Box 1, Folder 35B – HP Management
July 16, 1992, Message to HP People Everywhere Regarding the Change in HP’s Executive Leadership
7/16/92, Copy of typewritten text of statement
“Yesterday you learned that there will be a change in the executive leadership of our company on November 1.
“The changes were recommended by the Succession Committee which was established by the Board two years ago to deal with some of the problems that were having an adverse influence on the performance of our Company, and to make recommendations for the future leadership of the Company. Both Bill and I have been working closely with the Succession Committee since it was established.
“John Young has also been working closely with the committee in developing its recommendations and he has done a superb job in implementing the recommendations it has made.
“As the committee began to address the question of future leadership we recognized very early in our work that Lew Platt and Dick Hackborn were the two leading candidates. Each had outstanding ability which was not competitive but complementary. We thus recommended that Lew be the President and CEO and that Dick remain as Vice President in charge of Computer Products, which has been the most competitive and most profitable activity of our company. Our recommendations imply that both Lew and Dick will be equally important for the future of the Company.
“We had to deal with the issue of when the change in leadership should be made. The leadership of John and Dean has brought the Company to a dominant position of strength in our industry and we could have delayed the change for several years. We had two outstanding people, Lew and Dick, extremely well qualified, enthusiastic about accepting the opportunity and responsibility for the success of Hewlett-Packard in the years ahead. We decided the best course would be to make the change at the end of this fiscal year. Lew and Dick will become members of the Board when they take office on November 1. John and Dean will retire from the Board on October 31.
“This action was taken with a unanimous vote of the Succession Committee and the unanimous approval of the Board.
“I will remain as Chairman of the Board. Although Bill Hewlett has resigned from the Board he has a strong desire to support and help the new leadership.
“I want to take this opportunity to thank all of my fellow employees throughout the world for the steady way you have upheld the company objectives we laid out so many years ago. Bill and I also appreciate the hundreds of letters and communications we have received from so many of you since we have been dealing with these issues. We hope we will continue to hear from you in the future.
“It is gratifying to know how many of you want to help us keep HP as one of the best companies in the world. I have no doubt whatever that with your help we can, and we will, do just that.”
Box 5, Folder 40A – General Speeches
February 10. 1992 – Programs of the David and Lucile Packard Foundation, with emphasis on The Relationship of Population Control and Economic issues with Biodiversity, Palo Alto, CA. The forum of the speech is not given.
2/10/92, Copy of the text of this speech
Packard says the foundation has been “involved in environmental issues for over twenty years and many of these issues include biodiversity. Most of the environmental issues have been in California or other parts of the western United States and have involved the preservation of open space and endangered species, including marine species. Population pressures and related economic issues have almost always been involved but could generally be dealt with on a local basis.”
He says they became interested in the oceans of the world some twelve years ago and decided to build the Monterey Bay Aquarium as a first step. “The aquarium was designed to display the major marine habitats of the Monterey Bay. In doing this we have been extensively involved in the preservation of threatened or endangered species, sea otters and other marine mammals and several species of birds.
The resources of the oceans are so poorly managed that they produce only about half of the food they could produce under good management, and the pollution of the oceans is almost completely out of control. I am sure no one knows how many oceans species are threatened or endangered.”
Packard explains that the work in population control and environmental issues of the foundation has been expanded into Canada and Mexico, as well as other Central and South American countries. “From our experience so far,” he says, “we feel very strongly that the endangered species and related environmental problems can not be dealt with in any adequate way without taking into account the population pressures and the economic well being of the people who may be affected by the actions that are taken.”
Concluding that population and economic pressures are the main cause of environmental damage, Packard says he “does not see any hope that environmental damage can ever be stopped if the population and economic pressures are not brought under control.
Packard tells of the foundation’s work in the preservation of certain species such as the Monarch Butterfly. “The presence of this attractive insesct is enjoyed by thousands of people in Northern California and other parts of the United States and there do not appear to be any serious problems in protecting that part of their habitat in Mexico that is critical to their surivval.”
The foundation has also been active in helping protect the environment of the sea otter along the coast of Northern California. He notes, however, that “Because these creatures are so attractive to people, this program has more emotion than common sense. Thousands of dollars were spent to save a few sea otters from the Valdez oil spill, but there was no way to deal effectively with the thousands that were involved. Most of those that were saved from the effects of the oil were not returned to the ocean but were given to aquariums for their display.
“Frankly,” he says, “I do not think the preservation of individual species should always be the main object of … conservation endeavor[s]. I think the main objective should often be the establishment of a stable, self renewing biological environment. But that, of course, will assure the preservation of at least most of the species.” He cites the example of the spotted owl in the forests of the Northwestern United States which he says very few people have ever seen. “Despite the actions taken on behalf of the spotted owl the forests are not being managed on a long term self-renewing basis, and if they were it would provide an ample area for the preservation of these birds,” he states.
Talking about the long ocean frontage of Mexico Packard says this is another example where the preservation of specific endangered species in the ocean should not be the main objective. Instead he feels the oceans should be managed “so that they will be a stable, self renewing environment that will provide important resources for Mexico and the the rest of the world. In doing this the vast array of species that inhabit the oceans will be preserved.”
In some cases he feels “the preservation of a single species will be the catalyst for action. Catching dolphins in fishing nets…is a situation that must be corrected. This is an issue driven by emotion which can be corrected with a bit of common sense.”
Noting the forthcoming negotiations about the North American Common Market, Packard forsees “considerable opposition building up in the United States and some of the groups in opposition will certainly use environmental issues to support their opposition….I believe this distinguished group could be helpful to the President of Mexico by identifying issues that are likely to be troublesome and suggesting some actions that might be taken to reduce the influence of environmentalists in the United States who oppose the free trade treaty.”
Box 5, Folder 40B – General speeches
May 13, 1992 – Garden club of America, Cynthia Pratt Laughlin Medal, Baltimore, Maryland
May 13, 1992, Typewritten text of Packard’s acceptance speech
Packard was nominated for this award by the Carmel by the Sea Garden Club, and he expresses his appreciation to the Club President, Donna Dormody, for nominating him – “and to my friends who supported her nomination.”
Packard says when he first heard of his nomination for this award his first reaction was that there were certainly many other people than himself who were more deserving of such recognition. But then he recalled that he had, indeed, had a life long interest in gardening, first fostered by his mother. He says he began to help her plant a vegetable garden at their home in Pueblo, Colorado when he was about ten years old, adding that “We planted a vegetable garden every spring, a practice I have followed in nearly every one of the seventy years since.”
In the 1920’s Packard, earned a little money in the summer by cutting the lawns of neighbors. Many other boys did likewise, but, he says, “Most of the boys would try to get the job done as quickly as possible, but from my mother’s guidance I was motivated to take a little more time and do the cutting and trimming as neatly as possible.” From this experience he learned about the “better mouse trap theory.”
Packard graduated from Stanford in 1934 and took a job with the General Electric Company in Schenectady New York. He tells how he and Lucile Salter “a young lady I met at Stanford,” were married there in April of 1938, and how, in July, his interest in gardening “almost caused a divorce.…” He got up early one Saturday, his mind full of plans for a vegetable garden behind their house, and, as he tells it he “had the garden spaded and ready for planting when I went into the house to have a cup of coffee and found his wife in tears. In my zeal to get my garden planted I had completely forgotten that Saturday was her birthday!”
By 1950 “the Hewlett-Packard Company” he says, “was doing well and I began to extend my gardening interest into ranching. Bill Hewlett and I have major ranches in California and Idaho. We realized that the success of a cattle ranch is primarily dependent on the quality of the grasses and broad-leaf plants that provide the feed for the animals, and the trees and shrubs that protect the land from deterioration.”
Although “semi-retired” for the past 15 years or so, Packard says he has been “actively involved in restoring areas near the Monterey Bay to their original character. I have planted thousands of native trees and shrubs and established a nursery to produce grasses and plants that will survive long periods of drought that are becoming common in California.”
Packard closes by saying that “Gardening has been an important part of my life and it is a great honor to accept this award.”
5/13/92, Award Certificate for the Cynthia Pratt Laughlin Medal-1992. States that the medal is being awarded for “…outstanding achievement in environmental protection and the maintenance of the quality of life.” It says it was presented to David Packard “whose ongoing commitment to researching and fostering the growth of native plants and wildlife in California is encouraging long-term national efforts in the areas of conservation and the preservation of natural habitats.”
5/13/92, Summary for Candidates lists the Proposer, Seconders, and supporters.
5/13/92, Copy of a printed pamphlet describing the Garden Club of America
12/13/91, Copy of a letter to Packard from Mrs. Edward King Poor, III, National Chairman, Medal Award Committee, telling him he has been selected for the medal award.
1/22/92, Letter to Packard from Mrs. Edward King Poor III, saying she is “delighted” that he will be accepting the award, and giving details of the ceremony.
1/24/92, Letter to Packard from Donna Dean Dormody, President Carmel by the Sea Garden Club. She extends her congratulations on the award and says they are pleased that “a convervationist of your magnitude from this area has won such a prestigious award.”
2/21/92, Copy of a letter from Packard to Mrs. Edward King Poor, III sending a draft of his acceptance speech.
4/15/92, Copy of a letter to Packard from Mrs. Sellers J. Thomas, Jr., President of the Garden Club of America, inviting him to a cocktail party on the evening of May 13, preceding the award dinner.
4/21/92, Copy of a letter from Packard to Mrs. Thomas accepting her invitation to the cocktail party.
May 12, 1992, Copy of Packard’s travel itinerary
Box 5, Folder 41 – General Speeches
October 5, 1992, Dataquest’s Semiconductor Industry Conference, Monterey, CA
10/5/92, Typewritten text of Packard’s comments
Packard says he wonders what he could say to this distinguished audience that would be interesting or helpful. “I know you are interested,” he says, “in the outcome of the election this fall. Although I have expressed my preference I do not think it will make much difference who wins. The United States economy is so thoroughly involved and so dependent on the worldwide economy that there is no strictly domestic action that will be constructive.”
So Packard says he will confine his remarks to two matters. “First, to tell you about how some of the management policies and practices of the Hewlett-Packard Company came about. Second, to make some observations about what I see as the future long range opportunities for this industry.
Before talking of the genesis of the HP Way, Packard says he would like to begin “with a bit of personal background.”
He tells of growing up in Pueblo Colorado and wanting to be an electrical engineer with General Electric Company. He built a radio station at home and continued his interest in radio when he came to Stanford. At Stanford he worked in the radio station which was near the radio laboratory of Professor Fred Terman, who would stop in once in a while.
Professor Terman arranged for Packard to attend his course which included visits to local industrial companies which were involved in radio – Heintz and Kaufman, Litton, Eitel, McCullough and Farnsworth.
Packard met Bill Hewlett and Ed Porter at Stanford. They became close friends, and in 1934, they decided to go into business for themselves after they graduated – thinking it would be difficult to get jobs during the current depression.
However, Packard was offered a job at General Electric in Schenecdtady, New York. Professor Terman encouraged Packard to accept the job to get some experience while Hewlett finished a year or two of graduate study.
Packard tells of his advisor at G.E. trying to interest him in power transmission and electric generators. These were not to his interest and he took a position in the refrigerator department. He worked in a shop making glass tubes about the size of gallon jugs. Many of the tubes were blowing up in the manufacturing process and he was given the job of finding out why. He says he worked with the factory people going through each step of the manufacturing process until they produced a batch with no failures.
“As I look back,” he says, “ my decision to work on that ignitron tube problem with the people in the factory had a profound influence on the management policies we developed for the Hewlett-Packard Company. That was the genesis of what has been called management by walking around. I learned that quality requires minute attention to every detail, that everyone in an organization wants to do a good job, that written instructions are seldom adequate and personal involvement is essential.”
Saying that personal involvement has been very important at all levels in HP he gives a couple of examples. “In the middle of the 1970s our company was running low on cash and was planning to borrow $100 million. I realized that accounts receivable and inventories had got out of control, and I made a personal visit to nearly all of our operations to emphasize the importance of controlling these assets. It turned out that some of our procedures were at fault. These were corrected and by the end of the year instead of needing to borrow $100 million we had $100 million in the bank. Just a couple of years ago Bill and I began to receive complaints that the company was becoming to bureaucratic. We made some personal visits and learned that a division could not start a new product until it had been approved by six different committees at headquarters. These committee approvals were reduced to one, and our new product program is now far more productive.”
“…trying to provide long term security has been one of our policies,” Packard says. This began with concern about engineers. We had observed that in the aerospace industry in Southern California an outstanding team of engineers would be working for a firm that had an important contract.. When that contract was finished they were let go and had to find jobs at another firm which had a contract. Bill and I both thought this was a bad practice and we decided to concentrate our efforts on proprietary products so we could build a stable engineering team.
“Although our initial concern was about engineers, because of our close association with all of our employees in our early days, we extended this policy to include everyone.
“One of the important tenants of the HP Way was to finance our growth strictly from reinvesting our earnings.
He tells of working with his father who was a bankruptcy referee during the 1930s. He learned that a person or a business could survive if it had no long term debt. Often long term debt could not be refinanced during the depression and the person or business lost everything….We also felt it was desirable to have our employees own some share of the company. To do that we had an employee stock purchase plan under which our employees could purchase stock at a 25% discount from the market.”
“From these examples of our early experience I think you can see that the HP Way was developed over a long period of time and was built on personal experiences of Bill and myself.
“Because of the success of the policies followed by the United States and the free world since the end of World War II, we now face an unprecedented dilemma. I do not think anyone can predict the short term outcome but there are two areas of basic research extending over the last twenty years or so that will have a profound influence on all industry based on high technology in the future. One is a new understanding about how life began on the earth, and this is related to how the universe began. The other is a new understanding about the structure of the atom.
Packard says the second area of basic research that will influence industry in the future is “The beginning of the universe.”
“The most widely accepted theory about the beginning of the universe is that it was created some six billion years ago by a ‘big bang’ whereby all of the mass was created in a fraction of a second from energy. Over the next two billion years this mass condensed into all of the galaxies of the universe. The earth was formed during this period and had cooled to its present configuration. Water had condensed and about 3.8 billion years ago life appeared in virus-like micro organisms that each contained a piece of DNA and RNA identical in structure to a piece of DNA and RNA that is found in every living thing today. They had no cellular membrane and mutations could occur rapidly. These micro organisms lived on hydrogen sulfide which they disassociated to obtain the hydrogen for the hydrocarbons in their structures. There was no oxygen in the earth’s atmosphere at that time. About a billion years later these micro organisms learned how to disassociate water into hydrogen which they needed, and oxygen was released to the atmosphere and built up to its present level of about 30%.
“About two billion hears ago cells developed and mutations required the mating of two cells and the production of offspring. From that beginning all plants and animals in the world have evolved. The virus-type micro organisms still exist in all living things and can mutate much more rapidly than cells. It is through their action that such things as immunity to antibiotics can build up rapidly.
“The structure of the atom.
All of the amazing technical progress in the twentieth century has been based on scientific knowledge that was in place before the end of the nineteenth century. The basic laws of electricity and magnetism, Newton’s laws of gravity, Maxwell’s equations, were all known before the turn of the century. The atom was thought to consist of a simple nucleus of protons and neutrons surrounded by various numbers of electrons. This image could explain the periodic table and all of the electronic development of the twentieth century, the Poulsen arc, the vacuum tube, and the transistor were all based on this simple image of the atom. Einstein’s theories and the relationship of mass and energy were developed during the first half of the century, but this did not change the basic concept of a simple structure of the atom.
“The high energy physics projects, the Stanford linear accelerator and all other accelerators were driven by the cold war. There was serious concern that the Soviets might discover some new nuclear phenomena that would give them a military advantage. From this high energy research we learned that the atom is not a simple structure, but consists of ten or so different particles with weak forces ands strong forces. It is far different from the simple structure it was thought to be.
“Under the theory of the simple structure we could deal with only those materials that occur in nature. With knowledge of the complex structure it is now possible to make materials that do not occur in nature. Glass that is ductile, not brittle for example. This new knowledge about the atom opens up a whole new era, particularly I think for the information industry. I saw recently a demonstration in which nerve cells had been made to grow in an inorganic structure. This new knowledge about the nature of the physical universe will give us a better understanding of how the brain works, an ability to understand and utilize to our advantage the physical world in which we live. This means that your LSI’s will utilize organic material in the future.
“From this perspective, I do not think what happens this year in the political arena will be of any importance whatever in the long term. With these new horizons in front of you the opportunity for progress in the twenty-first century is clearly going to be far greater than the opportunity we have had in the twentieth century.”