The Big Lie: Spying, Scandal, and Ethical Collapse at Hewlett-Packard - Anthony Bianco The recent gubernatorial election in California focused attention on two women who had been CEO’s of major corporations. I don’t know much about Meg Whitman, although I think most ebay users were pleased to see her leave, but Carly Fiorina, darling of the business media several years ago, is examined more critically in this examination of the travails of HP after the death of Hewlett and Packard.

HP’s first foray into the computer business was the 2216A, a computerized instrumentation package that sold for over $22,000, or didn’t sell at first until Tom Perkins, their marketing guru, began promoting it for what it was, and how he discovered it was being used, a computer. HP had been terrified to call it such fearing that IBM, the giant in the business, would “squash” them if they discovered HP was trying to get into the computer business.

Their next project could have been revolutionary. Perkins, who by now had been promoted to GM of the Long Beach operation, sunk huge amounts of capital into the “Omega” project which would have been a quantum leap forward in computer power and design using 32 bits, double to processing power of the then current 16-bit machines.

Perkins was to become a major player in the bitter boardroom battles and was back on the board after several interim escapades with other firms and his forays into the world of venture capital. He proved to be a particularly difficult adversary during Spygate for Patricia Dunn, who, by this time had been through bouts with three different kids of cancer, the most recent being ovarian.

The biggest lie is always the best. And it's always the cover-up that bring ruin. The cover-up at HP pales in comparison to the lies at Wall Street, WMD, and Madoff, but it says a lot about business practices at the top. I was so glad that Carly Fiorina lost in California as this author lays much of the blame for HP’s repudiation of its long-standing ethical workplace directly at her feet. The record of the interpersonal dysfunctional relationships is sad, indeed. It’s amazing the company still functions given the level of vitriol, narcissism, and back-biting that the company descended into. Mark Hurd, who took over after two short-lived CEO’s (Patricia Dunn’s tenure was racked by scandal) left himself under an expense account and sexual harassment scandal in 2010. (He was recently hired by his friend Larry Ellison at Oracle, who has had his own problems with misanthropy.) The author suggests that it was Hurd's total lack of moral fiber that passed the blame for his actions to Patricia Dunn, his predecessor, and made her the scapegoat while she was battling terminal cancer.

The merger of Compaq and HP, fought bitterly by the Hewlett family, initially looked like it would be a big success, but ultimately it failed to translate into increased market share, the goal of every business. HP’s stock fell to such a level it attracted possible buyouts. Fiorina’s response was to place the blame on three of her subordinates whom she fired. The facts was that much of the initial success was due to talent at Compaq, but many of those managers couldn’t wait to abandon the new company given Fiorina’s antagonistic style of management. It became apparent to the HP directors that Fiorina had no interest of aptitude for the “hard, unglamourous work of managing a complex company day-to-day.” That had been the forte of the Compaq CEO who had quit just six months after the merger, unable to stand Fiorina.

It was the replacement of Fiorina with Mark Hurd that started the ball rolling downhill. The leaks were flowing worse than the hole in the proverbial dyke, and in an attempt to plug the leaks, Dunn embarked on an internal surveillance program -- the UDT, Unauthorized Disclosure Team, that ran code-named operations called Kona 1 and Kona 2 named after Dunn’s mansion in Hawaii -- that soon had everyone in a major snit pointing fingers at her and each other. HP’s internal security division became a loose cannon in its investigation hiring a firm specializing in “pretexting” to obtain the phone numbers and records of HP directors, staff, journalists, and relatives. The blame finally settled on Dunn, and at a time when she had stage-four cancer, and was given four felony counts. Those charges were later dropped and as far as I can tell she is beating the latest cancer. Ann Baskin, HP’s general counsel resign just before appearing before Congress where she and several other high-ranking HP officials invoked the Fifth Amendment.

I’ve read a lot of books recently about large corporations, Enron, Tyco, Worldcom, Goldman Sachs, Lehman Brothers, etc. etc., and what is becoming apparent is that CEOs and boards of directors, seem to have their own pecuniary interests at heart in the short-term, caring less about long-term prospects for the company. Top management becomes a battle ground of incestuous relationships as each seeks to maximize power and profit for him/herself jacking up stock prices by laying off workers and using creative buyouts with little thought for the long-term profitability of the company, often with little regard to the legality of their actions. I feel sorry for the average employee who often suffers as a result of these machinations.

Next time you get upset when your second grader misbehaves in school, you can despair a little more because it appears adults in big corporations haven’t left the second grade either. When you take a bunch of rapacious people operating at the emotional level of children and put them in charge of large corporations you get disaster, but a really fun story.