Hewlett-Packard
Dick Bingham
R.I.P. HP
What Silicon Valley can learn from the rise and fall of its original tech startup.
Photo by Bill Johnson/The Denver Post/MediaNews Group/Getty Images
It started with two engineers tinkering in a Silicon Valley garage. Behind brilliant ideas and a distinctive corporate culture, it grew into one of the most successful technology companies of all time.
WILL OREMUSWill Oremus is Slate's senior technology writer.
That’s true of both Apple and Google. It’s also true of Hewlett-Packard—a company that predated them by some 40 and 60 years, respectively.*
HP today is a broken shell of its former self. The seeds of its downfall were sown decades ago, when its focus shifted from high-end innovation to mass production of low-cost devices. On Monday, CEO Meg Whitman announced that it’s splitting into two companies: HP Inc. will hawk computers and printers while Hewlett-Packard Enterprise will focus on high-end business hardware and software, like IBM. It’s the second time in 15 years the company has spun off a core business—it turned its test and measurement division into Agilent in 1999, and it has been reeling ever since.
In its time, however, Hewlett-Packard was like nothing the business world had seen. It was, in many respects, the prototype from which the idea of the Silicon Valley startup sprang. Its former glory and longevity are worth recalling in an age when the potential for tech companies to strike it rich is taken for granted—and so is their evanescence.
The outlines of HP’s history have been well-traced, including by Michael S. Malone inBill & Dave: How Hewlett and Packard Built the World’s Greatest Company, and by co-founder David Packard himself in The HP Way: How Bill Hewlett and I Built Our Business. The two met as undergrads at Stanford University under the tutelage of the legendary electrical engineering professor Frederick Terman; in 1939, at Terman’s urging, they formed their own company in a one-car garage on Addison Avenue in Palo Alto, California, then a sleepy suburb known more for fruit orchards than industry.
Photo by David Paul Morris/Getty Images
Like a lot of tech startups today, Hewlett and Packard decided to start a company before they knew what it was they wanted to build. They considered everything from medical equipment to air-conditioning control systems before settling on anaudio oscillator that they managed to sell to Walt Disney, who used the devices in producing the soundtrack for Fantasia.
The founders were driven not by a particular business model or million-dollar idea, but by the conviction that, in Packard’s words, “we were able to design and make instruments which were not yet available.” The company’s subsequent products established it as a leader in instruments for measuring and testing electronic signals and devices.
By World War II, the company was scaling up rapidly to win and fulfill government contracts for its oscillators and vacuum-tube voltmeters. Out of necessity was born a corporate culture that would come to define Silicon Valley startups in the ensuing decades. As Walter Isaacson recounts in his new book The Innovators, citing Malone:
While Bill Hewlett was in the military, Dave Packard slept on a cot at the office many nights and managed three shifts of workers, many of them women. He realized, partly out of necessity, that it helped to give his workers flexible hours and plenty of leeway in determining how to accomplish their objectives. The management hierarchy was flattened. During the 1950s this approach merged with the casual lifestyle of California to create a culture that included Friday beer bashes, flexible hours, and stock options.
Over the years this approach coalesced in a management philosophy known as “the HP Way.” It emphasized problem-solving over profit-chasing and trust in employees over top-down management. It became a blueprint for the semiconductor industry, and then Intel, and ultimately the technology industry as a whole. The company made money—piles and piles of it—but it did it by continually inventing and honing useful products, not by maximizing volume and slashing costs.
“HP’s cultural legacy runs very, very deep,” Leslie Berlin, historian for the Silicon Valley Archives at Stanford, told me in a phone interview Monday. “The notion that literally a couple of tech guys in a garage could not only make it, but hit the ball out of the park—and that they did it without alienating their labor—it really helped to kick-start the Valley.” Berlin hears echoes of “the HP Way” in Google’s corporate motto, “Don’t be evil,” as well as in the company’s seemingly utopian corporate culture.
Malone, author of books about both Hewlett-Packard and Intel, agreed in a phone interview that HP was in many ways “the founding company of Silicon Valley.” But in other respects, he told me, it has always stood apart, whether due to the nature of its business or the magnitude of its success. While semiconductor and microchip companies—and, later, Internet startups—duked it out in cutthroat competition on the Valley floor, HP shone as a gold-paved citadel in the foothills where happy, healthy, lifelong employees settled in and raised families.
Hewlett and Packard may have treated their workers humanely, but they were unsentimental when it came to the company’s products and business models. “As early as the mid-1950s, an internal HP study showed that sales of most of the company’s products declined in the fourth or fifth year as their technological advantage slipped,” reported David Jacobson in a 1998 Stanford Magazine cover story. “So, in order to grow, the company had to generate an increasing amount of its revenues from newer ideas.” In a 2000 Forbes article, Malone elaborated:
The key to the greatness of Bill Hewlett and David Packard was that they held no attachment to things, only people. The garage was left behind, as would be, in time, the redwood building. So too was the audio oscillator and thousands of other products—all abandoned in the endless pursuit of something better. Only the people remained, and they were cherished and respected.
It’s hard to say just when the company began to lose the edge that its founders and their successors had been so careful to keep sharp. Some analysts pin the turning point on the tumultuous tenure of former CEO Carly Fiorina, who came to the company with a background in sales rather than engineering and orchestrated its acquisition of Compaq in 2002. Critics say she doubled down on the company’s maturing PC-sales business at the expense of more forward-looking products. Others fault her hard-charging successor, Mark Hurd, who pushed the company to tremendous profits through aggressive management and ruthless cost-cutting. Thestrategic flailing and soap-opera board intrigue that characterized Léo Apotheker’s 11-month reign certainly didn’t help.
Most agree, however, that the company had grown sclerotic and unwieldy even before Fiorina arrived. In a 2005 foreword to Packard’s book, Jim Collins wrote that HP in the 1990s “confused operating practices with core values” and “veered off course” with acquisitions whose success depended on cost-cutting and market share rather than technical innovation.
While the latest split-up may sound like a death knell, Malone believes it gives Whitman a chance to reshape Hewlett-Packard Enterprise in the mold of IBM, which sold its PC business to Lenovo in 2005. But even if that’s the case, it’s clear by now that the HP of old is not coming back.
For a time, though, all of the virtues of Silicon Valley at its best came together in a company that was at once wildly profitable and universally beloved. “Between 1955 and about 1965, HP was probably the greatest company ever,” Malone said. “It produced the kind of innovation you saw from Apple in the 2000s, but it was simultaneously the most enlightened employer in the country. They had the highest employee morale levels ever measured.”
In 1955, Hewlett-Packard was 16 years old. It has been 17 years since Steve Jobs retook the reins at Apple and remade the company in his image. And Google turned 16 years old this year.
*Correction, Oct. 8, 2014: This article originally implied that Hewlett-Packard predated Google by about 40 years and Apple by about 60. In fact, it predated Apple by about 40 years and Google by about 60.
Pat Riffel
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Thatch Harvey
Fred Cruger
Sent from my iPhone
I'm just glad I got to be part of it. Not everyone has a work experience like this, and a chance to truly be friends with your coworkers.Thatch
It's a sad day in many ways--but the wonderful memories live on.
On Thu, Oct 9, 2014 at 5:56 PM, Dick Bingham <dick.b...@gmail.com> wrote:
I really enjoyed being part of the ORIGINAL Hewlett-Packard company. It slowly degeneratedinto a profit-chasing environment at the last division where I worked at for 18-years and retiredin November 1998.Political Correctness programs in the latter part of the 1990's were instrumental in killing lotsof the playfulness that was so much a part of the HP environment. I'm glad I left HP while itstill resembled the company into which I was hired in 1970 as an R&D Engineer in 5U atStanford Park.Dick========================================================================
R.I.P. HP
What Silicon Valley can learn from the rise and fall of its original tech startup.
By Will Oremus
<141008_TECH_WilliamHewlett.jpg.CROP.original-original.jpg>
Hewlett-Packard co-founder Bill Hewlett on June 6, 1977.Photo by Bill Johnson/The Denver Post/MediaNews Group/Getty Images
It started with two engineers tinkering in a Silicon Valley garage. Behind brilliant ideas and a distinctive corporate culture, it grew into one of the most successful technology companies of all time.
Will Oremus is Slate's senior technology writer.That’s true of both Apple and Google. It’s also true of Hewlett-Packard—a company that predated them by some 40 and 60 years, respectively.*HP today is a broken shell of its former self. The seeds of its downfall were sown decades ago, when its focus shifted from high-end innovation to mass production of low-cost devices. On Monday, CEO Meg Whitman announced that it’s splitting into two companies: HP Inc. will hawk computers and printers while Hewlett-Packard Enterprise will focus on high-end business hardware and software, like IBM. It’s the second time in 15 years the company has spun off a core business—it turned its test and measurement division into Agilent in 1999, and it has been reeling ever since.In its time, however, Hewlett-Packard was like nothing the business world had seen. It was, in many respects, the prototype from which the idea of the Silicon Valley startup sprang. Its former glory and longevity are worth recalling in an age when the potential for tech companies to strike it rich is taken for granted—and so is their evanescence.The outlines of HP’s history have been well-traced, including by Michael S. Malone inBill & Dave: How Hewlett and Packard Built the World’s Greatest Company, and by co-founder David Packard himself in The HP Way: How Bill Hewlett and I Built Our Business. The two met as undergrads at Stanford University under the tutelage of the legendary electrical engineering professor Frederick Terman; in 1939, at Terman’s urging, they formed their own company in a one-car garage on Addison Avenue in Palo Alto, California, then a sleepy suburb known more for fruit orchards than industry.
<141008_TECH_HPGarage.jpg.CROP.original-original.jpg>
Tom Bruhns
Cheers, Tom "Weird hou men maun aye be makin war insteid o things they need." -- Tom Scott (1918-1995)
Lori Wentz
Date: Fri, 10 Oct 2014 16:43:55 -0700
From: k7...@msn.com
To: ex...@googlegroups.com
Subject: Re: Hewlett-Packard
Dave and Vera Nunnally
I was lucky enough to work for 3 “high tech companies” in my career, and saw this fall from greatness in each case:
1. The Bell System: This company started way before HP, and gave me my first job out of college. These were the guys who invented the transistor and developed the theory behind modern digital communications and the products that Lake Stevens excelled in. By the time I started they were over the hill and on the way to oblivion. When did it all go wrong? I quit after a year and joined this company I remembered from college as having cool test equipment.
2. HP/Agilent: It was like a change from night into day. Employees were valued. There was a vision that everyone could buy into. The founders controlled the company and ran it the way they thought a company should run. Unfortunately, I got to watch it unwind. But oh, what a ride! When did it all go wrong?
3. Tektronix: I loved to chat with the “old guys” from Tek. They sounded like much of you in their nostalgia about the good old days. Their founder was a contemporary of H&P, but was now long gone. Their downward spiral actually started before HP, and I was working with people who had gone through as bad of times as any of us. When did it all go wrong? They finally got absorbed into the conglomerate Danaher. Who knows where that will go.
Glad I am retired and can now just reminisce about what was and speculate about what will be for the great companies I was once lucky enough to work for. I just hope their future isn’t oblivion.
Dave Nunnally HP/Agilent 1971-2004
Williams, Laura M
As I read all of the emails regarding HP I have to say that we were a family at HP. I believe the folks I worked with were just amazing. Creating new products that were far superior to the competitors. I remember when I got the call offering me a job. I was so excited to be a part of great company. I worked for HP/Agilent for 23 years and those were the best years of my life. I now work for Danaher managing Fluke, Tektronix and Danaher IT finances. Many of the HP/Agilent folks are a part of the Fluke and Tektronix companies and it fun to share our memories of the HP days. We created memories at HP/Agilent that I am sure will stay with all of us. The values that Bill and Dave are instilled in all of us and no matter where the companies end up going we have to all be proud of the accomplishments we made as family to HP and Agilent.
Bill Harris
memories of my time at HP, almost all of which was at Lake Stevens.
Is it partly a management succession problem? I saw TI change when Pat
Haggerty, the last of the founders, passed away, and we've written of
the changes at HP after Bill and Dave were gone. The business world is
different today, but the business world was different (than HP) then,
too, and Bill and Dave went their own way.
Have you seen Chuck House's and Ray Price's /The HP Phenomenon/? Chuck
has good credentials from the T&M side, and that book showed me things I
hadn't realized at the time. He's got a blog at
http://hpphenom.blogspot.com/ that's often interesting.
Bill
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Bill Harris
http://makingsense.facilitatedsystems.com/
Daniel J Wisehart
Daniel
Kag...@aol.com
David Bennett
So well said Laura.
I too was 23 years and the best days of my life. You don’t know how good we had it till it’s gone. Watching hundreds leave was so painful.
Dave Bennett
Al Lorenz
What a great thread! Just seeing these names makes me smile.
Your comment got me thinking. When Apple lost its founders, it also
foundered, until Steve Jobs returned. I don't expect Apple to avoid the
same type of decay over the long term now that he is gone again. But what
might be a better example of the "remake" book is when Jack Welch, who rose
to a place of real power in General Electric about 1973, took GE from a
unfocused, floundering, bureaucracy to a company uniquely focused on
success. GE's stock valuation rose by 4000% under his reign. Of course,
Jeffrey Immelt is no Jack Welch and you can see the company losing its
former focus. GE was also not an example of valuing employees like HP did,
but what an amazing turnaround Mr. Welch took GE through. Of course, there
are books: http://www.amazon.com/Jack-Welch-The-G-E-Way/dp/0070581045
But, most of the time companies go the way of Wang, IBM, or unfortunately,
Hewlett-Packard. But what a fantastic place it was in its time! I was
fortunate to have been a small part of it and to have worked with such an
exemplary group of people.
Hmm, makes me think that, contrary to the thoughts of some, maybe the really
great CEOs are worth every penny of their compensation. Just thinking...
Al Lorenz
509-630-6769
877-822-3271 fax
-----Original Message-----
From: ex...@googlegroups.com [mailto:ex...@googlegroups.com] On Behalf Of
rvl...@pioneernet.net
look back on those years (from mid 80's to the early 90's)
with fond memories. The trust and accountability, from top
to bottom, was something I'd never seen before, nor the
years since. The autonomy was a breath of fresh air! The
projects were quite challenging and fun, but it was the
people that I grew to respect and love. The camaraderie and
friendships have lasted for decades.
I, too, feel badly for Hewlett Packard. Not necessarily for
the latest news, but for the series of announcements over
the years; the continuous decisions resulting in HP's
gradual demise from greatness, over a slow, inexorable 20+
years. The spiral of death is painful to watch.
Randy Lord
----- Original Message Follows -----
From: "Al Lorenz" <alo...@criterionprop.com>
To: "'Daniel J Wisehart'" <dwis...@gmail.com>, "'Bill
Harris'" <bill_...@facilitatedsystems.com>
Cc: <ex...@googlegroups.com>
Subject: RE: Hewlett-Packard
Date: Mon, 13 Oct 2014 09:05:02 -0700
Eric Wicklund
Eric
Fred Cruger
Sent from my iPhone
Suzanne Crichton
Throwing my 2cents worth.... Lots of positive comments I agree with. Randy, you have expressed my sentiments exactly. Accountability, challenges yet fun, camaradery, lasting friendships... Like others, I have had other jobs since. With my experiences since HP, and comparing stories of others, we were blessed to have experienced HP pre-2000. Bill and Dave, it was great while it lasted. Don't get me started on Corporate America. ... Suzanne Sent from Yahoo Mail on Android |
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James Vasil
Not sure what I remember the most but I’m pretty sure that the people were a significant part of what made LSID the best part of my career.
It was also very rewarding to be working for an organization that was held in such high regard by engineers everywhere. That little HP name badge bumped your credibility 9-12 dB whenever you walked into a customer site!
And the 3562A release is the only project I’ve ever been involved with where the developers had to argue with management that the SW was not going to be significantly improved by more testing. This is a far cry from having to fight against the “if it compiles, we can ship it” mentality that so many organizations have!
Although I don’t know that I would call it a “good” memory, I can never think of the Marysville site without remembering how stunned we all were when we came in and found that one of the fire sprinkler pipes had burst (or something like that) and inundated much of the lab area!
James
From: ex...@googlegroups.com [mailto:ex...@googlegroups.com]
Sent: Monday, October 13, 2014 9:46 PM
To: Eric Wicklund
Cc: ex...@googlegroups.com
Subject: Re: Hewlett-Packard
The things I remember most were
Scott Scheirman
Date: Tuesday, October 14, 2014 at 8:23 PM
To: 'Fred Cruger' <abbot...@aol.com>
Cc: <ex...@googlegroups.com>
Subject: RE: Hewlett-Packard
Paul Hall
Memories? Where do I start? Tom Bruhn’s skunkworks to make a 4 channel Wonderland? (I still have a ‘670 under my desk J). Customer visits around the world? Robotic mail delivery? The Rock?
Clearly, being at Hewlett-Packard (in the good years) changed us. We learned respect, accountability and passion for a job well done. Even if it wasn’t your job, we all worked together to put out products that impacted industries for years.
I was lucky enough to land at Xbox when we were a small, scrappy part of Microsoft. We were stuck in the rafters at company meetings and got only passing mention in the annual report. But we were crazy dedicated to our customers and we built a world-wide brand. In the last few years, ossification has taken hold here too and it’s a constant battle to keep the respect, accountability and passion alive.
For all that we learned at HP, now it’s up to us to pass it on. And to all who taught me so much – thank you!
Paul.
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Steve Bye
Steve