Hewlett: Legend of High Technology Stepping Aside
William Redington Hewlett walked into the room, an expression of mild surprise on the face that says handsome even through the wrinkles.
“Not the head of the table,” he said, shaking his head slightly as he acknowledged the seating arrangement that left him little choice. “I always sat in the middle,” he continued, pointing along the modest table that once served for board meetings. “Better communication that way. And I don’t like it to look like I’m talking down to anybody.”
With a slight limp and a gentle stoop to his already compact 5-foot, 10-inch frame, he acceded and settled into the waiting chair. Shirt-sleeved and wearing a blue-and-green combination that bespoke a plain workingman’s taste and budget, Bill Hewlett began his last interview as vice chairman of the company that made him a billionaire.
“It’s a non-event as far as I’m concerned,” he said of his scheduled Feb. 24 retirement from the company named for his alliance with David Packard that began nearly 50 years ago. As in nearly everything else having to do with Hewlett-Packard, Hewlett politely declines any claim to individual credit or notice.
His is the first name of a legend. In Silicon Valley, and across corporate America, Hewlett-Packard is more than a company name. It is more than the famous first garage-to-riches story of high-technology entrepreneurship.
Hewlett-Packard stands for a style, a certain way of running a company, treating employees, encouraging individual creativity and producing quality products. It is the original born-humble and built-to-stay-that-way electronics company. And in that context, Hewlett’s unassuming manners are more than fitting. They are, say associates less modest on his behalf, the lifeblood of “the HP way.”
The HP management style has become the way in many other companies in Silicon Valley and across the United States. More than his several patents, his company’s progress and products, it is the HP way that Hewlett sees as his legacy. “It was the management style. . . . That is what I am most proud of,” he said, after a long, reflective pause.
It truly was a Hewlett-Packard style, he said. “We shared all the decisions.”
They both, he said, “realized people wanted to do a good job” and agreed on the way to provide the proper environment. “Dave and I set up the philosophy of management by objective.”
That meant that employees were given latitude to do their jobs within the objectives of the department and the company. Hewlett and Packard established the MBWA style--management by wandering about; they rigorously practiced the open-door policy and eschewed the trappings of titles and success. No big offices or fancy furniture distinguished either Bill or Dave, as they are still known about the plant, from the troops.
And if the employees didn’t know that Hewlett and Packard were partners in more than business, they soon found out.
Unanimity of Ideas
“We just thought alike,” said Hewlett. He compared some of the experiences to parents being tested by a child who has gotten a “no” from one and goes to the other in search of a “yes.”
“If (an employee) didn’t get an answer he liked from me, he’d go to Dave, or the other way around. But almost invariably, he’d get almost the same answer. . . . We had the same ideas on where we were trying to go.”
Their unanimity was the backbone of Hewlett-Packard as it grew from a $538 initial investment in 1938 to a $7.2-billion company today.
Hewlett related a tale akin to the one about the man who was always right except the one time he mistakenly thought he had been wrong. “We disagreed one time,” he said, “and the discussion got very heated, but that was really because we misunderstood each other’s position. . . . We were actually in complete agreement.”
This kinship also extends to politics--both are Republicans--and in sharing their personal fortunes.
When Hewlett, now 73, talks about his money, it is as if wealth still is new to him, or at least not very important.
Being Rich Not Easy
“It’s nice to be able to do things, . . . but I don’t consider it the highlight of my life.” He said 99% of his personal wealth comes from his stock in the company; his holdings of 23 million shares put him in the $1-billion range.
Packard is twice as rich. The Hewlett family holdings were divided when Hewlett’s first wife, Flora, died in 1977, and the proceeds of her shares went to the charitable Hewlett Foundation.
“Being rich hasn’t been easy. It’s been the hardest on the kids,” said Hewlett.
“There was a tremendous difference between the first kid and the last in terms of what was around them, and how they were perceived. . . . They were treated differently because their family was wealthy.”
In 1971, radical animosities directed at the upscale Palo Alto community and Stanford University campus brought terror into the Hewletts’ lives: The modest Hewlett family home was fire-bombed. In 1976, son James, then 28, fought off would-be kidnapers. The same year, a radical group called the Red Guerrilla Family claimed responsibility when a bomb exploded in an HP building.
But just as Hewlett doesn’t like to dwell on the downside of being rich, so does he disdain public recognition for his philanthropy.
Hewlett’s foundation annually distributes about $33 million, mostly in the Palo Alto area. “When I die, it will be more than that,” said Hewlett, who has willed all of his shares in the company to the foundation.
Although the company is known as a good corporate citizen, the two men have gained a wider reputation for their private generosity.
Hewlett and Packard share a fondness for Palo Alto, the town that is now sprinkled with buildings bearing the Hewlett-Packard logo, and especially for Stanford University. Each has donated substantial sums to the university where they met as undergraduate engineering students in the 1930s; last April, Hewlett pledged an additional $50 million to the school, and in May, Packard and his wife pledged $70 million.
One HP employee relates the story of how, after an earthquake had struck in 1983 in the region near a ranch in Idaho jointly owned by the two men, Hewlett telephoned the ranch’s foreman in concern for the man’s safety and the ranch’s condition. Hewlett also asked about the state of the nearby town, telling the foreman he had, in effect, a blank check to provide whatever help might be needed--on condition that no one was told the benefactor’s identity.
The foreman, so the story goes, chuckled and said, “You know Mr. Hewlett, Mr. Packard called not 10 minutes ago and said the same thing.”
Yet, as in many successful relationships, one partner’s style often complemented the other’s, instead of just mirroring it.
A Technological Wizard
Packard was always the more visible of the two, giving speeches, serving in Washington as deputy defense secretary in the Nixon Administration and appearing often as an electronics industry spokesman. Even in the photos of the early days of the enterprise, it’s easier to spot Packard, a bear-like figure made all the more imposing by a look of determination.
Although both were skilled engineers, Packard, observers through the years have noted, was the one with the strong business acumen. Hewlett was the technological wizard, the tinkerer who preferred being in the background. He was a common sight in HP’s labs, often working on company projects side-by-side with engineers.
His “creative genius” as an engineer was a double boon to the company, said one longtime Hewlett-Packard observer. First, it gave the company a second and third generation of products--something many start-up companies fail to do. And, it drew other engineers--many of the country’s best and brightest--to HP’s labs.
Both men inspire fierce loyalty among their employees--past and present. Said a former HP employee: “I worked for HP for 23 years, and I can’t think of anybody who didn’t like Bill. He just is a genuinely nice man.”
‘Had No Plans’
He is often asked to tell the story of how the company achieved its successes. Not always, he related with a devilish glint in his blue eyes, does the request bring the anticipated results. “Professors of management are devastated when (speaking before business classes) I say we were successful because we had no plans.”
It was Hewlett’s graduate school laboring that resulted in the company’s first product, an audio oscillator--an electronic instrument used to test sound equipment. The quirky details of what happened then have become part of the HP legend:
- That they sent off a couple of dozen letters to potential customers and were surprised when the return mail brought orders, and that in 1939, Hewlett-Packard was born in a garage.
- That “in the beginning, we did anything to bring in a nickel,” recalled Hewlett, including making foul-line indicators for bowling alleys, an automatic urinal flusher and a shock machine to help people lose weight.
- That the company made its mark in quality-measurement instruments, and then took a turn into calculating machines and, in 1966, to computers.
- That the company is credited with being a spark for the development of Silicon Valley as a mecca for electronics companies. Hewlett disclaims this, even though HP spawned numerous spinoffs and its management philosophies were adopted by even more of the start-ups that congregated nearby in the Santa Clara Valley.
Just a Resident
“We’re not responsible for Silicon Valley, silicon is. . . . We’re just one of its oldest residents. Silicon Valley really started when Beckman Instruments sent (transistor co-inventor William) Shockley out” to open up a subsidiary. “He was a highly regarded scientist, but not a very good manager. So a lot of people left his company and set up their own. They started Silicon Valley; we just happened to live here.”
One of Hewlett’s favorite stories is about a decision made while Packard was still in Washington. Hewlett asked his engineers to design a small version of the calculator--one that would fit in a pocket. His engineers took him so literally that they even measured Hewlett’s pocket to make sure the product would fit.
When Packard returned to the company, the project was well under way and Packard was uncertain of its prospects, Hewlett related. “We weren’t sure we could make money on it. There were long discussions, and it was decided if we could sell 10,000 of them, we could break even. Well, we sold something like 100,000 of them the first year.”
The pocket calculator, an early consumer electronics phenomenon, is still Hewlett’s favorite among the thousands of products that his company has developed.
Hewlett acknowledges that the company had to compromise some of its independent operating style when it began making computers.
But HP has bent over backwards to avoid compromising its long-held practice of no layoffs. For a company employing 82,000 in businesses marked by foreign competition and manfuacturing technology advances, it hasn’t been a bed of roses.
Hewlett admitted that humane employment practices must be measured against the company’s long-term viability. “It’s a question of how much you care,” he said. “You can say you care so much that you’re not going to cut the work force and in so doing, jeopardize all other jobs . . . . If you’re too good, you can lose the company.”
For the time being, Hewlett has few worries that his departure will result in many changes in the way the company is run. “I can’t remember us ever having a serious vote, let alone (an issue) that was decided on one vote,” said Hewlett, who will remain on the board as director emeritus.
Hewlett, who was named vice president of the company when it was incorporated in 1947, became executive vice president 10 years later, president in 1964 and chief executive in 1969. He resigned as president in 1977 and as chief executive in 1978.
Packard served as board chairman before his stint in Washington and was reelected chairman after his return to the company in December, 1971.
Packard has not been active in the company’s day-to-day management since John A. Young succeeded Hewlett as president and chief executive. Although Hewlett still works at the office two or three days a week, his involvement too has dwindled. Now he’ll have more time for his mostly outdoor activities--fishing, skiing and botany.
A second generation of Hewletts and Packards will join the board soon, but Hewlett doesn’t see either Walter Hewlett or David Woodley Packard playing a big role in the company. Neither ever spent much time working at the company.
“We let (all the children) know, ‘if you want to work for the company, there’s got to be no question why you were promoted,’ and none were willing to accept the challenge on that basis,” Hewlett said with a chuckle.
“It’s very hard to expect generation after generation to be the same. The surest way to get a company in trouble is to continue to draw on the family.”
Besides, Hewlett is convinced that it doesn’t necessarily take a Hewlett or a Packard to perpetuate the HP way. “It doesn’t just happen from the top. It has to be built into the organization. These people are the purveyors of the HP way.”