Monday, September 21, 2015

Carly Fiorina is a master at misleading, but her business record really is that bad


In giving Carly Fiorina's record as Hewlett-Packard CEO a deserved trashing in last week's debate, Donald Trump cited criticisms by the Yale School of Management's Jeffrey Sonnenfeld, who Fiorina swiftly dismissed as a "well-known Clintonite." Sonnenfeld responds, swatting down not just the idea that he's some kind of Clinton puppet but Fiorina's flimsy, misleading defense of her lousy record. As with so many other things in the debate, Fiorina spit out a blizzard of numbers and supposed facts, but ones that were laughable if you knew the context. Take Fiorina's insistence that HP's struggles during her tenure as CEO were shared across the entire industry:
In the five years that Fiorina was at Hewlett Packard, the company lost over half its value. It’s true that many tech companies had trouble during this period of the Internet bubble collapse, some falling in value as much as 27 percent; but HP under Fiorina fell 55 percent. During those years, stocks in companies like Apple and Dell rose. Google went public, and Facebook was launched. The S&P 500 yardstick on major U.S. firms showed only a 7 percent drop. Plenty good was happening in U.S. industry and in technology.
Well, then. Among Sonnenfeld's conclusions about Fiorina's record, what she's learned from it, and what her presidential run has in common with her time as a CEO:
She plays fast and loose with highly misleading metrics, changing the goal posts by manipulating peer comparisons. Fiorina brags that she doubled revenues—but she cut value in half. She talks about doubling employment at HP when all she did was combine the employment of two huge firms—and then lay off 30,000 employees. She presents her story as rags to riches saga, from secretary to CEO, when in fact she is the daughter of a Duke University Law School dean and a federal Appeals Court judge. She just worked for a few months as a receptionist after dropping out of UCLA law school.
That's not all: At HP, Fiorina abandoned her predecessor's habit of flying coach, insisting on a corporate jet. She's claiming the moral high ground over Trump's mocking of her looks, but "She once ridiculed the music interests and appearance of a dissenting board member Walter Hewitt, son of HP’s co-founder—as well as the allegedly dowdy look of rival Senate candidate Barbara Boxer." In other words, Fiorina's record only holds up as long as she's the only one talking. That may work for short stretches in a debate, but it's not exactly the basis for a strong presidential run. The latest CNN poll has Fiorina surging to second place, but it's hard to see how that holds up as voters learn more about her record than she is willing to tell them.

Sep 21, 2015 by Laura Clawson

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