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.”
