Good Riddance, Carly!

Why HP shareholders are so happy Fiorina’s quitting.

Investors greeted today’s surprise resignation of Carly Fiorina, Hewlett-Packard’s rock star CEO, with the ultimate insult: HP stock opened up 10 percent on the news.

The company’s investors won’t miss Fiorina much. Only the media will. Telegenic, articulate, and highly accessible, Fiorina reveled in making bold presentations at high-profile events. During her tumultuous tenure, Fiorina successfully branded herself as an iconic, mononym CEO: People spoke of “Carly” the way they spoke of “Jack,” “Warren,” or “Sandy.” But the business press, television producers, and Davos creatures were easy marks. Fiorina, the ultimate saleswoman, failed to close the deal with her most important accounts: investors and the board of directors.

Almost from the outset, Fiorina sought to marry her media image with that of the company. In Perfect Enough: Carly Fiorina and the Reinvention of Hewlett-Packard,George Anders noted that one of her first acts was to commission a new advertising campaign for HP, starring … Carly. The company wanted to convey a sense that it was going back to the garage where Bill Hewlett and Dave Packard had started the company. But since the real shed wasn’t available, “the ad team picked out a back corner of HP’s corporate campus and built an ersatz garage” and posed Fiorina in front of it. To create the illusion of a rutted driveway, “Sport-utility vehicles rumbled back and forth until they wore down a 100-foot stretch of grass.”

Fiorina spoke big at splashy industry events in Las Vegas and various resorts, talking up HP’s vision and its prospects. But she was often forced to speak more softly to investors on conference calls. And her comments were frequently too glib. In November 2000, she spoke at Comdex the same day HP badly missed quarterly results. Her response: “Do CEOs get to ask for a recount?” (Get it?)

For Fiorina, a marketing whiz at Lucent in the go-go 1990s, the CEO job was all about sales—selling employees on the merger with Compaq, customers on the products, investors on the stock, the board on her strategy, and the media on her. (Adam Lashinsky’s 2002 Fortune article nicely captures her style.) But the controversial Compaq merger, which lashed HP’s highly profitable printing business more tightly to a commodity PC business, didn’t produce the synergies and higher profits she promised.

Over time, the gap between her polished rhetoric and the mediocre results grew wider. In July 2004, as Carol Loomis wrote in an excellent Fortune takeout, Fiorina gave a “totally upbeat speech at Allen & Co.’s big Sun Valley conference.” A few weeks later, the company announced yet another disappointing quarter. While audiences of media moguls lapped up her speeches, the audiences that mattered most weren’t buying what she was selling. The stock bumped along. Fiorina and her team didn’t believe their own spiel, to judge by their actions. This record of insider transactions suggests that in the last two years instances in which directors or top executives dug into their own pockets to make even symbolic purchases of shares in the open market were few and far between.

Perhaps insiders and professional investors sensed that Fiorina was distracted. CEOs justify the money, resources, and time spent going to Davos, serving on corporate boards and chairing presidential commissions as ways to schmooze customers, network, and plant the corporate flag. But really, they’re more about building a personal brand than a corporate brand. Fiorina’s globe-trotting may have sent not-so-subtle messages to investors and her board that her heart wasn’t in HP. She signed on to advise the transition team of newly elected California Gov. Arnold Schwarzenegger and joined the commission advising NASA on how to send astronauts to the Moon and Mars. Last December, Business Week reported she had told colleagues “that she is interested in going into politics at some point.”Jack Welch, Sandy Weill, and other long-tenured, share-value-obsessed CEOs never expressed interest in doing much other than running their companies.

In January, as stories began to leak that the board was considering shifting her responsibilities, Fiorina was chilling in Davos and spending time with reporters.

Ultimately, what made Fiorina such a media darling may have made her ill-fitted to be the CEO of HP in an environment of slow growth and relentless cost competition. “Fiorina is also extraordinarily and amazingly articulate in all settings,” Carol Loomis wrote in Fortune. “But there is also a downside to her verbal skills in that what she is saying so fluently sometimes wears thin with people, coming off as short of substance, overly aspirational, and lacking in spontaneity.”

Hmmm. Short of substance, overly aspirational, lacking in spontaneity, and interested in Republican politics? Treasury Secretary John Snow, watch your back.