Sunday, November 30, 2008


Some people keep asking, "when is the book due out?" Most people have quit asking, assuming that this one will never get done. Well, we think there is a reasonably good chance for completion within our natural lifetimes.

The current expected Galleys are in January, with publication set for April (yes, 2009). The book is "longish" but no more so than Jared Diamond or Thomas Freidman. Now, admittedly they had really good subjects and they are great writers. But this should be a great story, about a really great company especially during its heyday.

Reviews have been extraordinary to date but we are not at liberty to print them. Howze that for a self-promoting plug! Actually, it is true, somewhat to our surprise and certainly that gave us great pleasure. Whether that translates into many book sales is total conjecture.

We didn't write this for volume sales, but rather to try to capture in a sound historical context just how the company put together such an amazing track record. You'll have to judge the results next spring.

8 or 9 Oscillators -- Who Cares?

Since 1964, the "official story" from HP has been that the Walt Disney company provided the first order for Hewlett's inventive Audio Oscillator, to make the sound track for Fantasia; done with 8 oscillators that sold each for $71.50. This story was continued in Packard's autobiography, and embellished in Mike Malone's "Bill 'n Dave" biography last year.

Malone used the $71.50 pricing to demonstrate that Packard was always an efficient business-oriented profit-making leader, and that he had allowed Hewlett indulgence on the price due to the Oregon Territory war motto about "54:40 or fight".

The shift was in the internal HP magazine, Measure, at the 25th anniversary. Until then in company literature, it had been 9 oscillators, the original price for the first units was $54.50 each, and the Disney order was the first "high volume" order. While we found this discrepancy early, we couldn't reconcile it for quite a while.

Our research re the original order (helped materially by Alan Bagley) found that the Disney order was the third order for oscillators from HP, for $57.50 each for nine units, up $3.00 over the base price for the units shipped first to Stanford and Caltech, and the next one after Disney which went to MIT. The extra $3.00 bought two changes -- a bigger capacitor which moved the frequency range down to 20 cycles (from 30), and put a rack mount front cover on the machine. The price didn't go up to $71.50 for another year and a half, belying Malone's view of Packard's prescience.

Corroborating evidence was overwhelming, once the journal entry and some newspaper coverage of the day was discovered during the Dave and Lucile Packard museum exhibit in Los Altos. Oddly, though, the company which has prided itself on measurement accuracy all these years, had "no comment" and the only word from the PR group was an emeritus note which said "I vote for eight, but keep me posted". Ironically, the 50th anniversary issue evoked a letter from the man who sold the units, sent directly to Hewlett, which referenced the "nine". The man himself was mentioned, and his description of the sale, but the number was conveniently omitted.

Other topics in our manuscript generated much heat and invective on occasion, especially from participants. But this one failed to generate much buzz, and in fact, the coup de grace was delivered by one oldtimer, whose cryptic quote was "really, does anyone care whether the number of oscillators sold to Disney was 8 or 9?"

Another oldtimer, probably the toughest manuscript reviewer for correctness and detail over three years of our book preparation, said "I guess it is important to get it right, but it doesn't seem all that important. Legends have a way of getting embellished and botched up."

And then, ironically, after no feedback for four months on the manuscript this summer, HP Public Relations "experts" tried to stop the book on the basis that it had lots of "major inaccuracies" -- it would have been helpful if they could have specified even one error, but they deigned to do so, saying ominously that "all errors had to be fixed". They went on to add more severe threats, about "illegal use of confidential information" but the one table they cited had been given to us by them with the request that we use it because earlier writers had gotten it wrong!

So, the evidence to us at the moment is that at HP, factual history doesn't matter much more than culture, although it is fun to imagine that there still is an HP Way and that the mythology is still intact for Disney's sale.

Saturday, April 26, 2008

HP History

Last summer, I had the privilege of being "emcee" for an HP History day, which was hosted in the HP Palo Alto Auditorium, open to the public. Three terrific historians of HP equipments (much of it actually Agilent equipment today) gave their perspective and shared their enthusiasm with the audience. See it at as "Chuck House -- HP History"

Glenn Robb, an inveterate hobbyist, hosts a website with more than 50,000 scanned pages of HP records, including nearly all HP Measure issues and many product manuals.[i]

Long-term HPite Marc Mislanghe near Biarritz, France has collected and restored more than five hundred pieces of equipment, plus countless documents, pictures, and other artifacts. Fervent engineer Kenneth Kuhn, in Birmingham, Alabama, USA, has also rescued and refurbished several hundred pieces of equipment from imminent destruction.[ii]

The question for you is -- do you have HP stories/gear/literature to contribute? If so, call or write, or POST TO THIS BLOG. It will be read

[i] Robb’s invaluable archival trove is at Much of this is searchable. None of these sites are official HP sites; all have working agreements with HP archivists.
[ii] See for the American hobbyist; the French collector’s website is, and he can be reached at

The Secret Sauce of Innovation

April 9, Media X at Stanford featured me describing some elements of innovation as shared in the forthcoming book, HP Phenomenon. The website, has the video from that evening posted as of this week. Beware -- it is an hour long, so I should break it into segments for this blog. For now, though, it is there, under Spring Lecture Series.

We had a very nice audience in the Wallenberg Learning Theatre in the Main Quad at Stanford. The Q & A was particularly engaging. The slide screen captures are especially nice, done on the new NCast streaming video recorder (see ) which has been graciously donated to the Stanford Learning Center. See what you think...

The Media X lecture series is a biweekly public forum, open to interested folk in the area. Many of the lectures are captured and available later on the website. Some are proprietary, available for members only.

Sunday, April 13, 2008

Presaging the PC revolution

"Our intent for the 9100 products was very clear.… We were a team of scientists and engineers who wanted to build personal computers for other scientists and engineers. The distinction of being the first mass-produced personal computer is merited by [either the 9100A or] the subsequent 9800 Series (that) predated the ALTAIR 8800 marketed in late 1974 …." Bill Hewlett, 1985 [i]

When the HomeBrew computer club first met in Palo Alto in 1975, self-congratulating later that its members alone foresaw the Personal Computer age, HP designers were askance – after all, they had shipped 77,000 self-contained “personal machines” far more capable than anything proposed at this assemblage of amateurs. They had specified the design criteria for the Intel 1103 memory chip, and subsequently bought and shipped nearly 40% of Intel’s memory capacity to their engineering customers for the intervening four years. Alan Kay has long acknowledged that the HP 9100A was the inspiration for his Dynabook, “the first personal computer”. Steve Wozniak’s autobiography comments that “before the Apple 1, all computers had hard-to-read front panels and no screens and keyboards. After Apple 1, they all did.” – a patently false claim since HP personal computers had featured screens and keyboards for seven years.[ii] Wozniak also wrote that “I didn’t really think of our (HP handheld) calculators as computers, though of course they were.” And HP had already sold nearly a half million of those handheld calculators, from the HP division in which Wozniak was employed. [iii]

"The interesting thing to observe about computers and computer technology is that the most significant changes people don't notice. For example, the hand calculator really was a revolution. No one predicted it, no one worried about it. It sneaked up on us and suddenly we all have them, we all use them, and we never thought of it as revolution. It just sneaked up on us." Ken Olsen, founder of Digital Equipment Corp[iv]

But perception is everything – and the world did not, and does not, perceive that HP was a leader in computing. Perhaps for HP lovers, this is positive – if HP had in fact been acknowledged as the original leader, the hue and cry about HP fumbling the future might be louder than it was for XeroxPARC.

[i] Gerald E. Nelson and William R. Hewlett, “The Design and Development of a Family of Personal Computers for Engineers and Scientists”, Insights into Personal Computers, Ed. Amar Gupta and Hoo-min D. Toong, IEEE Press, NYC, NY, 1985, p. 38
[ii] Wozniak, Steve and Gina Smith, IWoz, Norton Press, New York City, NY, 2006, p. 158.
[iii] Wozniak, Ibid, p. 124.
[iv] Ken Olsen, founder of Digital Equipment Corporation, oral interview, Digital Historical Collection Exhibit, interviewer David Allison, Division of Information Technology & Society, National Museum of American History, Smithsonian Institution, September 28, 29, 1988

The Ethics of Silicon Valley leaders

Larry Ellison managed to reduce his tax bill by $3 Million last month, arguing with the County Assessor that his $170 Million (cost) Japanese replica home wouldn't be worth more than $70 Million in resale value. Woodside schools and fire/police protection services are the losers, although in this rarified community, the tax base is sufficiently high, and the student population for the gentry who inhabit the community low enough that one suspects that somehow things will work out even with this penurious attitude by the tenth richest American, reputedly worth $14 Billion.

Meanwhile, over at the Los Altos Museum, Lucile Packard's scrapbook is on display, with a remarkable sequence of three letters from November and December 1963. The first, from HP's attorney, said that the assessor had advised that they could probably qualify for a very large tax reduction with the Williamson Act agricultural exemption for their new 33 acre Los Altos Hills property. The second, from Dave Packard, said "we won't file for that, since most of the taxes go to local schools, and we want to carry our fair share of the load". The third, from the attorney, reported that when he talked to the county assessor, the response was "well, THAT makes my day!" thus beating Clint Eastwood to the words.

Packard, like Ellison, made the Top Ten list for richest Americans. But they differed greatly in their view of who helped them get there, and what they owe their fellow citizens, employees, and community. Silicon Valley is fortunate for the David Packard example. No community can take much pride in the other approach.

Friday, April 4, 2008

Start-ups -- always nervous for the leaders?

Notes from Lucile Packard's scrapbook, on display at the Los Altos Museum 'Dave and Lucile" exhibit Jan-Jun 2008:

Letter to her mother in August 1937 (after Bill Hewlett and Dave Packard have mused with two others about starting a company for four years): “I’m afraid most of these serious discussions are just a lot of playing around. Maybe I’m wrong, and someday the world will beat a pathway to our door, to see that great engineer who did this or that with this or that.”

Letter to her mother in May 1938, after Hewlett has implored Packard to leave General Electric and come back West with a memorable note that “there will never be a better time, and I feel that we must act”.[i] “Dave won’t get out of bed. Sometimes he gets to the edge of the bed and sits there in deep contemplation of the floor or his feet for ten minutes, but eventually he will get up…”

Engineers don't start out thinking like, or looking like, business folk. Lucile's letter to her mother, from New York, dated 'Monday' (~ July 1938) : “I’ve decided that he really is good-looking – that is, when he combs his hair, and washes his face and hands.”

Letter from his father Sperry Packard in Pueblo, Colorado, from whom he was mostly estranged, who sent him $100 for Xmas 1938, saying “to help you work out your problems” but admonishing him to buy a suit because “it is possible for someone brilliant to be careless about appearance, … but you cannot do that any longer. Your fine loyal wife is sticking with you and helping you work out your problems.”

[i] David Woodley Packard reported this letter at Hewlett’s funeral service. Many in the audience were surprised to learn that Hewlett provided the goad that launched the company. Both were careful, studious, and conservative; Hewlett frequently got there first and urged the more cautious Packard to act.

Perseverance -- LaserJet style

Jim Hall, R&D Project Leader, at the 10th anniversary of HP's first Laser Printer (EPOC = Electronic Printing On Command): On December 7, 1980 (Boise, Idaho newspaper business item headline) – "HP introduced its first laser printer; the HP 2680 laser printing system. We were developing what we thought was really a breakthrough product. It was phenomenal in terms of what we could print. We had a poll in marketing on how many we’d sell the first month. The forecast was 75. Actual sales were zero. We also sold zero in January and February. Finally in March, Dan Schwartz sold our first trade unit to AAMC in Washington D.C. This was the struggling beginning of the laser printer revolution within HP"

The EPOC printer had a Canon engine under the hood, and it took the team more than five years to invent it after signing the Canon contract. To Canon’s dismay, the next solution used a Ricoh engine. The price dropped to $10,000, the size shrunk by eighty percent, and the development took only two and a half years – but the product proved unreliable. Jim Hall, HP’s redoubtable development manager, ruefully acknowledged years later that it too failed – “another failure. Two tries and two failures.”

After the failures, the Boise, Idaho management team had lost enthusiasm for this sector, reducing the development team to five engineers for the third try – which yielded a product called the HP 2686A, later retitled as the HP LaserJet. It was a stunning, and unexpected, success, turning into a product bigger by a factor of five than anything else in HP's 90 division line-up. It soon hit $1 billion revenue per year. It was so stunning, in fact, that HP forgot to acknowledge or celebrate it for five years, an almost unfathomable reaction.

Question: at YOUR company, how many times does the same project manager get to lead the third project in the same field after eight years of trial by fire on two failures in a row? "Trust me, THIS TIME I know what to do!"

Thursday, April 3, 2008

Amigo -- so friendly it followed you home

Stan Sieler described the HP Amigo for Wikipedia:
The HP 300 “Amigo” was a computer produced by HP in the late 1970s based loosely on the stack-based HP 3000, but with virtual memory for both code and data. Designed as a single-user workstation, it was a commercial failure, massively so, considering the huge engineering effort.... The circuit boards were in a floor pedestal, with CRT and fixed keyboard on top. It pioneered such ideas as built-in networking, automatic spelling correction, multiple windows (on a character-based screen), and labels adjacent to vertically stacked user function keys, now used on ATMs and gas pumps. It also featured HP-IB as the I/O bus, an 8” floppy disk, and a fixed 12M Winchester hard drive. [i]

Two issues of the HP Journal – June and July 1979 – had fifteen articles penned by twenty-two authors that described the new system.[ii] Highlights were described as a “personal computer designed for the individual worker”, with guided “soft keys” for easy user-interaction, “on-board everything” including display, built-in hard and soft disc memory, and a stylish package. Sixteen machines could be easily networked. Priced slightly higher than the Alto at $38,500 with matching specs and a different, much easier interface by conventional wisdom of the day, it was a major statement by a major competitor already in the computer business. As noted multiple places, “the competitive landscape of the era was dominated by costly mainframes and minicomputers equipped with time-shared dumb terminals. Amigo was launched three years before the Xerox STAR; personal computers (circa 1981) were simplistic, with limited processing power and the inability to communicate with other systems.”[iii]

Aside from size, price, portability, software, and success, it was everything a personal computer should be. $40,000 for a personal computer might seem laughable, but the HP 9845C from Fort Collins two years later, a color-display workstation sans networking, sold like hotcakes at $39,500. Ironically, the $33,000 HP 250, characterized as a small-business computer, was developed simultaneously by the Böblingen Desktop Calculator group in one-fifth the time for one tenth the R&D investment, and it outsold Amigo tenfold. But it wasn’t politically correct – re-assigned to Cupertino under Bill Krause, it died of inattention. The HP 250 Journal article appeared two months in front of Amigo, two years after debut. Such internecine warfare was unbecoming of a well-managed corporation, but it increasingly characterized HP Computing. Something had gone radically wrong.

[i] Wikipedia HP 300;

[ii] HP Journal (30:6); Jun 1979; Cover: HP 300 Computer; George R. Clark, “A Business Computer for the 1980s...a totally new business-oriented design based on HP's silicon-on-sapphire integrated circuit technology, this new system packs a vast amount of processing power into a surprisingly small package,” pp. 3-6; James R. Groff, Eric P. L. Ha, “The Integrated Display System and Terminal Access Method...the HP 300 handles up to 16 application terminals simultaneously. Its own display can act like several mini-displays at once,” pp. 6-9; Frederick W. Clegg, “Reducing the Cost of Program's a compiler-based system, so run-time efficiency is high, but it has many of the conveniences of an interpreter-based system,” pp. 9-15; James R. Groff, Phillip N. Taylor, Alan T. Pare, “Managing Data: HP 300 Files and Data Bases ...choose one of seven different file structures or the IMAGE data base management system,” pp. 16-19; Tu-Ting Cheng, Wendy Peikes, “An Easy-to-Use Report Generation Language...templates on the screen take the place of RPG coding sheets,” pp. 20-23; May Y. Kavalick, “HP 300 Business's specially designed as a versatile business applications language,” pp. 23-26; David A. Horine, “Innovative Package Design Enhances HP 300 Effectiveness...monocoque construction is the starting point and even the shipping container is novel,” pp. 26-30; Ronald E. Morgan, “World-Wide Regulatory Compliance,” p. 30. See also HP Journal (30:7), July, 1979; Cover: HP 300 Computer; Arndt B. Bergh, Kenyon C. Y. Mei, “Cost-Effective Hardware for a Compact Integrated Business Computer...CMOS/SOS technology helps reduce an eight-board processor to only two boards,” pp. 3-8; W. Gordon Matheson, “A Computer Input/Output System Based on the HP Interface's designed to make it easy to add, delete and communicate with peripheral devices,” pp. 9-13; Richard L. Smith, “A Small, Low-Cost 12-Megabyte Fixed Disc Drive...a new Winchester-type disc was designed to meet the mass memory needs of the HP 300,” p. 11; Alfred F. Knoll, Norman D. Marschke, “An Innovative Programming and Operating and softkeys add new facets to the classical concept of interactive programming,” pp. 13-17; Ralph L. Carpenter, “AMIGO/300: A Friendly Operating improved man/machine interface sometimes called friendliness, requires an advanced operating system,” pp. 17-24; James C. McCullough, Donald M. Wise, “Configuring and Launching the AMIGO/300 System...system generation and startup are easier than they used to be,” pp. 20-21; Thane Kriegel, Dilip A. Amin, “A Multiple-Output Switching Power Supply for Computer Applications...designed for computer mainframes, this OEM power supply is an economical solution for the HP 300's power requirements,” pp. 25-28.

[iii] Xerox Star, Wikipedia,

Cricket -- an unmitigated disaster

An impressive calculator-watch, codenamed Cricket, was awarded the vaunted HP-01 model number. R&D VP Barney Oliver quipped, “I knew it wasn’t going to work when we started talking about it as fine jewelry.”[i] The electronic watch business actually became a feeding frenzy in Silicon Valley for a period, with over 100 entrants. The first casualty was the Swiss watch industry; the second would be the multiple players in the Valley. Most vendors concentrated on accurate time, but since even the $5 entries kept better time than any watch in history, that edge soon was superfluous. HP focused, as with the HP 65, on extraordinary functionality for a hefty price – $695. Even the title on the HP Journal article seemed breathless – “Wrist Instrument Opens New Dimension in Personal's a digital electronic wristwatch, a personal calculator, an alarm clock, a stopwatch, a timer, and a 200-year calendar, and its functions can interact to produce previously unavailable results.”[ii]
Reading the Journal article gives pause – c.f. the Calendar function description: The calendar function provides the month, day, and year, but it is often desirable to know the day of the week also. A function has been implemented to provide this information. With any date in the display, pressing the prefix key (Δ) and the colon key (:) converts the date to a decimal display from one through seven, indicating the day of the week (Monday is one, Tuesday is two, and so on). Attempting to perform this function on time or decimal information will cause an error indication. Sometimes it is also useful to know the day of the year [how many times have you needed that knowledge recently?]. With a date in the display, this function is accessed by pressing the prefix key (Δ) and the slash key (/).... In computations involving time, it is often necessary to convert from hours, minutes, and seconds to decimal hours. This is done by the key sequence Δ ÷. [iii]

What, in God’s name, had gone wrong? How could the division caught in a dogfight for years with Texas Instruments, learning to stock the shelves at Macy’s, produce such an esoteric device? Worse, the article announces “The HP-01 is the first of a new generation of wrist instruments.” It would also be the last. One might be grateful that they never produced the wrist spectrum analyzer or the wrist gas chromatograph....

[i] Over 100 companies entered the “semiconductor watch” business in one year’s time; virtually all failed. TI enjoyed the most success for awhile, with predatory pricing akin to the calculator business. Intel famously failed with their Microma line. Cricket suffered from three fundamental flaws – the keys, accessed via a sideboard stylus, were hopelessly small for aging fingers; the watch was much too large and heavy for comfortable wearing (a common joke was that you could tell who was wearing one by the extra length of their left arm); and the price was extraordinarily high. Barney’s quote is from a conversation with him when Chuck House became Corporate Engineering Director in April 1982.

[ii] HP Journal (29:4), Dec,1977, Cover: The multifaceted HP-01 Wrist Instrument; Andre F. Marion, Edward A. Heinsen, Robert Chin, Bennie E. Helmso, “Wrist Instrument Opens New Dimension in Personal's a digital electronic wristwatch, a personal calculator, an alarm clock, a stopwatch, a timer, and a 200-year calendar, and its functions can interact to produce previously unavailable results,” pp. 2-10.

[iii] HP Journal, Ibid, p. 7.

The Second Watershed

The HP 35 Handheld Calculator rescued HP from the 1970/71 recession in dramatic fashion. Backed by CEO Hewlett when fabled market research group SRI voted no, the product fueled enormous growth for HP from 1972 through 1974. Then Texas Instruments, using a variety of tough competitive tactics, gutted the Handheld market. Elsewhere for HP, from 1974 through 1976, Instrument Group growth slowed to 14% CAGR, and Computers, without Peripherals, were even less, plummeting to 13% per year CAGR. Peripherals saved the day – new printers, disc drives, and data terminals added orders of $80 Million and revenue of $50 Million. Net profits were an even sorrier saga – the Instrument Groups grew a cumulative 21% over three years, but Computers, even with Peripherals, were up only 7% overall in the same three years. Clearly, more was wrong than just the TI competition – at the height of the digital computing revolution, this was terrible earnings performance.

Hewlett, the more risk-taking of the two partners, had three new answers being readied – the classic tech touchdown approach. One, an impressive calculator-watch, was codenamed Cricket and awarded the vaunted HP-01 model number. Second was an incredibly sophisticated surveying tool. Most important, Ely’s Cupertino team was finishing Amigo, the most ambitious computer program in HP history, dwarfing the abortive Omega five years earlier. Featuring Silicon-on-Sapphire (SOS) technology that no other company had yet mastered, it augured to be the flagship personal computer that the industry eagerly awaited. Alas, all three – highly visible – failed. Hewlett had fingerprints all over the first two, and he had confidently supported Ely with Amigo as the bold replacement for the scuttled Omega. The loser in all of this was Hewlett. His own confidence wavered, and tragically the love of his life – Flora – succumbed to cancer early in 1977 as well.

A year later, he retired, handing the company to the first non-founding CEO, John Young. The question on everyone's lips then was "now what"?
The questions thirty years later are "what really happened, and why" and "what were the options, compared to competitors?" What do you know about this era at HP?

The First Watershed

Hewlett (and later Packard) described 1957 as HP’s Watershed. [i] This was the critical test for how or even whether the company, and Bill and Dave, could clear the hurdle that trapped so many. Watershed – the word connotes much in the arid West. A watershed event is a critical point that marks a fundamental division or a change of course – a true turning point.

In The HP Way, Dave singled out several differentiating events in 1957:
Taking the company public
Deciding to establish a manufacturing presence in Europe
Creating Product Divisions for the company
Holding the Company’s first off-site meeting for Senior managers
Introducing a formal set of Corporate Objectives
Enormous hiring expansion, with 87% new hires (vs. a typical 12%)
Occupancy of a new headquarters in the Stanford Industrial Park

Each of these was a significant event – taken together, they represented monumental dedication to a bolder future, one that could scale significantly and grow with the HP Way of personal initiative and feeling of participation without the founders having to be so directly involved as they had been up until now. Just as with the creation of the HP Way, much insight and ingenuity would be demonstrated in its evolution over the next decade. In retrospect, this would prove to be the far more important aspect of the HP Way – an ethos appropriate to a small intimate environment has been created innumerable times in world history, almost always doomed to failure as the enterprise grows larger than something the individuals can manage.

[i] History of HP videotapes circa 1983, Hewlett Family Foundation, HP TV Network. Disc #3, Chapter 15.

Dave Packard goes to Washington -- Part 2

The times were difficult, to be sure. Vietnam protests had forced President Johnson from the 1968 Presidential race; Nixon committed to an orderly withdrawal in the campaign, which he followed for most of his first year in office. Packard and Laird’s efforts went into downsizing the military to support increased domestic policies. And then, the My Lai massacre in February 1970 prompted Nixon to bomb Cambodia.[i] The Kent State tragedy happened within weeks, plunging the nation into paroxysms of guilt, anger, and rage. Packard, preparing to give a speech in Palo Alto, was targeted – a Daddy Warbucks as it were, as seen by the Stanford student body at Packard’s revered institution. The sponsoring group moved the speech to San Francisco – safer for him, they said. Beyond irritation, he lashed out in the speech, pronouncing Jane Fonda a traitor to the country, betraying his enormous sense of frustration.[ii]

Reports out of Washington were not sanguine. The press was vicious, the politics more so. Senator William Proxmire of Wisconsin led the Democratic Party effort to block Packard’s nomination, something that Packard would never forget.[iii] Nor could he ignore the impact on Lucile, who said to Dave: “each morning when I turned on the radio, they’d be saying something terrible about you, and that spoiled breakfast. Then at noon when I’d listen again, it’d be worse, and that spoiled lunch. Then you’d get home, and tell me what an awful day you’d had, and that spoiled dinner. So when was I supposed to eat?” It was an effective diet – she lost sixteen pounds in twelve weeks. And then she stopped listening to the radio.[iv] Asked later about his biggest accomplishment in Washington, Packard wryly quipped, “I gave up smoking”.[v]

[i] This was long before Proxmire introduced the infamous Golden Fleece Awards.

[ii] Packard, The HP Way, pp. 184-185

[iii] John Doyle oral interview by Ray Price, March 23, 2005, p. 15

[iv] DeBenedetti, Charles, An American Ordeal: The Anti-War Movement of the Vietnam Era, Syracuse University Press, Syracuse, NY, 1990.

[v] Documents from the Palo Alto Times and the San Francisco Chronicle

Dave Packard goes to Washington -- part 1

The quintessential Packard was the man who refused to accept the ruling of the War Resources Board in 1942 when they felt the company was making excessive profits and paying extraordinary wages via the unique profit sharing plan. Packard described it quite succinctly in The HP Way: “I felt very strongly about this issue . . . and they said I would have to take my case to Washington. I did so and worked out an agreement with the government that gave our company virtually everything we asked for.”[i] Omitted from the passage in his book – (a) he was only 29 years old; (b) his company had eight full-time employees; (c) Washington D.C. was a besieged wartime bureaucratic snarl; (d) his profit-sharing plan and his salary being kept the same as Bill Hewlett’s ($110/mo) while Hewlett was in the Army were both highly unorthodox; and (e) he went by train both ways, so this excursion took him eight days.

In short, this was nearly preposterous on the surface of it. So the phrase “I worked out an agreement that gave us virtually everything we asked for” had a lot of emotional undercurrent. Dave got things done – he seldom described how.

Questions: Why did he think he could do it? How did he do it? Would anyone you know have tried such a thing?
[i] Packard, The HP Way, p. 58.

The Computer World -- Smaller than you'd think in 1964

In the fall of 1964, Digital Equipment Corporation was finishing its eighth year in business, founded by students from Wes Clark’s pioneering computers at MIT. The company had produced the PDP-1 through PDP-6, and was ready to debut the PDP-8. It is hardly realized, however, that DEC had delivered only 118 computing machines in its first eight years – not exactly re-writing history yet – as the later PDP-8 and PDP-11 would.[i]
Professorial Dr. An Wang, inventor of core memory at Harvard, by now had built an electronic calculator company, Wang Labs, competing with Burroughs for financial tools in the small-office arena. "The Wang 4000 Computer System, was informally introduced at the annual IEEE conference in New York, in March of 1967.... (It) was formally introduced at the BEMA (Business Equipment Manufacturers Association) show in New York in late October 1967. By December, orders had been booked for seven (units).... Clearly the 4000 had a broad potential market. [ii]
Note the context of the times. Nine months of Wang marketing yielded seven orders. Digital Equipment sold 118 true computers in eight years. Burroughs built the lowest cost mainframes at the time; they sold 106 Datatron machines from 1954 through 1960.[iii]
Three separate leading companies – sales volumes of one to two units per month over a decade. No one, except IBM, had any unit volume. Even IBM’s volumes were small in unit terms. In 1963, IBM shipped roughly thirty systems per month, twice that of the Seven Dwarfs combined. Over the next three years, as System 360 began deliveries, General Electric and RCA were already beginning to concede the computer business

[i] Douglas Jones at the University of Iowa has a website devoted to DEC PDP history. The site is hosted at Ohio State Univ. DEC had sold nearly 1000 run-time controllers (PDP-5) by then – e.g. embedded controllers for air conditioners, akin to gas pump controllers today, but only 118 true computing machines. Revenues for 1964 had fallen, from $1.2 Million to $980,000, as the company readied the PDP-8 for market. Packard offered 25x current revenue, strikingly similar to the inflated prices of the era forty years later. The deal was struck, but came apart the next day as the two garrulous men assessed each other with baleful eyes.
[ii]; see Benzene, Rick, “Wang Laboratories: From Custom Systems to Computers”, article for the Old Calculator Museum, Boston, MA, October 2001. See also An Wang, Lessons: An Autobiography, Addison-Wesley and Wang Institute, Boston, MA, 1986. The April 24, 1967 "Product Engineering", McGraw-Hill, wrote up the 4000 introduction, p. xx.
[iii] George Gray, “The Burroughs B220 Computer”, Unisys History Newsletter, Vol. 5, #2, April 2001. Consolidated Electro Dynamics à Datatron 205 at the Babbage Institute, MN.
[iv] Chandler, Alfred D. Jr., Inventing the Electronic Century: The Epic Story of the Consumer Electronics and Computer Industries, Free Press, NYC, NY, 2001, pp. 86-103

HP as a Computer Company?

An interview with either Dave Packard or Bill Hewlett at the end of the First Public Decade (1967) would not have given an erstwhile investor any reason to think that this company would be a growth vehicle in the high-tech computing space. When Packard left HP in February 1969 to become Deputy Secretary of Defense in the Nixon administration, HP had grown enormously – to 15,000+ employees and 17 divisions across the globe by early 1969 from a small Engineering Services orientation at the outset, . Measured from first revenues for deliveries to the government in 1942 during the war effort, Packard led the company through growth of five hundred times in the next twenty-six years – a compounded growth rate of 27% for nearly three decades.
The Hewlett-Packard Company knew what it was – an electronic instrument company, defined around the predicate of building tools for engineers and scientists – and it pretty well knew what it wasn’t. The thought of entering a world served by back-office machinery was almost heretical – (a) IBM and AT&T were HP’s largest customers, and (b) IBM was already known for ruthlessly competing against ‘the seven dwarfs’ – themselves each ten times larger than HP, with far longer pedigrees in electricity and radio – it must have been nearly unthinkable to the founders.[i]
Nonetheless, because of issues with Digital Voltmeters (DVMs) making too many measurements for a technician to write them down fast enough, HP entered the computer business. The HP 2116A Computer was illustrated on the cover and described in the March 1967 HP Journal issue.[ii] Packard was insistent on calling it an instrumentation controller, but the front panel label said it was a computer.[iii] Over the first year, only five 2116A machines were sold to the outside world, all by one salesman (Dick Slocum) in the Eastern Sales region.[iv]
What on earth was going on?

[i] The Seven Dwarfs: Burroughs, Control Data Corp (CDC), GE, Honeywell, NCR, RCA, and Univac. [ii] Magleby, Kay. B., “A Computer for Instrumentation Systems”, HP Journal (18:7), March 1967, pp. 2-10; also “Successful Instrument-Computer Marriages”, Ibid, pp. 11-12. [iii] From Robert Grimm correspondence, December 4, 2005: “The article and other text followed Packard’s desire, but the simple ‘2100A Computer’ designation was arrived at after much discussion and debate, in line with the labeling of other HP products.” [iv] “Hewlett-Packard Corporation: Computer Division”, Case S-M-150R, Stanford Graduate School of Business, 1973.

Wednesday, April 2, 2008

A Caveat, courtesy of Joan Didion

Joan Didion especially cautioned that “It is one thing for me to write about them, and you and I enjoy reading the sly innuendos about them; it is less fun when I write about us, and have you and I read about us. Where it gets difficult is when I write about you, and you read it. Almost by definition, that segment will be perceived as wrong – incomplete, misunderstood, distorted, pejorative ...”[i]

We apologize in advance for all such inevitable perceptions, and we welcome corrections and amendments that might be incorporated on our website and in subsequent printings. Obviously, this work is our own, and we are responsible for all inaccuracies, misinterpretations, and omissions. The stories and achievements are those of the company, and the opportunity to learn them, relate them, and give their creators acknowledgment has been our immense and distinct privilege.
[i] Joan Didion, private communication with C. House, May 2004.

Purpose of this BLOG

HP has had more than 1.5 million employees by one count, not to mention the number of suppliers and customers. Sometimes it seems that each one has their own special story about the history, lore, or HP Way that they experienced. Blogs and Wiki's are social networking tools that presumably can help to gather some of these stories, but the organizational difficulty of such tools is still daunting. Our hope here is to post a moderate number of key anecdotes, with the thought that there will be many HP buffs who can elaborate, edit, criticize, contradict, or offer supplemental or enhancing material to make the stories more robust and hopefully more accurate.

So, help us to make the book and succeeding efforts more accurate, more compelling, more enjoyable for those who follow. And our THANKS!

HP Phenomenon is a working title for a new book

Chuck House and Ray Price are the authors. We were impressed with the relatively unique Hewlett-Packard innovation approach when we teamed in the early 1980’s to write and teach an eighty-hour Project Managers course within HP. Price’s work with Ouchi studying HP culture and practices dovetailed with the perspective that House had just gained while designing and teaching a forty-hour video-based electronics course for GE engineers concerned about mid-career redefinition for a digital world. The two experiences gave each of us an extraordinary view of the diversity and special strengths provided by a radically divisionalized, semi-autonomous organization when it was combined with an expectation of excellence, and a strong encouragement of innovation.[i] Four years of working and traveling together reinforced these views.
More than five hundred employees and others have provided stories, anecdotes, and materials for our consideration. We have gathered far more material than we were able to use; selection has been difficult and often arbitrary. We apologize to all who find that their efforts on our behalf are not adequately reflected herein; many times the mutually re-enforcing aspects of several interviewees were critical for us to be able to include the segment, even as it was impractical to name all who contributed insight to each aspect of the issues. Some perspectives are included from people at other companies, and in places the parallel path of a competitor is traced for a period because of the importance of that segment to HP’s evolution. Inclusions for other companies have been corroborated through Annual Reports and corporate histories.
[i] William G. Ouchi, Theory Z: How American Business can meet the Japanese Challenge, Perseus, 1981. HP and GE (Packard’s first employer) maintained a knowledge sharing arrangement for many years.

HP Interpretive History

Hewlett-Packard has had surprisingly few books written about its business history, most of them focused on dramatic sagas.[i] The ironies are many, the facts are spare.

A company derided for years by observers as lacking energy, stardom, leadership, will, and direction – a company that always resisted fast growth, but did pride itself on moderate, steady results – was the fastest-growing New York Stock Exchange company over the last forty years of the 20th century, and has become the largest electronics equipment vendor in the world.
[i] There are innumerable chapters and excerpts in books, plus myriad magazine articles over the years. There were two books by the founders: one (Inventions of Opportunity: Matching Technology with Market Needs) had a few pages written by Hewlett along with reprints of key product developments from the HP Journal (1983); the other, The HP Way, was Packard’s laconic and austere autobiography published in 1995, a year prior to his death. And then there are the Carly books – three of them at this writing; one, a memoir by Carly Fiorina, Tough Choices, 2006; and two others primarily covering the Compaq-HP merger fight that she led successfully – Burrows, Peter, Backfire, 2003, and Anders, George, Perfect Enough, 2003. A useful compendium of speeches given by Hewlett and Packard has been compiled from the HP Archives by long-time employee Albert Yuen, Bill and Dave’s Memos, 2DaysOfSummer Books, Palo Alto, CA, 2006. Most recently, Michael Malone completed a magnificent biography of the two founders, Bill and Dave: How Hewlett and Packard Built the World’s Greatest Company, Penguin Group, NYC, NY, 2007.

[ii] McKinsey study 1958-1998, reported by Richard Foster at the University of California, Santa Barbara, in the Entrepreneur series, April 14, 2003 (c.f. Foster, Creative Destruction, Why Companies that are Built to Last Underperform the Market, Currency, Doubleday, NYC, NY, 2001). Foster was troubled that HP’s numbers won the contest, since (a) he didn’t regard it as a major growth company (vs. Apple, Microsoft, SUN, Dell or Compaq, for example), and (b) HP was the model company for the “Built to Last” thesis for Jim Collins which was the antithesis for Foster’s work. True, other companies did in fact grow faster, but not over the entire forty-year span of the study. Re size, see Forbes 2000 Sales, April 12, 2004, p. 147.