Management and Leadership, Lecture by Carly Fiorina / Former CEO, HP (2007)

Video Lectures

Displaying all 6 video lectures.
Lecture 1
The Importance of Selective Information
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The Importance of Selective Information

Carly Fiorina, CEO of Hewlett Packard (1999-2005), talks about the importance of being able to distill enormous amounts of information. She explains how her experience in taking courses in Medieval History has helped her look at information selectively, a skill she has successfully applied in her corporate life.




Transcript



And almost by accident, I came to a course in Medieval History and Philosophy and found it fascinating. It was fascinating for two reasons, I think. One is because it was interesting to me even then, what happens, how does it happen that people who are enlightened, and optimistic, and focused on the future lose all of that and go into a period of darkness and fear. And how do they come back out of that again? And that is, in fact, what Medieval History is all about. But I also learned something about dealing with overwhelming amounts of information. Now, you know, this was quite a long time ago. Just to date myself, I graduated in 1976. I'm a grandmother, just so you get the picture here. And someone asked me, actually, were there women's organizations here at Stanford when I was here. And I said, honestly, I don't know. We didn't think about it that way. But one of the things that I learned in this Medieval History course was.... We had to read a work of philosophy every week. Big books, you know, Aquinas, Maimonides. I know, none of these thrills you, but suffice it to say they were books of about a couple thousand pages apiece. And every week, we had to distill those thousands of pages into a two-page paper. And for me, the process was that I would write 20 pages, then I would get it down to 10 pages, and I would get it down to 5, and finally, I would get it down to 2. Which for me, I hope, represented the distilled essence of what I had learned and what I had read. It turns out that that skill has been very useful as I've been through my life. Because all of us are overwhelmed with amounts of information, and there will come any time in anyone's life, whether it's in a course you're taking, or whether it's in a choice you have to make about your life or about your work, where what you're going to have to do is cut through lots of information and distinguish the truly important from the merely interesting.

Lecture 2
The Dynamics of Change and Fear
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The Dynamics of Change and Fear

Fiorina talks about the dynamics of change and fear. She notes that entrepreneurship is about risk-taking, and this is always associated with trying something new. Fiorina concludes by asserting that change involves gathering enough energy and force to overcome the power of status quo.




Transcript



So what do I know about change? First thing I know is that everybody is afraid of something. Everybody is afraid of something. All of you are afraid of something. All of us are afraid of something. What distinguishes people who are successful in their life from those who are not is what do you do with your fear. Some people are held back by their fears, and some people choose to move ahead in spite of fear. Courage is not the absence of fear. Courage is acting in spite of fear. But because everybody is afraid, what most of the time people are afraid of is something new. The essence of entrepreneurship is risk taking. The essence of business is risk taking. Taking a risk is all about trying something new. And yet as people go on in their lives, they become afraid of trying something new. And so change is always resisted, always. Because people are afraid, even if what they have is not satisfying to them, a lot of people are afraid to venture into the unknown. And that holds them back from change. And if you are trying to drive a company, an organization, your colleagues towards change, you have to know that they are afraid. And you have to know as well that the only way you can help people get over their fear is to give them a vision of something that's worth striving for, that's worth taking a risk for. But the other reason change is always resisted is because the natural momentum, the natural instinct of any institution - any institution, I don't care if that institution is a family, a board, a university, a company of 5 people or 500,000 people. Today, one of the many very interesting things that I do is, I chair the advisory board for the Central Intelligence Agency. And so I can say without fear of contradiction that this is true of governmental agencies, everybody. The natural momentum of any organization is to preserve the status quo. Why? Because people who have positions of power and influence want to keep them. And so they invest their energies in maintaining their positions of power and influence. This isn't because people are bad. It's just human nature. And so, again, if you are focused on risk taking, change, you have to understand that the momentum that works against you is the power of the status quo. And it's always there. That's why change is hard. And the other force that pushes against change is fear. Basic human fear. And so change has to have enough power. The power of the vision about what can be different, it has to have enough force and enough energy to overcome people's fears and to overcome the power of the status quo.

Lecture 3
The Difference Between Management and Leadership
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The Difference Between Management and Leadership

Fiorina provides an insightful distinction between leadership and management. She describes leadership as changing the order of things and management as the production of acceptable results within known constraints and conditions.




Transcript



And there is a difference between management and leadership. Management is the production of acceptable results within known constraints and conditions; very important. But management is not leadership. Leadership is all about changing the order of things.... But Machiavelli said something very interesting about change. Machiavelli said, "There is nothing so difficult or so dangerous as to undertake to change the order of things." And that is true. It is difficult, and it is sometimes dangerous, because people resist and people are afraid. And that is why only leaders can drive change.

Lecture 4
Leadership and Capability
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Leadership and Capability

Fiorina explains that leadership is about three things: capability, collaboration and character. She stresses the importance of capability, which is about asking questions and listening to answers. It is also about celebrating new ideas and taking initiative to try new things. She insists that a continuous learning process is important to strengthen an entrepreneur's capability.




Transcript



I think leadership is about three things: capability, collaboration, and character. Let me talk briefly about those three, and then I'm going to take your questions. Capability. Of course, when we think about capability, we think about skills, we think about experiences, all of those things are important. But sometimes, the most important capability you can have is the capability to ask a question and hear the answer. Every time you go into a new situation, you have to ask questions to understand what's there. I tell people all the time that the single best leading indicator of whether a business is doing well or a business is doing poorly is customer satisfaction. Customers always know what's wrong. They can't always tell you what they want, but they can always tell you what's wrong. And every time they tell you something that's wrong, it's an opportunity. So I think income statements and balance sheets are lagging indicators, very important. But an income statement or a balance sheet is a representation of decisions already made. Somebody's bought a product, that's revenue you post. A manager's made a decision, that's an expense you post. Lagging indicator. Real important, but you're looking in the rear-view mirror. They're things that tell you where a business is going. Asking the right questions of customers turns out to be really important. Customer sat is a vital leading indicator for businesses. And if you doubt me, way back in 2002, we were going through the proxy battle and the merger, and I made the incredibly outrageous comment that Hewlett-Packard would become the leading technology company in the world, and would beat both IBM and Dell. Everyone thought I was nuts. By the way, it has since happened. But what was interesting: people said, "How do you know you can beat them?" I said, "Well, because we can replicate their cost structure, we can replicate their distribution model, and because if you'll observe, our customer sat is going up, and theirs is going down." The truth is, Dell's problems were all foreseeable. All you had to do was look at the fact that they had quit innovating, they had stopped taking risks, they were relying on the same competitive model for too long, and their customer sat was straight down. It was only a matter of time. Which is why rate of innovation, the ability to take risks, the ability to celebrate new ideas is also a leading indicator of a business. So capability: you've got to ask the right questions. Capability: you have to celebrate new ideas, take risks all the time, try new things. Because however good the answers you have had are, every person, every organization eventually reaches a time when the old answers aren't good enough anymore. And then the only thing that works is creativity and new ideas and risk taking and innovation. The other important part about capability, I think, is to keep learning, to learn something everyday. I'm older than most of you, so I can say this with some certainty. But you know, you see people who are in their 40s and 50s, and some people at that age, or 60s, or 70s, or 80s, and some people in that age group are vibrant. And some people aren't. And a big part of that difference is, the people who keep learning, who keep trying new things are vibrant. And the people who stop learning and stop trying new things are old before their time. It is why, or maybe it's another application of something Charles Darwin said. Charles Darwin said, "It is not the strongest of the species that survives, nor the most intelligent, but those most adaptive to change."

Lecture 5
Ethics in a Corporate Life
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Ethics in a Corporate Life

Carly Fiorina, former CEO of HP, talks about the importance of ethics. She emphasizes that defying ethics will reap only short-term solutions but never provides a long-term benefit to the organization. She insists that only collaborative efforts can help overcome fears and bring the best outcomes for an organization.




Transcript



And finally, ethics. Here's the truth. In most organizations, in most endeavors, if you do things that are kind of on the line and on the edge, you can get better results in the short term. It's why a lot of businesses tolerate behavior that's on the edge. Because it sometimes produces better results in the short term. Values are what guide your behavior when no one's looking and you don't think anyone's going to find out. I believe that a leader's most important job is to make sure that everybody understands that actually, values matter, and ethics count. And you know what, we're not going to do stuff on the edge. Because what happens when people do things on the edge, is eventually, they walk over the line. And when they walk over the line, devastating things happen. Because in this era of always on communication and information, you can't hide anything anymore. And people are going to find out. So you can't get close to the edge. You have to really stay true to a set of ethics and values. And yes, there is some variation on ethics and values around the world. But most of the time, people understand what's on the edge, and what's not. So I'm going to stop here. But let me just say, everyone's afraid. Change makes people afraid. But what you're studying is all about change. Because everyone is afraid, people resist change, even when it's positive. And that is why only leaders can drive change. But if leaders drive change, collaboration powers change. It's only when people collaborate, really effectively collaborate, that they come to the best outcomes and the best answers.

Lecture 6
Gauging Ethics in an Organization
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Gauging Ethics in an Organization

Carly Fiorina, former CEO of HP, describes simple guidelines to gauge ethics in an organization. She asks entrepreneurs to answer key questions about promotion and performance within the organization. The answers to these questions, she says, will reveal the organization's view towards ethics.




Transcript



So the question is: how do you deal with ethics in an organization? Because it's intangible, it's not profit, it's not products. And it's a really important question. So the thing that I would say about values of any kind, but particularly the values of integrity, respect, trust, things that are very core to human beings but very insubstantial in terms of both income statement or balance sheet, is you've got to walk the walk. Nobody cares about the talk. You can put a hundred value statements on the wall, it doesn't matter. And there are two things that people watch for when they see if you're walking the walk. The first thing people watch for is who gets promoted. Who gets promoted? The truth is, everybody knows in an organization who has a lot of integrity and who doesn't. People know who's kind of walking on the edge to produce results. And if those are the people that get promoted, then people get the message. One of the hardest things I ever had to do in my career was fire somebody, fire a particular person. He had incredible potential. He was incredibly smart. He got great results. But he was doing things that we would fire an employee for. He was an executive, he reported to me. He was doing things we would fire an employee for. He was not truthful. He was abusing the resources of the company. Now, people said to me, "You know what, you don't have to fire him." But I did, because had he stayed - by the way, everybody knew what he was doing - had he stayed, everyone would have gotten the message. In the press, I was blamed for his departure. "She's such a terrible person, he can work work." It's okay. It's not about getting credit on the outside. But people on the inside knew what that meant. So who gets promoted? The second thing is, you have to be up front with people that this is what you expect. You have to tell them that. And so if you're going to go through performance evaluations, that has to be part of the performance evaluation. It can't just be the numbers. The values are going to matter. If you, for example, believe that collaboration is an important skill, then you have to coach, develop, people on the basis of their collaboration skills. You have to measure their performance based on their ability to collaborate. So how do you measure performance? What kind of coaching and development do you give people? Who gets promoted? Those are all the things that matter.