Ever since being named the “Most Powerful Woman in Business” by Fortune in 1998, Carly Fiorina has been in the public eye. A successful executive at AT&T and Lucent, Fiorina accepted her biggest challenge in 1999 when she became CEO of Hewlett-Packard, then a faltering giant. Her controversial leadership there included HP’s hotly contested acquisition of Compaq, as well as an ambitious transformation project that saw more than 30,000 employees lose their jobs. Last February, the HP board fired her, a move that only heated up the debate over her tenure. In her new memoir, Tough Choices, Fiorina defends her leadership decisions and describes in candid detail her final days as CEO. Fiorina spoke with Knowledge at Wharton about her book, leadership at Hewlett-Packard, and what’s on the horizon.

Knowledge at Wharton: Why did you write this book?

Fiorina:Because I think I’ve had some interesting experiences in my career. I first thought about writing a book five years ago, actually. There are many good business books, but business [for me] is all about the people. I thought then about writing a business book that tells the story of business through the story of people, because if you want to change products and profits, you have to change what people are doing. 

Knowledge at Wharton: You talk in your book about your love of camaraderie and teamwork. When you became CEO, did you feel you were leaving that behind? 

Fiorina: No. You need to have a team, particularly when you’re undertaking the transformation of a company. A company can’t be transformed unless tens of thousands of people are on the same page. So we had to be a team, and we had to have common goals and common efforts. On the other hand, of course, as the head of a company, there are some decisions that you make alone. Those are lonely decisions to make — among the toughest being to lay off people and take people out of their jobs. 

Knowledge at Wharton: If you had to boil it down, what is the most important quality for a leader?   

Fiorina: The role of a leader is to see possibilities in people and in circumstances and to see both danger and opportunity before others do. This, to me, is all about helping people see things that they maybe can’t quite see yet and then helping them deal with it. 

Knowledge at Wharton: What do you mean when you write that you haven’t lost your soul?

Fiorina: What I mean is hanging on to those things that I knew were important when I was a little girl. I watched my mother and father stay genuine, authentic people of character and integrity. I learned then that those qualities were important. Soul to me is all about knowing what you believe and what you think is right and wrong, being who you are and standing up for both who you are and what you believe. 

I worry that in business, when a scandal hits, we spend perhaps too much time talking about what new rule should be written and not enough time talking about personal ethics and character.

Knowledge at Wharton: But how do you change character?

Fiorina: First, a leader has to make it clear that issues of values, ethics and character are important and then follow through on that. One of the tough choices that I talk about in this book is letting people go — taking people out of jobs because of conduct that is inconsistent with values that are important in a company. Those are tough choices, among the toughest, but people walk the walk rather than listen to the talk on issues of values. 

I think that there has to be plain talk. Whether it’s in the board room or around a conference table, there has to be plain talk about “values matter, character counts.” Those are the things that guide your actions when no one is looking and when you don’t think that anyone can find out.

Knowledge at Wharton: You’ve described the HP board as dysfunctional and having some of these character problems. Was it a mistake that you didn’t address the composition of the board, perhaps by bringing in more CEOs? 

Fiorina: Certainly it was my goal, my objective and my desire to bring in more CEOs and to bring in more people with operational experience in big companies. Unfortunately, it turned out to be very difficult to do so. People’s calendars made it prohibitive; there are a lot of liabilities associated with serving on boards today that not everyone is anxious to take on. So it’s hard to recruit people like that to boards. 

But there is no question that I wish I had been more successful in bringing to the board room the same management assessment tools and techniques that we used with the managers in the company. That was resisted in the board room, and I didn’t get it done, and we would have been better off had I been able to get it done.

Knowledge at Wharton: Knowing everything you know now, would you still have accepted the CEO position? 

Fiorina: I would do it all again. I have no regrets about my time at HP, quite the contrary. I’m very proud of what we accomplished at HP because what we accomplished — and I say “we” because it was tens of thousands of people — did transform a company. Today that company is among the leading technology companies in the world, and that makes me very proud.  

Knowledge at Wharton: What about the idea that maybe you were not the right person at the right time for that job?

Fiorina: The results demonstrate that I actually was the right person at the right time. I think my departure has as much to do with other people as it does with me. When you stand back and look at the decisions that defined my legacy, the decision to undertake the transformation of a company to restore it to leadership, the decision to undertake the merger with Compaq, the decision to do all the heavy lifting required to focus the company once again on innovation and customers, to take billions of dollars out of the cost structures — all of those decisions served the company well and provided a foundation for its current success. 

Knowledge at Wharton: On the issue of the Compaq deal: When members of the [Hewlett and Packard] families made their decision to oppose that merger, what made you decide to carry on, no matter what?

Fiorina: We had undertaken a very deliberative, thorough decision making process. We had reviewed every alternative; we had looked at every risk. It was the right move for the company. Once you’ve made a decision that you are confident in through a decision making process that is sound, you can’t change your mind just because people disagree with you. You have to carry on for the good of the company.  

Knowledge at Wharton: Your book makes clear that you bring a lot of emotional intelligence to your management roles. How do you explain the high level of hostility towards you personally? 

Fiorina: Some of that comes with the territory. I was asked to lead the transformation of an iconic company with a mythic set of founders and an incredibly ingrained culture. I was an outsider in every conceivable way, outside the Valley, outside the industry, not from an engineering background. All of those things were going to create controversy and hostility. I represented change in a very personal manifestation, and there were tough, tough things that had to be done to undertake that transformation. I accept that the roughly 35,000 people who lost their jobs under my tenure don’t like me. It’s normal that they wouldn’t like me.

Knowledge at Wharton: You’ve often been described, or even caricatured, as being “cold.” As a woman in business, you experienced many insults and developed a thick skin to overcome those challenges. Is it possible that thick skin was perhaps too thick?

Fiorina: I hope not. I hope that I will always be the kind of person who feels deeply the impact of the decisions that I am making. But it doesn’t change the fact that sometimes those very difficult decisions have to be made. Let’s just say I would have come under very different criticism if I hadn’t made the tough choices necessary to transform the company into a leader. I accept that people characterize me in certain ways based on the nature of some of the decisions that I had to make.

Knowledge at Wharton: In her testimony before congress, Patricia Dunn refused to take responsibility for the current “pretexting” scandal at Hewlett-Packard. In your view, who is to blame for that?

Fiorina: Let me back up for a moment and say that I wasn’t there when all of this happened. I do recognize the dysfunction that existed in the board room where people were not talking directly with one another, where various personal agendas or even personal animosities were overtaking a deliberative process. But setting aside the legalities of various techniques, I think what’s important in any board room is a very strong sense of personal ethics and good business judgment. That appears to me to be lacking in this case on many people’s parts. 

Knowledge at Wharton: You write that your top career advice is, “Don’t think about the next job.” People have mentioned the possibility of your going into public service and maybe even running for public office. What is attractive to you about either of those options?

Fiorina: I’m engaged in a number of public service activities today with things that matter to me. They are leadership development, community development, empowering women leaders around the world. I have a great deal of admiration for people who are engaged in public service and giving back to their communities in whatever way. So it would not be a complete stretch but, as you just mentioned, I’m taking my own advice and not concentrating on the next job and doing this one right now.

Knowledge at Wharton: Why do people call you by your first name, and what do you think of that?

Fiorina: That doesn’t trouble me all that much. Sometimes people are more comfortable with using a diminutive form of address with women than with men. On the other hand, when I meet someone for the first time and they feel comfortable enough to say, “Hi Carly, how are you?” it is a friendly way to start.

Knowledge at Wharton: Anything to add? 

Fiorina: I hope that when people read Tough Choices they get a sense of the full sweep of business, from a secretary in the mailroom to a CEO in the boardroom. And I hope they’ll find it an authentic telling of how people are in business.