
So we asked this fundamental question. When the answer was yes, then you have to define leadership. What does that mean in terms of products, market share, customer service, growth? So we defined what leadership meant, then set ourselves on the path of achieving those objectives.
That is a multiyear transformation process, but I say that to illustrate that the most important first step is to decide, to choose. What do you want to be? Do you want to lead or not? Those choices have consequences.
IB: What are among the most valuable lessons or experiences you had at Hewlett-Packard that could benefit community bankers?
Fiorina: I would say, first, that the employees in your bank actually know what needs to be done. People are really smart. If you give employees the opportunity to think through what they might do differently, they usually come up with the right answers. So, seek the wisdom of the people who work for you, particularly the people who are out talking to customers.
The second thing, I’d say, is leadership is hard and controversial under the best of circumstances.
The third thing is if you want to conduct yourself in a principled way, then you have to be prepared to accept the consequences when others are not principled. All of us face that.
There are people who face unprincipled folks and bend to meet them. Then there are principled people who say, no, I’m going to stick to my principles and accept the consequences. That also is a fundamental, individual choice that a leader has to make at some point. Who am I? What do I believe? And what am I prepared to stand up for?
IB: Any other thoughts from your leadership experience?
Fiorina: If you want to achieve leadership, you have to spend a lot of time thinking not only about your goals, but also the strategy to achieve those goals. You also have to think about how you’re going to organize yourselves to achieve those goals. What are the right processes? How are you going to measure your success? What are you going to reward? What’s the culture? All of those things are important.
Of course, community banks have a set of challenges that I didn’t face. The financial industry is unbelievably regulated now. The regulations favor the big guys; it favors Wall Street and discriminates against community banks.
The only way you become a leader is to serve customers better than anyone else. It gets down to really fundamental things. If a community bank wants to be a leader in its community, it needs to start by determining what the community needs, what it will value, and how the bank will deliver to its customers in the community what they need and value.
It sounds so fundamental, but a lot of companies forget that the only way you’re going to lead is if your customers say you are.
IB: How do you see technology influencing companies and community banks in the future?
Fiorina: Technology changes everything, every industry, every company. So the issue is not whether technology will change it. Technology is changing it. The issue is how to harness technology to your advantage. That requires a thoughtful strategy.
If you are focused on customer service, technology can be a huge help to your customers. It can allow you to do more with less. There are opportunities where community banks could potentially share some technology. People need to be active users of technology, not passive victims of technology.
IB: Since you left Hewlett-Packard, how have business models or management changed, for either the better or worse?
Fiorina: Fundamentally, the way you engage employees and deliver to customers and transform businesses is the same because people are the same. Ultimately, business is about people, and you cannot drive success and transformation without understanding what motivates people.
What’s different is there is way more short-term thinking now. It was hard to focus long-term back when I was a CEO, but now the average stock holding is less than 90 days. The time horizons have gotten shorter for business. That’s a problem over time because people make choices to benefit the short term that diminish the long term.
The other thing that changes is that there’s vastly more regulation and legislation. The financial services industry is clearly one that’s experiencing that. In general, the government makes it easier for big companies and harder for smaller companies. That’s a problem because small companies innovate at a faster rate than big companies. When you make it tough for community banks and small business, you make it tough for everybody.
IB: How can community banks find their way out of this?
Fiorina: Community banks should be looking for reasons to collaborate and share resources and know-how. But when you’re in a highly complex competitive, very difficult market environment, the most important thing actually is to focus on serving customers. It’s so basic, but companies forget it and take serving customers for granted. In the end, customers are what makes business go and employees are the ones who serve customers.
IB: You believe the highest calling of leadership is to unlock the potential of others. How can community bank leaders unlock the potential of their own employees?
Fiorina: That’s the most important question that leadership faces always. In my experience, every organization has more potential than it realizes. The consequence is that every organization can achieve more than it sometimes thinks it can.
What community bank leaders need to ask themselves, their teams and their employees is, what is our ambition? Then they need to start to think through in a very systematic way, how do we achieve our ambition? And use the potential of their assets and employees to achieve that.
That sounds so basic and is much harder to do than it is to say. There was a general in the Civil War who said the greatest mistake a general can make is not to underestimate the strength of his enemy troops but to underestimate the strength of his own troops. Leaders underestimate the potential and strength of their own organization all the time.
It’s worth setting the bar high and challenging and rewarding people to try to reach those higher goals. In my experience, most of the time, people get there.
IB: You credit your father for teaching you the importance of fighting with integrity and courage of one’s beliefs. How did his philosophy guide you in your decision-making and actions as a leader?
Fiorina: What that meant to me is that you have to stick with what you believe to be right despite the consequence.
If you look at why Wall Street is held in such low regard by people, it’s because Wall Street did things that lacked integrity and did them over and over and over again. It’s sort of one scandal after another. In other words, their principles didn’t mean very much when the going got tough.
Community banks have an opportunity to establish relationships with customers that customers believe are invested in integrity. You have to have a long-term view to be able to do that, but I think it is an opportunity.