1971 – Hewlett Speeches

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:



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






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





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:



DMI laser

Some component fields

Data products

Analytical instruments




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 1st 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 1st and 2nd lessons – Benediction, if any, may wait.


1st 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 2nd 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.




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:




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



“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 20th 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