BACKFIRE by Peter Burrows (John Wiley & Sons) is a fascinating story of the controversial merger between Hewlett-Packard (HP) and Compaq that resulted in one of the most publicised and biggest proxy fight in American corporate governance.
The book evolves around two main characters, Walter Hewlett, who is the son of Bill Hewlett, a family scion and board member of Hewlett-Packard, and Carly Fiorina, the stylish and charismatic CEO who wanted to bring change and new thinking to HP.
Burrows shows the reader an internal battle of two different minds and personality for the soul of HP. As the title suggests, Carly Fiorinas decisions and reform backfired the company that was known for its more conservative and egalitarian ways.
He takes us back into the makings of HP. From its humble beginnings, the two co-founders Bill Hewlett and Dave Packard wanted to create a company that emphasised innovation, ingenuity and creativity as well as a strong sense of esprit de corp among its workers.
The HP way was a huge success in corporate governance mainly because of its down-to-earth approach.
Over the next 50 years, HP would provide a blueprint for generations of entrepreneurs. Their approach boiled down to basic ideas: By giving workers respect and autonomy, they would build innovative products that would both contribute to society and generate big profits, Burrows wrote.
Besides giving a historical account of its co-founders and the HP way, the author gives detailed accounts of Walter Hewlett and Fiorinas personality. These instances are not just glimpses but in-depth examples of how they think and act.
The chapters are written like a historical novel, especially the first few chapters. Burrows succeeds in describing in detail the happenings leading to the proxy battle without making it too melodramatic.
After Bill Hewlett and Dave Packard retired, HP was having a lot of problems managing the company in a very highly competitive market. Many new executives came bringing in their own interpretation of the HP way.
HP was losing its grip and the board knew that something drastic had to be done. HP appointed Fiorina as the new CEO in hopes to bring change. However, her aggressive approaches were controversial and often not quite the HP way. Walter Hewlett felt that her decision to merge HP with Compaq would be detrimental to the company.
Although written like a novel, Burrows depiction of its characters, however, is realistic and objective. We are shown both sides of the story. Both Walter Hewlett and Fiorina are well described as people with flaws and strengths.
Readers are given instances of this throughout the book using quotes and comments from Walter Hewlett, Fiorina and the people who have worked with or known them.
Fiorina is not described as a superhero of HP nor is she the cruel manipulative dragon lady. Walter Hewlett is not the saviour of HP or the villain. Instead, readers are left to decide for themselves. Burrows shows us the many facets of their character.
One cannot help feel sympathetic with Walter Hewletts decision to fight for something he felt was wrong, yet at the same time one must surely admire Fiorinas confidence, determination and charisma to propose such a high-stake merger.
With all the cards laid down, the reader is left to debate and decide whether Fiorinas move was wise and good for HP or disastrous as Walter Hewlett predicted.
Backfire is definitely a must-read for investors, executives and those concerned with corporate governance, especially in understanding the workings of a mega-company like HP.
A fast-moving and compelling story, the book is also wonderful for scholarly debates, and lessons on corporate governance.