Shortly after stepping down as chief executive officer of IBM Corp. in 2002, Louis V. Gerstner addressed MBA students at Harvard Business School. “The thing I have learned at IBM,” he said, “is that culture is everything.”
That’s no insignificant statement coming from the outsider who joined the ailing computer company in 1993 to turn it around – the Big Blue of the crisp white shirts, lifetime employment, and cult of individuality among employees.
Indeed many recruitment experts seem to agree with Gerstner that an organization’s culture is a crucial consideration when it comes to evaluating candidates for hire.
Not Steve Mader. The vice chairman and CEO practice leader of search firm Christian and Timbers was part of the team that recruited another outsider, Carleton S. Fiorina, to tech giant Hewlett-Packard in 1999. Fiorina resigned under pressure as the company’s chairman and CEO earlier this month.
“HP might have hired someone with a better cultural fit but that wouldn’t have made [that executive] more effective” than Fiorina, he says. Mader spoke with CFO.com about what CFOs can learn from the HP–Fiorina relationship.
Instead of culture, Mader prefers to focus on leadership. That is, it’s not so much whether leaders are compatible with their companies’ culture, but whether the leader has the skills to recognize and bridge any gaps between his or her own style and the existing culture.
To illustrate, Mader points out Gerstner’s tenure at IBM. Gerstner recognized that IBM’s culture of individualism – what made IBM’s sales executives so famously dynamic and effective – was no longer serving the company. He led the shift towards integration within the company, which ultimately helped IBM reinvent itself as the go-to source for total business solutions.
Moreover, while Fiorina was seen by many as a one-woman change agent for HP, making over the company in her image. Gerstner believed in smoothing the way for progress by motivating the existing workforce to effect it.
Though both Gerstner and Fiorina were new kinds of leaders for their companies, says Mader, Gerstner “was a more adeptly trained leader.”
For CFOs, the lesson from Fiorina’s experience is that “it’s really important to be concerned about real connection with the people around you,” says Mader. “It’s not enough to come in and be efficient.” That’s especially important for finance chiefs, since they are often the most similar to the CEO in terms of having a company-wide perspective; in some ways they’re almost an extension of the CEO. “It’s very important [for CFOs] not to redouble any mistakes in leadership that the CEO can make in terms of being connected.”
Not that Fiorina’s stormy tenure was entirely of her own making. When HP’s board hired Fiorina in 1999, executives saw her difference in style from “the HP Way” as a good thing. At the time, the question was whether anyone could actually change any aspect at the company. HP “picked Carly because she was everything HP was not,” explains Mader.
“But then,” he adds, “they didn’t like it.”
In a sense, he says, HP could be criticized for lacking the commitment to following through with the changes the company hired Fiorina to make. “Every moment Carly wasn’t looking,” he says, “the old HP mores cropped up. They actually didn’t want to do what Carly wanted to do.”
So now that Fiorina is gone, what’s HP looking for now? To be sure, the CFO, Robert Wayman, was the logical choice for acting CEO, as is often the case, says Mader. But HP isn’t necessarily looking for someone like Wayman, a 36-year HP veteran. “He doesn’t have enough Type A in him,” the headhunter observes.
However, Mader – whose firm isn’t involved in the search this time around – believes that the company “should be looking for someone who’s shown they can motivate and mobilize a management team.
“Carly’s limitation,” he continues, “was that she wanted to come in and will her way in there. HP needs someone who knows how to use leadership.”