Box 1, Folder 61 – General Speeches
January 12, 1965 – Sanborn Credit Union Talk
1/12/65, Brief handwritten notes for talk as written by Hewlett
Report on year’s operations
Very good, sales up 9%
Profits up 24%
Outlook for next year good.
Hewlett says their GM, Bruce Wholey, suggested they might be interested in what is going on around HP. Discusses divisions – what they do
Letter to Hewlett from William Hughes of Sanborn Credit Union inviting Hewlett to speak to their Ninth annual Credit Union Meeting.
Box 1, Folder 62 – General Speeches
January 13, 1965 – Acquisitions in Retrospect, Harvard Business School, Boston MA
1/13/65, Several pages of handwritten notes by Hewlett. His remarks were recorded and printed in a copy of the Harbus News, and since this is clearer than his notes the following summary is taken from the newspaper.
Hewlett says he is not giving a “canned” speech – “It is a talk about some problems that I’m worried about right now.”
Hewlett speaks of how they concluded some eight years ago that they needed to expand. They felt the need to spread out of California, not only because of high labor costs, but simply so as not to keep “all their eggs in one basket.”
Hewlett says their first acquisition was a subsidiary they had established to make transformers. “We picked ten good men to run the company and they were successful – almost too successful. From this experience Hewlett says they learned that “most people don’t like to share the wealth – especially if it is their own.”
Purchase of most of the F. L. Moseley Company in Pasadena was next, in 1958. Hewlett says “We quickly learned that people who start their own company are usually convinced that their own way is right.” They found it more difficult to make necessary changes. Hewlett says they looked upon Francis Moseley as “the loyal opposition because he was outspoken and elegant in doing this.”
HP acquired Boonton Radio in New Jersey in 1959. “This was a company that had made no progress in ten years,” Hewlett says – “and did not have a progressive management.” How to get things going again was a difficult problem – “Either you throw everybody out, or you use the low pressure long time approach,” which HP followed
Sanborn was the next acquisition, manufacturers of general and medical instruments. In this case they found they had to change the management. There was too much paternalism, no discipline, people promoted who were not qualified. Management did not know what was going on down the line -–most were not qualified.
Hewlett says they learned three things form the Sanborn experience. “First, two years is about the minimum that you an expect for a turnaround; second that organizations that don’t have a progressive management are very expensive; and three, given a chance people want to do a good job.”
Although he says it is a limited sample, and that from the electronics industry, Hewlett says they learned six lessons from their acquisition program.
- “The most successful firms were the ones with the ‘go ahead’ [attitude]. “You can tell this,” he says, “by wandering out in the shop and seeing if the men are charged up – or are leaning on their shovels.
- “In most areas you do better by persuasion than by direction.
- “Stagnant and dormant companies take a great deal of push to get going again.
- “It is hard to avoid conflicts of management when the management has part ownership.
- “It is hard to determine the quality of the company from the outside.
- “A strong marketing organization is vital. It should be married to a good product line.”
8/25/64, Letter to Hewlett from Benson P. Shapiro, Vice-President of the New Enterprise Club of Harvard Business School inviting him to speak to their Club.
9/9/64, Copy of a letter from Shapiro to Packard with same.
9/11/64, Copy of a letter form Hewlett to Shapiro saying he would be glad to speak to their group in December or January.
9/24/64, Letter from Shapiro to Hewlett saying the month of January would be open for them.
10/1/64, Copy of a letter to Shapiro from Hewlett saying the 13th of January would be a good date for him.
10/26/64, Letter to Hewlett from Shapiro saying the 13th is fine.
11/10/64, Copy of a letter to Shapiro from Hewlett enclosing a biographical sketch, adding that it will not be necessary to meet him as he will be meeting with his son who attends Harvard.
12/3/64, Letter to Hewlett from Shapiro discussing logistics.
12/10/64, Copy of a letter from Hewlett to Shapiro enclosing photos and saying he will meet at 3:45 PM.
1/14/65, Letter to Hewlett from Shapiro thanking him for speaking to their Club
1/15/64, Letter to Hewlett from Frank L. Tucker, Professor of Business Administration, saying he enjoyed hearing and talking with Hewlett.
1/26/65, Handwritten letter to Hewlett from Jason Fane enclosing page from the Harbus News with transcript of Hewlett’s speech.
2/11/65, Copy of a letter from Hewlett to Jason Fane thanking him for the article.
Box 1, Folder 63 – General Speeches
January 15-17, 1965 – Monterey Management Conference
1/15/65, Hewlett’s handwritten notes for his remarks at the Conference
Hewlett starts with a review of recent acquisitions:
Mechrolabs, Delcon, EMI, ICM, Datamec,
He lists several problem areas in departments, and ends with two “basic questions.”
How to Digest what we have.
- Impose HP’s accounting system
- Keep hands off younger firms until we find out more about them
- When changes are made make them as part of a total plan or program
- Have a clearly defined point of contact in HP for communications in both directions
Future Policy on Acquisitions
- Acquisitions should not necessarily stop
- Must recognize the problems that mount up with each one
- Should know in advance how they will fit in with HP, particularly with regard to marketing, financial, relation to other divisions, anticipated demand on management
Hewlett talks about R&D problems
- How to coordinate aspects of R&D
- Foreign R&D
- What is the role of R&D
1/14/65, Copies of charts and graphs describing various areas of company operations
11/25/64, Copy of a memo from Bob Brunner to ‘file’ on the subject of appropriate location for some instruments now manufactured in Loveland
12/9/64, Copy of a memo from Bob Brunner to G. Benoit and Bruce Wholey, on the subject of Sanborn’s engineering accounting system
1/4/65, Copy of a letter from Ernie Arbuckle, to Packard, with copy to Hewlett, saying he will not be able to attend the Monterey meeting and providing some points for possible discussion
Undated, Copy of a memo from Packard, possible sent to all senior managers, providing some management philosophies from Bill Harrison of Harrison Labs
Box 1, Folder 64 – General Speeches
February 8, 1965 – KCL Management Conference, Russian Talk, Bakersfield, CA
2/8/65, Hewlett’s handwritten outline of his remarks.
Hewlett says he was a member of a group of business people who visited Russia the previous November. The purpose of this visit was a study of their economic system, not political, although both are intertwined in Russia. They met with high level members of the Soviet government.
Hewlett discusses Planning, saying that it is centralized although some efforts have been made to decentralize. Problems with centralized planning in a complex society.
He talks about foreign trade – increasing need, prices,
Agriculture – big push to improve. Have increased production of chemical fertilizer. Need western technology in animal feed program.
No information on oil.
Their group met with Kosygin who Hewlett says is a quiet, serious man with a sense of authority. He says Kosygin said they have such things as long distance transmission lines, continuous casting of steel, and would like a complete chemical plant and a consumer plant.
He says Kosygin expressed a desire to strengthen mutual confidence with all countries, particularly the U.S.
[See also Hewlett’s speech folders dated November, 1964 and February 11, 1965]
Box 1, Folder 65 – General Speeches
February 11, 1965, Comments on Current Trends in Planning and Management Philosophies in the USSR, Stanford Graduate School
2/11/65, Handwritten outline of remarks written by Hewlett on notebook paper
Hewlett says this was a serious trip of 92 executives, organized by the Business Institute to study Russian economic system – not political. They spoke with top Russian representatives.
Hewlett discusses central planning saying “they have come a long way.”
He says the most stressed subject was foreign trade. The Russians want to increase trade and they discussed problems of trade with the U.S., and prospects of future trade.
Hewlett says the Russians have large plans to improve their agricultural production.
The businessmen met with Kosygin who he says was a quiet, serious man, with a sense of authority. He says Kosygin also stressed the importance of developing their foreign trade. Kosygin said Russia has much to offer, long distance transmission lines, continuous casting of steel, special mineral sources. In exchange Kosygin said they needed a complete chemical plant – and consumer goods.
Hewlett says Kosygin emphasized some points
They adhere to the principle of peaceful co-existence
They desire to develop maximum economic cooperation
They desire to strengthen mutual confidence with all countries
Hewlett makes note of conclusions in his outline but does not elaborate.
[See also Hewlett’s speech folders November, 1964 and February 8, 1965.]
Box 1, Folder 66 – General Speeches
February 23, 1965 – HP Shareholder’s Meeting, probably in Palo Alto, CA
2/23/65, Outline of points he wishes to mention, handwritten by Hewlett on notebook paper
He concludes with:
1965 a good year
Major commitment in new year
Moved to consolidate marketing
Establish new concept of HP Labs
2/23/65, Copies of printed Statement of Income
Box 1, Folder 67 – General Speeches
October 20, 1965 – Long Range Planning, HP Planning Meeting, Palo Alto, CA
10/20/65, Handwritten notes by Hewlett on the back of the day’s program for the meeting. Hewlett is to give an introductory talk.
Hewlett says long range planning may have a bad name, however it is necessary.
In earlier years, when HP at 100 million, would plan for personnel, cash flow and plant. Now company of the size that demands a formal coordinated structure. Planning starts with ground rules of the company, objectives, general strategy. Basic plan must come from operating people – you. Management by objective – not directive.
This meeting is intended to lay the ground work for such planning.
10/20/65, Earlier handwritten outline – very brief.
this discussion is in the folder. [See also speech November 23, 1965, as well as report dated May, 1966 which he describes as a supplement to this earlier report]
Box 1, Folder 68 – General Speeches
November 8, 1965 – Visit to Turkey and Afghanistan for the General Advisory Committee on Foreign Assistance Programs. (See also speech May, 1996)
11/8/665, Typewritten text of Hewlett’s report on this trip to Turkey. Although the title of the report includes Afghanistan, he did not cover the latter herein. Hewlett made a second trip to Turkey in May, 1966, and a summary of his report on this trip is included in the speech folder of that date.
This is a report, not a speech, and a very comprehensive report it is. He visits with many people, private and in government, and gives his impressions on many aspects of Turkey’s people, government, industry, education and so forth. U. S. aid programs to Turkey were an important backdrop to his visit. The following provides brief summaries of Hewlett’s report.
I . THE IMPORTANCE OF TURKEY
U. S. assistance to Turkey is about equally divided between military and economic aid. Turkey is strategically important, not only as a member of NATO, but also because it controls the entrance into and exit from the Black Sea. Turkey has a long history of wars with Russia.
U. S. economic aid to turkey is important because it is important that Turkey be economically healthy if it is to carry out its military assignments and remain an independent state aligned with the free world. There appears to be no reason why Turkey cannot gain self-sufficiency within a decade or so.
II. HISTORICAL TURKEY
Modern Turkey, as a western democracy, started with the Ataturk revolution in 1923. Ataturk drove out most of the Christian and Jewish people from Turkey, leaving the nation short of people experienced in commerce and industry. Typically, the Turk looked down on such activities as unbecoming to a member of the ruling class of the Ottoman Empire.
However, the Ataturk regime did do much to encourage the development of industry, passing a law favorable to industrialization in 1927. But the Turk’s inexperience in matters of business and the depression which affected much of the western world in the thirties did much to prevent the development of any substantial industry in turkey. The legislation which had favored industrial development was repealed in 1942.
During the thirties Turkish thought was much influenced by ideas of a planned economy as practiced by Nazi Germany, Fascist Italy, and Communist Russia. Great emphasis was placed on State industries which have been characteristic of the Turkish economy since that time.
After Ataturk died in 1938 his governmental traditions were carried on by his lieutenant, Inonu, until 1950 when elections brought in Menderes. The Menderes regime was, more or less, a reaction to the paternalistic policies of the Ataturk-Inonu governments which had appealed particularly to the peasant population which made up three-fourths of the people.
The Menderes government was overthrown in a revolution of 1960 and a new liberalized constitution was approved in 1961. A series of coalition governments followed, headed by Inonu, who continued to reflect the policies of the original Ataturk regime.
The Inonu government fell in early 1965 and, in forthcoming general elections, will likely be replaced by the Justice Party headed by Suleyman Demirel, a man with considerable business background who will likely implement policies favorable to free enterprise.
III. CURRENT STATUS
Three-fourths of Turkey’s 30 million people work in agriculture, which accounts for 40% of the national income and 70% of exports. Industrial development has been slow, with government business accounting for 40 to 50% of output. Turkey has had a high imbalance of payments – about 400 million dollars a year – with the deficit made up by outside aid. The per capita income of Turkey is one of the lowest in Europe. Turkey has been slow to develop export markets which have remained almost static since 1953. In addition, the military program puts a big load on the economy, taking about 30% of the budget.
IV. THE STATE ECONOMIC ENTERPRISES
The State Economic Enterprises, the SEE, are active in a wide variety of fields such as coal mines, steel mills, textiles, glass, mines, lumber, and insurance. The State also owns and operates the railroad system, has control over the pulp and paper industry, much of the petroleum industry, and is expanding in fertilizer and chemical businesses. They tend to be largely inefficient and expansionary in nature.
V. DEVELOPMENT OF PRIVATE ENTERPRISE
The lack of a substantial entrepreneurial class in Turkey tends to limit the growth of private industry. Typically, the Turk is inexperienced in management and has little background in the concept of general public ownership of a corporation, The limited availability of risk capital has also served to restrict industrial development. Those enterprises which are labor intensive and capital light most nearly match the resources available within the Turkish economy.
Turkish agriculture employs the bulk of the people and accounts for 40% of the national income. It is tied to traditional crops such as cereals, fruit, nuts, tobacco, sugar beets, and cotton. Principal exports have been tobacco, dried fruits, nuts, cotton, mohair and wool. Little has been done to develop such export crops as fresh fruits and vegetables to the available European market. Great potential exists to improve Turkish agriculture and thus allow Turkey to become self-sufficient in its food supply as well as increase exports.
There is much in Turkey that should be of interest to the tourist, particularly along the Aegean and Mediterranean coastlines. This area is important in a historical and archaeological sense and there are many ruins of considerable importance and interest, which are just now being developed. The Turk appears to be a poor hotel-keeper. He somehow fails to develop a concern for the guest and what his needs are. Although the Turk is friendly, he does not appear to have the light, happy disposition for which so many of the inhabitants of other Mediterranean countries are noted.
IX. POPULATION CONROL
The population of Turkey increases about 3% a year and this substantial increase does much to reduce the effectiveness of its industrial and agricultural progress. Steps must, and are, being taken toward a family planning program that will bring this population growth more into line with that which the economy an justify.
Despite the many problems, there is a great deal that is encouraging in the Turkish picture. Much optimism rests upon a new class of Turk who has a more modern outlook and who is dedicated to moving Turkey forward. Many of these people have been trained in the U.S. and are now bringing to bear much of what they have learned here both in knowledge and in philosophy towards the solving of some of their country’s problems.
XI. CONTRIBUTIONS FROM THE U.S. FOREIGN ASSISTANCE PROGRAM
To date, a very large percentage of U.S. assistance to Turkey has gone toward the public sector with heavy concentration on the infrastructure, particularly road construction. One was struck by the quality of the modern main roads and the apparent good efficiency of the maintenance program for them.
The largest single project to which the U.S. has contributed has been the Eregli Steel Mill on the Black Sea. This steel mill has recently been placed in operation and is complementary to the older State-owned mill. It is expected that as the market for its products builds up the mill will become self-sustaining and should be making money within two years.
The U.S. has also played a major role in the field of education. Literacy training for military draftees has been a very effective program The U.S. aid program has also been effective in assisting higher education programs. One is the Middle East Technical University in Ankara. Its President, Dr. Kurdas, is building a modern technical university. Interestingly, all courses are taught in English. This university is just getting started but it appears it will do much to upgrade the level of higher technical education.
The second school which Hewlett visited was called The Hacettepe Science Center. Its founder was Dr. Dogramaci. Dr. Dogramaci had been appointed a Professor of Pediatrics and from this position he was able to create a new young staff educated in modern medical practices. From this springboard he was able to build a completely integrated educational institution known as the Hacettepe Science Center. This now includes a College of Arts and Sciences, two Nursing Schools, a School of Dentistry, a School of Physical Medicine and a School of Graduate Studies – all basically supported from private sources.
Hewlett visited four companies in the Istanbul area – two in the private sector, one State owned, and one a branch of a major American company. One of the Turkish-owned companies was in the business of furnishing products extracted from corn, such as starch, corn oil, and corn sugar. The second Turkish company was in the insecticide business, based on chlorine chemistry. The third company was SEKA, a State-owned pulp and paper factory. The final plant was part of the Goodyear Tire and Rubber Company, and all the top management was American.
Hewlett sees American training as a strong influence in all these companies. One of the major roles that U.S. aid has played is that of lending assistance to the development of industries in the private sector and to those programs that will improve the management skill of Turkish entrepreneurs and business administrators. A pattern for this is beginning to take form.
Hewlett makes several recommendations:
- Every reasonable effort should be made to support the development of the private sector vis-à-vis the State-owned enterprises.
- Continue the work with the Forest Service encouraging it to take steps leading toward a more effective utilization of the great forest reserves of Turkey.
- Aid funds should be concentrated in relatively few areas, and the U.S. should try to do the best possible job.
- One of the most productive long range programs that American assistance can foster is that of education.
- The experimental program of the Agriculture Controlled Credit Bank deserves the active support of U.S. assistance.
- Hewlett is quite skeptical that tourism will play an important role in the Turkish economy. This must be looked upon as a long term area and any funds expended should be in such areas as developing improved management practices, rather than attracting tourists into an area that currently is limited.
XII. FINAL COMMENT
Hewlett says he was highly impressed with the people administering the U.S. AID Program in Turkey. They showed a great desire to make “each dollar spent in Turkeyachieve the greatest return towards promoting the U.S. policy of making Turkey economically independent and self-sufficient with the next few years.”
Box 1, Folder 69 – General Speeches
November 23, 1965 – Turkey and Afghanistan, EE Faculty Luncheon, Stanford, CA
11/23/65, Outline of talk, handwritten by Hewlett on notebook paper. His date on the paper is 11/8/65 – see above
Hewlett provides a comprehensive review of his travels in both of these countries, covering history, economics, education, agriculture, problems, U.S. assistance….
10/27/65, Letter to Hewlett from Professor John Linville, confirming Hewlett talk to EE faculty on February 23, 1965
11/5/65, Copy of a letter to Professor Linville from Hewlett saying he has been having trouble reaching him.
September 1964, Copy of printed map of Stanford
Box 1, Folder 70 – General Speeches
December 6, 1965, Talk to Medical Sales Seminar, to HP Sales People, Palo Alto, CA
12/6/65, Outline of comments, handwritten by Hewlett on notebook paper
Hewlett talks about the importance of change, HP history, HP concepts of marketing, the outlook for medical instrumentation. He says “We are the right company, in the right place, at the right time.”
11/23/65, Copy of a memo from Carl Mahurin, listing the seminar participants
12/1/65, Copy of a memo from Carl Mahurin listing seminar agenda
Box 1, Folder 71 – General Speeches
January 5, 1966 – Talk to New Marketing MBAs, Palo Alto, CA
1/5/66, Brief notes for talk, handwritten by Hewlett Packard
Speaking about the problems associated with the assimilation of the sales representatives, Hewlett talks about stress saying it means a challenge, means an opportunity.
“A great opportunity for you to contribute to and help in the working of these problems. I hope that you find this interesting and challenging.”
12/23/65, Copy of a memo from Len Gibson to Bill Hewlett inviting him and his wife to a dinner affair.
12/27/65, Copy of a memo from Len Gibson (no addressee) listing the attendees with brief biographical facts.