Box 3, Folder 35 – General Speeches

 

November 5, 1979 – GTE Management Meeting, Engineering Session, Hilton Head SC

 

11/5/79, Speech, handwritten by Hewlett

Hewlett apparently was invited to attend this three day seminar of GTE managers, and this is a speech he gave to engineering people on day three.

 

He tells the group that he is not going to try and tell them how to run their R& D   program, saying “I have seen no sign that you need any help.” But he does say that he can share his experiences in managing the engineering program at HP.

 

Hewlett provides some background on HP and current financial figures. He says it is roughly ½ the size of GTE.

 

He describes the organizational structure of HP, divisions and groups, and says the product divisions:

a)     Must make a profit

b)    Must finance their own growth

c)     Must be making a product contribution

 

Speaking of control of the divisions, Hewlett describes the Primary methods:

1)    Groups, and their “small staff”

2)    Corporate visit once a year – 2 years for some

3)    Strong internal accounting system, designed to emphasize elements of corporate policy

4)    Responsible for preparation of a rolling 3 year intermediate range plan

5)    Responsible for the preparation and execution of a detailed annual plan

6)    Key element is allocation of R&D funds

 

In discussing the R&D function in the instrument field Hewlett lists some relevant factors, such as:

 

1)    Leans much more toward a “free field style” than a more rigid fixed style

2)    On funding package solutions for a customer – can spend a great deal to solve a specific problem if there is a broad enough user need.

3)    Control R&D cost and of overhead. He says he once estimated that for each dollar spent on R&D, 5 dollars of pretax income was returned to the company.

4)    Wide open field with great opportunity for innovation – primarily a question of matching need and technical solution

5)    Importance of “freedom of design”

6)    Importance of “next bench syndrome”

7)    Excellent training ground for young engineers – can give the engineer a real feeling of accomplishment and job satisfaction.

 

Hewlett adds that “To support these R&D activities we budget 9 to 10% of sales – about 1% to central labs, 8 or 9% to division support.”

 

On the role of the central labs Hewlett list some points:

 

1)    Divisions too busy doing their own thing

2)    Place to spawn new ideas and new processes

3)    High risk, low cost philosophy

 

On the computer field Hewlett says:

 

a)     Need to have a total strategy

b)    Projects can be very long and detailed. HP is a small company but spent 60 engineers for 3 1/2 years on an operating system. Well over 200 man years to wind out.

c)     Had great difficulty  in learning how to operate in the field – low morale – black arm bands

d)    Have our act together now, have the basic strategic plan, have learned how to take the best out of HP background and apply to new highly competitive field

e)     Work can be made interesting and rewarding if one works at it.

 

Conclusions

 

“I have not told you anything that you did not already know, but I hope that I have reinforced that knowledge with examples and numbers.

 

“If there were only one way to run an R&D program it would have been discovered long ago and would be in universal use throughout industry – until someone found a better way.

 

“One point is evident that some level of planning and control is essential  – the need varies from product line to product line, but we must have it.

 

“But this very planning and control tends to curb innovation in the professional staff, particularly if laid on with a heavy hand – it should be used in moderation.

 

“Engineers and scientists as I know them derive great satisfaction from finding practical solutions to real problems and in seeing the fruits of their labor put to a good use. They must be given every opportunity to find their work exciting and fulfilling.”

 

Hewlett says he enjoyed sitting in on the sessions over the last two days, particularly the one on Human Resource activities. He says he was disturbed by some of the answers to a little survey taken in the session. To the question ‘Are you thinking of what your professional staff really wants?’, 26 people answered ‘yes’, but 20 said ‘maybe’ and 13 said ‘no’.

 

“People should not be babies or treated in a preferential way, but you are dealing with a creative and by and large dedicated group of people. To the degree to which you can match their aspirations to the needs of the corporation you will achieve a maximum of return to the company and create the strongest type of dedication and loyalty to the company. The care and feeding of a professional staff is a full time job.”

Box 3, Folder 32 – General Speeches

 

January 29-31, 1978 – Management Meeting, Silverado, CA

 

1/29/78, Copy of typewritten text of remarks, with first page lead in handwritten by Hewlett.

 

Hewlett talks about the forthcoming transition in management  in the same vein as he did when talking to the Toronto sales Office on October 19, 1977. [See speech folder of that date] Again he talks of he and Dave being difficult to replace, the two of them as “legends,” and the heritage of “cultural control,” or, as it has been known at HP,  “The HP Way.”

 

And he again describes the evolution in organizational changes over the years, says these changes will continue.

 

He ends saying he is very comfortable with the new management team.

 

1/29/78, Copy of the agenda for the meeting, and a list of attendees

 

 

Box 3, Folder 33 – General Speeches

 

February 23-24, 1978 – Talk about 1977 results, review of company history, and the forthcoming change in management

 

2/23-24/78, Outline of remarks, handwritten by Hewlett

 

Hewlett covers the essential financial statistics and ends with the statement that these excellent results are due to “the great strength of our management team, for it is basically this management that in the last year or so has been responsible for the improved performance of the company.”

 

He then says he wants to switch to another subject. “I will be retiring as CEO in just three months,” he says, […and I would like] “to make a few comments about the company over the years, – the key changes that have taken place and some of the problems and challenges that lie ahead for the new management team.”

 

[The company was] “founded in 1939 as a partnership. Changed to corporation in 1947 with assets of a little over $400,000 – all stock owned by DP and WRH.

 

“The next ten years was a period of consolidation with the years 1957-58 being key and critical.

 

“By 1958 [we were]:

 

A relatively small company committed to the development, manufacture and marketing of electronic test equipment

a)     Sales 30 million

b)    1750 employees

c)     Have completed the second major change in ownership by going public and taking on the first part time outside director

 

“In 1958, just 20 years ago, some profound significant changes were made that are now hallmarks of the company:

 

1)     Concern about the company size lead to a program of decentralization

2)     Management by Objectives

3)     Entry into international market

4)     A few years earlier had begun a program of college recruitment for engineers – in 1958 expanded [this program] to engineers who had had graduate business training. Interesting to note that John Young, who is the President of HP, was hired in that year.

5)     Introduced a major in–house training program at the foreman and supervisor level throughout the company

6)     To coordinate our expanded personnel and training function, employed our first professionally trained personnel officer, Ray Wilbur, who, by coincidence will be retiring this year.

7)     Almost subconsciously we were gearing up to be a major firm in our field of electronics. Today’s sales are almost 10 times those of 1958.

 

“We can now skip ahead another 10 years and we find that indeed we had been able to build on those structural changes

1)    From being just in electronic instruments we are in:

Desk calculators

Computers

Medical electronics

Analytical electronics

Components

All basic elements of the company today

 

2)    Our international business had blossomed, and whereas this was about 10% in 1958 [it is] now almost 26% of sales.

 

3)    Our decentralized program had progressed to the point that for reason of management span of control we had that year added a group structure. Again, it is interesting to note that John Young at that time was made a VP and placed in charge of one of the groups.

 

4)    That was the year we got rid of Packard and sent him off to Washington to straighten out the Defense Department

 

“That in a sense brings us another 10 years – to today.

 

1)    Shortly will take another major step, for in May when I retire from direct active management, we will see the company change from one managed by the founder-owners to one managed by professional managers

2)    It is worth therefore taking a look at the company at this point in time and view its strengths – its problems and its future.

3)    It is a major international company in the field of electronics with about 40 separate operating divisions throughout the world

 

a)     Can identify about 50 market segments in which we operate –

b)    About 50% of our business comes from abroad – geographic divergence

c)     Sales running at about 15 billion, with 36,000 employee world wide

d)    Our basic operating strategy is based  on

 

1)    New products supported by strong R&D program

2)    Pay-as-you-go financing

3)    The dignity of the individual in our dealing with both our employees and our customers

4)    A sense of responsibility to the community at large

 

“The future

“What are our problems – easiest to say a list of non-problems

 

1)    New product ideas – new areas of profit, with our broad range of product experience we are in an ideal position to take advantage of future growth in the electronic industry

2)    We have demonstrated that we know how to make a profit and that we can finance future growth from such profit.

3)    We have a very strong and experienced management team

 

 

“Problems are basically of manager growth

 

1)    Based on a historical trend line, the next 5 years should see our employees increase by 20,000 people, with 7 million square feet of new plant space.

2)    Have the problem to manage and stimulate a much larger organization – to preserve The HP Way

3)    We must maintain a tight coupling between our expanded marketing operation and the technology on which growth depends

4)    Our area of greatest growth, computation, is also our area of most sophisticated competition. It is also an area of excellence. We must therefore work out careful strategies to capitalize on our strengths and experience in order to successfully carve out an important position in this rapidly expanding field.

5)    All I can say is that I have confidence that our new management team can successfully meet these challenges.”

 

 

Box 3, Folder 34 – General Speeches

 

March 3-7, 1978 – On Retirement as CEO, Villars, Europe

 

3/3-7/78, Hewlett’s handwritten outline for his remarks

 

Hewlett’s remarks here are very similar to those he gave in the above speech, February 23-24, 1978. After the conclusion of this part, he turn to a section he calls “One Last Thought”

 

“Although Dave and I will be taking a less active role in the day-to-day management of the company, we are in no way walking away from it. It simply is not possible to have spent your life in an endeavor such as HP and not have it a very  [large] part of you. There is still much counsel and guidance, grown out of years of experience, that we can offer the company even though the direct responsibility for running the company is elsewhere.

 

“I will add one further personal note that a large percentage of my friends are or were company people. They will still be so. HP Europe holds a very very special position in my heart….I have seen it grow from a small seed to a major element of the corporation. I have developed warm and personal friendships that will continue, as will my interest in the health and continued growth of this magnificent organization.

 

“Thank you.”

Box 3, Folder 29 – General Speeches

 

April 20, 1977 – “Technology and Profitable Growth,” General Electric Spring Conference, Bellaire, FL

 

4/20/77, Copy of the typewritten text of Hewlett’s speech

[See also speech dated March 23, 1976, “The Four Musts of Hewlett-Packard” and one dated May 5, 1980, Personnel conference at Silverado]

 

Hewlett is addressing a group of General Electric people and he notes that while HP has just reached the one billion a year sales level, GE was at that level 38 years ago when HP was just starting, so he acknowledges that “we are still a little bit behind you.”

 

“In a sense then,” Hewlett says, “my talking with you tonight about technology and profitable growth might seem like carrying coals to Newcastle. However, I have spent my entire professional life dealing with these matters, and I firmly believe that regardless of a company’s size some element of its operations can stimulate interest and lead to valuable discussion.”

 

Hewlett says he will try to be “fairly practical “ in his remarks, as he knows that engineers are practical people.

 

He recalls that when they started HP they found that people they hired wanted to do the right thing, and would do the right thing if given the opportunity. “We found,” he says, “that by respecting the dignity and worth of these people, there was much they could contribute. I believe that a great deal of what we subsequently accomplished in the company is a direct result of this very basic approach to people.”

 

Engineering of Opportunity

Managing the engineering effort was a learning process Hewlett says. Since they could not afford to hire top engineers they had to make the best use of their resources as they could. He says they derived something he calls “engineering of opportunity.”  Instead of telling their small engineering staff that they wanted a specific device developed they preferred to say “What technology can we apply to meet these …needs?”  And he says they were able to invent a large number of useful products for their customers while staying within the bounds of their technical capabilities.

 

Hewlett describes another learning experience. He says that during the mid-fifties somebody in the company thought up the concept of a “vintage chart,” upon which they plotted the annual sales of each of their products over a period of four or five years. “We found,” he says, “that the average life of a product was surprisingly long, and that our entire growth was heavily dependent upon adding a layer of new products each year. This impressed upon us …that the route to growth was through new products – products that contributed real value content to our catalog.”

 

Other Early Lessons

They also learned the hard rule, “If you want to do something, you had better earn the dollars first….This philosophy of pay-as-you-go also had a long-term influence on how we approached management problems.”

 

Hewlett describes another key learning experience, –“…discovering the advantage of having a relatively small group of people working together closely – people who knew what they were doing and where they were going.” They wanted to preserve this characteristic and believed the method of achieving this was to decentralize their operation – even though their volume was only about 50 million at the time. They also recognized that in order to follow a decentralized organization they would have to develop an overall operating philosophy to guide the decentralized units.

 

To do this he says they chose a concept “that is now popularly known as ‘management by objective,’” — a term he says they had not heard of at the time. He describes the decentralized organization as one where the organization was divided into “several small operating divisions with well-defined product lines, to assign managers with complete responsibility for all their functional areas, to provide them with some broad, general guidelines, and then keep track of the division’s performance.”

 

Broad Objectives

Hewlett says he and Dave Packard “sat down and wrote six corporate objectives. The first of these dealt with the essence of everything we were trying to do – make a profit. The other objectives covered customers, fields of interest, growth, people, and citizenship.

 

“Although we have reviewed and modified these objectives from time to time, they really have not changed very much over the years.” They did add a seventh objective in the mid 1960s which had to do with management techniques – a reflection of their increased size. “These objectives have withstood the test of time, and our ability to follow them so steadfastly has been a major factor in the company’s achievements.”

 

Four “Musts”

Hewlett says he tried to boil down these objectives into a few catch phrases, and he coined four “musts: – You must make a profit, you must make that profit by technological contribution, you must work through people to achieve these objectives, you must put back more into the community than you take out.”

 

Hewlett goes on to discuss each of these themes, and he starts with technology. “To make a technological contribution,” he says, “you have to have good people, and you have to have a proper atmosphere.  It is obvious…that good people attract good people, thus producing an exciting place to work. This is a positive feedback type of operation, and if you can get into this mode, it is extremely beneficial.”

 

Concerning the need to maintain a creative atmosphere, Hewlett says R&D people “don’t want to be on the sidelines; they want to feel that they have a major role in defining what a company does.”

 

“At HP, product decisions are almost always made between the divisional manager and the R&D personnel – not, in contrast with many companies, between the divisional manager and the marketing operation. In our business, we feel that – important as they are – marketing people must play a secondary role in the question of product definition.”

 

Being on the Cutting Edge

Hewlett says this is a very important for engineers, who want to be on the cutting edge of what the company plans to do – not simply asked to carry out a pre-determined course of action. “This… is the basis of one of our objectives – that you must make a technical contribution, not take a ‘me too’ approach.”

 

Engineering Management

The high degree of engineering involvement in HP’s entire program requires people in divisional management who understand engineering. “It is not by accident,” he says, “that 35 of our 36 or so divisions are headed by people with engineers’ degrees. (He adds, parenthetically, that less than a quarter have an MBA.) “This means…that we are taking people who are not trained in management and putting them into key management slots. In turn, this approach requires a strong commitment by top management to provide these people with considerable back-up support.”

 

Deep Commitment to ICs

Hewlett describes HP’s philosophy on IC fabrication. “We have,” he says, “nine divisions with integrated circuit facilities, and a tenth just coming on-stream. People from the semiconductor industry tell us that no one can afford to spread such sizable capital resources out among nine or ten areas – but we don’t look at it that way. Our feeling is that while we won’t make money on integrated circuits, per se, we will profit from the sale of products built around these tailor-made integrated circuits. As an indication of this, I would guess that probably 90 to 95% of our products now have one or more of our proprietary integrated circuits in them.”

 

Profit…A State of Mind

Making the substantial commitment of dollars into technologies such as ICs requires a high level of financial security. Hewlett says “One measure of financial security is whether you’ve been able to finance your growth from earnings, or whether you’ve had to engage heavily in debt financing. It is for this reason that we have continually stressed the importance of profits to HP people at all levels of the organization.

 

“Profit, as far as I am concerned, is a state of mind. It is not just something the boss is harping on; instead it is something that each person in the organization must be convinced is in his own best interest. Once that attitude prevails, each individual will have a direct concern that this part of the organization is making a profit. I think that concern is even more important for technical people. Because in a more sophisticated sense, profit is the difference between what an item cost you, and what your customers perceive its value to be –that is, the technical contribution if you are in a technical field. I think that every one of our technical people now appreciates this fact fully. They recognize that if you are going to make a profit, it has to be on the basis of some kind of contribution.”

 

Technology and Profitable Growth

Talking about his third “must,” working with people to achieve objectives, Hewlett says he doesn’t need to elaborate on this area because, of all the companies he knows, GE is “the most conscious of this need and has done the best job.” He adds only one comment: management by objective is a extremely costly program, personnel-wise. It requires a large number of managers because you are spreading the workload among a great many people. Additionally, if you are drawing your management talent from the engineering staff, it is important to recognize that these people have not necessarily been trained in basic management principles. Therefore, it is essential that you provide training and development programs and facilities to be sure that when you put these people into management positions, they are indeed able to handle them.”

 

Hewlett says he does not want to take the time to discuss the fourth “must,” …responsibility to the community. “That is a very broad area with many ramifications. I just want to assure you that we supported the concepts of good citizenship long before it became the popular thing to do.”

 

No Perfect System

Realizing that there is no perfect system for running a company – Hewlett says he can draw some general conclusions.

 

“We really have not solved the problem of the dual ladder. I know that you people have given this a lot of thought too, and the solution still lies in the future.

 

“In terms of management by objectives, I think we have had reasonably good results at the upper levels. The approach has been quite successful as a motivation for our management team. But I have some doubts as to the degree to which it operates at the lower level in the corporation – and that, of course, is one of the places we would like to have it operate most effectively. We intend to work on this problem.

 

“I believe we have been reasonably successful in making profit a viable concept in practically everything we do, and that the profit center itself has been satisfactory despite some short comings. We have accomplished this partly by our management-by-objectives approach, and partly by creating a special management accounting system that tends to remind managers where their primary focus should be.

 

“Finally, at HP we have committed ourselves to the concept that achieving profit and growth via a constructive R&D program on a pay-as-you-go basis is the path we want to follow. I see no reason why it will not continue to work for us just as well in the future.”

 

 

Box 3, Folder 30 – General Speeches

 

October 19-20, 1977 – Visit to Toronto Sales Office, Canada

 

10/19/77, Copy of typewritten text of speech

 

Hewlett says a few words about FY 1977 which is about to close. He says he “thinks it is going to be pretty good year – about 107% of quota in U.S., international a little weaker.”

 

“I really think the company is in very good shape – in a very strong financial position….It is my view…that we are probably in as good a position as I can recall we’ve ever been.”

 

And that leads into what Hewlett says he really would like to talk about – “the transition that is going to take place in management during the next few months.” He mentions the previous announcement that John Young has been elected President and Chief Operating Officer of the Company. He says that implies that “unless he does something horrible before I retire as chief executive officer he will assume that title.”

 

“Now I want to be very frank with you on this matter because I think it’s important for all HP people to understand what is happening and what is going to happen. These are not easy remarks for me to make. So I’ll tell you quite frankly that Dave and I are not doing to be easy fellows to replace. To be absolutely frank, it will be impossible! I’d be dishonest if I said anything different. But I think it’s better for us to make a decision now, when we have a choice, than have to do it at some later date on an involuntary basis.”

 

Hewlett points out that the change is not just a change in management, “it is a change from an owner-founder management to a professional management. We took a half-way step some years ago when we changed the company from a privately held company to a publicly held corporation. At the present time, the Hewlett and Packard families still own about half of the stock. This will be reduced in time. Inheritance taxes in the U.S. are such as to be almost confiscatory, and as you probably know, my wife’s estate sold quite a bit of HP stock simply to pay death taxes on that estate. The remainder will go into a charitable foundation and the foundation must sell some stock eventually to provide needed liquidity. So time will take care of disbursing much of these holdings.”

 

Hewlett says he has come to realize that Dave and he are getting to be legends. “I honestly say that modestly, but so many people come up and ask to shake my hand before I leave – you begin to sense how legends grow.”

 

“And perhaps people want legends. Perhaps they want to feel that there’s something special about people who lead them. And if that’s what they want, let them have it – although I must say I sometimes swallow pretty hard.

 

“I think the fact stands that Dave and I have held a special position in this company, that will not duplicated. But in the long run we’ve got to be replaced and, as I said, it’s better to do this on our own time schedule than involuntarily.” He also admits that he feels himself “running out of gas to some extent” – further indication that this is the right time.”

 

Hewlett tells of the Stanford professor who studied what he called HP’s ‘management by cultural control’ – The HP Way. “So I assure you,” Hewlett says, “that even if the new management team had an inclination to change the character of this company, they would have a hard time doing it. Because each one of you – and there are now 35,000  people in the company – would be there to protest indirectly, and to say, ‘This isn’t the way it’s done at HP.’”

 

“What you must realize is that there are going to be changes. There must be changes. In fact as John [Young] talks to you shortly about the next five years, you should begin to see how the kind of growth we foresee will inevitably pose problems. We’ill probably have twice as many divisions, for instance, if we follow our present policy. How will we control that number of divisions? Will six groups be right? Or will we need more groups, or fewer? Is the concept of three executive vice presidents the proper way to run this company? What will we do about the collision course that calculators and computers are following? And what role should the labs play in the company as it grows larger? Those are some of the problems we face, and we are going to have to make some changes to resolve them. I don’t know what those changes are going to be, but certainly John and his people are going to have to come up with some suggestions.”

 

“Dave and I have a great deal of confidence in the new team. I don’t think we would have recommended them to the board if we didn’t. It might just interest you to know how a decision like that comes about. I really think it has roots in our management by objective because under that concept a person is given the opportunity at the very early stage to make independent decisions, and to follow his own management style with the bounds of the corporate guidelines…. Speaking further about John Young, Hewlett says “He was known to the board, he was well known to the company, and in view of all who knew him, he was exceedingly well qualified to lead the company in its next generation of management.

 

“Now I probably have more at stake in this company than anyone in this room, except Dave, and I want to tell you that I feel comfortable with the new management team that is going to be with you next year directing the future of the company.

 

“Thank you”.

 

 

Box 3, Folder 31 – General Speeches

 

November 2, 1977 – Herbert Hoover Medal for Distinguished Service, Stanford Alumni Association, Location not given

 

11/2/77, Copy of typewritten statement, with handwritten notations by Hewlett

 

Hewlett says he is very honored to be the 10^th recipient of this award, especially when he looks at the names of the previous recipients.

 

He recalls that Herbert Hoover, in approving the use of his name for this award, stipulated that the recipient should decide the time , place, and nature of the presentation ceremony. “It was not the date that was the problem” he says, “once a moment of thought allowed me to determine that it should informal and with friends. It was where and who. The real question at issue was a curious one. Who are my friends? In thinking about this subject, I realized that a very high percentage of people whom I put in this category have been associated with the management of Stanford during the past 10 or 15 years and in particular, during 11 years I served as a trustee. This was a period during which I cemented old friendships and established many new ones.

 

He says his experience was “exciting and stimulating, and that the people he associated with were “thoughtful and dedicated.” He realized that most of the people he thought of as his “friends” were those associated with his experience on the Stanford Board. So he concluded that he should “build the invitational list around these people and supplement it with family and a few old friends.”  He says the decision as to “where” was an easier one. “I wanted it to be informal and local. I am afraid that I imposed upon Dick and Jing when I asked that the award be made in their home.”

 

“Subject to one obvious absence, I can truthfully say that there is no group with whom I’d rather share this honor than those of you here tonight. You honor me by your attendance.”

Box 3, Folder 26 – General Speeches

 

February 24, 1976 – Shareholders Meeting, Palo Alto, CA

 

2/24/76,  Typed copy of Hewlett’s remarks

 

Hewlett says HP performance in 1975 can only be considered as fair, although quite good when compared to the electronics industry as a whole. Shipments up 11% to $981 million, pre-tax earnings up 3% to over $148 million. Earnings per share were $3.02, down from $3.08 in 1974.

 

H runs through a series of overhead slides:

 

Slide #1.

The first shows the sales growth pattern over the past ten years. He says the slide shows sales growth in the period 1966-1970 was 19%, and for the period 1971-1975 it was 29%. He notes Packard returned to HP in 1971.

 

Slide #2

Shows growth of profits for the same ten year period. Profits averaged a 9% annual growth for the first five years, and a 20% growth rate for the next five years.

 

Slide #3

Shows test and measurement business – about 45 of total sales. In the last five years the annual rate of growth was18% for sales and 20% per year for pre-tax earnings.

 

Slide #4

Data Products is the next largest category group. This is the most rapidly growing area averaging 45 percent growth in sales and 68% growth in pre-tax profit per year. He notes the 3 to 1 rise in profit between 1972 and 1974, showing the impact of the pocket calculators.

 

Slide #5

The Medical Group, represents about 10% of total sales. Long steady growth in sales, averaging about 31 percent over the last five years. Average annual earnings up 52% during the past five years.

 

Slide #6

Smallest group – Analytical

Average sales growth 34%, profits grew at 80%/year over past four years.

 

Slide #7

Shows how inventories grew rapidly between 1971 and 1973. Corrective steps taken that year improved this situation from a high of 30% of sales down to 21 % by 1975.

 

Slide #8

Accounts receivable. Percent of sales rose from 23% in 1971 to 28% in 1973. Since has dropped to 21%

 

Slide #9

Shows sharp increase in employment in 1972 and 1973. Static for last two years.

 

Slide #10

Better asset management. At the end of 1973 HP had a net cash deficit  (cash and cash equivalent less short-term borrowings) of $111 million. By the end of 1975  the net cash position showed a favorable balance of more than $33 million.

 

Slide #11

R&D expenditures. Averaged about 10.5% of sales prior to 1971. Due to rapid growth during the years 1972-1974 couldn’t keep up the same % to R&D. By 1974 R&D expense fell to 8% of sales, but back up a bit to 9.1 % in 1975.

 

 

Box 3, Folder 27 – General Speeches

 

March 23, 1976 – “The Four Musts of Hewlett-Packard,” Purdue University, West Lafayette, IN

[See also speeches dated April 20, 1977 and May 5, 1980 on this subject]

 

3/23/76, Typewritten draft of speech

 

Hewlett says, “There is always a certain advantage in choosing a provocative title – hence ‘The Four Musts of Hewlett-Packard.’ These musts are – you must make a profit, you must make a contribution, you must achieve your objectives through people, and you must give back to the community more than you take out.”

 

He says these “are an imperative re-statement of the corporate objectives cast into simpler categories. I want to make it clear that these imperatives pertain to Hewlett-Packard, and may or may not be applicable in all respects to other companies.”

 

Looking at the first imperative regarding profit, Hewlett says “In recent years somehow or other profit has almost become a dirty word. In some people’s mind it is synonymous with profiteering. There is a tremendous lack of understanding in the American public abut the size and role of profit. Let me quote you a few figures that you may or may not have heard before. These figures resulted from a survey by the Opinion research corporation  a few years ago. The following question was asked:

‘As a rough guess, what percent profit on each dollar of sales do you think the average manufacturer makes after taxes?’ The average answer came back a surprising 28% — with some groups ranging as high as 34%, and the lowest estimate around 21 percent. The actual fact is that the average American manufacturer makes only about 4% after taxes on each dollar of sales. Thus, public estimation of profit was seven times higher than reality. It is not surprising that with this point of view of profit, there has been an increasing tendency to ask business to accept greater operating costs without any offset from price increase.”

 

Hewlett moves to talk about the profits at Hewlett-Packard, and what they are used for. First, he says HP is not an average company – its profits are higher than the average –8 ½ % in 1975, and 9 ½ % in 1974.

 

Where do HP’s  profits go? He says, “Of  the approximate $900 million in profit earned by the company during its life time, about 22% went to employees in profit sharing and other benefits; 38% was paid in income taxes to the state, federal and foreign governments; less than 5% was paid in dividends to the shareholders; and the remainder of about 36% was re-invested in the company to finance its growth.

 

“The economy of this country is based on the free enterprise system. The life blood of free enterprise is profit, and without profit for any long period of time, the free enterprise system will disappear.”

 

“Profit is not something that should be put off until tomorrow, it must be made today, and each day thereafter. I know of many companies who were always gambling on the future, but somehow the future never came, and they either failed or had those blowing hopes of the future permanently stunted.”

 

“Profits should be the primary source of financing company growth.”

 

Hewlett tells of the problem a few years earlier when “through lack of attention to asset management, and failure to maintain an adequate profit level, we found ourselves on the threshold of reversing a long standing policy through funding our debt by means of long term obligations. By paying much greater attention to inventory levels and accounts receivables…we were able to reverse these trends, such that at the end of last year, we showed a favorable balance of about $46 million.”

 

Speaking of the next must, must make a contribution, Hewlett says they are not talking about giving money away. “We are talking,” he says, “about a technical break-through, a conceptual innovation, a better way of solving a problem, i.e., a contribution to the science of measurement computation….This implies we must spend more than the average on our R&D program, and indeed we do. Traditionally averaging around 10% of sales, this makes us a higher-than-ordinary cost company in our fields. It says we should not compete in areas where low and lower production costs are the sole measure of success. This may sound like a contradiction in view of the high competition now prevalent in the pocket calculator field, but we will have a few ideas on how to make our brand of calculator more valuable to the user.”

 

But when is a contribution a contribution? Hewlett says this is not an easy question to answer. “Much of our R&D effort goes into supporting existing additional product lines. Typically, in the instrumentation field a given design concept has a fairly long life expectancy, 5 to 8 years. Therefore we have ample time to plan a next generation and to incorporate into it the most advanced thinking. We have very little cosmetic face lifting….What is needed is a spark of an idea of how to do the job in a better way. I have often called this ‘engineering of opportunity’ – with this you get directly down to the problem of building a device without worrying too much about inventing a new technique as well.”

 

“Behind all this discussion of contribution is lurking the customer, who is the person we are trying to serve. If you are solving a real problem for him, and you are solving it at the right price, he will buy your product and will be willing  to allow you to make a profit on it. If you don’t achieve this, he will not buy it – it’s just as simple as that.

 

Hewlett talks about the period of time  before they were in the “big ticket items such as computers.” Back when their sales were some 250 million dollars a year, the average order was around $1000,  or about 200,000 orders per year.  “Because we had a limited customer base,” he says, “this meant that we went back to the same customer time and time again. It was essential therefore, that we solve his needs on an honest basis. It did us no good to sell him a bill of goods, for we would not be welcomed back….The customer must be happy with his product after he has purchased it. This requires that we maintain effective after-sales support; good parts availability; reasonably quick recalibration service if desired, and as we have grown, these items have continued to be a very basic part of our operations.

 

“If one now looks back to our corporate objectives, you can recognize specifically the objective on profit. The objective on growth is partially covered under the heading of profit, for this is the source of funds to pay for growth, and partially under contributions – for our product line will grow from these new innovative thoughts. Our field of interest is sufficiently defined under contributions, and obviously that objective, pertaining to our responsibility to customers, is also to be found there.”

 

 

Box 3, Folder 28 – General Speeches

 

May 27, 1976 – Chamber of Commerce, Corvallis, OR

 

5/27/76, Outline of thoughts  for talk, handwritten by Hewlett

 

After some introductory  remarks concerning HP’s products, and the corporate objectives, Hewlett says he wants to talk about a question he is sure is of great concern to this organization, as it is to him — “The subject of current trends in government and its affect on the economy of the private sector.”

 

“As many of you know, one of our corporate objectives is to be a good citizen in our communities, to solve more problems than we create. We feel that the betterment of our society is not a job for a few – it is a responsibility to be shared by all. This we intend to do.

 

“The excesses of the 19^th century did nothing to allay past suspicions, even though…these were no worse than what was happening in the political sector in the U.S. – remember Tammany Hall and Boss Tweed.

 

Out of these concerns came the Anti-Trust legislation…which I believe were beneficial in an overall sense.” But Hewlett goes on to say that over the last 15 years there has been a trend to solve social problems at the expense of the productive economy – and he feels this has gone too far.

 

“One of the results,” he says, “has been the rise in importance and number of independent and appointive boards and commissions. A second has been the rising voice of the ‘so called’ Consumerism.” He says he would like to discuss each of these separately along with the effect of each on the business community.

 

Hewlett defines the appointive form of government as one that has regulatory power independent of any legislative or executive body. He lists some recently created: Consumer Product Safety Commission, Environmental Protection Agency, Equal Employment Opportunity Commission, Office of Health and Safety.

 

He says the problems with the appointive form of government are that it is not responsive to the public at large, once started there is no way to get them out of business.

 

On “Consumerism” Hewlett says he is very much in favor of the consumer’s voice being heard, but at least two problems with this trend have arisen:

“The tendency for a small vociferous minority to exert undue influence, and

The susceptibility of regulatory agencies to react to such pressures.”

 

Hewlett gives seat belts as an example of the “tyranny of the minority over the majority who did not want all those gadgets.”

 

Another example he cites was the how an action by the  Consumer Product Safety Commission resulted in at least eight pregnant women undergoing abortions based on misleading information put out by the Commission.

 

Another problem with these Boards which Hewlett cites is “the pressure they exert to replace anyone on the Board who may have first hand knowledge of the subject, simply because they may be biased.”

 

Hewlett moves on to the subject of “Corporate morality.”  He says he “thinks many of the cases reported where there has been flagrant, inexcusable, disgraceful, [events], action should be taken to punish the individuals or corporation involved, [but]:

 

“Need a reference standard, and

There is the danger of exporting our own morality”

 

“While the government is looking into the matter of morality in the private sector, they should also be looking at themselves as well.

 

“I know of flagrant cases where in order to assure reelection an official has taken action that clearly was not in the public good.

 

“It is an axiom that a politician’s first responsibility is to get reelected. Similarly, it is business’ first responsibility to make a profit. But it is clearly understood that such responsibility must be tempered with some respect for the public good. This same tempering should be part and parcel of the responsibility of the politician vis-à-vis his reelection.

 

Hewlett says he has been only critical thus far and would like to discuss what might be done to start to change the less than satisfactory environment in which the private sector finds itself.

 

A)   “Reevaluate which of the multiple agencies – Commissions are really needed, are doing a truly useful and important job. Those that do not meet this test should be phased out

 

B)   “Those that continue should be classified as to who should be truly independent, such as the Federal Reserve Board. The rest should be assigned to a branch of the executive branch to assure responsibility to the electorate.

 

C)   “Where governing bodies do exist they should be selected from individuals who have first hand knowledge of the subject.

 

D)   “Codes of ethics should be established for both the private and the public sectors and that should be enforced. None of this ‘legislators protection society’ business.

 

E)    “Leaks should be stopped, and this means starting at the top.

 

F)    “Most important of all there should be developed a better understanding between the public and private sectors.

1)    The private sector should understand and learn more about the important role of the politician and how very different it is from his world,

2)    The politician should understand better both the role of the private sector and what makes it tick. In fact I think that in general he has a better understanding of the problems of the private sector than the private sector has of his.

 

G)   “I feel that there is an encouraging trend in all of these directions but it is just not going to happen by itself, nor is it going to happen overnight.

 

“We all must become involved in a move toward representative government and mutual understanding and trust between the public and the private sector.

 

“I would also like to take this opportunity to publicly thank all of our friends here who first brought the advantages of Corvallis to our attention, and their tremendous labors to make our coming a reality.”

Box 3, Folder 21 – General Speeches

 

February 25, 1975 – Shareholders Meeting, Palo Alto, CA

 

2/25/75, Hewlett’s handwritten notes, in outline form, noting information he intends to cover at the meeting

 

Hewlett notes that it is a pleasant experience to give a favorable report, and he proceeds to cite data on 1974 performance, the management structure, capital expenditures and employment.

 

 

 

Box 3, Folder 22 – General Speeches

 

March 12, 1975 – Visit to HP Plant, Boise, ID

 

3/12/75, Outline of topics to discuss, handwritten by Hewlett

 

Under the subject of “How did we get from there to here?” Hewlett lists:

 

Early goals

Did you ever expect to be where you are?

Progress – slow and steady – conservative

Based on new products

Entry into new fields

Pay-as-you-go

Up to 1958-59 all HP in Palo Alto

Had made first start in divergence

First time set down corporate objectives

Through 1960s rapid diversification

Medical

Analytical

Computers, calculators, pocket calculators

Group structure

Current organization

 

What are we doing here?

Part of a plan to expand outside California

Boise chosen for many reasons:

2 hours from SF

Good place to live

Community wanted us

 

Early period

Good EE, not good ME

Don’t design up on curve

All knowledge not derived from school

 

The grass is always greener syndrome

Computers

 

Never try to take a fortified position unless essential

Tektronix [Refers to difficulties breaking into oscilloscopes]

 

Problems of communications

Pay checks [Refers of change in pay system that didn’t go over with employees]

GmbH, Loveland, Japan

 

Carrot in the wrong spot

Asset management

 

Balance

R&D, growth, marketing

 

Screw up of acquisitions

 

How are we doing?

Very pleased indeed, 138% of target in orders

211 employees

Policy of local hire

 

Look ahead

Boise will be headquarters for electro-mechanical products

Will break ground this month for new building on new site

May have to lease some additional space

 

The test

If I had to do it again I would chose Boise

 

 

Box 3, Folder 23 – General Speeches

 

April 22-23, 1975 – Talk at University of Oklahoma, Norman, OK

 

4/22/75, Copy of handwritten outline of Hewlett’s talk

 

This talk is entirely devoted to his description of HP – its organization, its products, its philosophies. He concludes by talking about where they are today and where they are going. He says they have the “hatches battened down for the current situation,” they are in “good financial shape,” have a “freeze on hiring,” no lay-offs, but taking extra days off at Thanksgiving. [See also speeches dated March 25, 1982, and May, 1992]

 

 

Box 3, Folder 24 – General Speeches

 

June 15-17, 1975 Management Meeting, Napa, CA

 

6/15/75, Copy of typewritten text of Hewlett’s remarks

 

This is a general talk about the role of management in the world of today. He titles it “Managing a profitable billion-$ decentralized corporation in a changing worldwide environment.”

 

Hewlett feels that all over the world we are moving towards an era of “greater concern for the individual both singularly and in groups.” He acknowledges that the interests of the individual are not always consistent with that of the group, nor with that of business. “As people have votes and businesses don’t – this obviously poses problems and it is inevitable that more rather than less restraint will be placed on businesses in the future.”

 

“Businessmen,” he says, “have never done a very good job of explaining business to the public – the internal selection process did not emphasize this ability. The lack of understanding of the average person on the street is appalling. In a survey conducted by a McGraw Hill subsidiary, the question was asked of a wide cross section of the public: “What do you think is the average profit [as a percentage of sales after taxes] of manufacturing corporations”? The answer came back – an average of 29%…and the actual figure is 4%. It is no wonder that the public thinks that business is an infinite reservoir from which all goodness flows.”

 

As a result of this general view, Hewlett sees a continuing drift towards socialism. He admits to being prejudiced, but says he doesn’t believe socialism can succeed.

 

The days of the Robber Barons in the U.S. were accompanied by strong aggressive men who would be considered ruthless by modern standards, Hewlett says. Much has been done, he says,  by Business Schools to perfect the science of management, but the rise of big corporations all too often brought an arrogance and disdain for people and government…..If the free enterprise system is to survive, we need a new criteria in selecting our managers. These managers and leaders must be people who have all the technical skills that their predecessors did, but they must also have the quality to understand their own people, and a quality to understand and participate in the key role that business must play in the prosperity of the country, as well as what its responsibilities are in this respect. “

 

Hewlett feels the new generation of manager “must be sure that his own employees understand what the company is doing, where it wants to go, and how it wants to get there. But the reverse is also true – management must listen to what its people want, to what their problems are, and to see how their goals and objectives can be met consistent with the framework of the corporation.” He says he is not talking about management by committee, simply communication and understanding.

 

“If each person within [the U.S.] workforce understood the system and truly felt that there was a partnership between business and its employees, we would have far fewer kooky laws passed by our government. The modern business leader also needs to take a more active role outside the company. This is something we have certainly preached for a long time under the heading of ‘Good Citizenship’. Just as a manager must know and work with his people, so must a manager know and work with his government. Most government people do want to do a good job, but too often they don’t really understand the effect of their actions in the other direction. Most people outside of government don’t really understand the problems that face governments and the people who administer it. There is much that business can learn about some of the facts of life that face governments, and understanding these problems, [might] be more sympathetic with some of the decisions reached. In other words the new facet of management that must be added to be successful in a changing world, in addition to all the other management attributes, must be the ability to communicate both up and down – to communicate and to understand – to understand and be willing to act.”

 

 

Box 3, Folder 25 – General Speeches

 

September 13, 1975 – Dedication of Grenoble Plant, France

 

9/13/75, Copy of typed remarks

 

Hewlett says that General Charles de Gaulle visited the United States in 1960. De Gaulle had heard of the Stanford Industrial Park in Palo Alto, California – where high technology companies and a major university existed in close proximity to the benefit of both –  and wanted to see and learn more about this unique development.

 

De Gaulle visited HP’s plant, its administrative offices, its research laboratories, and its manufacturing areas. Hewlett says he remembers that “on several occasions our employees broke out in spontaneous applause on seeing him pass by.”

 

Hewlett says he reports this anecdote, not only because it was a matter of pride to have the President of France visit their facility, but also because it provides “an important reference date from which to view the intervening progress of our company. I am sure that none of us at that time conceived that 15 years later we would be dedicating a plant in France. Nor would we have dreamed that our French plant would be fully a quarter the size of all the facilities operated by Hewlett-Packard at that time.”

 

Since that time Hewlett says HP’s total sales have grown 15 times, but “international sales have grown by a factor of 50.”

 

“At the time of General de Gaulle’s visit, our product line was limited to electronic test and measuring instruments….However, today we also produce all forms of computational equipment – computers, desktop electronic calculators, and pocket calculators -–as well as medical electronics equipment, instruments for chemical analysis, solid-state components, and some equipment for civil engineering.

 

“Thus, in these past 15 years we have grown from a company with a relatively small number of products sold almost entirely in the United States, to a much more broadly based company with over 50 percent of our business emanating from outside the U.S.”

 

Hewlett poses some questions: What brought HP to France – to Grenoble; what will they manufacture here; what are their long range plans; will they be a beneficial influence to Grenoble, and to France.?

 

In answering these questions Hewlett says France is not only a major market, but it “provides a highly skilled workforce, supported by one of the best educational systems in the world.” Add one of the most stable economies in Europe, and convenient location. “All justification enough to come to your country.”

 

Hewlett says they were drawn to Grenoble by its physical attractiveness, its ‘livability,’ which is an important factor in attracting and holding top professional and managerial employees. Grenoble is close to technical institutions as well as the University of Grenoble.

 

Hewlett says they plan to manufacture computers and their peripheral devices at the Grenoble plant, as well to assemble various components into large computer systems.

 

“At present,” Hewlett says, “about 90 percent of the orders we receive for products manufactured here in Grenoble come from outside France. At the current rate of production, we are contributing a favorable increment of about 40 million francs annually to France’s balance of payments.”

 

He says the Grenoble facility also has its own research and development staff,  “whose initial responsibility is to develop data entry input terminals for Hewlett-Packard’s entire line of computer products.”

 

Talking about HP’s management philosophy, Hewlett says “the company operates with a high degree of decentralization. Our basic viewpoint is that decisions can and should be made at the lowest possible operating levels. After all, the people at these levels know first hand what is actually going on, and are well qualified to make many routine operating decisions. But, they need some general guidelines in which to operate. We achieve this by means of broad corporate objectives that are well understood throughout the corporation. This philosophy of distributed management, which we call management by objectives, encourages a broad participation in operating decisions and serves as an excellent training ground for all levels of management.”

 

Hewlett mentions the staffing of the Grenoble plant. He says, “In keeping with our long-standing policy of managing and staffing local organizations with local people, the next manager in all probability will be selected from our present staff in Grenoble. You might be interested to know that of the 203 people employed here, 186 come from this region. There are only 17 non-French employed, two of whom are from the U.S.”

 

“I cannot close without saying a word about the tremendous amount of help and cooperation we have received during the startup phases of this operation. This help has come from many sources – the French government itself, from the region as a whole, and certainly from the city of Eybens. Let me express our appreciation for all that you have done to make this operation a success. I also want to pay particular credit to the exceedingly fine workforce we have been able to assemble. In a very short period of time, they have been able to master complicated procedures and are as efficient and dedicated as many of our more mature workforces – a clear vindication for our decision to come here.

 

“Somehow I feel that if General de Gaulle were with us today, he would heartily approve of our decision to come to France and build a plant in this wonderful and hospitable region. We are pleased and honored to become a corporate citizen of your community, and we look forward to a long and happy relationship.”

Box 3, Folder 13 – General Speeches

 

February 26, 1974 – Shareholders Meeting, Probably in Palo Alto, CA

 

2/26/74, Outline of comments and data to be presented, handwritten by Hewlett

 

Hewlett opens his remarks saying “As I said last year, it’s nice to have a good report to make again.

 

“It’s good to have such a nice turnout – particularly as we want to make this a valuable meeting for you by allowing you to understand your company better. It is a most complex operation. In our annual report we tried to give you some indication of the scope and breadth of our operation. Many of the items pictured in the report are to be found on display – hope you will take time to visit these displays, and, if you have time, to participate in a plant tour.”

 

He follows with a summary report on 1973 operations:

 

Sales up 38%    Continues trend, was up 27% in 1972, or 76% in 2yrs.

Pre-tax income up 27%

Net income up 32%

 

Hewlett says that in citing this data he “is reminded that we are a high PE ratio company and as such it is important that this operation of the company be well understood – no unnecessary surprises.”

 

He says he is compelled to point out that while PTP fell from 15.5% to 14.3%, a lower tax rate cushioned the impact.

 

And he says that while pocket calculators have had an impact on sales, giving a “free ride” for two years, “competition is now here.”

 

On the other hand he points out that:

 

With the rapid growth, 50% of HP employees have been with the company less than 18 months.

 

And parts and material shortages have increased costs and have been responsible, in part, for a bulge in inventories.

 

Hewlett goes through more data, including performance of each of the product groups, and then talks of the future, He says the rest of 1974 is unclear – good backlog, expenses controlled. “Unless the bottom falls out do not anticipate major problems.

 

He closes with a mention of the subject of long-term debt, saying that their plan to take on such debt had been called off due to:

 

1)     “Encouraging nature of profit performance and cost controls program

 

2)     The rapid decline in cost of money

 

3)     The prospect of some price relief

 

4)     Most of all, determination by a majority of HP people that did not want to change a policy that had served us well, (i.e. pay as you go), and a resultant dedication to run the organization so that we can get on a pay as you go basis.”

 

 

Box 3, Folder 14 – General Speeches

 

February 27, 1974 – “Bay Area as a Unique Region,” American Association for the Advancement of Science, San Francisco, CA

 

2/27/74, Hewlett’s handwritten notes outlining his remarks. He appears to be introducing a forum of speakers on various subjects related to the Bay Area. He states that this discussion is being broadcast live to KQED FM radio station 88.5.

 

Hewlett says the Bay Area is  a unique region and contains ¼ of the people who live in California.

 

“It has,” he says, “most of the problems of major urban areas: smog, transportation, housing, plus some its own, e.g. earthquakes.”

 

The region has approached solutions to many of these problems on an integrated, area-wide basis:

East Bay Regional Parks, 1930

BART – Bay Area Rapid Transit

BCDC

ABAG – Association of Bay Area Governments

MTC

Air Control Board

Etc.

 

He says they will try to put all of this into an integrated picture, starting with such basic factors as population trends, energy needs, transportation problems, housing.

 

Then he says they will move on to look at Planning and Control, Land Use, problems of air and water pollution, education, medical care, plus the future outlook for the area.

 

 

Box 3, Folder 15 – General Speeches

 

March 26, 1974 – Analysts Breakfast, New York, NY

 

3/26/74, Outline of information for remarks handwritten by Hewlett

 

1973

Hewlett reviews performance data for 1973 – a very good year

 

He talks about their planned long-term debt – which they cancelled. They had considered such a step following two years of rapid growth, but concluded a lack of proper asset management was the real reason causing a cash flow problem.

 

1974

He thinks HP growth in 1974 will be between 10 and 15% over 1973.

 

In talking about pocket calculators he discusses Texas Instruments’ model SR-50. “The SR-50,” he says, “is a very good unit in design despite TI’s criticism of Polish Notation,[which] we feel is best suited for scientific and engineering applications.”

 

Hewlett says they expect to finish 1974 “with a better looking balance sheet.”

 

“I would characterize 1974 as a year of great uncertainties – of considerable belt tightening – a year to catch up with ourselves. After all we grew 76% from 1971 to 1973, and deserve a chance to catch our breath.”

 

 

Box 3, Folder 16 – General Speeches

 

April 10, 1974 – Testimony on behalf of WEMA, before the Finance Committee of the U.S. Senate on Trade Reform Act of 1973, Washington D. C.

 

4/10/74, Copy of the typed text of Hewlett’s remarks. This runs some 27 pages, but it is accompanied by a summary of his testimony, giving  WEMA’s position on this legislation, and this is described below.

 

In general Hewlett says WEMA “strongly supports the concept and most of the specific provisions” of the legislation, H. R. 10710.

 

The comments on specific provisions were:

 

Title I – Negotiating Authority

“WEMA believes that H. R. 10710  provides the necessary legislative authority to permit meaningful negotiations of tariff and non-tariff trade barriers.”

 

Title I – Consultation with Industry

“WEMA is especially pleased that representatives from the private sector will have the opportunity to make their views known on negotiating objectives and bargaining positions.”

 

Title II – Relief from Injury Caused by Import Competition

“WEMA generally supports the sequence for extending import relief set forth in section 203. WEMA is particularly pleased with the safeguards afforded Tariff Items 806.30 and 807.”

 

Title II – Adjustment Assistance

“WEMA supports the expanded and liberalized adjustment assistance provisions for employees and firms.”

 

Title III – Relief from Unfair Trade Practices

“WEMA recommends that the Secretary of the Treasury be permitted to waive the application of countervailing duties for a period of up to four years when the products are produced in foreign government-owned or controlled facilities.”

 

Title IV – Trade Relations with Countries not Enjoying Non-Discriminatory Treatment

“WEMA recommends modification of Title IV to permit the extension of MFN treatment and the granting of credits when such actions are in the best interests of the United States.”

 

On Related Matters

 

Access to Raw Materials

“WEMA favors adoption of language which would seek enlargement of the scope of powers of the GATT to deal with raw material shortages, and permit retaliation, if required, against unjustified foreign export restrictions.”

 

International Tax Considerations

“WEMA believes that any changes in the tax laws affecting U.S. trade and the international activities of U.S. firms should be made with the objectives of increasing U. S. exports and permitting U.S. companies to operate abroad on the same basis as their foreign competitors. WEMA urges the Congress not to enact tax rules and regulations which would handicap U.S. firms and permit foreign competitors to seize market opportunities to the ultimate detriment of U.S. industry and labor.”

 

 

Box 3, Folder 17 – General Speeches

 

June 2-4. 1974 – Managers Meeting, Quail Lodge, Carmel Valley, CA

 

6/2/74, Notes for remarks handwritten by Hewlett

 

Hewlett opens the meeting saying, “After running the company for over 30 years on a pay-as-you-go basis, we have gone from a position at the end of 1972, when the net of our total borrowing and cash on hand had just about been a wash, to the point at the end of 1973 [when] our short term debt less cash was more than $110M.

 

“The bulk of these increases was accounted for by two items: $188M in A/R, and a like amount in inventory; and, secondly, the inverted emphasis on profit and growth. By that I mean that in many cases growth had become the overriding goal and not the profit to support the growth, i.e. we lost sight of the basic tenant of the company of pay-as-you-go.”

 

“As I look at the future I am convinced that we can solve our asset management problem – that we can bring growth and profit into line – that we can build plants and design organization structure, but I don’t see us on the road to solve what may turn out to be our most difficult problem – managers. We have built this company on the basis of MBO and that presupposes adequate managerial talent. Without this asset MBO fails.

 

“Thus as we go through the next day and a half I hope that you will keep this thought in mind – when do we get the people, how do we select them, and how do we train them.”

 

“I want you all to start thinking most seriously on this matter as shortly it [will] become one of our principle areas of focus.”

 

 

Box 3, Folder 18 – General Speeches

 

June 10, 1974 – At WEMA Meeting, Palo Alto, CA

 

6/10/74, Outline notes for speech, handwritten by Hewlett

 

Speaking of the world pre-October 1973 Hewlett says foreign competition was very strong. U.S. $ twice devalued. U. S. coming to the end of a long cycle of growth – world in phase.

 

Reviewing the effect of the petroleum crises, Hewlett says it should be seen in perspective:

1)     One further step in the destruction of the status quo established at the end of WW II

2)     Followed pattern that led to abolishment of fixed exchange rates of Breton Woods

3)     Pattern quickly recognized by developing countries as a method of forcing a more equitable distribution of the benefits of world economic growth between the developed and the developing nations.

 

The immediate results were”

 

1)    Different for different economies

1. A disaster for nations with little or no natural resources
2. A bonanza for developed countries with an abundance of natural resources
3. A great problem for developed countries with few resources – Japan
4. A chance to improve their position for developed countries with nearly sufficient resources

 

2)    The results to date have not been as bad as expected

 

Longer Term Results

 

1)   Will further compound trends such as:

1. rise of nationalism
2. increased trend toward socialist – France, Germany, UK
3. inflation

 

Effect of this gloomy picture on technology industry of U.S.

 

U.S. in a favorable position: food surplus, natural resources, leads to strong economic position

 

U.S. technology some of the best in the world.

 

Strengthening dollar will reverse trend of foreign manufacturing

 

Summary

 

As long as U.S. can maintain technological initiative outlook very good, both here and abroad

 

As we move more into an era of scarcity, “conservation” becomes the word.

It is going to be increasingly difficult to do business in the world.

It is going to be a tough time to be a manager – but good management has a chance to pay off handsomely.

 

 

Box 3, Folder 19 – General Speeches

 

October 10, 1974 – “Implementing Affirmative Action,” Human Relations Commission, Palo Alto, CA

 

10/10/74, Copy of typewritten text of speech

 

Hewlett first looks at the “background of the problem,” and describes what he sees as the difference of problems faced by women and those faced by minorities. He says minorities have always had a position in the workforce, albeit an inferior one. “In almost traditional fashion, these ethnic groups drifted together into areas of sub-marginal housing, which rapidly took on the characteristic of a ghetto. Both the economic condition and the cultural environment, as well as the prejudices of society, often denied these people even the most basic education, let alone access to the higher levels of education.

 

Women, (speaking of non-minority women) were felt to belong in the home, not in the work place competing for a “man’s job.” They were able to avail themselves of the same education as males, at least through high school. Increasing numbers of women with university or college degrees are now entering the work force,

 

Hewlett says “…the objective of affirmative action is to place in increasing number of both minorities and women in the work force. But even more important than numbers alone, is to assure that they simply do not occupy the lower levels of employment, but that they be dispersed through all levels of management. Clearly, this is not simply a case of equal opportunity, but is a case of an affirmative action that will provide a positive drive to achieve these results….Unfortunately, it is not possible to pass laws and have it happen, unless people really understand the reason for the laws and are willing to support them both in spirit and in fact.”

 

“To get people into the work force, i.e., equal opportunity, is nowhere as difficult as getting them properly distributed within the work force. I can assure you that one may be able to meet all of the requirements of the former, but if the first level of supervision is not sympathetic, is not understanding, is antagonistic, little is going to be achieved in the way of advancement. Therefore, in my view, one of the most important requirements is to make it known within the organization that employment, and advancement of women and minorities, is not only the law, but is the right and equitable thing to do….Thus, if the first step is entrance employment, the second step is a receptive environment.”

 

But beyond these first two steps, Hewlett emphasizes the need for training and qualification for advancement. He explains that individuals may not think of themselves as eligible for advancement, and may not take steps to achieve the skills that are necessary for advancement. “Therefore,” he says, “the third step really has two parts – the establishment of adequate training programs, and the encouragement of both women and minorities to participate in these training programs, and above all,  demonstration by the organization that individuals who have qualified themselves for advancement have been promoted when openings are available.”

 

Saying that he has been primarily addressing himself to problems related to hourly workers, he says that the entrance and advancement into professional and management positions is more difficult. “…on-the-job training, while important, is less critical and more dependence must be placed on university training. Here the problems between minorities and women are sharply differentiated. As I pointed out at the beginning, higher education has traditionally been more available to women than to minorities. For women, therefore, it is more a question of preparing themselves for a career, with the expectation that professional and managerial jobs will be available to them on graduation.”

 

Hewlett says it is unfortunate that too few women are electing an engineering education. And in the Peninsula area, he sees an engineering education as almost a “sine qua non for management advancement.” He sees more women active in the field of computer science and “this field can well provide a seed bed from which women with professional training can move to higher levels of management.”

 

The problems facing minorities are “sharply different” than those facing women, Hewlett feels. “If one looks at engineering, for example, the seeds that lead to a bachelor degree in engineering really were planted way back in grade school. A proficiency in mathematics is a corner stone of most engineering. Mathematics is a long series that really spans all the years between grade school and the baccalaureate degree. If a student does not start early along this route, he will find it difficult to catch up. It is essential, therefore, that the schools encourage minority children who have mathematical proficiency, or who show potential for mathematics, to enroll and continue with this field of study. By the time the student graduates from high school the die is already cast as to whether he is qualified or not to enter an engineering curriculum. I believe that industry has an opportunity to work constructively with the school system to try and encourage qualified minority children to become interested in mathematics. If we are to have a reasonable distribution of minorities in the professional field, we must provide them with the tools to achieve this education. No amount of law making is going to produce instant engineers. The background requirements for some of the other professional areas is less stringent, but certainly any program in business administration requires a fairly good proficiency in mathematics”

 

Advancement for women and minority professionals is much the same as for hourly workers, Hewlett says. “There must be internal training programs, there must be sympathetic supervisors, and there must be a demonstrated advancement route. In addition, there is a more subtle form of barrier that inhibits advancement that must be recognized and dealt with. This barrier springs from the fact that much business is really transacted in a most informal style – at coffee breaks – during lunch – during recreation activities. Unfortunately, it is at such times that individual groups seem to naturally separate – women have their coffee in one area, men in another; ethnic groups collect at lunch and so on. If this problem is recognized, much can be done to minimize it. By encouraging a great commingling by both minorities and women, thus allowing them to participate in this important component of information transfer and decision making.

 

“You must have detected through all of this discussion, a common theme of management dedication to solving our problems of social inequity. As in most organizations, this type of leadership must come from the top, and unless the boss is really convinced that these goals are worthwhile efforts and unless the boss clearly conveys his views to those below him, no real progress is going to be made. But he cannot do it alone, nor will the organization do it without his leadership. Thus, in the last analysis the implementation of an effective affirmative action program is spread throughout the organization and it is a much a philosophical point of view, as in any set of actions.”

 

 

Box 3, Folder 20 – General Speeches

 

October 29, 1974 – Meeting with Security Analysts, Palo Alto, CA

 

10/29/74, Outline for speech handwritten by Hewlett, as well as a more complete text, also handwritten by him

 

Hewlett says the purpose of the meeting is to impart information to them, as representatives of the investing public, which will enable them to better serve their customers, and avoid the “desire to take off on flights of fancy either on the up side or the down side.”

 

“For example,” he says, “[we] have been trying for some time to tell you that we aren’t going to make $3 [EPS] and despite this I continually read your figures that say we are. Well, [we] were right – with 11½ months under our belt, it now appears that $2.85 plus or minus 5 cents is a much closer guess.”

 

Hewlett reviews estimated fourth quarter results and then gives some general comments on the year. He says the “most significant” item was the decision to operate on a pay-as-you-go basis.

 

On the year ahead he says it will be “most difficult indeed…. If it were not for some very strong new products coming on stream next year we would expect no growth outside of [that] due to inflation.” With these new products Hewlett predicts a growth rate of about 5%, 15% including inflation. He calls 1975 “a year of catch-up” following 130% growth over the previous three years.

 

Hewlett moves into what he calls their “philosophy.” He says that “In times like this it is important to know both within and without the company how we view ourselves – what we will do and what we will not do – what we are and what we are not.

 

“We are a producer of high quality products that are based on innovation and a well planned engineering program. For this we must charge more. Our customers have thought this was a good trade-off and have been willing to pay more.”

 

“As we become more and more involved in the consumer business we must remind ourselves of this fact and concentrate on high performance, technical innovation and reliable products – and not let ourselves become seduced by the siren call of lower prices which hopefully are compensated for by increased volume.

 

In the area of management Hewlett says both he and Packard will be retiring in four years and that it is important that they experiment with alternate forms of management, and that they train people in the higher levels of decision making. “I want to assure you of two things,” he says, “There is not an anointed successor – neither in the top team nor elsewhere in the organization. Much can happen in four years. And secondly, that neither Dave or I plan to retire from active management of the company until we reach the mandatory retirement age of 65.”

Box 3, Folder 11 – General Speeches

 

June 1, 1973 – “Did I make the Right Decision,” Commencement Speech, Polytechnic Institute of New York, Brooklyn, NY

 

6/1/73, Copy of typewritten text of speech

 

This speech is essentially the same as that given at Brigham Young University on February 14, 1963, so it is not repeated here.

 

 

Box 3, Folder 12 – General Speeches

 

September 20, 1973 – “Current and Future Commercial Relations with Russia,” East-West Trade Panel, International Industrial Conference, San Francisco, CA

9/30/73, Copy of the typewritten text of Hewlett’s speech

 

Hewlett says he intends to discuss trade relations with the U.S.S.R. from the U.S. standpoint. He starts by reviewing the background of trade relations between the two countries, listing the turning points of  this relationship as it developed over the years. He mentions:

 

1811 – Russia was taking one-tenth of the total exports from the U.S., and was a major supplier of marine stores to the U.S.

1832 – A treaty on navigation and commerce between the two countries was signed granting Most Favored Nation status to each nation.

1911 – This MFN Agreement was abrogated by the United States because of Russia’s policy of restricting the immigration of Jews from Russia.

1920 – Although World War I and the Bolshevik Revolution isolated Russia from the West, Herbert Hoover’s American Relief Administration spent $20 million dollars of Congressional appropriations sending grain to famine-stricken Russian peasants.

1931 – The Soviet market was taking two-thirds of all U.S. exports of agricultural equipment and power-driven metal-working machinery.

1934- The Soviet Regime, under Stalin, was recognized by the U.S. In 1933, and in 1934 the Export-Import Bank was established  expressly to finance trade with the U.S.S.R.

1936 – The U.S.S.R. granted MFN status

Following World War II, the advent of the Cold War brought a sharp decline in commercial relations between the two countries. The U.S. judged the Soviet Union to be in default because of transactions resulting from the wind-up of the Lend-Lease program.

1951 – Increasingly restrictive measures by the U.S. had limited trade with communist countries, and in 1951 MFN status for all was revoked.

1959 – Earlier, President Eisenhower had decontrolled 700 commodity items for export to the U.S.S.R. and Krushchev visited the U.S.

1964 – Senate hearings on East-West trade revealed considerable interest within the U.S. to loosen restrictions. The Johnson Administration removed a large number of nonstrategic items from the controlled list. $110 million wheat sale to the Soviet Union by the U.S.

1966 – East-West Trade Relations Act was an effort to extend MFN status to communist countries, failed due to Vietnam War climate. The Nixon Administration continued to try and liberalize trade restrictions.

1969 – U.S. exports to the U.S.S.R. had doubled over preceding years, surpassing $100 million for the first time since the 1964 wheat sale. Soviet Five-Year Plan stresses their need for the development of its electronics, chemical and consumer industries.

1971/1972 -Secretary  of Commerce Stans and Soviet Union Minister of Foreign Trade Patolichev exchange visits.

1972, President Nixon visits Secretary General Brezhnev in Moscow, resulting in agreement on trade relations between the two countries. One principle included stated “The United States and the Soviet Union regard commercial and economic ties as an important and necessary element in the strengthening of their bilateral relations, and thus will actively promote the growth of such ties. They will facilitate cooperation between the relevant organizations and enterprises of the two countries and the conclusions of appropriate agreements and contracts, including long-term ones.” This was followed by several agreements concerning grain, settlement of debts, and scientific cooperation and so forth.

 

In reviewing the status of current trade relations Hewlett says “…it is evident that each country has strong reasons for wanting to expand both trade and technical cooperation with each other. The U.S. sees the Soviet Union as a major trade partner….On the other side of the ledger, the U.S.S.R. has real need for more East-West trade.”

 

Hewlett gives some production figures to illustrate the gap  between the Soviet productivity and that of the U.S. “It was apparent by 1972,” he says, “that the Soviet economy was lagging badly behind plan. The GNP had only risen about two percent….Crops, ferrous metals, and chemical products had slid badly, and natural gas production was down for the first time in 20 years. It should have come as no surprise, therefore, that the Soviets were so receptive to U.S. proposals for improvement in trade relations.

 

However, MFN status remains a problem Hewlett says, and adds that Congress wants to place a condition on MFN status pending a “more reasonable approach by the Soviets to the [Jewish] exit visa problem. It would be a mistake to assume that these [proposed conditions] spring solely from the Jewish community. I think that the average American with a tradition of freedom of movement has a very hard time understanding the Soviet position on this point. I do not feel that this problem will go away easily.”

 

Hewlett discusses the problems U.S. exporters have dealing with the Soviet Union where most trade is carried on through foreign trade organizations, who speak for the total demands of the country. “The American businessman,” Hewlett says, “ is used to talking directly with the customer and ascertaining firsthand the customer’s problems. It can at times become extremely difficult to have to work through these FTOs although they are a basic part of the system.”

 

Hewlett says he feels this lack of “direct, personal contact between the American businessman and his Soviet counterpart” is one of the “greatest obstacles” to increased trade with the Soviet Union.

 

“It seems obvious to us,” Hewlett says, “that any long-term trading relationships must depend upon some form of quid pro quo. If the Soviets are going to purchase any reasonable quantity of goods with their limited foreign exchange, they must get something in return—either technical know-how, the right to manufacture certain products, or some method of earning foreign exchange. These are not easy problems to solve and we are currently wrestling with them.”

 

Hewlett says he thinks it an be said that “political considerations are often more important to trade relations with a socialist state than would be the case with trade between free market countries.

 

“As I pointed out at the beginning of my presentation, the relations between the U.S. and the Soviet Union has had a long background of being up and down. I have no reason to believe that history will not repeat itself, and there will be occasions when the current détente may be set aside for political reasons. But in the long-run, I feel that economic pressures will prevail and that the United States and the Soviet Union, whether they like it or not, will find themselves as important trading partners.”

Box 3, Folder 10, – General Speeches

 

November 30, 1972 – “Environmental and Social Forces Affecting Business in the Bay Area,” Bay area Outlook Conference, San Francisco, CA

 

11/30/72, Typed text of Hewlett’s speech

 

Hewlett starts with a discussion of the general characteristics of the Bay Region and their impact on the business climate.

 

He feels the San Francisco Bay Area is one of the outstandingly attractive regions in the U.S., and that it is this very characteristic that is most threatened by uncontrolled growth and destruction of the environment.

 

He points to the region as a center of culture and learning – museums and art galleries, symphonies and operas known throughout the world. Two great universities have had a “profound influence on the region’s development.”

 

He describes the area as having “some of the nation’s largest and most important companies,” – but highly organized by unions, and thus “one of the most expensive regions of the country in which to do business.”

 

He says it is of no coincidence that “out of the liberal thinking of the region the ‘Free speech’ movement at U.C. originated and soon spread to the rest of the country,” as shown by the student unrest of the past few years.

 

From the “poverty pockets of the East Bay came the Black Panthers, and I am sorry to say, also the Hell’s Angels.”

 

And he mentions that “The region was one of the first to rise up in its wrath and say ‘no more’ to the State Division of Highways as it attempted to fill some of the choice sections of the region with snaking strips of concrete.

 

“No,” he says, “I would not say that the Bay Area is a region without spirit or imagination.”

 

In the environmental area, Hewlett sees latent, if not current, problems. “The fact that there are already six regional organizations now operating speaks to this point.”

 

He names some of the specific problems areas: urban sprawl, traffic and transportation, waste disposal, quality of water and air…. ”What makes these problems particularly pressing here,” he says, “is the geographical nature of the area with its narrow strips of land, with its proximity to many waters, and a natural formation that can and does easily trap smog.” But he cannot say that these environmental problems have “at the present time, an unusually adverse effect on business in the area.”

 

My concern,” he says, “rests with the social forces that I see acting in the area.”

 

And he cites the city of Berkeley as an “archetype” of the social problem he has in mind. “Berkeley now has a near majority of radical council members. Many of their recent actions might be defined as a sharp departure for normal city administration.” And he points to rent control as an example. He quotes the Chronicle newspaper as saying that ‘In much of the business community, the radical presence at City Hall has been viewed as somewhat akin to the Visigoths sacking Rome.’

 

Looking at his home town of Palo Alto, Hewlett says that “any suggestion of expansion in the industrial area is met with substantial resistance. At the instigation of the radical organization, Venceremos, the City council asked the city Attorney whether it could legislate that no defense work could be carried on within the city limits.

 

“It is very difficult to plan a business program in such an environment,” Hewlett says. “Unless and until I feel that there is a more friendly climate toward business in the community, I am unwilling to allow any more expansion in Palo alto than is absolutely necessary.”

 

In addition, Hewlett points to a recent survey among business executives where “…43% responded that the major disadvantage of doing business in the Bay Area had to do with the high cost of labor and of land, 32% cited high taxes and cost of government, and 27% unions and union dominance.”

 

Hewlett feels these factors, coupled with a rather negative attitude toward business, has had an very adverse effect on the local business attitude. He says many businesses have moved out of the area or are thinking of doing so.

 

Having pointed out some reasons why he is concerned about the climate for business in the Bay Area, Hewlett turns to some methods that, he feels, might possibly reverse some of the trends.

 

“First,” he says, “I believe that we need more effective and realistic planning – planning that can stand the test of time and provide stability to the region.”

 

Regional planning can allow “business and industry to make long range plans without the prospect that tomorrow, through some capricious whim of a single community, your plans, and indeed the returns from your investments can be negated.”

 

Hewlett feels business “should bend more than it has been willing to do in the past toward recognizing the wishes of the community. It needs to understand the community’s character, its aspirations, its needs and its goals. This is not an easy job as there are many diverse pressures in a community that are not always pointed in the same direction.”

 

Corporations should “encourage employees, regardless of position in the company or party affiliation, to take an active interest in the community and its political processes. The best antidote for radical thinking is reality. Anyone who makes his living in business – from the janitor to the president – is going to be better qualified to separate fact from fancy than someone who has only a theoretical base of this position.”

 

On the other hand, Hewlett says “…environmentalists must be willing to make some compromises. A ‘stop the world, I want to get off’ attitude is going to be self-defeating. The environmentalists will, in the long run, lose more than they can ever gain by such an approach, for society will simply brush them by as unrealistic dreamers.”

 

He gives an example of unrealistic thinking by some environmentalists, in this case from the Sierra Club. “…a recent Sierra Club report, addressing itself to the question of new power plants in California, stated that these plants ‘take up an inordinate amount of valuable open space.’ It went on to state that ‘should utility projections materialize, gigantic atomic generating pants would line the coast at five mile intervals by shortly after the year 2000.’

 

“Such statements are simply untrue. Moreover, they are particularly damaging in that they only contribute to the growing power shortage in our state.”

 

Hewlett gives another example, which involves HP’s planned facility in Santa Rosa. “This is a plant,” he says, “for which very careful planning has been devoted to have it complement the natural attractiveness of the region. Yet some conservationists have opposed any such development even though the unemployment rate in Santa Rosa is more than  9%, and many of its young people must go elsewhere if they are to find a meaningful job commensurate with their education.

 

“So the community, too, must be willing to change its attitude toward business.”

 

“An industrial plant is a living thing populated by human beings – it should not be relegated to the wastelands – to the most unattractive areas. Its employees spend one-third of their waking hours there, and they are entitled to pleasant and attractive surroundings. Too often industry is simply looked upon as an alternate source of revenue and no more – something for which the community has no real responsibility.”

 

Hewlett says a former City Manager in Palo Alto commented to him once that he could run the city without any property tax at all because the city got so much money form business and industry. “Yet,” Hewlett says, “industry in Palo Alto is made to feel like a second-class citizen.

 

“But when all is said and done, the ball is on the business side of the court. If there is to be meaningful regional planning, business must get behind it and push. Business must supply the jobs for our unemployed and underprivileged citizens. Business must be willing to try and ‘sell itself’ to the community and become an exemplary corporate citizen., and business, by its actions, must convince the public that the free enterprise system is able to adapt to changing times, and that it is a fundamentally better approach than that provided by socialism.”

Box 3, Folder 2 – General Speeches

 

February 23, 1971 – Shareholders Meeting, Santa Clara, CA

 

2/23/71, Copy of text of Hewlett’s speech at the Shareholders Meeting

 

Hewlett says he will not go over the year end results as these are in the Annual Report which they already have. “It is sufficient to observe that it was not our best year in history: Sales rose slightly, but our profits fell below the previous year by 11%. Our domestic sales were down 12% from 1969, and it was only through a 32% gain in international sales that we were able to wind up the fiscal year with an overall sales increase of 7%”

 

He says that the recession they have been going through was painful – but such recessions can bring constructive results.

 

He explains that prior to 1970 they had been growing at an average compound rate of about 16% per year for the prior ten years, with the maximum growth of 26%  in 1962, and a minimum of 5.6% in 1963. With the need for forward planning to meet requirements of  plant and equipment we began planning  for 1970 facilities in 1968, and had construction well underway in 1969. So by the time they realized they would end up with excess capacity it was too late or impractical to  cancel projects. Planning for human resources operates in a similar way.

 

Hewlett notes that in addition to this “flywheel effect” there are other characteristics associated with a long-term growth pattern such as they have experienced. He describes one of these factors as “sloppy organization and administration.” Another is the characteristic that growth is not necessarily spread out evenly throughout product lines and imbalances within the business can develop. He says much of 1970 was spent in trying to rectify these problems.

 

The entire domestic marketing force was reorganized to accommodate the growth in product lines from the traditional electronic instruments to adequately handle the current HP product line, which he gives as “electronic instruments, medical electronics, analytical equipment, computers, and related products, calculators, components, and measurement systems.”

 

The management of both international and domestic marketing was strengthened and he mentions that Carl Cottrell was appointed Deputy Director of the International Group, and Bob Boniface was appointed Marketing Director and made a Vice President.

 

Hewlett comments on their experience with the “ten-day work week” they started in July. They felt that layoffs to meet the situation would not only work a hardship on loyal and productive employees, but layoffs would make it difficult to regain momentum once the general business improved.

 

Hewlett says he feels “the reduced work week was an effective and equitable way of bringing into line our productive capability with our incoming order rate.” He adds that they received many favorable comments both from inside and from outside the company, and that they returned to a full work week on January 1.

 

On the subject of minority employment Hewlett says they have been making a “concerted effort” to increase the number of minority employees and he says HP minority employment in the Bay Area remained essentially the same in spite of the recession.

Hewlett talks a bit about Noel Eldred having died [November 30, 1970] and how he had “played a key role” in the company since 1944. Eldred had recently been appointed an Executive Vice President.

 

Hewlett closes with some figures on the first quarter of 1971 operations: sales dropped 1 ½ % from the first quarter of 1970, and earnings per share dropped 12%. He admits these are not highly satisfactory figures, but notes they are close to targets for the period. He adds that with the economic climate the way it is they do not anticipate any marked upturn in domestic business in 1971 – international is expected to grow some but at a slowed pace.

 

2/23/71, Handwritten note to Hewlett from unstated person with some suggestions for his talk to the shareholders

2/23/71, Copy of the printed Notice of Annual Meeting of Shareholders

2/23/71, Copy of typed standard agenda for shareholders meetings

2/23/71, List of Directors with attached biographies

2/23/71, Typed statement of a resolution on tandem options, plus a list of these since 1965

2/23/71, Typed list of instruments on display at the meeting

2/23/71, Copy of press release giving first quarter results

2/23/71, Copies of tables of financial results

2/23/71, Copy of a table of HP Bay Area minority employment

 

 

Box 3, Folder 3 – General Speeches  

 

March  2, 1971 – J. Barth Forum, San Francisco, CA

 

3/2/70, Outline of items to cover in talk, handwritten by Hewlett

 

Hewlett talks on the environment for HP business in the 70s

 

He postulates an economic model:

 

Domestic

Military spending dropped 17% in areas of interest to HP. HP able to weather this with increase in international business. Should bottom out in 71/72.

NASA –  Bottom out in 71/72

Health – Increasing importance, rising from 6 ½ to 8 ½ % of GNP 70-75

Pollution – Rising importance

Industrial – General trend toward automation

Education

Communications

 

International

 

Hewlett sees developed nations which have been expanding rapidly  may have to stop and catch their breath.

Less developed countries will concentrate on social problems, health, communications, education, some industrial growth

 

HP’s traditional line of business allowed it to track rising expenditures in Defense without being part of it.

 

HP enters the 70s as a much more diversified company

 

Instruments are 60% of business

Data processing

Med

Analytical

Components

Systems

Special areas

 

Building for these fields has affected earnings, marketing and R&D in particular

 

How HP will interact

 

Basic Strategies

Use earnings for traditional line to support new areas until they become profitable

HP Labs support new areas

 

Businesses we will be in vs. opportunities

Instrument business is basic

Medical – difficult area

Those less driven by DOD and more by industrial:

AMD

Communication

DMI laser

Some component fields

Data products

Analytical instruments

International

 

Conclusions

Fair match to business in the 1970s

Waiting for economy to improve, get house in order, people in right slots

See 1971 as a static year

1972 could be good

 

3/1-3/71, Copy of typed agenda for the meeting

10/27/70, Letter to Hewlett from E. D. Costello of J. Barth Research inviting him to speak to their Investment forum

11/4/71, Copy of a letter from Hewlett to E. D. Costello accepting their invitation

12/18/71, Letter to Hewlett from John D. Leland, Director of J. Barth Research, thanking him for accepting their invitation and giving details of schedule

2/5/71, Letter to Hewlett from E. D. Costello sending some sample question he may wish to address in his talk

3/4/71, Letter to Hewlett from E. D. Costello saying his contribution to the program was “exceptionally fine.”

3/17/71, Letter to Hewlett from John D. Leland, Jr. thanking him for addressing their forum

3/1-3/71, Copies of two charts showing projected DOD, NASA, and Aerospace expenditures

 

 

Box 3, Folder 4 – General Speeches

 

March 22-23. 1971 – Analysts Breakfast, New York, NY

 

3/22/71, Handwritten notes written by Hewlett on Hotel stationary

 

Hewlett starts with a comment about Eldred passing, and then says that Bob Bonface has been appointed the VP for Marketing, Bill Doolittle appointed VP International

 

Commenting on the first quarter of FY71 he says business has been flat – earnings 4.9M, 19 cents EPS, vs. 5.5M, 22 cents in 1^st Q 1970 – a drop of 12%.

Done much to bring expenses in under control

Profit in line with targets, not unexpected

Introduces Boniface and Doolittle

 

 

Talks about changing nature of business

Shift from defense related

More than 40% in non-traditional products

 

Feels HP is in tune with the times

 

Providing solutions for country’s social problems

Medical and health care

Air and pollution control

Data products

Systems and automation

 

1/31/71, Copy of printed Interim Report for first Quarter, 1971

2/10/71, Copy of a letter from Hewlett to Samuel Payne, Morgan Stanley Company; A. H. Gordon, Kidder, Peabody; Paul Davies, Sr., Lehman Bros.; Walter Frank, Marcus & Co.; and Mortimer Marcus, Marcus and Co, inviting them to a breakfast meeting  of  Security Analysts and HP executives, to be held during the week of the annual IEEE meeting

3/16/71, Memo to Hewlett from Dave Kirby outlining the arrangements for the breakfast meeting with security analysts

3/22/71, Two printed pages, probably from the IEEE program, outlining the schedule of some of the events

 

 

Box 3, Folder 5 – General Speeches

 

April 17, 1971 – Harvard Business School Club of Northern California, award to Edgar Kaiser

 

4/17/71, Typewritten sheet with text of Hewlett’s remarks in introducing Edgar Kaiser, who had been selected by the Harvard Club to receive their “Business Statesman of the Year Award.” Hewlett was asked to be one of the sponsors of the event and to introduce Mr. Kaiser

 

Hewlett says Edgar Kaiser is so well known no introduction is really necessary. However, he says he enjoys this role because he has so much respect for Edgar.

He calls him “one of the most innovative and exciting business managers to appear on the scene during the last thirty years.

 

Hewlett quotes from Kaiser himself to say “We must make our investment of heart and soul as surely as we invest our money. Our returns must be in terms of people, their aspirations, their hopes and ideals as much as on the balance sheet.”

 

A long biography for Kaiser is attached.

 

4/17/71, Copy of printed invitation to Mr. And Mrs. Hewlett

1/8/71, Letter to Hewlett from Lawrence L. Leonard, Conference Chairman saying they appreciate his willingness to be a member of the sponsors’ Committee for Harvard Business School’s 1972 Western Regional Conference.

1/27/71, Letter to Hewlett from Jon R. Katzenbach, Sponsors Chairman, thanking him for agreeing to serve on the Sponsors Committee.

2/29/71, Letter to Hewlett from William F. Geisler, enclosing a draft of the invitation to be sent over the name of the sponsors

2/22/71, Letter to Hewlett from James B. Hill discussing arrangements for the affair

3/4/71, Letter to Hewlett from E. L. Johnson, saying they had received his check for $350 for a table

4/17/71, Letter to Hewlett from Edgar Kaiser thanking him for introducing him at the award dinner.

4/27/71, Letter to Hewlett from James B. Hill thanking him for his participation and asking for $428.86 as his share of the costs.

5/11/71, Letter to Hewlett from George L. Roen acknowledging receipt of his check in the amount of $428.86.

2/11/71, List of HP employees who are graduates of Harvard

 

 

Box 3, Folder 6 – General Speeches

 

June 16 -18, 1971 – Semi-Annual Management Meeting, Palo Alto, CA

 

6/17/71, Handwritten notes by Hewlett for his opening comments. He is obviously concerned about HP’s poor performance during FY 70, and wants a change

 

Hewlett draws a similarity between the church and a corporation:

 

“Call to Worship – which you have had

Prayer of Confession – which you need

Declaration of Pardon – which you will not get”

 

That said he says he will now deliver the 1^st and 2^nd lessons – Benediction, if any, may wait.

 

1^st Lesson

 

This has been the worst month in history: plus 1.8% in sales, 1.1 M behind target, 1.7 cents vs. 6.1 cents per share.

 

Some problem with profit and inventory, but still bad

 

And he continues saying the 2^nd Lesson “is like unto it.”

 

For the year to date compared with last year he says they are 2 ½% down in shipments, and 21.9% in profit before taxes.

 

He says he does not know of a more instructive lesson upon which to base a Sermon.

 

Sermon

 

He says they have all been through a “very difficult” year.

In the first half they were well below targets

In the second half  arbitrary force fit on targets

Long term drop in profits

 

Hewlett sees pricing as a big problem.

 

He sees a 10% wage and salary increase coming over the next 12-15 months which will increase costs by 4% exclusive of other increasing costs.

 

Increased sales by 3.4% – but 6.1% increase in R&D, and 4.9% increase in marketing expense.

 

And he emphasizes that for a 3.4% increase in sales they got a 1.6% decrease in profits – and 1970 was a poor year.

 

Hewlett says he has asked the divisions to increase their prices – he has directed them to increase their prices. But during the last year while the GNP was going up 5.2%, HP prices were going up less than half that, and are now down to about the 1% rate. The only course left appears to be to raise prices by an arbitrary amount  – the only problem is how much.

 

Analyzing the problem Hewlett says the situation is the result of people trying too hard for the wrong thing: volume rather than profit, future long range growth rather than today’s earnings, pushing too hard against a stone wall when the equivalent effort could be better spent elsewhere.

 

He says better planning is needed:

The present system of pure bottom up targeting is not working

Need more specific allocation of dollars based on specific needs and objectives.

And all of this to fit into a given profit objective rather than the profit simply being what is left over once all needs have been met.

 

 

Hewlett states the purpose of the meeting as:

 

To better understand the problem that faces us

To agree on specific courses of action to solve the problem

To leave here prepared to implement a program of reconstruction to get the company back where it belongs

 

6/18/71, Handwritten notes by Hewlett for closing remarks

 

Hewlett reflects on why we come to these meetings and supplies some answers:

Informal contact that are so important – things can be said in an informal atmosphere that are difficult to communicate in a more formal setting.

 

There is a family atmosphere in HP – and a formal part.

 

Allow some top people to bounce ideas

 

He summarizes what has been learned this year:

 

That current year order level is grim

That this not a short time phenomenon, but  long term trend – in part due to failure to keep up with inflation, part due to competition

 

That international is tracking U. S. – the question is will U. S. recovery compensate for international decline?

 

Making some comments Hewlett says he sees some structural problems:

 

Pricing

 

Must be smarter

It is not sufficient to say we are making too much and will not be tomorrow – need flexible pricing

Pricing in terms of what the contribution is – when you have a good product use excess profit – Laser, DMI

 

Targets – Start with profit

 

Longer term planning

 

Initiative still with divisions

Agree on acquisitions

Must be more customer oriented, rather than hardware

Keep changes to a minimum

 

6/16/71, Copy of typewritten agenda for the meeting

5/12/71, Copy of a memo from Austin Marx to Hewlett, Lee and Boniface saying he thinks HP is falling behind on pricing

Several sheets of tables giving data on operations and finances

 

 

Box 3, Folder 7 – General Speeches

 

September 23, 1971 – “A Positive Approach to U. S. Exports,” World Affairs Council of Northern California, Palo Alto, CA

 

9/23/71, Outline of Hewlett’s remarks, handwritten by him

 

Hewlett tells how,  during the years after World War II, the U.S. had the financial and industrial strength, and the technical knowledge to try to get the free world going again. But now some problems.

 

Trade deficit –             Due, in part, to our inability to control our  internal inflation

Balance of payments

 

He talks about the Bretton Woods principle and how it will affect the United States

Cheaper labor abroad

 

Some cards the U. S. holds:

Know how to compete

Rise of technology

Rising standard of living – replace labor with capital

 

“The new challenge is to learn how to live and compete in a world where U.S.  is not the dominant partner, but an equal partner. This is going to be harder than you think.”

 

9/8/71, Memo to Hewlett from Tom Christiansen to Hewlett attaching an article on the subject for background.

9/13/71, Letter to Hewlett from Richard G. Heggie, Executive director, World Affairs Council, giving details on arrangements for the luncheon.

9/23/71, Handwritten note to Hewlett from Austin Marx attaching a background article

10/5/71, Letter to Hewlett from Wallace E. Connolly, World Affairs Council, thanking him for his talk at their meeting.

Copies of several additional background articles

 

 

Box 3, Folder 8, – General Speeches

 

October 20, 1971 – “The New American Challenge” – Receiving the WEMA Medal of Achievement, Los Angeles, CA

 

10/20/71, Handwritten comments, written by Hewlett, reminiscing about the early days of WEMA, and expressing appreciation for the award.

10/20/71, Copy of earlier handwritten draft of same talk

 

10/20/71, Outline of speech, titled “A New American Challenge,” handwritten by Hewlett

 

The U. S. is indeed in some serious trouble – how can we get out – are we really broke

 

Our world has changed, and we have been unwilling to see it and admit it. Need to take a new look at the world as it is today – not as it was 21 years ago. The New American Challenge is not to others, but to ourselves.

 

Hewlett reviews the problem:

What is happening to U. S. foreign trade – what is our competitive position? He says he approaches this as a free trader, a believer in the role of technology, and a firm believer in the role of competition

 

And he gives some background on the problem:

U. S. was dominant during the years following World War II

U. S. imports 2:1 in favor of U.S. in 1947, now negative

Not that exports have not risen (up 4 fold during this period), imports have risen faster. From 1961 to 1971 imports of autos rose 1500%, TVs up 600%.

 

But before we panic look at some of the positive factors in U.S. and consider how we can capitalize on them once the U.S. dollar is properly priced in the world market.

 

He reviews important factors in the U.S. which should be highlighted

Anti-trust act – sharpened competition

Rise of technology

Rising standard of living

 

He suggests a constructive program

 

Management Science. Use to make U.S. production more efficient, both for exports and against imports.

 

Concentrate on high technology products

 

Increment production ability

 

Conclusions

“Although our international competitive posture has been greatly weakened, we still have many basic strengths. We shouldn’t panic, but should take stock of areas of strength and concentrate and build on these areas. There is going to be a readjustment of internal economy that will be difficult, but fundamentally, they are in the right direction.”

 

10/20/71, Copy of earlier handwritten draft of same talk

10/20/71, Copy of typewritten paragraph describing the WEMA award

7/8/71, Letter to Hewlett from R. Stanley Dollar, Jr. congratulating him on the award

7/12/71, Letter to Hewlett from J. E. Wallace Sterling congratulating him on the award

7/21/71, Copies  of letters from Hewlett to each of the above thanking them for their note.

7/15/71, Handwritten note to Hewlett from Frank Seckler congratulating him on the award

7/22/71, Copy of a letter from Hewlett to Frank Seckler thanking him for his note

7/1/71, Letter to Hewlett from William Cook saying he is pleased to learn that Hewlett can accept their invitation to be the featured speaker at the Chief Executive’s Night in October

7/21/71, Copy of a letter from Hewlett to William L. Cook discussing dates that would be acceptable

7/23/71, Letter to Hewlett from William L. Cook saying Oct 20^th would work well

7/28,71, Copy of a letter from Hewlett to William L. Cook giving the time he will arrive in Los Angeles

7/26/71, Letter to Hewlett from J. I. Hamilton congratulating him on the award and telling him that he had been doing the last several years

8/3/71, Copy of a letter from Hewlett to J. I Hamilton saying he was delighted to hear from him

8/2/71, Letter to Hewlett from John J. Tordoff congratulating him on the award

8/4/71, Copy of a letter from Hewlett to John J. Tordoff thanking him for his note

8/6/71, Letter to Hewlett from Don Larson reminding him of a reception prior to the award luncheon

6/25/71, Letter to Hewlett from R. C. Mercure, Jr. of  WEMA, confirming his selection by WEMA  for the Medal of Achievement

6/30/71, Copy of a letter from Hewlett to R. C. Mercure saying he is delighted to be selected for the award

8/24/71, Handwritten note to Hewlett from Richard M. Leonard saying it was good to see him again

 

 

Box 3, Folder 9 – General Speeches    

 

December 13-14, 1971, Management Meeting, San Felipe Ranch

 

12/13/71, There is no copy of a talk Hewlett may have made at this meeting, however one of the managers, Tom Perkins, made comprehensive notes on what each manager said and the following is from his notes on Bill Hewlett’s summary of the meeting.

 

1. Human relations practices must be improved – several instances of poor judgement
2. The management by objective  concept needs to redefined and communicated to all HP managers
3. Group structure seems to be working – need to clarify gray areas
4. Probably should identify a single spokesman to handle safety and pollution problems
5. Should put all hourly employees on salary basis where possible
6. Need policy statement on financial disclosure and confidential information
7. Present price approval mechanisms should continue, although Morton may begin to do his own pricing in the future
8. Dean Morton and Emery Rogers to be appointed to Executive Council
9. 1972 targets approved an annual basis and all targets to be done on annual basis without resetting in six-month intervals

 

11/9/71, Memo from Ray Wilbur to Tom Perkins giving his ideas on topics for discussion at the management meeting

11/17/71, Memo from Emery Rogers to Hewlett with his thoughts on the forthcoming meeting

11/17/71, Memo from Dean Morton to Tom Perkins giving his ideas for the meeting

11/18/71, Memo from Bill Doolittle to Tom Perkins giving his ideas for the meeting

11/18,71, Memo from Ed Porter to Hewlett with his ideas for the meeting

11/18/71, Memo from Ray Demere to Tom Perkins giving his thoughts for the meeting

11/18/71, Memo from Frank Cavier to Hewlett giving his ideas on topics to discuss at the meeting

11/22/71, Memo to Hewlett from Bob Boniface with his thoughts for the meeting

11/29/71, Memo to Hewlett from Ralph Lee with his thoughts for the meeting

11/29/71, Memo to Hewlett from Tom Perkins attaching a preliminary model for statements looking ahead several years

11/30/71, Memo from Tom Perkins to managers attending the meeting saying Hewlett would like to discuss several general topics and has assigned each of these to managers as shown on an attached list

12/6/71, Memo to top managers from Ray Wilbur attaching a proposed updating of HP’s Management Development Program

12/27/71, Memo from Tom Perkins to top managers outlining material covered at the meeting

1/5/71, Handwritten note to Hewlett from Ray Wilbur with his summary of the discussions on topics at the meeting

12/13/71, Copy of a table analyzing inventories

Copy of what a possible annual report for HP in 1981 would look like

 

 

Miscellaneous – Undated, untitled folder, containing miscellaneous material as listed below:

 

2/8/60, Copy of a memo from Ed Porter, but not addressed, giving a suggested organizational format for HP plants

2/15/60, Copy of a memo from “Vet” to Porter giving a five year forecast of space requirements

Undated, note from Ed Porter to Ralph Lee urging action on plans to build building #5 or #6

Undated, Several groups of pages torn from notebooks upon which Hewlett has written information concerning actions on the development of HP facilities in Europe

Box 2, Folder 35 – General Speeches

 

January 19 and January 25-27,1970 – Management Meetings, Colorado Springs, CO and  Ouchy, Switzerland

 

1/19/70, Outline of  talk handwritten by Hewlett

 

Hewlett says the purpose of the meeting is to talk about problems, solutions, and the direction HP is going. This meeting is consistent with management by objective – important to share these thoughts.

 

Giving a bit of history Hewlett tells about the first management meetings where they sat down and talked about problems – formulated the first corporate objectives. Later meetings were held in Monterey, larger, more rigid structure. Became harder to get sales up and easy to push sales down.

 

Two way communications in meetings like this are important. For this meeting a tentative agenda is worked out with Lee and Eldred and then sent to the Operations Council where it is picked apart and restructured.

 

This kind of process can be seen in the budgeting process. General targets set up by the Executive Office, then Groups and Divisions do their targeting – generally accepted.

 

With this system of delegated responsibility Hewlett says he has not given up any of his authority. He is still the one the Board or the Shareholders look to for healthy company operation of the company. But management load has been spread.

 

Says what they want to do today is provide a distillation of the discussions they had last December, [See speech folder December 1-2. 1969], with much of the original cast.

 

1/9/70, Copy of a memo from Stan Selby to Hewlett giving directions to the meeting place. A list of attendees from both Loveland and Colorado Springs is attached.

1/19/70, Copy of a letter from Stan Selby to Hewlett telling him where the management meeting will be held and enclosing a list of attendees and a tentative agenda

1/25/70, Copy of agenda and list of attendees at the European Management Meeting in Ouchy, Switzerland. No notes on a Hewlett speech is in the folder, but it can be assumed that it was along the line of the above.

 

 

Box 2, Folder 36 – General Speeches

 

February 12, 1970 – Analysts Meeting, Wilmington, DE

 

2/12/70, Outline of points to discuss handwritten by Hewlett

He gives 1969 financial data, discusses changes in the Board, and reviews progress in the first Q. FY70.

Reviews organizational changes and gives some outlook for the future

Reviews problems

Long term outlook: optimistic

2/12/70, Earlier draft of speech outline handwritten by Hewlett

2/12/70, Outline for Hewlett speech typed, from Marketing

2/12/70, Handwritten sheet with more suggestions for Hewlett talk

2/12/70, Typewritten sheet giving FY 69 financial data

10/2/69,  Copy of a letter from Hewlett to William G. McKenna VP Financial Analysts of Philadelphia, saying space does not permit the addition of their group to the meeting in Wilmington, but possibly they might like to join the breakfast meeting HP will be having with analysts in New York in March

1/23/70, Memo to Maddie Schneider from Emery Rogers talking about time arrangements during Hewlett’s visit

9/30/69, Letter to Ed Van Bronkhorst from Ralph E. Pierce, Financial Analysts of Wilmington, saying they will be present for the meeting with HP on February 12.

1/7/70, Letter to Ed Van Bronkhorst from Ralph E. Pearce saying they look forward to meeting with Mr. Hewlett at the meeting with the Financial Analysts to be held in the Hotel DuPont, in Wilmington

1/20/70, Letter to Hewlett from Ralph Pearce saying they understand Mr. Van Bronkhorst will not be attending the Feb. 12 meeting, but they look forward to meeting with Mr. Hewlett and Emery Rogers.

1/29/70, Copy of a letter from Hewlett to Ralph Pearce saying he has learned that their VP in charge of Operations, Ed Porter, will be in Avondale on February 11 and 12, and he has invited him to join the group for lunch on Feb. 12

2/13/70, Letter to Hewlett from Ralph Pearce thanking him for addressing their group

2/19/70, Copy of a press release issued by HP giving financial results for the first quarter FY 70

 

 

Box 2, Folder 37 – General Speeches

 

February 24, 1970 – Shareholders Meeting, Santa Clara Plant Site

 

1/26/70, Copy of printed Notice of Annual Meeting of Shareholders

2/24/70, Copy of typed suggested agenda for the meeting

2/24/70, Copy of typed resolution

2/24/70, Copy typewritten resolution amending Articles of Incorporation

2/24/70, Copy of  floor plan showing location of displays of HP products

 

 

Box 2, Folder 38 – General Speeches

 

March 25, 1970 – Analysts Meeting, New York, NY

 

3/25/70, Complete text of Hewlett’s talk handwritten by him on lined tablet paper

 

Hewlett talks about the discourse that goes on between security analysts and company managers. The analyst interviewing a manager tries through adroit questioning to gain some bit of wisdom that will give his clients an advantage. The manager is under governmental constraints as to what information can be communicated – “cat and mouse game,” he says.

 

However, Hewlett says the fact that the Company has invited the analysts here indicates that  they are anxious for them to know more about HP and to understand the company better. He says that what the individual analyst gets out of the meeting is the difference between a skilled and an unskilled listener – both hearing the same information.

 

Reading a balance sheet or profit and loss statement, Hewlett says, can give insight into the health of the company. But they don’t show anything about what he calls “our greatest asset, and that is our people.” He says that their evaluation of the quality of management is a better indicator of the future prospects of the Company than anything he might say. Last year two Group Managers, John Young and Carl Cottrell spoke. And this year three Division Managers will talk about their respective operations: Dean Morton of the Medical Division, Emory Rogers of the Analytical Division, and Bill Terry of the Colorado Springs Division.

 

3/25/70, Copy of typewritten sheet showing FY 69 financial and operations data

4/3/70, Letter to Hewlett from Arthur Carwardine saying he enjoyed meeting him at the meeting.

 

 

Box 2, Folder 39 – General Speeches

 

April 7, 1970 – Counterpart Luncheon, Palo Alto, CA

 

4/7/70, Outline of talk, handwritten by Hewlett on lined tablet paper

 

Counterpart is a community self-help organization, black and white people working on projects to assist minority groups in the area. Hewlett is addressing  industry and community organizations to tell them more about Counterpart and solicit their help for 1970 projects.

 

Hewlett says the problem is not whether there should be help, but how to help. Must support programs that are successful, and counterpart is successful he says.

 

He gives some background on Counterpart and describes specific projects where help is needed. He asks that they make these known to their people and help with money and interest.

 

4/7/70, Copy of a circular letter, signed by Hewlett, and apparently sent to many community organizations and companies. The letter lists specific counterpart projects, shows the budget needed to support each, and asks that they pick a project they can support.

 

 

Box 2, Folder 40 – General Speeches

 

April 13, 1970, Acceptance of Harvard Business School Club Award – “Business Statesman of the Year,” San Francisco, CA

 

4/13/70, Typewritten text of Hewlett’s speech

 

This is a speech about the social responsibility of business and Hewlett says he would like to feel that “society is moving in a direction that allows the humanitarian component of every good manager to take an ever more active role as a constructive agent of social change.”

 

He tells his audience that he wants to talk about the “young men and women that you will be hiring over the next few years and give you some personal views as to what I think they believe and want and what the business community might do about it….We are in the midst of a revolution as great as the Renaissance or the Industrial Revolution.”

 

Although the universities have been the focal point for thought and action, Hewlett says “It is a mistake to think that the problems in our universities today are simply the result of acts of a handful of irresponsible radicals….The militants could not function at all if it were not for a very broad level of tacit support within the university community; not that the acts that the radicals perform are necessarily condoned as such, but rather that the average student sees in the radical a statement – albeit grossly exaggerated – of some of his own views on what should be done to direct society towards a better course.” And he points out that we will shortly be hiring these young people for work in our organizations.

 

Considering what might be the reaction of these young people to the corporation Hewlett wonders if there “Can be a revolt in the corporation just as there was in the university?”

 

And he describes recent happenings at universities: – “Deans thrown out of their offices at Harvard, the door of the President of MIT battered down, red paint poured over the head of the President of Stanford.” Hewlett does point out that the average university is more “archaic, more authoritarian” than its corporate counterpart. But corporations are “far from perfect and universities are not all wrong”, and “there are lessons to be learned.”

 

Hewlett feels the student of the day wants to “become part of society; wants to cut through the hypocrisy that he sees all around him; and wants to get on with the problem of trying to solve what he feels are the social ills of the world.” And his inability to make progress along these lines is, Hewlett feels, at the root of many student riots.

 

Hewlett says the students who will be joining our organizations will be bringing their views with them. “They will be a group that is infinitely more idealistic than anything we have known in the past.” Although joining the recent trend of increased social responsibility among corporations, “They will also be questioning some of the most fundamental concepts on which the corporation is based –authority, responsibility, structure….They will want a structure that is less rigid, more understanding of the individual.”

 

“The real authority will be the authority of knowledge and judgments and of leadership – not from the title on the door. All of this raises some very basic questions about what will be the relative responsibility of managers to their shareholders, to their employees, and to society at large.

 

Hewlett feels that these trends will move corporations to place greater emphasis on responsibility to society rather than a sole responsibility to shareholders. “This will,” he says, “raise serious questions in the minds of the shareholders, for as a group, shareholders are probably the most reactionary or conservative component of the corporate structure. Yet it must be made clear to the shareholder what the cost-benefit ratios really are. He will have to be made to understand that in the long run these actions will cost him less –less in taxes – less in lack of efficiency – less in disruption to the economy.”

 

Hewlett says “We have already come a long way since the time that corporate support to higher education was actively questioned by shareholders. Indeed, a very large corporation may more and more be considered a public trust, rather than the private property of its shareholders….The company that can successfully adapt to such changing values will be at home and will represent a constructive force upon the changing society. The young men and women that you will be employing in the next few years can be the focal point that promotes and facilitates these changes. The companies that cannot adapt will find themselves out of step with the times – a relic of the past. These young people with their idealistic and sincere dedication, working in conjunction with the wisdom and understanding of an older generation and with a government that is sympathetic and helpful, an move us a long way toward solution to the complex problems facing us today.”

 

3/13/70, Typed note to Hewlett from his Secretary, Madelen Schneider, saying she had talked to one of the Harvard Club members who attended the previous year dinner, and she passes along information on what the speaker at that time said about business and social responsibility.

3/31/70, Letter to Hewlett from J, E. Wallace Sterling, President of Stanford, congratulating him on the award and saying he regrets he will not be able to attend.

3/31/70, Letter to Hewlett from James B. Hill, Harvard Business School Club of Northern California, discussing arrangements for the award dinner

3/26/70, Letter to Hewlett from Robert J. Wert, President of Mills College, offering congratulations on the award

4/2/70, Copy of a letter from Hewlett to Dr. Wert thanking him for his note.

3/26/70, Letter to Hewlett from Ernest C. Arbuckle, Chairman, Wells Fargo Bank, congratulating him on the “Man of the Year “ award.

4/2/70,  Copy of a letter from Hewlett to Ernest C. Arbuckle thanking him for his note

4/1/70, Letter to Hewlett from Albert H. Gordon congratulating him on the award

3/26/70, Letter to Hewlett from W. P. F. Brawner congratulating him on the award

4/2/70, Copy of a letter from Hewlett to Mr. Brawner thanking him for his note

3/25/70, Handwritten note to Hewlett from Dr. L. R. Chandler congratulating him on the award

4/2/70, Copy of a letter from Hewlett to Dr. Chandler thanking him for his note

3/25/70, Letter to Hewlett from Richard S. Bullis saying its nice to see friends become leaders in government and business

4/2/70, Copy of a letter to Richard Bullis thanking him for his note

3/25/70, Letter to Hewlett from R. Stanley Dollar, Jr. offering congratulations on the award

4/2/70, Copy of a letter to Stanley Dollar thanking him for his note

3/26/70, Letter to Hewlett from Herbert Navis congratulating him on the award

4/2/70, Copy of a letter to H. A. Navis thanking him for his note and offering him congratulation on being appointed a VP at Socal

4/14/70, Letter to Hewlett from H. A. Navis thanking him for his kind words

4/3/70, Letter to Hewlett from Richard J. Porn, Albuquerque Industrial Development Service, Inc. congratulating him on the award

4/6/70, Letter to Hewlett from James J. Foley, Harvard School of Business Administration, sending a biographical sketch of Lawrence E. Fouraker, the new Dean of the Business School

3/30/70, Letter to Hewlett from Richard E. Guggenhime saying Hewlett deserves the award

4/8/70, Copy of a letter from Hewlett to Richard E. Guggenheim thanking him for his note

4/1/70, Letter to Hewlett from Gaynor H. Langsdorf, congratulating him on the award and saying he looks forward to seeing him at the “Grove”

4/1/70, Letter to Hewlett from Edward Lee Soule, Jr. offering congratulations

4/9/70, Copy of a letter from Hewlett to Edward Lee Soule, Jr., thanking him for his note

4/1/70, Letter to Hewlett from J. K. Gustafson, Chairman, Homestake Mining company, offering congratulations on the award

4/9/70, Copy of a letter from Hewlett to J. K. Gustafson, thanking him for his note

4/3/70, Letter to Hewlett from Dean A. Watkins, Chairman, Watkins-Johnson Co., offering congratulations on the award

4/9/70, Copy of a letter from Hewlett to Dean A. Watkins, thanking him for his note

4/9/70, Copy of a letter from Hewlett to Emanuel Fritz thanking him for commenting on the award

4/1/70, Handwritten note to Hewlett from Mrs. Allan E. Charles saying Harvard shows good judgment in making its awards

4/9/70, Copy of a letter from Hewlett to Mrs. Charles thanking her for her note

4/3/70, Letter to Hewlett from K. S. Pitzer congratulating him on the award

4/9/70, Copy of a letter from Hewlett to Kenneth S. Pitzer thanking him for his note

4/2/70, Letter to Hewlett from L. W. Lane, Jr. congratulating him on the award

4/9/70, Copy of a letter from Hewlett to Bill Lane thanking him for his note

4/9/70, Letter to Hewlett from Charles A. Anderson of SRI saying he was a part of the committee and is in full agreement with the selection

4/10/70, Letter to Hewlett from Rudolph A. Peterson saying the award is well earned

4/14/70, Letter to Hewlett from Richard O. Buxton saying they were pleased to learn of his award

4/16/70, Copy of a letter to Richard O. Buxton thanking him for his note

4/8/70, Letter to Hewlett from William E. Roberts, Ampex Corp. congratulating him on the award

4/21/70, Copy of a letter from Hewlett to William E. Roberts thanking him for his note

4/16/70,  Letter to Hewlett from Larry M. Winward, Administrative Assistant to the President of Lane Publishing Co., congratulating him on the award, on behalf of Bill Lane and all at Sunset Magazine

4/21/70, Copy of a letter from Hewlett to Larry Winward thanking him for his note

4/15/70, Letter to Hewlett from Walter A. Hass, Jr., congratulating him on the award

4/21/70, Copy of a letter from Hewlett to Walter Hass, Jr. thanking him for his note

4/16/70, Letter to Hewlett from Walter A. Hass saying they had to miss the award dinner as Mrs. Hass became ill

4/21/70, Copy of a letter from Hewlett to Walter A. Hass saying he was sorry to hear of his wife’s illness and that they missed them at the dinner

4/16/70, Letter to Hewlett from William S. Powell, saying he was sorry they could not be at his richly deserved award dinner

4/21/70, Copy of a letter from Hewlett to William S. Powell thanking him for his nice

note

4/9/70, Letter to Hewlett from Stephen D. Bechtel, Jr., offering congratulations on the award

4/22/70, Copy of a letter from Hewlett to Stephen D. Bechtel, Jr. saying was sorry he couldn’t make the award dinner

4/9/70, Letter to Hewlett from Charles Johnston Hitch congratulating him on the award

4/12/70, Copy of a letter from Hewlett to Charles J. Hitch saying he appreciates his note

4/7/70, Handwritten note to Hewlett from Jane F. Taylor congratulating him on the award

4/23/70, Letter to Hewlett from James B. Hill of the Harvard Business School Club thanking him for being with them to receive the Business Statesman Award

4/28/70, Copy of a letter to Ms. Jane F. Taylor thanking her for her note

4/17/70, Letter to Hewlett from Peter N. Teige commending him on his speech at the award dinner

4/28/70, copy of a letter from Hewlett to Peter Teige thanking him for his letter

5/1/70, Letter to Hewlett from Kenneth M. Cuthberton, Stanford University, Vice President for Finance saying he had read the text of his remarks at the award dinner and believes he did a great service by his comments

6/17/71, Letter to Hewlett from George I. Roen, Harvard Business School enclosing a check for $225, refunding an overpayment for ten people attending the award dinner

6/69, Copy of an SRI publication  called “Voices of Tomorrow” giving highlights from a film they made of interviews at Stanford asking students of their views of the business community

 

 

Box 2, Folder 41 – General Speeches

 

May 13 to June 2, 1970 – Trip to Europe and Asia

 

4/3/70, Memo from Franz Nawratil to Bill Doolittle discussing a press conference during the open house day in Frankfurt on May 22

4/10/70 Memo from Bill Doolittle to Dick Alberding in Geneva giving travel arrangements for the trip to Europe

4/13/70, Memo from Bill Doolittle to Franz Nawratil saying Hewlett, Lee and himself will attend the open house on May 22.

4/27/70, Memo from Eberhard Knoblauch to Alberding, Doolittle, Hewlett, Lee and Terry, enclosing a tentative agenda for the GmbH review on May 21. He adds a note to Hewlett that they would appreciate it if he would say a few words.

3/10/70, Letter to Ralph Lee from Nicholas O. Wise of Executive Jet Aviation, Inc.(EJA) saying they would be happy to assist with air travel in Europe and giving contact information

5/6/70, Copy of a TELEX from Doreen Norris at HP in Palo alto to EJA in Basle, Switzerland requesting a chartered jet for Hewlett leaving Stockholm for Edinburgh on May 18.

5/8/70, Copy of a telegram from EJA in Columbus, Ohio transmitting a message from their office in Basle giving flight information for trip from Stockholm

5/13/70, Exchange of telegrams exchanged between the Hewletts and their daughter and son-in-law in Stockholm to arrange stay with them instead of Grand Hotel

5/18/70, Copy of typed itinerary for a visit of possible French manufacturing sites on May 18

5/15/70, Copy of a typed agenda of visit to GmbH facility on May 21

5/14/70, Copy of a telegram from Karl Doering to Hewlett giving agenda for open house in Frankfurt on May 22

Undated, Several pages of rough notes written by Hewlett listing topics he wished to discuss at various places

Undated, Typed list of HP people in Singapore, plus biographical information on some governmental people

 

 

Box 2, Folder 42 – General Speeches

 

May 15, 1970, Board Meeting, HP new Santa Clara plant

 

5/15/70, Outline of discussion comments handwritten by Hewlett on lined tablet paper

 

Topics addressed by Hewlett include:

 

The original character of HP

Marketing structure – independent reps to in-house regions

Seeds of change – acquisitions: Sanborn, F&M, Delcon,

Group structure

Problems and Solutions – growth, marketing, product line responsibility,

Why two instrument groups

Current economic outlook – targets by groups, new chart of accounts

Long term outlook – structure, better control needs, leaner divisions, should be in fair condition if economy improves by end of year

If economic condition worsens have cut all fat and will have to take more drastic action

5/15/70, Typed tentative agenda for Board Meeting, plus several pages of charts and tables

 

 

Box 2, Folder 43 – General Speeches

 

July 1, 1970 – Announcement  to Employees re Cutback in Hours, and Pay

 

7/1/70, Copy of typed text of this announcement, given here in its entirety

 

“As I have been indicating in recent issues of Measure, the domestic economy has been sufficiently slowed down to materially affect our incoming order rate. In fact, we are now producing at a rate that is approximately 10 percent larger than our incoming order rate. This has resulted in a substantial reduction in our backlog and an increase in our inventories of almost $23 million during the last twelve months.

 

“The general economic outlook does not appear to be improving and it is therefore necessary to bring production in line with orders. The traditional way would be to have a 10 percent layoff. This is not, however, in the HP tradition of considering the company as a team effort. The most equitable method, therefore, is to have all share. I have therefore decided to reduce the work week for all by 10 percent. This will be achieved by having the company work four days one week and five the next. The first day out under this new plan will be July 10^th. Accordingly, all employees, hourly or salaried, will be receiving about 10 percent less base pay. For reasons of high order levels or previous commitments, certain plants will not be affected. These will be Avondale, Colorado springs, San Diego, and the automatic test department of AMD here in Palo alto.

 

“It is difficult to determine how long this condition may last, but it is expected that by the end of our fiscal year we will be able to return to a full time schedule. A review will be made each month to determine if the order situation will allow individual divisions to return to full time.

 

“These days when the plants are closed may not be counted as paid vacations. Your supervisors have more detailed information about the operation of the plan and should be in a position to explain its operation to you.

 

“One note: at the briefing that I gave this morning to supervisory personnel, I indicated that there would be a substantial offset to the 10 percent reduction due to the removal of the Federal U.S. incremental surcharge. I was mistaken in the numbers quoted, and the effect of this change will be in the order of 1 or 2 percent rather than the larger number indicated.

 

“This is as equitable a plan as I can think of – let’s make it work!”

 

7/1/70, Draft of above announcement handwritten by Hewlett on lined tablet paper

7/7/70, Letter to Hewlett from Tom Griffin commending him on the way the reduction in hours was handled

7/16/70, Copy of a letter from Hewlett to Tom Griffin thanking him for his letter

7/7/70, Letter to Hewlett from the wife of an HP employee commending him on the way this problem has been handled She says “This family is with you all the way…”

7/16/70, Copy of a letter from Hewlett to Mrs. Margaret Shergalis thanking her for her “most thoughtful” letter

7/2/70, Letter to Hewlett from George B. Shott of White, Weld and Co. commending him on HP’s solution to the problem

7/2/70, Letter to Hewlett from J. F. Hunter commending him for the action taken

7/3/70, Letter to Hewlett from Arthur L. McLendon commending him on the handling of the situation

Also enclosed in this folder are several pages of analytical data evidently used in the discussions leading to the final decision to cutback hours.

 

 

Box 2, Folder 44 – General Speeches

 

August 3, 1970, Semi-Annual Managers Meeting, Palo Alto, CA

 

8/3/70, Copy of typed preliminary agenda for the meeting, and a tentative list of attendees

8/3/70, Bound binder of data with graphs, charts and other data regarding financial and operations data covering eight months ending 6/30/70

11/21/70, Copy of a letter from Hewlett to Dr. George L. Bach saying he is delighted that he will be able to attend the forthcoming meeting of the Management Council

12/5/69, Copy of a letter from Hewlett to Dr. Bach saying all the managers were very pleased with his discussion and asking if he would be interested in giving a short lecture to their top people four times a year

12/10/69, Letter to Hewlett from Dr. Bach saying he would like to discuss the idea of  periodic meetings with HP people “so long as they involve only a modest amount of time”

12/11/69, Copy of a letter to Dr. Bach from Hewlett suggesting their secretaries arrange a satisfactory time for them to get together

7/22/70, Copy of a letter from Hewlett to Dr. Bach saying he is delighted he will be able to join their meeting next month

 

 

Box 2, Folder 45 – General Speeches

 

September 14-18, 1970 – Talk on the “Role of Small Computers in Instrument Systems,” Computer Conference, Novosbirsk, Soviet Union

 

9/14/70, Copy of typewritten text of Hewlett’s talk.

This is a fairly technical talk in which Hewlett describes HP‘s experience in using computers to automate the testing of electronic components, equipment and systems. He says the need for this arose because of the “increasing complexity of individual pieces of electronic equipment, the desirability of routine testing of electronic components for reliability…and a trend toward the assembly of a number of individual pieces of equipment into computer systems.”

 

“It became evident,” he says, “that the instrument companies should become involved in the computer business or abrogate a reasonable percentage of business to the computer concerns. In addition, there were secondary reasons why an instrument company like Hewlett-Packard should enter the computer field. Perhaps the most important of these was the necessity to thoroughly understand the computer itself so that an optimum match might be made between the computer hardware and the instruments with which it would be associated. An additional factor was that many of the skills involved in the design and production of computer hardware were applicable in the design and production of more complex measuring equipment.”

 

Hewlett says “the design of a computer for instrumentation use posed some special problems. Perhaps the most severe of these was the fact that the computer should be able to operate in the same environment as the instruments. Traditionally computers had been designed to operate in a very favorable environment, often involving air-conditioned rooms in which both temperature and humidity were controlled….” He adds that they had little tolerance for variations in electrical current, and were not designed to withstand much shock and vibration.

 

Hewlett says that in designing computers for instrument purposes they have found unique application in some extremely hostile circumstances, and he gives an example of its use on an oil drilling platform in the Gulf of Mexico.

 

Hewlett tells of HP’s own use of a computer-controlled system for the production testing of the printed circuit boards for the 9100A and B Desk Top Calculators.

 

Another example Hewlett describes is the “application of the computer to solve specific instrumentation problems.” He says specialized software is required and he tells of one that was designed for use at the Stanford University Medical Center. “The integrated/hardware/software package is intended to automate time-consuming laboratory procedures and perform real time cardiac analysis.”

 

Looking ahead Hewlett sees continued developments in the field of automatic measurements. “Perhaps,” he says, “the best indication of this is the fact that universities are now beginning to give courses in this field. It will not be long before we have a generation of engineers who have been trained to use and understand automatic testing and will be more willing to accept it and encourage its use than the older generation.

 

9/14/70, Copy of earlier draft of talk, as well as outline draft handwritten by Hewlett on tablet paper

9/14/70 Copies of several papers describing HP’s work in various areas of automatic testing evidently sent to Hewlett in preparation for this talk

 

 

Box 2, Folder 46 – General Speeches

 

December 7-8, 1970 – Semi-Annual Managers Meeting, Palo Alto, CA

 

12/7/70, Typewritten outline of Hewlett’s comments at the beginning of the meeting

 

I. Look Backwards

Hewlett presents some figures which make it obvious that international sales are catching up to domestic

 

Reasons have to do with end of war in Vietnam, the Nixon Administration’s cutbacks in military spending, credit tightening, declining federal support for science

 

Economies of developed countries are booming

 

II. A Look ahead

 

Revolution underway: concern for the environment, population, are we smart enough to change with the social changes

 

III.  HP Today

 

We’ve come through a difficult year. He says he has “hounded” everyone on targets, people count, R&D costs

 

Important products coming in 1971, we are in the right field with the right products

 

Healthy organization, new accounting system

 

IV  Long Term and HP products

 

Medical and Analytical coming along well

 

HP movement away from government support, counter balanced by entries in industry and commercial field

 

Data products is our ace in the hole

 

V.  Diversities [may bring] problems

 

No longer have a monolithic product line where it is easy to control details

 

Need new method of control to insure diverse areas are prospering

 

1970-1972 A time of real cross-road for HP. We are too close to it now, but by the end of the decade we should be able to look back and see what a change  of direction we took

 

12/7/70, Draft of above outline handwritten by Hewlett

12/7/70, Copy of the text of Hewlett’s concluding remarks

 

At the meeting several round tables were held with top managers circulating  among them. The groups were to discuss:

 

New operating strategies

Operations

Communications

Compensation

 

Hewlett says he found the round table groups “extremely interesting” – got more discussion.

 

From the operations group discussions Hewlett says he sensed that we need a better statement of overall strategy – corporate strategy

 

Questions raised regarding the objectives of the corporation on profit, growth, market penetration. He concludes we must have a small group of market strategists.

 

Product line reporting vs. facility reporting is gaining support. Hewlett sees this trend as “…finally breaking down the barriers that have existed and the troubles that have been caused in terms of our international operations.

 

Question came up on the need for greater flexibility in worldwide pricing. Independent reps in international areas tended to want to price as high as possible, whereas the company wanted to price as low as possible – longer range viewpoint. Solved by publishing prices.

 

Need to pay more attention to the economic forecasts from Austin Marx and Lee Bach.

 

On travels to plants managers need to spend more time wandering around and visiting with the people.

 

What should we do when it becomes obvious that targets will not be met. Must come back and talk about it with upper management.

 

The area of strategy boils down to a question of the allocation of engineering personnel among the laboratories. On relations between HP Labs and the divisions. Hewlett says he sees some things that can be done in this area.

 

Division reviews. Managers usually present their views and programs – without discussion of possible alternatives. Should try to get discussion of these.

 

Compensation. Appears to be some misunderstanding about the role of profit. Hewlett starts with the policy: First, we are competitive. Two, we are in many different areas of business – with different standards. In period of cutback should  we give raises regardless of how the company is doing?  “Should we simply go ahead and raise salaries and to hell with profit.?” Some people seem to think that way. Hewlett says “I want to assure you that if you think that, you are operating under a very serious misunderstanding about how this company is going to be run.”

 

He says he can put this in perspective. He estimates that the stock owned or in options of the people in the room is about $5.7 million. “If this company went down to 10 times earnings, you would see $4 million vanish from the people in this room. If you want to see the equity in this company go down by that amount, just adopt a policy that says that we are going to give all earnings to our employees, regardless of what earnings the company has.”

 

He adds that it is also important to have a “good” price earnings ratio if one wants to acquire another company – which is more easily done with appreciated stock than with cash.

 

Hewlett quotes Packard as saying “If you don’t believe profits are important, you are miscast as a manager at HP. And you had better come in and see me.”

 

Next Hewlett discusses pricing. “It is inconceivable,” he says, “that we can go along with the prices of everything that we buy, services we pay for increasing and not do something about our prices….We have to devise a mechanism so that we review these profits and get the maximum profit we can, subject to certain limitations, on the products that we make. Even though this may represent a reduction in sales volume, the important thing is not how many dollars we push out the door – it is how many dollars are left after we’ve done it.”

 

He adds a cautionary note for those who might take his words too literally and get greedy. “If we try and seek too much profit in a given line of a product, then you are going to attract the competition. Once the competition is in there it is hard to get out. So you have to walk a fine line. You have to get a return that is adequate to provide the growth, to support the price and earnings ratio that we traditionally carry, and still not make it too attractive for our competition.”

 

He says this finishes his review of the panel discussions, but he says he would like to say a few words about the “environment in which we operate.”

 

He refers to some slides that were shown the previous day which indicated that the Company would be doing about $14 million more business in the second half than in the first. He says this flies in the face of Professor Bach’s belief that business in general will not be as good in the second as it was in the first. “I think it is terribly important,” he says, “that you keep that in mind and not become carried away with what might appear to be some pretty good business in the first part of the year.”

 

Hewlett refers to Alberding’s comments earlier to the effect that they needed higher targets and budget in Europe since business was strong. Hewlett admits that he was the one who “made him [Alberding] cut his numbers back and I will speak softly of that when I go over to Europe….I just don’t think it hurts to have some conservative targets.”

 

12/8/70, Outline of notes for above comments, handwritten by Hewlett.

11/20/70, Memo from John Young to Noel Eldred talking about points he would like to see put on the agenda.

12/2/70, Copy of a memo from Austin Marx to Panel speakers describing their assignments

12/2/70, Copy of a memo from Austin Marx to all meeting speakers giving them a copy of the latest agenda – which is attached

12/7/70, Copy of a later edition of the agenda

12/14/70, 12/14/70, Copy of a letter from Hewlett to Professor Bach thanking him for joining their meeting, and sending a check.

12/7/70, A collection of many charts and graphs showing various phases of operations

12/7/70, Copy of a typed list of all the “professional “ employees in the Company

 

 

Box 2, Folder 47, General Speeches

 

December 16, 1970 – Data Products, Senior Sales Seminar, Palo Alto, CA

 

12/16/70, Outline of  comments he intends to make handwritten by Hewlett

 

Hewlett lists some factors which prompted HP to get into the computer business:

Increased interest in automation

Design of programmable instruments

Decision of enter computer market

Initial limited objectives

Expansion into other fields

Broadened scope of operations

 

Commenting on HP’s computer business today he says:

HP’s commitment?

In two areas – computers and calculators, which will merge

As an indication of commitment he gives the percent of sales dollars allocated to HP Labs, 8 ½% vs. 14 ½ to Data Products organization

 

HP and the computer market

Important to operate from a strong base

Role of instrument systems

IBM, HP, DEC

Role of advanced calculator

Importance of marketing and restructuring of field marketing force

The depression and HP’s computer business

 

The year ahead

Timing good – 2100

Has forced a tightening up of operations after a period of rapid growth

The role of good software prolonging 2116 life

HP’s willingness to stay in there and slug it out

 

12/11/70, Letter from Bill Nilsson to Carl Cottrell giving a profile of the new sales personnel and a summary of their concerns about HP in the computer business – which Hewlett addresses in his talk

 

 

Box 3, Folder 1 – General Speeches

 

January 24-26, 1971 – Management Meeting, Ouchy, Switzerland

 

Included in this folder are copies of the same talks he gave at the management meeting in Palo Alto December 7-8, 1970 [See folder of that date] and it is likely he gave much the same talk at this meeting.

 

1/24/71, Notes for a talk handwritten by Hewlett

 

There also is an outline of a talk, handwritten by Hewlett, but his notes do not seem to fit the situation of a management meeting in Switzerland. Attached to the front of this copy is a note to Hewlett from his Secretary asking if he recalls what meeting this was for. His answer was “No.” So, even though it may not fit here, the notes of this copy are briefly summarized below.

 

Hewlett starts by giving the purpose of the meeting

Discuss what we are doing

How we want to run the company

Mutual problems

 

He lists the next topic as The Management Structure, the Office of the Chief Executive, and the Management Council

Management by Objective

Annual budget

Personnel Relations

He says we must not destroy the one factor that sets us apart – personnel relations. “In the last analysis it is the devotion of our employees that sets the company apart – ideas about the dignity of the individual, how you motivate people.”

 

12/22/70, Memo from Carl Anderson to Hewlett giving plans for the meeting in Ouchy, and asking his travel plans

1/5/71, Copy of a memo from Hewlett’s Secretary, Madelen Schneider to Carl Anderson, giving the Hewlett’s travel plans

1/15/71, Telegram to Hewlett from Carl Anderson discussing travel arrangements

Note from Carl Anderson to Hewlett attaching the agenda for the meeting in Ouchy