The Carly Chronicles

Hackborn guided Fiorina through HP's business challenges that needed fixing: The personal-computing division was acting as if fast-charging rival Dell Computer Corp. didn't exist. The sales force was tripping over itself. The company was losing ground to younger rivals, such as Dell, Lexmark, and Sun Microsystems, which irked Hackborn greatly. "We're in danger of losing everything that made this company great," he said. Fiorina listened carefully and explained her work at Lucent, where she had built an industry-leading sales force. She had come to the lunch regarding Hackborn as the company's Yoda: the elder figure of supreme respect and the true decision maker in the search for HP's new CEO.

Several hours into the meeting, Fiorina began speculating about who should be chairman if she became CEO. She wanted some wise-uncle support early on. Departing CEO Platt had signaled his desire to remain chairman, and she thought he could help. But she quickly realized that Hackborn didn't like that idea. At that moment, an idea popped into her mind. Looking at Hackborn, other people might have seen a wrinkled retiree with sunken eyes and white hair. She saw something different: a special counselor. Rather than get tangled up in a Platt conversation, she looked at Hackborn and said, "Actually, Dick, I think you ought to be chairman."

The idea startled Hackborn. He had been seeking to wind down his commitments to HP. But as he and Fiorina continued talking, he warmed to the idea. When their meeting ended and Fiorina headed toward her plane, she told herself, "I've got him hooked!"

Soon afterward, Hackborn briefed the entire HP board on his chat with Fiorina. "I could see he was dazzled by her," fellow director Patricia C. Dunn recalls. "He was really excited about her vision for the company. She had a feel for the company's strengths and weaknesses. It corresponded with his feel." Hackborn expressed mild concern about Fiorina's lack of a technical background, but that wasn't a top-priority worry for him. "We may be getting one of the top two or three CEOs of our generation," Hackborn declared. "She could be the next Jack Welch."

Carly Goes Back to the Garage...Sort of
Once she took office at HP, Fiorina followed the newcomer's creed that had served her well for more than a decade. She hunted for good ideas buried in the bureaucracy while identifying inane practices that could be stopped right away. She declared war on brand clutter, pointing out that a profusion of minor brand names -- Chai, Tape Alert, Vectra -- was confusing customers and weakening what should be the best brand name of all: Hewlett-Packard.

Fiorina quickly identified her rallying point: the original Palo Alto garage where Bill Hewlett and Dave Packard founded the company in 1939. To change HP's culture, "we had to go back to the roots of the place," she later said. She engaged a local ad agency, Goodby, Silverstein & Partners, to reposition HP to the world. Goodby creative manager Steven Simpson sat down with Packard's autobiography, The HP Way, and, working from the text, produced a manifesto that he called "Rules of the Garage." It contained 10 maxims that had guided the men who had built the early oscillators, voltmeters, and atomic clocks of the 1930s, 1940s, and 1950s. "Perform more than you promised," Simpson wrote. "If the person at the next bench sees what you're working on and doesn't say, 'Wow!' start over." He arranged the rules in front of a photo of the original garage and sent his draft to the company for review.

Fiorina loved the concept. But she and Susan Bowick, HP's head of human resources, decided the draft rules didn't capture the company's current direction. Soon the allusions to next-bench engineers and topflight performance had disappeared. Newly coined rules had taken their place, notably "The customer defines a job well done" and "Invent different ways of working."

More rejiggering lay ahead. Goodby and HP executives wanted to showcase the garage in HP's new television commercials, but Packard's old house had changed hands multiple times, and the shed in back was being leased for $100 a month by a florist. So the ad team picked out a back corner of HP's corporate campus and built an ersatz garage. The lawn in front of the building was made to look like a rutted driveway. Sport-utility vehicles rumbled back and forth until they wore down a 100-foot stretch of grass. Ad-agency camera crews arrived and ultimately produced a dazzling commercial with Fiorina herself telling people, "The company of Bill Hewlett and Dave Packard is being reinvented. The original startup will act like one again. Watch!"