Box 3, Folder 52 – General Speeches

 

October 11, 1989 – “Random Thoughts on Creativity,” University of Bologna, Italy

 

10/11/89, Copy of typewritten text of speech

 

Hewlett starts with a preface like introduction to give the context of this speech for his audience in Italy. “Once every four years,” he says, “there is a meeting of the International Industrial Conference held in San Francisco. It is sponsored by the Conference Board and the Stanford Research Institute. Its attendees, about 500 in number, come from all over the world, drawn both from developed and newly emerging countries and represent the largest and best known organizations. Its most recent meeting was just completed in September of this year. The theme was ‘Carrying on International Business in a Global World.’ One of the principal subjects dealt with the increasingly complex nature of such businesses and the role of technology in competition.”

 

Hewlett wants to weave the subject of creativity into this context and says “Certainly creativity is a critical component of technology. It is particularly appropriate to speak about creativity when one remembers the great contributions made by Leonardo da Vinci, Galilei, Galvani and Marconi. I thought that it might be of value if I shared some views on the creative processes with you today.” And he says he asked Dr. Charles House, an R & D manager at HP, what creativity was. He says House, “with a twinkle in his eye,” replied ‘Creativity is what interferes with my established engineering program.’ And Hewlett acknowledges that “There is much truth in that statement.”

 

Hewlett gives another definition of creativity, this time from Thomas Edison: ‘There ain’t no rules around here. We’re trying to accomplish something.’

 

He says he gives these two comments “…because they say a great deal about the creative process. It works best when it is not too structured. But it must, in the long run, be tamed, harnessed and hitched to the wagon of man’s needs.”

 

Hewlett tells of a high level Commission, established by the President of the United States. “The charter of this Commission,” he says, “ was to understand the long-term competitiveness of the United States with emphasis on technology. One of the Commission’s recommendations was to ‘Create and apply new technology.’  “Technical innovation spurs new industries and revives mature ones. Technological advances lead to improved productivity, an essential ingredient for our standard of living.

 

“But technology,” Hewlett says, “is the child of creativity.” And he asks, “How can we stimulate greater creativity in our industrial technological society?”

 

Continuing his efforts to define creativity, he quotes the Nobel Prize Winner, Albert Szent-Gyorgyi, as saying, ‘Discovery consists of looking at the same thing as everyone else and thinking something different’. Hewlett calls this “…a good working definition.”

 

Another point Hewlett makes is that education is not a requirement for creative activity, and he gives an example of an engineer at HP who had just one year of college. “Despite [this fact] he was one of the most creative people I’ve known. You could present him with the most difficult problems and he’d come up with ingenious solutions. He had the ability to isolate the essence of the problem and attack it with vigor.”

 

“Psychologists can’t even agree on how to measure this characteristic, let alone predict who will display it. Establishing an environment that fosters creativity and observing who flourishes is probably the best way of finding this elusive characteristic.”

 

Hewlett distinguishes between two kinds of creativity, the first being “spontaneous, in which an individual sees a complete and elegant solution to an interesting problem.”  The second kind he sees he calls “creativity on demand, in which specific objectives are established and must be met, but with a great deal of flexibility in how the results are to he achieved.”

 

He says both types share many common traits. “Creative people have an abiding curiosity and an insatiable desire to learn how and why things work. They take nothing for granted. They are interested in things around them and tend to stow away bits and pieces of information in their minds for future use. And they have a great ability to mobilize their thinking and experiences for use in solving a new problem.”

 

Hewlett sees a “sub-class” of creative types – “persons who not only have the ability to see things around them, but also to note that which differs from the norm.”

 

He gives the example of Sir Arthur Fleming, who discovered Penicillin when he noted a “mold had landed on a culture dish with colonies of staphylococci,” and he saw that it killed the adjacent colonies.”

 

“Intellectual curiosity is a great source of creativity. An example of this is demonstrated by Nobel Prize winner in Physics, Luis Alvarez, a close friend of mine and for several years a member of the Board of Directors of our Company.” Hewlett goes on to tell how Dr. Alvarez, during a trip to Egypt, became interested in the fact that no burial chamber had been found in the Pyramid of Khephren. He decided he would try to find the answer to this problem. With some financial help from Stanford University he was able to use cosmic rays from the sun, as one would use X-rays, to determine that no burial chamber existed.”

 

Hewlett says he has been talking about creativity as it would apply to research-type situations, and says he would like to move on to the development phase, the
“Create on Demand” type of creativity. “Here,” he says, “creativity’s role is slightly different….There is now a clearly defined objective and the job is to find a way to meet that goal.”

 

He says much has been written about this type of creative process – “techniques to stimulate and enhance it. One book on the subject I greatly enjoyed was ‘Conceptual Blockbusting’ by James L. Adams. This book suggests that “we all suffer from mental blocks that stand in the way of solving the problem at hand. These might be emotional blocks such as fear of failure, frustration, or too much or too little motivation. They may be perceptual blocks such as using incorrect information or the wrong method, or not using all your senses. Quite often, they are cultural blocks which sometimes can be the hardest to overcome.”

 

Hewlett believes younger people have an advantage here because they have a “habit of always questioning past wisdom and authority.”

 

“Projects do not,” Hewlett says, “always progress at a steady, uniform rate. Sometimes progress is stymied by a very difficult problem. The problem might be overcome by a clear, technical breakthrough, but more often than not, it is by-passed with a compromise solution I like to call a ‘quick fix’. If there are too many of these ‘quick fixes’, you’ill probably wind up with a very cumbersome solution to the problem.”

 

Hewlett tells of a engineer named Harald Friis, who had retired from Bell Labs. Friis would visit HP once in a while and he liked to talk with the R&D engineers about their projects – particularly when they had reached a dead end in the development process.

 

“He could get them to step back and view their work as a whole. He would ask, ‘What are you really trying to do? Are you on the right track, but feel you have too many quick fixes, or, are you really on the wrong track and need to make a fresh start?’ Hewlett says “Harald was just wonderful in helping our engineers reach this critical decision. He had a way of making a person see things in perspective and the engineers just loved him.”

 

“There is a time and place for creativity, but in the developmental process, timing sometimes outweighs technical innovations. It all comes back to the question of how often you can change course and still make forward progress. It is simply a matter of judgment.”

 

Hewlett gives an example involving the development of HP’s first desktop calculator. “Integrated circuits were just being introduced and we had to decide whether to delay the entry of the product so that we might use integrated circuits or go ahead and introduce it with a primitive, but proven, read-only-memory device. We chose the latter. Timing was the dominant factor and not the ‘niceness’ of the solution.”

 

Hewlett says he wants to switch from talking about the creative process in the R&D phase, and “look at how creativity can help increase productivity and improve quality….We need the same creative effort in the production process that we now lavish on the development phase. We must start by having productivity and quality as objectives in the research and development process. Productivity must be designed into products – not added at a later date. Quality cannot be ‘inspected in’.”

 

Hewlett feels in many cases industries are not taking advantage of the technology already available which could be used to improve quality and the manufacturability of a product. He sees universities as having a responsibility in this area. “…our universities …need to improve a theoretical base for quality control and efficiency in the manufacturing process.”

 

“I hope I’ve made it clear that creativity will play a vital and critical role in our increasingly high technology society. Industry is going to have to make some drastic changes in how it views the importance of the research and development program and its role in improving productivity.

 

“Changes are never easy to make. There is comfort and safety in tradition, but change must come, no matter how painful or expensive it may be.”

 

Hewlett says change need not present a “bleak” picture for the technically trained manager. “Change opens cracks in the monolithic structures. It presents a period of great opportunity, for this is the time when the best and the most creative minds will be sought out and placed in positions of key responsibility.

 

“In the high technology field, top leadership is always looking for good minds, high energy levels and a willingness to accept responsibility. In fact, many companies are so committed to creativity that they may still emphasize the recruitment of engineering graduates, even though at the time a general hiring freeze may be in effect for the rest of the company.

 

“It may turn out that the next few years will be one of unprecedented opportunity for the scientifically trained and creative mind and that their involvement will benefit industry with sharp increases in quality and efficiency in the manufacturing of its products.

 

10/11/89, Copy of Italian translation of speech

10/11/89, Typewritten copy of an earlier draft of speech, with handwritten changes by Hewlett

10/11/89, Copy of an earlier draft of speech, handwritten by Hewlett

5/22/89, Copy of a letter to Hewlett, written in Italian, from Fabio Roversi-Monaco, director of Education, University of Bologna. A copy of the translation is also supplied. The letter tells Hewlett that  the University wishes to confer upon him an Honorary Doctorate in Electronic Engineering.

6/1/89, Copy of  letter from Hewlett to Professor Fabio Roversi-Monaco saying he will be in Europe in October and could arrange to be in Bologna at their convenience.

8/23/89, Copy of a letter to Hewlett from Alfredo Scarfone of HP in Italy giving a draft of the ceremony in Bologna.

11/22/89, Copy of an HP memo from Carol Parcels to Mollie Yoshizumi [Hewlett’s Secretary] returning a copy of the speech

Box 3, Folder 50 – General Speeches

 

April 20, 1988 – Wells Fargo Bank International Advisory Council, San Francisco, CA

 

4/20/88, Typewritten copy of speech. It is very much the same as that given on this subject November 1, 1993, and is not repeated here.

 

4/20/88, Copies of two earlier drafts of speech, one with handwritten notations by Hewlett which were incorporated in the final text.

4/15/88, Typewritten note with information from Stanford engineering library concerning Leonard Fuller of Federal, and Herdun Pratt of Mackay. It says the two companies merged in 1928 with the International Telephone and Telegraph Company.

 

 

Box 3, Folder 51 – General Speeches

 

August 17, 1988 – John May Memorial, San Francisco, CA

 

8/17/88, Copy of typewritten text of speech

 

Hewlett says he first learned of John May via his own mother who had gone to a Century Club luncheon where May spoke. Mrs. Hewlett was very impressed by May and the community foundation principle he presented. Some years later Hewlett was asked to join the San Francisco Foundation as a member of the Distribution Committee. John May was the Executive Director of the Foundation.

 

Hewlett says he served in that capacity from 1962 to 1970, and that “It was one of the experiences I cherished the most. Learning how to give away money is not easy, but John was a good teacher.”

 

Hewlett tells how, in the mid-60s he and his wife, Flora, set up a family foundation. “Initially,” he says, “it was a very small operation that we operated out of our back pocket.” When May retired from the San Francisco Foundation in 1973, they asked him to become the first director of their family foundation. He served in that capacity for several years and Hewlett describes how “The structure he set up, and the philosophical approach that he established during the period that he was director was exactly what we needed and are still follow[ing] today.”

 

Hewlett describes John May’s work with the San Francisco Foundation in some detail, telling how his work there “was a model that is now followed in a number of  [communities around the Bay Area.]”

 

Hewlett closes saying “If John is in heaven and looking down, as I know he is, he must derive great satisfaction by what he sees. One form of immorality comes from the fact that you are remembered in the hearts and minds of men; that the world is a better place for you having lived. John certainly meets these conditions. Unfortunately, too few of the beneficiaries of John’s genius ever knew of the real benefactors, but those of us here today do know and we say, ‘Thank you, John May.’”

 

7/14/88, Typewritten paper, probably prepared by Mollie Yoshizumi, Hewlett’s secretary, containing factual data about John May.

7/14/88, Copy of a letter to John May’s widow, Jean May, from Hewlett saying he had been away for two weeks and had learned of John’s death upon his return. He says “John was a wonderful person and the contributions he made to the Foundation World were extraordinary. He changed the concept of a Community Foundation. If that was not enough, he set the William and flora Hewlett foundation on  course that it still basically follows today.”

8/8/88, Handwritten note to Hewlett from Jean May thanking him for his “kind and sympathetic words,”

8/12/88, Copy of a FAX from Tom Silk, attorney, to Mollie Yoshizumi, sending various obituaries that had been printed about John May. He mentions more material may arrive from Henry May.

8//15/88, Copy of a note from Henry May [brother] to Tom Silk transmitting more biographical information.

11/4/88, Letter to Mr. and Mrs. Hewlett from Robert M. Fisher sending the 1988 Annual report of the San Francisco Foundation.

Box 3, Folder 49 and 49A– General Speeches

4/2/87, Memo from Doug Kundrat to Mollie Yoshizumi thanking her for facilitating Hewlett’s approval for IBM to reprint an excerpt of his MIT address and enclosing letters he had written to IBM transmitting the approval.

4/22/87, Memo from Doug Kundrat to Mollie Yoshizumi sending a copy of IBM’s publication :Creativity” containing the excerpted address

8/27/87, Memo from Doug Kundrat to Mollie Yoshizumi enclosing another IBM publication containing the excerpted MIT address, this one named “Innovations”

Undated, Copy of an article titled “Chase Chance and Creativity, by James H. Austin

Undated, copies of some pages from an article which tells how Edwin came to invent the Polaroid camera

Undated, Copy of the cover of a booklet titled Conceptual Blockbusting by James L. Adams

Box 3, Folder 49 and 49A– General Speeches

 

June 2, 1986 – “Random Thoughts on Creativity,” MIT, Cambridge, MA

 

6/2/86, Copy of typewritten text of speech, with some handwritten notations by Hewlett

 

This speech is almost identical to that given on October 11, 1989 at the University of Bologna, Italy and so is not repeated here.

 

Papers included in the folder – note a second folder needed

 

6/2/86,  Typewritten and handwritten  drafts of speech

2/7/86 to 5/12/86, Various Notes on travel arrangements and ceremony logistics, apparently to Hewlett from his secretary, Mollie Yoshizumi.

2/12/86, Photocopy of page from MIT publication, “Tech Talk,” with article telling of Hewlett’s planned attendance and address at the forthcoming commencement

5/14/86, List of corporate members and spouses attending luncheon

6/2/86, Copy of typewritten sheet listing program schedule for the ceremony

6/2/86, Typewritten list of center stage principals

1/14/86, Letter to  Hewlett from Paul E. Gray, President, Massachusetts Institute of Technology, saying “A student group has overwhelmingly recommended you as this year’s Commencement Exercises,” and he invites Hewlett to be the Guest of Honor at their commencement

1/28/86, Copy of a letter to President Gray from Hewlett accepting the invitation – and noting the date will mark 50 years since his own graduation from MIT [Master of Engineering]. He also asks if Gray could let him know who the commencement speaker was 50 years ago.

2/6/86, Letter to Hewlett from Paul Gray, saying he is delighted Hewlett will be the 120^th Commencement speaker. He also advises that a Newton Diehl Baker, former Secretary of War, was the Commencement speaker in 1936.

2/11/86, Letter to Hewlett from Timothy McConnell, a student and President of the Gamma Pi chapter of Kappa Sigma, inviting him to dinner at their House during his trip.

3/4/86, Copy of a letter from Hewlett to Timothy McConnell saying the schedule for the Commencement activities has not yet been finished, and he will let them know whether he is able to accept their invitation at a later date – looks tight, however, he adds

5/23/86, Copy of a letter from Hewlett to Timothy McConnell explaining that, due to the brief trip schedule, he will not be able to accept their invitation to dinner.

2/18/86, Letter to Hewlett from Harold E. Edgerton, retired from MIT, congratulating him on being the Commencement speaker, and saying that he is sending a copy of a book entitled  “Moments of Vision.”

2/24/86, Copy of a letter to Edgerton from Hewlett thanking him for his letter.

2/22/86, Letter to Hewlett from, Dave Lyons, a student at MIT, saying he has lost the manual for his HP 15-C and wonders if Hewlett could send him a replacement.

3/6/86, Copy of a letter to Lyons from Mollie Yoshizumi, Secretary to Hewlett, telling him the phone number which he can call to obtain the manual – for $10.00.

2/18/86, Letter to Hewlett from Dr. Julius A. Stratton, [former professor at MIT?], saying it “has been a long time since that were together at MIT. He also says he will never forget Hewlett’s “kindness and generosity is establishing the Stratton Professorship, which has meant so much to me.”

3/27/86, Copy of a letter to Dr. Stratton from Hewlett saying he hopes to be able to visit during his trip.

 

 

4/28/86, Copy of a letter to Hewlett from Dr. David. S. Saxon, Chairman of  the MIT Corporation, inviting him, and guests, to a luncheon at his apartment on campus after the Commencement

5/9/86, Copies of notes from Mollie Yoshizumi, Hewlett’s Secretary, to members of his family accompanying him on the trip, sending them a copy of Dr. Saxon’s invitation

5/14/86, Copy of a letter from Hewlett to Dr. Saxon accepting the luncheon invitation and listing the members of his family who will attend: son and daughter-in-law, Walter and Esther Hewlett; daughter and son-in-law, Eleanor and Jean-Paul Gimon, and grandson, Eric Gimon.

5/13/86, Copy of a note to Hewlett from Karen Gervais, HP Press Relations, saying she would like to offer  his speech on creativity at MIT to either the New York Times or the Wall Street Journal, and asking if this meets with his approval. A  handwritten note from him at the bottom of the letter says “wait and see” [See also note dated 11/25/86 below]

5/15/86, Letter to Mollie Yoshizumi from Mary Morrissey, Executive Officer for the Commencement, listing all arrangements for local transportation upon arrival and for the following day.

5/22/86, Copy of a letter to Dr. David Saxon, from Hewlett, saying he would like to add another person as a guest for the luncheon after the Commencement – Loret Ruppe, a cousin of Mrs. Hewlett, and head of the Peace Corps.

5/29/86, Copy of  a letter from Hewlett to Dr. Roger Heyns, President, The William and Flora Hewlett Foundation, sending him a copy of his MIT speech and thanking him for his help.

5/26/86, Letter to Hewlett from Vivienne Lee, graduating class President, telling him how much she enjoyed and benefited from her experience as a SED student at HP the previous summer, and saying she looks forward to meeting him at the commencement.

5/30/86, Copy of a letter from Hewlett to Vivienne Lee saying “it was such a pleasure to read her heartwarming letter,” and adds that he looks forward to meeting her.

5/30/86, Notes to his children, Bill, Mary, and Jim, sending copies of his speech with the note: “I thought you might be interested.”

6/2/86, Copy of a note from Mollie Yoshizumi to Dr. Luis Alvarez, sending him the copy of Hewlett’s speech as requested.

6/5/86, Copies of letters from Hewlett to the following people sending each of them a copy of his commencement address:

Robert J. Glaser, M.D.

Don Hammond, HP, Bristol

Chuck House, HP, Palo Alto

Mrs. Philip Ruppe, Washington  D.C.

Dr. Jerome B. Wiesner, MIT

6/4/86, Letter to Hewlett from Paul E. Gray, MIT President, thanking him for participating in their Commencement Exercises

6/18/86, Letter to Hewlett from David S, Saxon, thanking him for participating in the MIT commencement

 

 

6/12/86, Letter to Hewlett from Robert C. Di Iorio, Associate Director of MIT’s News Office, sending him a copy of their news release about the Commencement Exercise,  including quotes from his address.

6/26/86, Copy of a letter from Hewlett to Robert Di Iorio thanking him for his letter.

5/21/86, Letter to Hewlett from Professor Lawrence Susskind, Executive director, Program on Negotiation, Harvard Law School, commenting on the support given their program by the William and Flora Hewlett Foundation, and inviting him to visit during his trip.

6/26/86, Copy of a letter to Professor Susskind from Hewlett saying he got his letter too late to respond and is sorry they could not meet, maybe another time.

6/26/86, Letter to Hewlett from David R. Lampe, Editor, The MIT Report saying they would like to include an article based on his speech at the Commencement in their publication, and he encloses a draft of a suggested article.

7/17/86, Copy of a letter from Hewlett to David Lampe approving the draft for publication.

 

 

See second folder on this speech for more material, mostly correspondence, with related publications.

6/2/86, Printed program for the entire Commencement Exercise

6/4/86, Issue of MIT publication, Tech Talk, containing the text of Hewlett’s commencement address

1/31/86, Handwritten note from Jean Burke, Measure Managing Editor, to Hewlett’s Secretary Mollie Yoshizumi, enclosing a transcript of her interview with Hewlett on the subject of creativity. Also attached is an issue of Measure which contains an article on the subject

11/10/86, Clipping from the Singapore newspaper, The Business Times, containing an article on creativity based on Jean Burke’s article in Measure

5/?/86, Handwritten note to Hewlett from Luis Alvarez attaching a copy of a talk given by Walter Alvarez [his son] on the subject of iridium and stellar impacts on the earth

5/19/86, Note to Hewlett from Steve Fox, HP Patent Law Department, attaching a copy of an article describing how Einstein got the idea for his Theory of Relativity, [in a dream], and how Niels Bohr formulated Quantum Mechanics.

5/19/86, Handwritten note to Hewlett from Steve Fox, Patent Law Dept. attaching an article on counterfeiting which quotes John Young, HP president

7/3/86, Letter to Hewlett from Jerome B. Wiesner, thanking him for the copy of his address, and enclosing a copy of one he plans to give in October titled “Creating with Computing”

8-9/86, Issue of the MIT publication, TechnologyReview containing excerpts from Hewlett’s commencement address

11/25/86, Memo to Hewlett from Karen Gervais, HP Public Relations, enclosing her edited version of his MIT commencement address, and asking if it meets with his approval, adding that she wants to approach either the Wall Street Journal, or the Christian Science Monitor to get it printed.

12/17/86, Memo to Hewlett from Karen Gervais saying she has “tweaked” the third paragraph as he suggested, plus the last three paragraphs which she thought needed some more work, and she again asks his approval

11/14/86, Note to Hewlett probably from Secretary Mollie Yoshizumi, saying Doug Kundrat of the HP Patent Legal Department called to say that IBM is interested in reprinting the excerpt from his MIT speech [MIT TechnologyReview – see listing dated August/September above] in their publication “Creativity.” Hewlett’s handwritten word “OK” is written on the page

 

 

Box 3, Folder 46 – General Speeches

 

March 18, 1985 – Symposium on Economics and Technology, Stanford, CA

 

3/18/85, Typewritten text of Hewlett’s comments

 

Hewlett says “Someone upstairs must be chuckling over the fact that he is involved in a seminar on Engineering Economics”  – since a course on that very subject was the only course he failed while at Stanford.”

 

Hewlett says he senses there is “a gap between the grass-root technical innovation and the very large corporations who are users of technical innovation. How do we move from the individual entrepreneur…to very large technically innovative companies…?”

 

He goes back some 25 years to the ‘$10 Million Syndrome.’ “This reference.” he says, “was based on the observation that many technically oriented companies reaching about that size ran into serious problems. These problems were sufficiently severe that management could not cope with them, and the company either went out of business or was acquired by a larger organization.”

 

Hewlett describes three problems which tended to cause such a crises. The first related to management itself. “Typically, such organizations were started by engineers or scientists whose primary skills were in technical fields. They took the attitude that management will take care of itself. Unfortunately, it doesn’t and suddenly they would wake up to the fact that the organization they had created was not capable of meeting the challenges of the future.”

 

“The second problem concerned financing the growth. “The financial problems of a small company are very different from that of a large one. Initial capital is often available from the individuals themselves or from associates or friends, and certainly in small amounts from banks. However, these funds are quickly swallowed up in the basic working capital needs of a growing company. It is therefore essential that stress be put on the principle of financing growth from earnings.”

 

And the third problem concerns product line depth. “A new innovative product has a logical life. A company having demonstrated the viability of such a new concept soon meets competition from other companies attempting to exploit such ideas, or as it often happens, newer technologies invalidate earlier inventions. It is essential, then, that if a company is to survive, its product line must be expanded and strengthened. This speaks to continuing research and development efforts which, again, needs to be financed.”

 

Hewlett feels the only difference 25 years has made is a matter of size – the problems remain today. He sees all of these problems as a matter of economics – “for technically innovative companies, large and small, are affected equally by the economic climate in which they exist. A rudimentary knowledge of economics is really essential to direct the program of a modern corporation”

 

 

Box 3, Folder 47 – General Speeches

 

April 11-12, 1985, – “My Discussions with the Computer,” HP Conference on User Interfaces, San Francisco, CA

 

4/11-12/85, Copy of typewritten text of talk

 

In this talk Hewlett quite frankly admits that he is a novice in working directly with computers, and he tells of his frustrations in trying to follow user instruction manuals. One paragraph in particular tells it all:

 

“It was not until we began to make general purpose computers that my frustration reached a boiling point. I used a new generation of computer whose name I shall not use to protect the guilty. I spent two full days having to learn how to load programs by reading the instruction book from cover to cover several times. In the end I simply threw in the sponge and called for help. The only stipulation was that each step in the process was to be identified by a paragraph number in the instruction book. I can assure you that this turned out to be impossible.”

 

Hewlett understandably concludes  that “Proper instructions on how to use a computer is just as important as the design of the computer. And I can assure you, that the team that designs a computer is not the team that should write the instruction book. The writing of a good instruction manual is and should be a highly professional matter. To turn it over to the designer can be a disaster, for he simply cannot put himself on the same level as the average user. He inherently assumes a higher level of knowledge than the customer is apt to have. Skills for writing instruction manuals are related to such professional fields as communications, education or psychology, all having something to contribute. In fact, instruction manual writing should really be a field by itself.”

 

6/2/86, Memo from Brian Egan of HP to Hewlett asking if he could get a copy of the speech made by Hewlett at the User Interface Conference in San Francisco in 1985.

6/30/86, Note from Mollie Yoshizumi, Hewlett’s Secretary, to Brian Egan, sending the requested copy.

7/3/86, Note from Egan to Mollie Yoshizumi thanking her for the copy.

 

 

Box 3, Folder 48 – General Speeches

 

November 16, 1985 – Commencement Exercises, Rand Graduate Institute, Santa Monica, CA

 

11/16/85, Copy of Hewlett’s comments as printed in a booklet containing other speeches

These are some brief comments made by Hewlett on receiving the honorary degree of Doctor of Public Policy.

 

Hewlett makes a very brief statement. He says he is not sure what he has contributed to Rand, but he is sure Rand has contributed a lot to him. “…it introduced me to many other operations I would never have gotten into except for my experience here at Rand…. I’m very, very  much indebted to my experience here at Rand. I consider it a great honor to receive this degree. Thank you very much.”

 

 

Box 3, Folder 45 – General Speeches

 

November 17, 1984 – Enterprise Forum Luncheon Talk, MIT, MA

 

11/17/84, Copy of typewritten speech

 

For the most part, this speech is very similar to that given by Hewlett on April 20, 1977 at GE. He describes HP’s formative years, the origin of their basic philosophies, as well as management and employee relations policies. Towards the end of this speech he discusses some pros and cons on venture financing.

 

[We do not repeat the first part of the story on HP’s developing years, and jump to Hewlett’s comments on venture financing.]

 

After telling the story of HP’s growth Hewlett says “he wants to use our own corporate history as a basis for discussing methods of financing corporate growth. The two main methods common today are, of course, through self-generated funds or to accelerate the process, venture capital financing.”

 

He says “venture capital has been incredibly effective in bringing new industry – particularly hi-tech, on line. I am not here to denigrate venture capital, but to point out that one pays a price for this form of financing. ‘There are no free lunches.’”

 

Hewlett says he recently read a very interesting article on venture capital written by Joel Kotkin who was primarily critical of this form of financing, mainly from the standpoint of the organizations providing such services. He goes on to say that “Kotkin’s book had a very interesting section on George Doriot, perhaps the father of venture capital, and his American Research and Development Corp. Doriot’s style was to provide lean financing. He is purported to have said ‘If you provide too much capital, the founders might start buying Cadillacs, 50 room mansions, etc.’ How correct he was. His style was to work closely with the young management to nurture them through the ups and downs, not just for the short term but for the long….One of his great success stories was that of working with Kenneth Olsen in the establishment of ‘DEC’….I know only too well how successful ‘DEC’ has been. There are many disciples of Doriot in the venture capital market today – but not all venture capital organizations follow his conservative role.”

 

Hewlett says he sees “…three main potential problems arising from many venture capital financing techniques. First, is the dilution of the original entrepreneurs interest. I am sure that the point may be made that even a highly diluted interest in a very rapidly growing company may be of greater value to the original entrepreneur than a slow, steady growth, assuming of course, that the founders can acquire sufficient management skills to do so. But these very rapid growths have their own problems. Instant millionaires have little incentive to continue their creative role. I believe Silicon Valley has one of the highest concentrations of Jaguars anywhere in the country. I recently saw a bumper sticker ‘God owes me a Porsche.’”

 

“A second problem of accelerated growth is that of management development. It is extremely difficult to train managers to staff a year after year growth of 100% per annum….The problem of management development, or the lack thereof, is highlighted if one looks at the rate of turnover in management of many of the most spectacular current crop of hi-tech venture capital supported companies. To understand the nature and extent of the problem, one must look at not just the spectacular successes, but the spectacular failures. Many of these failures should not be solely laid at the door of venture capital, but do suggest that the quality of venture capital support is not uniform and may fail because of inadequate management development.

 

“A third problem relates to the quality of the organizational structure. I spent some time in my discussion of HP’s rather slow and perhaps ponderous growth and the development of what we now, provincially perhaps, describe as ‘The HP Way.’ By this we mean the tradition and practices that had been built up over the years relating to how the company is to be run and how the employees see their stake and their role in the future of the company. Many of these precepts spring from the fact that at one time, Dave and I were ‘there.’ We knew what it was like to be struggling; what it was like for employees to be struggling; and what is more important, the employees, even the new ones, sensed this to be true., It is very hard to build tradition in a very rapidly growing concern where the top level of management is often brought in from the outside and has little understanding of what the company is like at the working level. One pays a price for forced growth.”

 

“Having said all this, it seems to me that the following question should be asked: ‘Is venture capital good?’ My answer is ‘yes.’ In many cases, with responsible investors, it performs an absolutely essential service.”

 

“Is it the only way for small companies to get started? My answer is ‘no.’ There are other ways.”

 

And to show examples of this Hewlett talks about two companies – Solectron and Computerland. He goes through the development of both. Solectron was started in 1977, and by 1978 was in serious financial trouble. Winston Chen, a recent Ph.D graduate from Harvard, joined it in 1978, when sales were $450.000.  And by 1984 sales had grown to $55 million. To achieve this growth $350,000 capital was raised from friends and family.

 

To solve the problem of management in a period of high growth Chen told Hewlett that he established an in-house school to help their managers become good entrepreneurial managers.

 

Hewlett says “We have found that in smaller business environments, management theories and training can help a company tremendously if the top management and management in general, is committed to the implementation of the training program.”

 

Going on to another example of non-venture capital financing, Hewlett says he was recently talking with Bill Millard, founder of Computerland. a retail store chain. Millard says he started with a disastrous association with a small computer company backed by venture capital. Coming out of that he decided there had to be a better way, and started to develop a system that was intended to be self-financing. His idea was to use franchise stores, and he started with $10,000 in capital. Starting in 1978 the company has had a growth rate of over 100% per year. Management has been home grown, and financing has primarily been at the retail store level.

 

“Private financing is not a panacea,” Hewlett says, “…but in many areas, alternatives are possible. This is particularly true with the rise of service industries whose capital requirements are often nominal. A good example is certainly the independent software firms, particularly if they operate with an aggressive policy of moving forward and not resting on their oars.

 

“I am sure that there are many other important fields as yet unrecognized that may have growth rates comparable to the electronic industry. In the financing of growth in these areas, all methods of financing should be carefully analyzed and the most appropriate one selected.

 

“There are alternatives to venture capital financing.”

Box 3, Folder 41 – General Speeches

 

April 6, 1983 – “Productivity,” HP Productivity seminar, Philadelphia, PA

This was seminar, organized much like a trade show. Some 2100 people showed up for HP’s series of presentations.

 

4/6/83, Outline of speech handwritten by Hewlett

 

Hewlett says it might be interesting to hear how they, at HP, got into a productivity network and computer use.

 

He explains that for many years HP was purely an  instrument company, but they found they were having increasing pressure to automate their instruments to control and then reduce data.

 

He says that in response to this need they “started a line of computers that were rugged – could take the same class B environment as instruments: temperature, line voltage, vibration, and shock. Such computers were not common at that time of ‘hot-house’ computers.” They quickly found that these computers had many uses beyond  instrument control.

 

“Shortly afterwards,” Hewlett says “they developed a scientific desk top calculator on the rationale that we could sell it to our scientific base customers – actually because we thought it would be fun to do. The pocket [calculator] followed on the same basis.

 

“After a period of time these products began to have important spin-offs.”

 

Began to use the mini-computer in many plant wide applications

1)    First, a simple air conditioner controller

2)    Then, machine tool loads

 

As proficiency with computers grew Hewlett says they began to recognize that they had many more applications other than that of a control room computer.

 

1) Major system based on dedicated computer:

a)  Computer to computer dial up data entry

b)    Parts inventories

c)     Order processing automation

 

Uses of desk top calculators in Europe

 

1)    Advanced units much easier to use for the uninitiated than the former computers with their rigid language structure.

2)    The fact that they were selling more calculators in Europe than in the U.S. caused them to realize the great advantage of the individual but powerful workstation

 

Hewlett says, “It began to dawn on us that we were smack in the middle of a productivity program and that we had the proven bits and pieces to put such a system together. Further, that most of the necessary basic R&D had already been carried out – not under the heading of a formal R&D account, but carried out and paid for by the various users in the company.

 

“It was then, and only then, that we began a formal program of documenting and exploiting the particular niche in which we found ourselves.

 

“What you see and hear at this conference is the result of this effort. These were developed as user-based systems and we very much consider them as such. We solicit your comment and help, for your problems are our problems, and vice versa.

 

“We clearly see a recognition of the fact that we are both an instrument and a computer company.  The automated lab is one example and the other is the internal use of the computer for our own manufacturing operations:

a)     The next bench syndrome repeated.

b)    The best salesmen we have are our own people, using computers in manufacturing and office management operations.

c)     This is a field we are comfortable in.

 

4/6/83, Copy of newspaper clipping about the seminar

 

 

Box 3, Folder 42 – General Speeches

 

May 19, 1983 – Ground breaking ceremony, Center for Integrated Circuits, Stanford University, CA

 

5/19/83, Copy of the typewritten text of Hewlett’s remarks

 

Hewlett says that the “venture we see taking shape here reminds me of my own good fortune as a first-hand witness to so many of the developments in the field of electronics.”

 

He tells how, forty years prior, radio tubes, and even simple light bulbs, were used in the design of electronic circuitry. “Then tubes begat transistors; transistors begat printed circuits; printed circuits begat integrated circuits, and so on.”

 

“Integrated Systems technology,” he says, “is a logical and natural extension of this genealogy. It represents the vertical integration of the semiconductor and systems technologies. Among the small number of universities pursuing this integrated technology, Stanford has shown itself to be outstanding. A notable example is the early application of integrated technology to new medical and rehabilitation devices, such as the optical-to-tactile reading aid for the blind. The Center for Integrated Systems is a commitment to -–and an affirmation of faith in – the belief that joint, coordinated research is the key to the computer of the future and its applications.”

 

He says CIS is a consortium of 19 major U.S. corporations that have joined Stanford University “to undertake basic and applied research across a broad spectrum of disciplines. These range from semiconductor materials to software for dataprocessing systems. Initially, each sponsoring company has pledged $750,000 toward the construction of the new CIS building. Annual contributions of $100,000 each in partial support of CIS research programs are expected. Further, each sponsor has been invited to send one full-time visiting researcher to the CIS to lend technical support.”

 

Hewlett describes the physical building, which will house CIS: 70,000 square feet of floor space, including 10,000 of clean rooms for research on large-scale integrated systems. He says the Center will be a “very clear and distinct answer to three of the major problems faced by the United States. First is the failure of our national programs of basic research to keep pace with the needs of our universities and our industries. The second is the need to strengthen our system of education. And the third is the challenge to U.S. trade and technology posed by a number of foreign countries.” He reviews each of these.

 

BASIC RESEARCH

Hewlett says for many years America had the reputation as being a “fountainhead of innovation.” And, during the 19^th and early 20^th centuries the private sector was the stream of innovation – with individuals and business organizations exploring the frontiers of science and utilizing the products of technology.

 

The role of government as a “massive and then dominant factor in research,” Hewlett says, “grew out of the experiences of World War II. To undertake the various jobs of defense and national security required huge outlays of money and manpower that only a national government could muster.”

 

The government naturally turned to universities as a source of talent, and ultimately the government became the chief provider of funds for academic research. Industry’s contribution, on the other hand, has been quite modest, according to the National Science Foundation. Hewlett  says industry has contributed “only from 4 to 6 percent of total academic research and development funding …during the years 1960 to 1981.”

 

Hewlett  points to a National Science Foundation report that shows a trend of significant increases in R&D spending in Japan, West Germany, France and the United Kingdom. Considering the interrelationships of technology and productivity, “some of these countries may surpass the U.S. in productivity if present trends continue,” he says.

 

 

FOREIGN COMPETITION

Hewlett points to the “distressing problem” of the rule in the U.S. that companies must play on a “level field” – a one-on-one match between competing firms. On he other hand, some foreign countries, as a mater of national policy, become partners with industry. Powerful alliances are formed, cartels encouraged, R&D subsidized, exports subsidized.

 

“This makes quite a different ball game,” Hewlett says, and he gives some examples: The Boeing Aircraft Company in the U.S. is facing competition from the European Airbus. “Airbus Industries,” he says, “formed by the governments of six European nations, has been highly successful in establishing a major market position. The infusion of large sums of money over an extended period is its chief source of strength. Airbus promotion has included reported economic inducements beyond favorable financing. Examples are landing rights, trade concessions, subsidy to cover airline operating loss, and military equipment. This meant government-to-government negotiations to secure directed procurement of the national airlines to buy Airbus.”

 

“The government of France has nationalized many of the key industries of that country. The question arises: What will be the terms and conditions for a private-sector company that attempts to compete against these nationalized firms? And what kinds of subsidies will be available to the nationalized firms when competing abroad?”

 

Another example he gives is in Japan. “Japan,” he says, “represents a clear example of a national commitment to specific industrial goals. One by one, it has targeted major sectors of the international market for sale of its auto, steel, consumer electronics and now computer products. Never before has the world seen such a concerted marshaling of national resources in the name of international trade. To date they have been outstandingly successful with this strategy.”

 

“It is clear, however,” Hewlett says, “that a response in kind to these and other examples would be contrary to the U.S. tradition of free enterprise and our laws governing competition. I am convinced that our anti-trust laws on the whole have been beneficial to U.S. industry. However, these laws need to be reviewed from time to time in light of changing conditions. In fact, the government has recognized this problem, and the department of commerce has just recently issued new guidelines that exempt shared research projects from anti-trust prosecution, providing they meet certain guidelines.”

 

Hewlett says CIS is “just such a venture, and one that meets the guidelines of the Commerce Department. More than that it is an imaginative response to the three problems I mentioned: the inadequacy of U.S. spending on basic research, the need to strengthen the educational system, and the deterioration of our competitive position in international trade.”

 

EDUCATIONAL NEEDS

Beyond the benefits of cooperative ventures like CIS, Hewlett says “industry must also take a more direct and active role in solving problems of educational resources. Foremost among these problems is the declining capacity of U.S. colleges and universities to develop the professional skills that will be needed in many technical fields in the years ahead.

 

“Two years ago, for example, an American Electronics Association survey of members indicted  major shortfall of graduates in future years. The surveyed firms projected a need of from 10,000 to 25,000 more graduates than our colleges and universities expect to produce.

 

“Part of the problem is in the shortage of funds to provide adequate faculty salaries. Most recent estimates place the engineering faculty shortage as one in ten, with even larger gaps for some of the more specialized technologies.”

 

Hewlett sees ways that industry can help. “One is to provide incentives that will make such faculty positions more attractive and competitive. As an example, Hewlett-Packard Company has committed $6 million to develop new electrical engineering and computer science faculty at 22 selected universities between 1982 and 1987.

 

“The program, developed jointly with the American Electronics Association, is designed to redirect the career interest of some superior students toward academia instead of industry. Its specific objective is to develop university faculty members, not Ph.D. graduates who will then be recruited by industry.”

 

“Finally, our pre-college education system is clearly in deep trouble with regard to the teaching of sciences and mathematics. A 1982 survey disclosed shortages of high school teachers of math, chemistry and physics in most of our states. Other studies tell us that the graduates of our secondary schools have fallen behind their counterparts of a number of other countries in quantitative skills and in understanding of science.”

 

“Let me conclude by offering my heartiest congratulations to the Board of Trustees of Stanford University, the sponsoring companies, and especially the co-directors –Professor John Linville and Professor James (Jim) Meindl – for your faith and support in bringing CIS so close to reality. Thank you.”

 

 

 

Box 3, Folder 43 – General Speeches

 

September 14, 1983 – “The Full Circle: Science Education and the Liberal Arts,” Oakland, CA

 

9/14/83, Copy of typewritten text of speech. Hewlett, a former trustee of Mills College, received the honorary Doctor of Laws degree and gave the following speech:

 

Hewlett says he wants to provide some historical background on the difficulty of  establishing education in the sciences in the early 19^th century, and how, once established, it recognized the essential nature of liberal education. “Now,” he says, “the circle is closed, and liberal arts needs to recognize the generality of science.”

 

Hewlett says he was stimulated  to study the growth of science education by a book he came across some years earlier called ‘Technology and the Academics,’ by Eric Ashby, wherein Ashby described the difficulties in introducing science education into the universities of England. Hewlett says he will base much of his introduction to the subject on the problems in England since “many of the techniques used to solve these problems found their way into this country.”

 

Based on Ashby’s book, Hewlett says the English universities in the 19^th century had little interest in science – somewhat better in Scottish schools. The situation was better on the continent – scientific inquiry flourished in France. Students from abroad came to Germany to study the new emphasis on science.

 

By the mid to late 1800s Hewlett says the “British began to realize that a knowledge of science was in the national interest if England was to continue its dominant position in the field of manufacturing. Darwin’s Origin of the Species, published in 1859, generated a tremendous interest in England…an interest that sparked the final effort for an introduction of science into higher education.”

 

Hewlett says “Education in the United States in some ways tracked what was happening in England. Of the three oldest colleges in the U.S., Harvard and Yale were founded primarily for the training of ministers…. The general level of education was low.”

 

In the 19^th century, pressure rose for some technical education in the U.S. Hewlett describes how, “in response to this need, the Massachusetts Institute of Technology was founded in 1859, and was modeled after the English technical institutes. Thirty-five years earlier, Rensselaer Polytechnic Institute had been founded in upper New York state and was modeled after the Ecole Polytechnique in Paris. In 1847, Lawrence Science School was founded and 25 years later, was incorporated into Harvard as the Graduate school of Applied Science.”

 

“U.S. education was strongly influenced by parallel developments in England and on the continent, modified to fit its own needs.” Science had been established as an essential component of higher education.

 

“By the end of the first World War it became apparent that some element of liberal education should be required in the purely technical schools. In the mid-thirties, John Buchard set up a department of Humanities at MIT….A second step had been taken and science now firmly established, began to move back towards liberal education.

 

“ The final step is now upon us – the recognition that science education is an essential part of any liberal education.” To expand on this thought Hewlett talks about the computer. “I chose this subject,” he says, “because of its high visibility, but one must remember that a computer is only a product of science. In discussing computers and education, I am not talking about computer aided education, but the actual use [of  computers] by students themselves.

 

“The uses in undergraduate education are diverse and hard to define,” he says. “The library is one of the first possible applications where a terminal can easily replace the old card file, but its uses are far more general. I inquired at Stanford about undergraduate usage, and to my surprise found that 20% of undergraduate computer time was used by students in the Humanities and Social Sciences. I was also informed that there is an increasing demand for computers as word processors, obviously for reports and term papers. For one of the new dormitories, serious consideration is being given to providing a terminal for each student.

 

“Graduate usage of computers is more obvious, particularly as a research tool. Most areas of research can make effective use of computers for such purposes as the study of ancient and modern languages to statistical studies in social sciences, for management of research libraries to printing texts prepared in such fonts as Greek and Cyrilic. [sic]

 

Hewlett says “The role of science in a liberal arts college should not be to turn out professional chemists or physicists. The role of science teaching should be to provide students with sufficient knowledge of science to allow them to make their own judgments and not to depend solely on others.“

 

“If science is essential, how do we go about introducing it into liberal arts education,” Hewlett asks. He sees two parts to this problem one related to primary and secondary schools, and the other related to the college and university structure. “Our secondary school structure has been deteriorating for 20 years,” he says. “It is indeed a disaster. We are not going to correct it overnight. I will not dwell further on this subject, but I am reminded that all my children went to Palo Alto High School, which had a fine science department. When the old science teacher retired, the football coach replaced him.

 

“At the college level, I am convinced that some form of basic science must be required of all students. This may not be greeted with uniform enthusiasm. I did not enjoy taking western civilization, but nonetheless, I think these basic courses must be introduced. In general, science teaching should be designed to stress the basic laws that govern the way the physical world operates. To achieve this, certain tools are necessary. Mathematics is one of them. If a Freshman is deficient in math, perhaps there should be a course in ‘dumb-bell’ math, but please don’t call it that. A second would be a working knowledge of statistics, for example, one should know why using the average of averages can lead to serious errors.

 

“And finally, why am I discussing science in a liberal arts college to such a diverse group – freshmen to seniors, graduate students and faculty and guests in general? For the entering classes, the purpose is obvious. For the upper classes, a warning of future needs should be evident. For the guests, a reminder that in this day and age, there is no end to learning. Once it was thought that after having received a degree from a college or university, studies were over. We can no longer rest on this concept. Education must be viewed as a current and never ending process.”

 

9/14/83, Copy of the Convocation Program

 

 

Box 3, Folder 44 – General Speeches

 

November 21, 1983 – AEA 40^th Anniversary Remarks, Location not given

 

11/21/83, Copy of typewritten text of talk with handwritten notes by Hewlett

 

Looking back forty years Hewlett recalls the early days of the organization that was to become AEA [American Electronics Association]. “That group had a membership of 25 companies,” he says. “The Hewlett-Packard Company had 45 employees, the transistor, the integrated circuit, and the microprocessor had yet to be invented. Computing was in its infancy, and Dave Packard and I were a whole lot younger.

 

“Today, the American Electronics Association is celebrating its fortieth anniversary with 2400 member companies representing one-and-a-quarter million people.

 

“And the Hewlett-Packard Company has 72,000 employees worldwide.

 

“The transistor, the integrated circuit, the microprocessor and a host of other advances in electronics technology have revolutionized the way the world works, plays, and communicates. Computers and computational devices have entered every aspect of modern life.

 

“And Dave and I are a bit older.”

 

Surmising that many people may be wondering what lies ahead, reflecting the uncertainty of the times, Hewlett says newspaper headlines can give the impression of  “a bubble bursting. Some companies are quitting the home computer business, and others are filing for bankruptcy. Some companies are reporting slower growth and disappointing earnings, and others are announcing staggering losses. And that sensitive barometer, the stock market, has reflected the uncertainty by a volatile treatment of electronic stock prices.”

 

Seeing that people are worried about competition from abroad, particularly from the Japanese, Hewlett says “I don’t think it would be amiss to say that perhaps, as we celebrate forty years together, we might be asking ourselves whether we can face the next decades with any kind of confidence. I think we can.”

 

In considering the future, Hewlett, reviews the past. He says the electronics industry has a “solid record of innovation, of making it easier, faster, and less costly to perform a task using electronics technology.”

 

He cites the electronic calculator as an example. He says that when they first introduced the HP-35 pocket calculator, they would have been pleased to sell ten thousand of them in the first year. Actually they sold over a hundred thousand that first year. “And within five years,” he says, “a product that had never been dreamed of before had completely supplanted one of the one of the basic tools of the engineer – the slide rule.

 

“Our industry’s history is filled with stories like this. It has been an ongoing process of using innovation to make our products more powerful, less costly, and easier to use. The result of our efforts has been tremendous growth and the movement of electronic technology into all areas of our lives – into our factories, our offices, our hospitals, our schools, and into many of the products we use in our homes.”

 

Hewlett feels the Japanese challenge is overrated. “They’re tough competitors, to be sure,” he says. “But we do drive the technology. Even where they have been successful, we were the initiators of the technology – VLSI, robotics, statistical quality control. They benefited from our oversight, not from any basic weakness on our part. The Japanese presence in our markets should be welcomed for forcing us to focus on creating real value, not speculative value. We are fully capable of matching their record for quality and I believe we are entering a new dawn of productive labor-management relations.”

 

He urges everyone to get “a firm grasp on our strengths. As a country, we’re financially strong. We understand marketing in a way few nations do. We are the world leaders in technology, and we can maintain that strong technical position if we keep our eyes on the ball.”

 

He lists some action items: “Use the R&D tax credits for increased investment in research. Let’s scrutinize our own research carefully and not let other nations benefit from our oversights. Let’s continue our support of collaborative research vehicles like Stanford’s Center for Integrated Systems. And let’s continue our support for engineering education and the maintenance of a strong basic research capability at our nation’s universities.”

 

Returning to the AEA, and the value the umbrella it has provided to all members, Hewlett says “Whether the subject is increased R&D tax credits or engineering education, the AEA has spoken out both effectively and in a timely manner. We have all benefited from its credibility and its hard efforts on our behalf. We’re not just celebrating forty years this evening. We’re celebrating forty years of solid accomplishment and the knowledge that the best years are yet to come.

 

“Thank you”

 

11/10/83, Memo from public relations person Katie Nutter, to Hewlett, transmitting a draft of this speech.

Box 3, Folder 39 – General Speeches

 

March 25, 1982 – “The Human Side of Management,” University of Notre Dame, IN

 

3/25/82, Copy of typewritten text of speech    (See also speech May, 1992, Random thoughts on The HP Way)

 

In talking about this subject Hewlett says he would like to draw upon “almost 43 years of direct shared-management responsibility in a company that Dave Packard and I founded in 1939 – a period that saw the company grow from just two people to one that now employs about 65,000 people. I particularly want to talk about the importance we placed on the individual from the very beginning. In no way do I want to suggest that we have ‘all the answers’, or that this is the only way to do it. But sometimes it helps to go from the abstract to the concrete, and so with this in mind let me tell you a little bit about the development of Hewlett-Packard Company.”

 

He reminds his audience that both he and Packard were products of the great depression, which influenced their decisions on how a company should be run. They did not want to run a ‘hire and fire’ operation, sought achieve a loyal and dedicated work force.  And they thought this work force should, to some extent, share in the progress of the company. “Secondly,” Hewlett says, “we wished to operate, as much as possible, on a pay-as-you-go basis, that our growth be financed by our earnings and not by debt.”

 

When they first started out Hewlett and Packard did almost every job in the place from sweeping the floors to keeping the books, to inventing the products. They were so small they had to hire whomever they could and train them, hoping they would work out. Implementing their belief that employees should share in the progress of the company they initiated a production bonus plan. The idea was to pay 30 percent of sales to employees through pay and bonus. The same percentage was paid to everyone from janitor to top manager.

 

Hewlett tells of the production manager they had who was not working out in spite of all their efforts to improve his management skills. They had to release him, but Hewlett says the decision “is still with us, and in subsequent years has led us to make every effort to find an appropriate niche for a loyal employee.”

 

In another early situation in the 1940s Hewlett tells of the employee who came down with Tuberculosis and had to take a two year leave of absence. They were able to provide some financial help for the employee and his family, but they concluded this was a problem they had to solve on a permanent basis. They established a plan for catastrophic medical insurance to protect employees in situations like this.

 

In the early years they had to work with the people on hand. They had to sort out employees according to their abilities, their education or training background. Hewlett says many of those employees are still with the company, a number in key management positions despite the fact they never went to college. On the other hand some were “forced to recognize that there were limits to their future progress in the company. Hewlett says they “…worked hard to deal with this problem and, almost without exception, were able to find appropriate jobs for them within the organization.” In this way they were able to preserve their workforce.

 

Hewlett says for a considerable time they did not have a Personnel Department. “We had strong convictions that one of a manager’s most important jobs was to deal directly with his employees. We did not want to impose any artificial barriers to hinder direct communication.”

 

Hewlett describes another technique they employed. “The informal structure of the company led to what was eventually known as the ‘open door’ policy. In a sense this said that any employee could come in and talk with Dave or me or any other senior executive about his problems. Although such a technique could easily be abused, it never was, and it served as an excellent safety valve for the frustrations that occur in any organization.”

 

Hewlett says 1957 was a turning point for the company. “Up to that time,” he says, “HP was directed by the owner-founders operating in a single plant in Palo Alto, California. Most of the basic policies that directed the company were firmly in place, and we had a good team of people running the operation.

 

“But there were signs of strain appearing. I think the principal concern Dave and I had was that, as it increased in size, the company might lose the intimacy we felt was so important to the organization. Therefore, in January 1957, Dave and I took the top ten or twelve people of the company on a weekend retreat to discuss the future of the company, and to decide what action might be taken to insure its continued success.”

 

As a result of the conclusions reached by this group they decided to divisionalize the company along product lines. “We felt,” Hewlett says, “that by reducing the size of the operating units and decreasing the span of control, we would provide an opportunity to recapture the personal touch that everyone felt was so important. The managers of these divisions would assume direct responsibility for the health and welfare of their charge, but they would need some guidance. Second it seemed that this guidance could best be achieved with a simple set of policy statements. In fact, these statements consisted of no more than a codification of past company policies.”

 

Hewlett summarizes these statements. The first relates to profit and sets a specific target, and says that “all the other things we wish to achieve rested on the success of this first objective.”

 

The second deals with and defines our product line; “…we should concentrate on the things we know and do best.

 

The third objective relates to customers and stressed “inexpensive quality.”

 

The fourth objective in part reads, “To provide employment opportunities for HP people that include the opportunity to share in the company’s success which they make possible, further, to provide for their job security based on their performance,  and to provide the opportunity for personal satisfaction that comes from a sense of accomplishment in their work.”

 

On the matter of job security Hewlett says “The objective of job security is shown in a number of ways. Hewlett-Packard has attempted to avoid large ups and downs in its production program because these large ups and downs would require that we hire people for a short period of time and lay them off when we do not need them. It is evidenced by the fact that we have attempted to be lenient with some of our older employees who, as we have grown, have not measured up to the standards we might have reason to expect. But in the interest of those employees who are carrying their full load and who are growing with the company, we have not felt committed to accept anything like an absolute tenure status. Nor do we feel that this policy implies that we must recognize seniority except in cases where other factors are reasonably favorable.”

 

“The fifth objective dealt with meeting the obligations of good citizenship, while the sixth spelled out our policy on growth.

 

“These objectives are somewhat similar to the U.S. Constitution – a document expressing basic ideals subject to current interpretation and to amendment. If you look at our objectives, as they exist today, you would see how little they have changed despite a hundred-fold increase in sales and a 50-fold growth in employment. And instead of a single plant operation, [we are] a company operating with over 50 management units in about 32 countries around the world.”

 

The recommendations of the 1957 meeting were quickly implemented by divisionalization and by wide distribution of the objectives. “But,” Hewlett says,   “these were not the only changes that took place at Hewlett-Packard that year. For one, the company changed from a privately held corporation to one that was publicly traded. With our stock now on the market, we were able to reward many of our employees with stock bonuses. These bonuses went to a wide variety of officers and employees who had played important roles in the company’s past performance.

 

“We concluded that the time had come to have a corporate personnel department with a clearly stated role: to support the management team. In no way was it to supplant the direct manager/employee relationship which we considered so important.

 

“In the next three years, basic changes continued to occur. 1958 saw expansion into the European market with sales headquarters in Geneva, Switzerland. To expand our product line we made the first of several acquisitions. A stock option plan was instituted not just for the top few managers, but with the thought that a broad distribution of relatively small options (100 shares) could have real value as a formal indication of a job well done.”

 

Going on describing changes, Hewlett says a second manufacturing plant was established in 1959, not in the U.S. but in Germany. A second acquisition was made in 1959 and an employee stock purchase plan was implemented. An employee stock purchase plan with a 25% subsidy plan was established for employees.

 

1960 saw the establishment of a manufacturing plant in Loveland, Colorado, and a cash profit sharing plan was established to replace the former production bonus plan. A key question was whether the bonus be based on individual plant performance, or should the benefits be spread uniformly through the corporation? The decision was that it be determined on the basis of corporate performance, so as  not to sow the seeds of discord among divisions.

 

Looking at HP four years after the establishment of divisions and the concept of management by objectives, Hewlett sees considerable progress. “From an operation in a single plant and a unified management structure with sales of about 20 million dollars, and about 1200 employees, it had grown to a complex organization, with 10 divisions operating in four locations inside the U.S.- and with employees and sales each increased by approximately 2 1/2 to 1.”

 

Hewlett says he feels the new management structure had been tested and it worked. “The recipe was simple: 1) have objectives; 2) explain and teach them; 3) gain agreement with modification if necessary; 4) have everyone share in the success of achievement; and 5) be egalitarian to assure that communications are open.”

 

He notes that the system worked even in a place like Germany, a place with very different traditions and background. He says they had greater problems with some of the U.S. acquisitions, particularly where they had operated under a more autocratic rule.

 

Hewlett says he will not “burden” his audience with a year by year description of developments over the following years. “Suffice it to say we greatly reduced our expansion via the acquisition route and turned more to internally generated concepts. By far, the most important of our expansions was in the computational area, first in the scientific and technical area, more recently in general applications.

 

During the following years Hewlett says they continued to give the development and welfare of their people a high priority. “We have not been afraid to experiment with new ideas,” he says. An example would be doing away with the concept of time clocks and implementing flex-time. Under this plan there is a window for starting work of about two hours, say 6:30 to 8:30 AM. Employees put in their eight hours and then may leave.

 

An idea involving a four-day week of ten hours each did not work out well and they dropped it. But another plan combining vacation and sick leave into a single package “greatly simplified the complex problem of sick leave accrual and should do much to solve this difficult problem.”

 

“One of the most dramatic examples of working with our employees,” Hewlett says, “occurred during a recession in early 1970. It became evident that we had about 10% more employees than we needed for the production schedule. Rather than lay off or furlough 10% of the work force, we simply decided that everyone in the company would take every other Friday off without pay. It worked very well. Employee after employee commented how much they appreciated the opportunity for continued employment, albeit at a reduced pay rate, when on all sides they saw people who were out of a job.”  After about six months of this they were able to return to their regular schedule.

 

Hewlett says there are many ways they try to take their employees’ wishes into consideration. “One is to pay heed to the area of the country in which an employee would like to work. This cannot always be achieved but, by and large, much can be done.

 

“Many companies have a policy saying that once an employee leaves you, he will not be eligible for re-employment. We have had a number of people leave us because opportunities seemed greater elsewhere. We take the view that as long as they have not worked for a direct competitor, and if they have a good record they are welcome back. They know the company, need no retraining, and usually are much happier for having had an additional work experience.”

 

Hewlett sees HP’s policy of providing an “open door” for employees who feel they have not been treated fairly the right to talk to higher levels of management about the problem as a way management can get direct feedback on how employees feel. Hewlett says they also want more general feedback from employees. “One way we have tried, and which has been fairly successful, is a technique we call ‘communication luncheons.’ A senior executive will visit a division and ask to have lunch with a group of employees, 15 or so at the most; no supervisors are invited.”

 

“The format is very simple. After light conversation to break down the barriers, usually an employee will ask a question about something in the company that he does not understand or with which he is unhappy. This provides an opportunity to discuss company policy or company problems. Sometimes these items are trivial, sometimes the ‘word’ has not gotten down; sometimes the problems are strictly personal and must be treated with great care so as not to interfere with the supervisory process.”

 

Hewlett describes another approach which they tried to obtain “feed back on how our U.S. people felt about the company.” They employed the services of a company to survey employees with several objectives in mind:

 

1. “Give employees a chance to express their opinions about the work place

2.  Provide an opportunity for the company to listen to employees’ concern and to

3.  Compare HP with other large companies with regard to the attitudes of employees, and

4.  Set a standard, or benchmark, for future surveys, possibly in other parts of the HP world.”

 

Hewlett says “the responses to this survey were very positive. It was clear that the people liked the survey itself as a way of communicating their views. But it was not a one-way program: the survey results were made known to the employees and, where there appeared to be deficiencies, positive remedial actions were taken, and these were reported. The recommendations for flexible time off came from this source.”

 

In summing up the matter of employee feedback, Hewlett says “What I have been endeavoring to demonstrate is that there are many creative ways by which an organization can learn the needs of employees and thereby work with them to help them develop a better life style – a happier work place, a more meaningful existence – all at practically no added cost to the organization.”

 

“The United States is rapidly discovering that it must be competitive in world markets, and that both cost and quality are factors. Productivity is the name of the game, and gains in productivity will come only when better understanding and better relationships exist between management and the work force.

 

“We must find better solutions to the adversary relationships that have so long dominated the American labor scene. Management is in a position to take the lead in such a new relationship. Managers have traditionally developed the skills in finance, planning, marketing and production techniques. Too often the relations with their people have been assigned a secondary role. This is too important a subject not to receive first-line attention. In this regard we could learn much from the Japanese. We must reinvest in the human side of management.”

 

 

Box 3, Folder 40 – General Speeches

 

May 17, 1982 – Dedication of HP Plant at Evry, France

 

Text of speech handwritten by Hewlett

 

“I am very sorry,” Hewlett says, “that I cannot address you in French. It is my loss.

 

“Yesterday I was taken to Claude Monte’s garden in Givereny and enjoyed it greatly. I couldn’t help but think of what the wonderful impressionist artists such as Monte, Renoir, Monet gave to the world through their art. I also remember the great contributions to science by such people as Pasteur, in the biological sciences, and the Curies in the physical science.”

 

“”It was no coincidence that just about 7 years ago we completed our first plant in Grenoble and how successful the organization has been. Indeed we have just completed a second plant on the same  site, roughly doubling our present space.”

 

“We are finding a great synergy between such technologies developed in our own laboratories in the U.S. and the highly trained and educated work force in France. It is exciting to see such technologies transplanted to French soil and now flower.

 

“We see now an efficient force in Europe with our French operation. France is the 4^th largest exporter in the world and we are doing our share with 80% of the product made in France being exported. There are at the present time no Americans in management positions in France.

 

“It is no accident that we have taken an option on a parcel of land of about 60 hectares near Lyon to provide space for further expansion.”

Box 3, Folder 38 – General Speeches

 

February 26, 1981 – “Human Values in a Competitive Environment –A Personal Reflection,” Stanford Business School

 

2/26/81, Outline of talk handwritten by Hewlett

 

This is a brief recap of the start of HP. Hewlett says it is not easy to describe this history without sounding self-righteous. But he starts out  “to take you through some of the early formative years, when things were simpler and clearer.” He admits that they did indeed start in a garage – “one car at that time.”

 

He recalls two important factors that need to be kept in mind:

 

1)    Both he and Dave Packard were products of the depression

2)    Because they both did all of the work around the place, they had great empathy for their people.

 

Several factors marked their early period:

 

1)    They wanted no ‘hire and fire’ policy

2)    Because they were a small, informal, company they had close personal relationships with their people

3)    Had the novel idea of sharing their profits

4)    Followed an ‘open door’ policy

5)    Wrote a statement of corporate objectives in 1957

 

In a later period they:

 

1)    Acquired companies

2)    Expanded outside the U.S. and outside California

3)    Certain problems became acute – early employees had peaked – always had worked to “re-pot” before – now had to let go

4)    Willingness to experiment with ideas that would accommodate employee life-style wishes in company  – flexible hours, 4-day work week

5)    9 day fortnight during recession

6)    Communications lunches

 

Conclusions

 

“I know that [our practices] were the product of very strong beliefs that Dave and have always shared re the dignity of fellow man. They are a product of our home background, our religious teaching and our ability to observe.”

Box 3, Folder 36 – General Speeches

 

May 5, 1980 – Personnel Managers Conference, Silverado, CA

(See also speeches dated 3/23/76 and 4/20/77, and 3/25/82)

5/5/80, Notes for speech handwritten by Hewlett on the back of an old typewritten speech

 

This speech is essentially the same as that of April 20, 1977 and is not repeated here.

 

 

Box 3, Folder 37 – General Speeches

 

November 11, 1980 – Fellowship Forum, Redwood City, CA

 

11/11/80,  Notes for talk handwritten by Hewlett in pencil on notebook paper. There is no indication in the folder of who the audience was. The short talk is a review of the history of HP, and it is not covered here.