Monday, November 8, 2010

the story just won't die

The HP Board must have wanted to get even, or at least "weigh in". After the calming of things for a couple of weeks, Ellison couldn't resist going on the offensive again, trying to tar Apotheker with fraud and intent to cheat Oracle (oh, my, takes one to know one?), and more importantly, tie his hands as he starts this week at HP with a lawsuit over IP and trade secret theft and infringement (weren't those the concerns of HP's Board if Hurd went to Oracle?).

So, in the Wall Street Journal, and in Fortune, we find stories back-to-back "illuminating" the issues behind the Board's findings that led to ousting Hurd. Ah, the drama and suspense -- imagine watching a key football game in Mark's hotel room after drinks downstairs (with a TV there), but our girl wasn't needed for the Boise meetings, she just happened to be in town on HP's nickel. Undoubtedly no sexual harassment. More like the claim, as yet not picked up by any local area newspaper, that ran last week in the NY Post claiming that Hurd and an unnamed Marketing VP of Sun Microsystems had consensual relations in 2007.

This guy sounds kinda like Clinton and Kennedy, apparently plenty capable in his main job, but a little driven by his loins.

HP 'sources' went out of their way to explain that, except for this set of lying cheating pecadillos, they loved the guy, contrary to some outside observer comments (presumably including mine). If so, I'm saddened. I would have hoped that the Board was indeed beginning to catch on that he had raped HP's future almost as badly, if not worse, than his consorts. But maybe as I feared, this too was consensual. In which case, they have complicity. And in which case, you have to ask, "who's really running the place?" Is there a long-term perspective around?

Wednesday, October 6, 2010

lucky break

I had a most unusual opportunity this week, serendipity does work. I'd never met Henning Kagermann before, but I was in a session that he moderated at the STS Forum in Kyoto. Afterward, I introduced myself and we began from the Media X relationship at Stanford, for which Ike Nassi and Paul Hoffman at SAP Palo Alto Labs have been stalwart supporters. The D'School at Stanford, with which we work closely, is of course known as the Hasso Plattner Institute. Kagermann and Plattner were the leaders of SAP for many years, Kagermann as Co-CEO from 1998 to 2009. He picked Leo Apotheker as his co-CEO when Plattner stepped into being Chairman, and the two served together for five years.

So, of course, I asked -- "will this guy Apotheker help HP?" His answer was a bit surprising to me. He said ABSOLUTELY, IF THEY'LL LET HIM. He went on to say that the "CEO World" which can mean quite a lot in different circles views HP as a very difficult assignment right now. For three reasons.

First, there is a history of the Board shooting the CEO (he mentioned three, including Lew), and he didn't have any warm fuzzies for the current Board, except he thought Leo A was 'head and shoulders' more mature and stronger than either Fiorina or Hurd when they got the nod. He also had high praise for Ray Lane, but he focused on Apotheker, whom of course he knows a lot.

Second, there is a history of HP employees "thinking they own the place" and being, in his words, "whiners" if asked to change. This is not unlike the Wall Street Journal editor's view, who snottily said "they still believe in The HP Way". Well, Dave and Bill trained a generation to think of it as THEIR COMPANY, so that part is GOOD in my book. I agreed though with Kagermann that this can get carried away, and become an excuse to keep old patterns too rigidly in place even though external conditions have changed drastically. Kagermann's view was that THIS is the tough one, and he said he was hopeful that the company's employees would give Leo A a chance.

Third, he felt that HP had indeed lost considerable momentum in terms of customer perception about the vitality and creativity in their product and service offerings with the administration of the last guy (whose name I've forgotten). This he felt is fixable, especially if the second point can be re-energized. He felt (and said in the session) that ICT is a long ways from mature, that in fact the Cloud Computing metaphor, mobility, and Web 3.0 will make everything we've seen to date look primitive. I happen to agree with him -- so the best very well could be in front of all of us.

Overall, he was very encouraging about Apotheker and his value to HP. He had no specifics re Apotheker's leaving SAP except to say the dynamics of the world meltdown caused a lot of damage and that was mostly to blame. Hummn.

I felt privileged indeed to have him share these perspectives. He has himself retired from SAP, and is Chair of the German Academy of Science and Eng'g (think NSF in America), and also chairman of the EIT KIC ICT directorate of the European Union. Coincidentally, his new CEO in that role is Willem Jonker, our long time Media X partner from Phillips with whom I had dinner two weeks ago in Braunschweig, Germany at the European Research Initiative Council. At that meeting, chaired by Intel, there was precious little positive news or confidence in HP, which both surprised and saddened me. Enough that I didn't blog about it then.

Friday, October 1, 2010

Another surprise.... Leo Who?

Howls from shareholders, question marks from insiders, blogs cranking up all over the Valley, now we have a target

What fun! Who is Leo Apotheker? I'd first of all remind readers that was the same reaction when the HP Board picked Mark Hurd, and the same when IBM picked Lew Gerstner. Not every outsider pick is a bad one, and not every insider pick is good

Apotheker is well known, and well respected, in Europe. Totally coincidentally I spent three days last week in Germany with the Intel/SAP Joint Ventures lead director. No, we weren't prescient enough to guess this selection, but it was a great visit re what is happening in Cloud Computing and ICT. SAP, of course, is the only viable contender against Oracle in the Enterprise Software world, and has done an incredible job over the years head-to-head. SAP has strong presence in Silicon Valley, both with their operations in Palo Alto (headed by veteran Ike Nassi) and the Hasso Plattner D'School at Stanford, started by David Kelley et al.

Several positives:
1. He speaks and thinks globally (fluent in five languages is a major plus these days), unlike the last guy. HP employees are 71% outside the US, as are 90% of their suppliers (this is no longer much of a US company, folks). HP sales are 73% outside US. The Enterprise wins will be elsewhere, not in the States. Every other candidate 'floated' was a US centric person.
2. He is a long-term SAP player, came up through the ranks, and served admirably as co-CEO for five years. The seven months before the sudden resignation can be explained (maybe rationalized) as a power play that didn't work for Plattner, and he was the sacrificial lamb. But this guy knows the industry of Enterprise Servers, Enterprise Storage, and Enterprise Software about as well as anyone out there. Put him together with Donatelli (work hard to keep Donatelli, by the way), and it could be very good
3. Getting Ray Lane to join, and LEAD the Board. WOW! This is blockbuster news actually. Lane was a HUGE part of Oracle success for years, was in fact the only humane face on the place. And he said for the WSJ, he joined HP "because of LEO A". Now that has to be read as extremely positive, from a guy that I have admired for years. The team of Donatelli, Leo A, and Ray Lane can be imagined as INSPIRED if you are betting on Cloud Computing and Enterprise Services as the play.
4. They did not pick someone from the hardware/consumer side (which is a hard business, especially as far behind as they are starting, and with the low margins of most of it).
5. They did not pick someone who was a Hurd clone (need I remind you how angry the employees were at him?)
6. He is not unafraid to be a spokesperson in public (this IS the largest high-tech company on the globe, and the only one of the top ten who had a CEO who would not take speaking engagements or talk to public issues).
7. He has high marks both as a strategist and an operationally sound guy (notwithstanding whatever led to the denouement at SAP)

Several negatives:
1. He is not an insider, nor is the new heir apparent leadership (Leo A, Ray Lane, Donatelli together are all new to HP Way)
2. Probably lose Bradley over the slight (not sure how to interpret this, stay tuned)
3. Half of HP's business, and two-thirds of its profits, come from PCs and Printers. He needs to keep some of the key leaders here
4. He doesn't look or sound charismatic. But then, compare it with Bradley, Livermore, or Donatelli -- not much different.
5. He doesn't sound inspiring (maybe the same point as above?).
6. He doesn't sound "lovable" in the old HP Way sense. And HP employees long for someone who will vote for them too.

All things considered, I would have to say, CONGRATULATIONS to the HP Board. This is an interesting, and bold choice. We're pulling for you!

Monday, September 27, 2010

Another score for illegal behavior

What the hell is going on, we might ask. Headline in the San Jose Merc this time said "Valley's Titans Conspired". Citing a Justice Department investigation and findings, six companies -- Google, Apple, Intel and three smaller fry -- Intuit, Adobe, and Pixar -- agreed to quit their practice, now five years old, of colluding to 'not poach' each others' employees. Maybe that's why HP didn't pursue the suit against Hurd any longer -- if the Justice Department now is looking into restraint of employee 'freedom'...

These companies have been more respectable, outwardly, than many in the rough-and-tumble Valley. These are not (except for Apple) companies that got caught in the gigantic stock option 'backdating' fraud. These are the darlings in general -- Google far outpacing Yahoo to lead in Search and now perhaps in Android phones; Intel far and away the leader in microprocessor deliveries and now ramping up for fantastic n-way 'cloud computing'; Apple held in extremely high regard for pinpoint marketing savvy with the i-Pod, i-Phone and i-Pad hits in succession. Intuit is the world leader (and there is really no second place) for Home and Small business Accounting software; Adobe is the master of multimedia delivery security; Pixar -- my gawd, the greatest animated film company of all time (well, maybe Disney..., but Pixar does such complex wonderful stuff).

So what happened? Well, it seems that these leaders are all pretty good friends. The story implicated Eric Schmidt (CEO Google), Steve Jobs (CEO Apple), Bill Campbell (Chairman Intuit) and Paul Otellini (CEO Intel) directly. Otellini and Campbell are on Schmidt's Board (as is Stanford Prexy John Hennessy), Campbell was on Jobs' staff for years and is a close friend; Schmidt was on Apple's Board until the Justice Dept invited him to step down a year ago. Jobs of course was the key owner of Pixar before selling it to Disney (and now he is Disney's largest shareholder). Adobe was coerced by Apple, in order to have its software included on the new i-Pad. Hard to imagine that these folk all had cocktails at a barbeque one night, and someone said, "hey, I've got an idea..." but who knows?

What is clear is that, once again, the leadership in the Valley looks tawdry, cheap, and illegal. Classically, Intel issued the statement that it perennially has ready: "we've agreed not to enter into agreements (like this anymore). Intel does not believe its actions violated the law, nor does the company agree with the allegations." Unstated, but as we've seen in a multitude of other actions involving Intel non-violations, they'll keep a little extra cash around to pay the fine.

what next for HP and crowd?

The beleaguered HP Board settled with Mark Hurd last week, getting $13.5 million back (of the $42 million they gave him) and in turn withdrew their injunction request to stop him from going to work for Larry Ellison at Oracle. Since Hurd's paycheck will total around $11 million with an upside 'prob,ability' of another $5 million, he probably felt that he could be a bit magnanimous.

After a suitable few days, the Board floated their current best thinking:
1. They want an insider (this after looking at a crop of outsiders, and presumably listening to a lot of 'oldtimers' about the last two choices)
2. They discussed a couple of outsiders that they had considered, sort of explaining that they were 'late' for the one who just became the new Nokia CEO...
3. They said Todd Bradley, Ann Livermore, and Dave Donatelli -- in that order -- were the leading inside candidates, while the newspaper showed a big article with Viomesh Joshi prominently talking about the peripherals business, far and away the most profitable part of HP. VJ was not "on the list" put forth by the board
4. Astonishingly candid, the article said "several members of the Board" backed Bradley, "who has many of Hurd's capabilities" The article went on to note that Livermore is the best candidate in terms of the company employees liking her, but "she's been passed over twice". It then said Donatelli hasn't been at HP long enough (just a year), so is "unlikely" to prevail. This was all big news a week ago; nothing has appeared since. Wierd, don't you think? Says they're wrestling with something that has them uncomfortable.

Wednesday, September 15, 2010

HP R&D and Palmissano

The dirty little secret is starting to get wider currency. Sam Palmissano, in today's Wall Street Journal, p B1, is headlined at "IBM's Chief Thumps HP". Spencer Ante's story uses the wrong numbers (the same numbers that journalists have used for these past two months -- I have been flabbergasted by how everyone uses everyone else's words/numbers as though they themselves had done the work!), but makes the point that HP has been lowering its R and D investment steadily for a long time now.

Palmissano said "HP used to be a very inventive company.... (but re) buying 3PAR, HP had no choice. Hurd cut out all the research and development..." Damning, but of course, just words from a competitor.

Ante then repeats the mantra that HP under Hurd cut R and D from $3.5B (4% of revenue) to $2.8B (2.5%) in 2009 while IBM has maintained their R and D percentage at 6% ($5.8B). True numbers, but he (like others) uses a foreshortened lens to look at the facts.

I first reported this systematic reduction in R and D investment in an May 2009 interview with Ashley Vance of the New York Times, who featured a barbed response from R and D VP Shane Robison, related in my May 26, 2009 blog entry "Whither HP Now". Our book, THE HP PHENOMENON, documents this in overview form on pp. 503-4, submitting that the Valley 'buzz' is that HP has become "innovation hostile".

It is perhaps noteworthy that HP tried to stop publication of the book, citing "numerous factual errors , inappropriate use of confidential materials, and unwarranted conclusions", none of proved to be supportable when we engaged on specifics. The errors we have found in HP website materials, pointed out carefully, have been ignored (such as how many oscillators they sold to Disney and the price point, etc., not that it matters except you'd think they'd care enough to have their own history correct).

Since Ante and others are insistent to show that Hurd screwed it up by going from 4.0% R and D to 2.5% R and D investment, I would at least like them to use the right numbers. For example, it is wrong to use the 2005 fiscal numbers as Hurd's baseline, since Carly was gone for eleven months of calendar 2005 and nine months of fiscal 2005. And Hurd was there for nine and seven months respectively that year. And we have three quarters of 2010 already reported, measurably lower than 2009 for R and D percentage.

First of all, the six decade continuous investment at 9.0% plus or minus 1% was ended by Lew Platt, who took it from 9.0% to 6.0% in seven years, 1992-1999 (5.8% 4th Q 1999). Carly continued the trend, at a somewhat slower decline, taking it from 5.8% to 4.9% (1999-2003). Under pressure from her Board in 2004, she held R and D dollars constant, and the percentage shrunk to 4.4%. Counting the first six months of fiscal 2005, she averaged 4.34% R and D investment for her last eighteen months (counting the 2nd quarter of 2005, ere Hurd was fully on-board).

Hurd quickly started reducing, cutting $46M out of the 2nd half R and D actual dollars, taking the percentage to 3.9% from 4.3% in six months. The carnage continued through his last days, the average for three fiscal quarters of 2010 is 2.3%. General selling and administrative costs are now 437% of R and D costs, vs. 308% when he arrived.

So, for the last three CEO's, here is the track record:
Platt reduced R and D percentage by 34% in seven years
Fiorina reduced it by 27% in five and a half years
Hurd reduced it by 47% in five and a half years

The claim at HP continues to be of the form that "it is hard to spend more money on R and D and expect better results; we're spending plenty...". But Apple seems to find new exciting products to invent, with higher investment rates and more risk-taking. Iterative R and D is really just D; memristors are indeed R, but somewhere inbetween is what used to be the sweet spot. Even when they out-invent the competition (great examples include 3D Printers and DNA Printers, plus HP Halo), they today have a tendency to license or outsource or forget to market their advantage. What gives?

"What gives" is clearly a focus on today, not tomorrow; pandering to quarterly results throughout the company which emasculates not just R and D, but the possible uptake or technology transfer from R and D to successful marketing launch. Palmissano got it right. He closed his statements by praising Ellison at Oracle, "Oracle invests". That might become the contest between Hurd and Ellison, which has not yet been picked up in the trade press as the possible hot button.

Thursday, September 9, 2010

insider or outsider

A number of my best friends -- "oldtimers" as they're affectionately called in our book THE HP PHENOMENON -- are clear. What's been wrong at HP is that the Board has picked two outsiders in a row, and they were both TERRIBLE when all the facts became known. Thus, without question, the Board has to pick an INSIDER this time, the way HP did it so well for the first sixty years. Otherwise, it is hard to know, respect, and honor "the HP Way".

There is a lot of wisdom in that view, in my opinion. The HP Way, despite what Wall Streeters and avaricious shareholders believe, is not outmoded or inappropriate for this day and age. Indeed, as we chronicle in the book, the very distributed nature of most multinational corporations today, whether using outsourcing or offshoring or merely localized operations to support international sales, MUST HAVE some sort of honor system akin to the historic HP Way. Consider -- one out of five professionals working for Intel, Microsoft, Cisco, IBM or HP have NEVER met their boss face-to-face. Wouldn't you, as a shareholder, like to imagine that those workers believe in their company and their leadership and work hard on their (and your) behalf?

But, this begs the question. The first question to consider is "who is an insider?" Are there any left? Who knows what the HP Way even means. Instructive to read page 245, where old-timer VP Bruce Wholey was vituperative about the "new kids in computing and in Headquarters" circa 1980's. Page 384 documents the fact that these disgruntled employees led Packard to "ask for John Young's resignation" for lack of empathy with "the HP Way". Lew Platt certainly fulfilled the founder's hopes, and the company employees adored him by and large. Worth noting though that what Hurd was good at (and I do give him credit for running a lean, mean organization which did bolster Wall Street bidding 'while it lasted'), was just not Lew's strength.

So, the first thing to note is that the Board replaced two insiders (Young and Platt) in just about the same timeframe as the later Board got rid of two outsiders. This job ain't easy. In other words, they were looking for help outside when they found Carly; the insiders had not measured up twice in a row.

Perhaps the more important observation, though, is how many "insiders" are left, and from when do you count? By our 'count', only about five percent (ONE OUT OF TWENTY) employees at HP worked there before Packard passed away in 1996. And only about ten percent (ONE OUT OF TEN) employees at HP were there prior to the Compaq merger eight years ago. If those numbers seem out of whack, go do the math. It should scare you!!! Lest you think this is a new problem, consider page 383 where Bill Hewlett observed that 58% of HP employees in mid-1976 had been with the company less than 18 months, so how could they possibly know yet "the HP Way"?

So, it is folly to think that the ONLY CHOICE is to "go inside" -- and it is even more silly to think that if the Board does so, that it will mean that the CEO selected has any HP WAY DNA built in over a long acculturation period. Granted, there is still a pool of several thousand folk who have been at HP a long time, and "know deeply" the HP Way -- but they are more or less unlikely to be on the short list of CEO candidates.

So, I submit that the Board's task is to study the meaning and impact of the HP Way of doing business, try to correlate that with the distributed / chaotic / inchoate / highly competitive world in which the company has to perform, and select someone INSIDE or OUTSIDE, who can balance three things --- 1. the HP Way of leadership and ethics, which means empathy for, trust in and responsibility given to employees; 2. bold, decisive strategic choices; and 3. crisp operational excellence.

Thinking about these three points -- Packard and Hewlett shared power for a long time, and both were legendary for Point #1. Packard was great at #3, not too bad on #2; Hewlett was generally intuitively great on #2, and almost absent on #3. The pair did good work. Young was excellent on #3, as was Hurd. Hurd failed #1 on every count imaginable, and #2 mostly. Young did better, certainly excellent on much of #1 (not so hot on empathy, but able to delegate). Platt was superb on #1, better than either Dave or Bill on empathy and trust. Lew did not, however, do #2 or #3 particularly well. Carly... gets an A from me on #2, although the trade press and many pundits didn't agree even on that. I think time has vindicated her two biggest moves, even though the PwC attempt failed, it was the right direction and IBM has shown that to be true in spades. She actually should get fair marks on #3, because the truth was that the PC integration with Compaq was much further along under Duane Zitzner than the current team gives credit for -- Dell was already on the run. Carly's failing was that style issues clouded #1 so badly that it would have taken herculean measures in #2 and #3 to 'win'. Kinda like Hurd -- herculean #3 stuff at the expense of #1 especially, and #2 eventually, catch up with you.

So, what does that say? No new CEO will walk on water for very long; Hurd and Ellison will help see to that, not to mention legions of other observers. And no person can be great at all three (presumption, yes, but perfection is rare, right?). So, it might be that an organization of two or three shared roles is worth considering (possibility one) or that if just one person, they should be a good listener, able to let their team help on all three points, but in particular, they must not be ONE-DIMENSIONAL. A choice to be empathetic and operationally tough is tricky at best, but if you're ethical and fair, it is easier. It'd be wonderful to imagine that someone could be found who is a leader, not a manager, good at two of the three and not terrible at the third; who could accept a COO who could be really good at two of the three with a different balance than the CEO. That's my dream...

Wednesday, September 8, 2010

Marc Andreessen -- the linchpin for the HP Board

Lots of speculation running through the Valley about HP's Board. The San Jose Mercury-News had two front-page stories on Monday, Labor Day, one about Hurd joining Oracle, and the other profiling Marc Andreessen, the 'high-tech heavy' on HP's Board. I had the distinct pleasure some years ago (maybe fifteen years, gawd is that possible?) to introduce Marc to Doug Engelbart. One was 24 years old at the time, a wunderkind for his Mosiac invention and Netscape company that ushered in the modern Internet with its exciting browser. The other was 74 years young, the almost forgotten creator of the PC / networking paradigm when he was at SRI in the mid-sixties. Each exclaimed at the time to the other, almost simultaneously, "I am so glad to meet you!!!"

Several of us managed to get Doug nominated the next year for the Lemelsen/MIT prize, at $500,000 the highest prize in America for scientific achievement. I hand-carried the nomination forms to MIT the last day of submission; Doug won handily for his 1968 "Mother of All Demos" that we profiled at Stanford on the 40th anniversary in December 2008 -- but the context was that until Andreessen's creation, the world had a hard time seeing more than a 'mouse' in Doug's contributions, so until the Internet 'exploded' in usage, Doug labored in obscurity except within our 'techie circles'. Once this happened, of course, he got acknowledged widely, including ACM's Turing Award and the Presidential National Medal of Technology.

Marc, for his part, lived through tumultuous times at Netscape, with noisome persona such as Jim Clark, the founder of Silicon Graphics, Netscape, and Healtheon doing battle called "the Browser Wars" with the Darth Vader from the North, Microsoft. The net result was a 1999 firesale (well, $4.2B) to A/OL, itself the darling and eventual casualty of the boom and bust.

Nearing forty, Andreessen has matured enormously. He has founded and led two other companies, restructuring one with considerable success that he later sold to HP. His positions on the Boards of Facebook, e-Bay and HP are worth a moment's consideration. We are in the midst of a profound restructuring of society, driven by Internet applications of every kind and description. The triangulation view that these three Board seats afford him has got to be pivotal for assessment, not unlike the view that Eric Schmidt got while seated on the Apple Board for several years. Marc also has a strong position at the Venture Capital table through his 'day job', seeing all manner of the 'newest ideas' that run rampant through Silicon Valley; he and his wife have a major commitment to social philanthropy as well, unusual (and incredibly commendable) at his age.

Andreessen, moreover, is one of the small minority of HP directors who came aboard without prior ties to Hurd; he is the only director who has worked in engineering or innovation in a direct way (unless I missed something in the other bio's). So we're pulling for you, Marc. Help 'em get it right this time...

Tuesday, September 7, 2010

Hurd lands on his feet, maybe

Amid speculation all week, the next shoe dropped finally yesterday, as Oracle's arrogant Larry Ellison announced that Mark Hurd would become the new co-President of Oracle, replacing beleagured married Chuck Phillips (whose jilted girl friend put a saucy Times Square billboard up in January). HP wasted no time in filing for an injunction to prevent it, filing in Santa Clara County court at 11:30am this morning, citing a clear violation of their mutual contract and a damaging competitive unfair practices situation. These are tough things to win in California, since judges have viewed them as 'limiting a person's ability to hold a job'. But this one is about as high-profile as you can get; if it is unwinnable, it could well launch a whole new level of pirating key execs.

HP's claims, that Hurd four times in the past three years has signed confidentiality documents, including the finale on August 6, 2010, seem clear enough. HP further noted that he was WELL COMPENSATED in the resignation, partially in order to ensure the confidentiality clause. Well, it would seem that $42 million should have tided him (and any payments to women) over for more than thirty days. But maybe his $7.15 million Atherton home is a bit chilly these days, and he has to husband his cash.... And doubtless, the mere two years that he is supposed to be enjoined might seem longish if you're used to having $20 or $30 million in spending money each year. Poor man.... has to find employment somehow, especially at his advancing age

My take is that this may be the straw that breaks the camel's back. This is an incredibly confrontive act on the part of Ellison and Hurd, a pair who could find even closer friendship in the days ahead since they obviously share core ethical disregard for ordinary laws and rules. It figures -- one of Larry's previous tennis partners and erstwhile competitors in databases went to jail for kiting Informix financials a few years back, a mere 'billion dollar misstatement' for a company whose annual revenues were about that same size. Were it not for cases like Enron and the amazing theft via stock option backdating, "a mere billion" could have raised hackles. We still, of course, don't know the extent of the infractions that led to HP and Hurd separating...

Think about it this way -- seven hand-selected Hurd lieutenants and three others vote UNANIMOUSLY to ask for his resignation -- at a time the world viewed Hurd as "the" HP shareholder savior. They KNEW this would not play well on Wall Street, but they voted their conscience. Doesn't it stretch all credulity to think that the Board was concerned enough about non-sexual non harassment and supposedly $1,000 or maybe a little more in faked expense reports to fire this guy? I give you example A -- yesterday's announcement was as deceitful as the way he managed at NCR and at HP for the past decade. He is dishonorable, unethical, a total fraud and cheat, and he just got exposed more clearly. Plus, as I noted before, he's still a thug.

Thursday, August 19, 2010

My gawd, the HURD story is still alive?

These things usually abate fairly quickly; sexual pecadillos, robbing the till, and egregious acts of other kinds have a titillating capability for hours or a few days at most. Why is this one still going strong two weeks in?

Perhaps because it still seems surreal, even in the Cheshire Cat world in which we live. Hurd hand-picked seven of the ten directors who voted unanimously to have him resign immediately, for 'piddling offenses' (a wonderful phrase used yesterday by WSJ apologist Holman Jenkins Jr , who had the gall a year ago to inform his readers that the Wall Street meltdown of late 2008 was 'our fault' because we panicked, rather than any culpability by the banking/Wall Street community). Hurd's cronies -- unanimously? For no reason at all? Come on. Get real.

One columnist said "let's look back at his track record at NCR, before coming to HP." The finding: NCR has stagnated ever since -- for the same reason that HP has been stagnating for 34 months -- costcutting, especially when it cuts into bone (i.e. the innovation engine) cannot succeed in building long-term strength. You can build efficiency, but not momentum. And it usually quits working, especially in the brainiac high-tech world when your talent walks out the door. That is why it became double-edged when R&D is slashed so far and key resumes are flooding out of the place. Jenkins calls this "the sickly moanings of the vaunted HP-Way", demonstrating fairly clearly that he hasn't a clue what that 'vaunted idea' meant or means.

No one in this recent brouhaha has resurfaced the cover story for Business Week October 9, 2006 which noted that Hurd was so popular with his NCR employees that they repeatedly slashed the tires on his car in the NCR parking lot, and the company had to hire bodyguards to protect him at home from his 'team'. Wow! And no one has focused really on just how hated this guy was by his HP team -- 34% approval by "the home team" when even a Larry Ellison can garner 78% at Oracle. To blame this on "sickly moanings" of archaic nostalgia for "the HP Way" is seriously demented.

The problem with such drivel is that there is a germ of truth in it, and WSJ readers are not in a place to appreciate the nuances, especially when a too-clever by half editor picks up the cudgel. The HP Way did calcify under Lew Platt; Carly Fiorina was brought in to shake it up; she was resisted mightily under the guise of "protecting the HP Way", and she did ultimately fail. In part, that failure was due to passive compliance, if not outright resistance, to her ideas and leadership -- and "the HP Way" was invoked time and again as the stalking horse for such antics. But just as the bankers might have had just a spot of culpability for the Lehman et al debacle, it is just possible that Carly's leadership style had a little bit to do with all this.

Similarly, there is no question that Hurd did some -- even a lot of -- necessary and valuable 'tough leadership' to 'right the HP ship' in terms of operational effectiveness. That is to be applauded -- UNTIL it crosses the line. To become unethical -- with vendors, customers, employees, shareholders, investigative journalists, and even the board -- is OVER THE LINE. This guy, plain and simple, was and is a thug. There is no place, in the HP Way, the American Way, or in a Fortune 500 leadership company, for such a person to be exonerated, let alone exalted. Jenkins owes the HP Way an apology.

Thursday, August 12, 2010

Oldtimers think Carly is when HP went over the cliff -- and certainly her Public Relations engine was in overdrive. But most folk we talk to think she started the corporate raiding of the till. The Proxy Statements on file show a different story.

There are two meaningful comparison sets of years. 2000 was the height of the boom; 2001 the bottom. 2008 (before the Lehman collapse) was the "best year", 2009 a disaster. I left out imputed stock option values, since those are remarkably hard to understand, thanks to your Federal Government's arcane FASB rules. I figured CASH PAID OUT is a good comparable.

In the 'good year comparison', Hurd and team made 700%, 266%, 1790%, and 1920% more money for CEO, CFO, PC Chief, and Services Chief than the Fiorina team. The next year for each, all took 'cuts' on both teams -- but for 2009, Hurd and team made 1400%, 368%, 970% and 1011% more than the comparable Fiorina team. The employees didn't fare nearly as well.

The Board did better too, averaging 320% more in 2009 per director than in 2001. Each full-time director, for a few meetings per year, made on average $328,000. Pretty good hourly rate.

To the best that I can figure, Mark Hurd's severance pay, for a "profound lack of judgment" that caused IMMEDIATE RESIGNATION, exceeded John Young's lifetime earnings. Young, CEO for fourteen years, gave 32 years to HP, and never had, so far as we know, any sexual harassment suits filed against him. He grew the company by a factor of sixty from his first organizational impact time until he retired WITHOUT ACQUISITIONS of consequence; Hurd grew it by a factor of 1.4, buying all of the growth in acquisitions, and the amount that he added in profit was less than the amount of R and D that he took away. The amount of debt that he added, to a company that never had any, is hard to calculate on a percentage basis.

But he did take away something akin to $150 Million in personal earnings (what some of the current HP employees have called "theft") in the past three years. WHEW. What has this Board been doing? What IS this Board doing?

Wednesday, August 11, 2010

Who is writing this blog?

From a blog posting June 1,2009 by Joel Birnbaum, long-time R&D leader for HP, and definer of the HP/PA computing program, commenting about Chuck House and the new book by him and his co-author Ray Price:

"When I came to HP as a rare outsider hired into a high position, many people advised me to look up Chuck as someone who really understood the soul of the company. He was famous within HP for his wit, his creativity, and his willingness to speak out against things that he thought short-sighted or self-serving. I found that he more than deserved his reputation.

"His soon to be published book (The HP Phenomenon: Innovation and Business Transformation, Stanford Press, 2009), for which I was interviewed extensively, is likely to find wide acceptance and is a marvel of careful research and writing.

"Chuck is a witty, daring and very effective speaker, and during our time together at HP, he lent his name to many causes that resulted in dramatic improvements... not always with the prior approval of upper management. HP was eventually proud of these sometimes irreverent accomplishments, and many found their way into the literature and are in wide use in the industry today.

"For all of his career, Chuck's signature style has been his refusal to accept the status quo for purely historical reasons, and to think creatively and deeply about a problem or opportunity and then, often with recruited partners, to seek a novel solution. Chuck's style, while often flamboyant to attract attention to his causes, is inherently a modest one.

what were you saying a year ago?

From this blog on December 13, 2009

"Dave Iverson (of KQED and NPR) moderated the CHM (Computer History Museum) event, very ably, and the questions were good ones. One in particular had to do with the current 'regime' and pay practices. Tough one to answer, and my answer "unconscionable if true" for the reported $113 Million for the four top people caused a murmur. I did say, 'Bill and Dave, for their egalitarian company, would find that an unusual pay practice'." The CHM video of this event is still available; these comments occur at about minute 60.

From this blog on Sept 2, 2009

"Hewlett and Packard have had multiple occasions to turn over in those cold graves -- the selloff of Little Basin and the merger/acquisition mania pale alongside pretexting, forfeiture of long-promised benefits, and rules banning executive participation on civic boards. Ethics and a huge belief in the dignity and value and worth of all employees were cardinal elements, weren't they?"

And from August 17, 2009

Five long-term HP employees (144 years between them), including two current VPs and one ex-EVP, commented: "the image of HP being the leading corporate citizen in the community, long a cherished hallmark of the company, has dried up in the current regime. Carly, they averred, was as strong on that as Lew or even Dave himself; not so under Hurd.... {At a key STEM (Science, Technology, Education, and Math) meeting for America recently, leaders} were outspoken about HP absentee-ism on topics of science and math education in America. They were outspoken... that HP only cares about sales, and ties 'corporate giving' only to 'deals' at best these days."
"Moreover, the considered opinion was that nine of the top ten high-tech firms in America (recall that HP is now the largest) have their CEO or Chairman or both involved enough in STEM education to be carried on the front pages of the Wall Street Journal while HP stands aside. What the hell has gone wrong at this place? Is the new guy in touch with anything besides the bottom line?"

Tuesday, August 10, 2010

Larry Ellison shows his colors

Mark Hurd's "close friend" Larry Ellison weighed in yesterday, to say the HP BOARD just made the biggest mistake in history for HP shareholders, as big as the idiots who removed Steve Jobs at Apple twenty-five years ago.

Surprise! This is the 4th richest guy in the world (Forbes, January 2010) who brazenly took $3 million away from the Portola Valley school district in 2008, while spending nearly a billion on his boat. Might makes right! Begins to give you a sense of why The Robber Barons were called that a century ago.

And Larry says no CEO fills out their own expense reports, so that must be a trumped up charge. Right! His minions tried to cover up the (non-sexual) dalliances? And he ... umm... voluntarily agreed that maybe he should resign?

Check out Bianco's BIG LIE

Anthony Bianco had the perseverance to dig into the mountain of filed data re pretexting. He had the courage to write the book. He fingered Mark Hurd as "the guy", and in addition fingered him as "nailing Patti Dunn" (without violating the HP sexual conduct code) to take the fall for him.

My Amazon review of Bianco's book on June 13, 2010 (before Jodie Fisher sent her complaint to the HP Board June 29), says "where there's smoke, there's likely a fire. Unfortunately, from Tiger Woods and Enron and WorldCom leadership, to Lehman Brothers and other Wall Street "leaders"... we are getting accustomed to leaders being less than they seem. True at HP now?"

Howze that for calling the shot?

Holy mackerel

The e-mails were flying fast between 2:07pm and 2:09pm last Friday afternoon. I arrived home from a visit to the Palo Alto Medical Foundation at 2:21pm, unaware that HP had just announced that Mark Hurd had just resigned. The e-mails were from a varied lot -- KGO/TV who had never ever tried to call me before; reporters for Business Week, CNBC, etc with whom I'd met once or twice in previous years; friends and colleagues from HP today and "the old HP".

Sexual harassment that didn't happen?

A few mis-stated expense reports, that "totalled" somewhere between $1,000 and $20,000? This turned out (missed by nearly all the columnists) to be for EACH ONE. The 2008 10K report says Hurd was re-imbursed $79,814 in tax "True-ups" for the estimated $243,000 in "personal meals" that he ate on behalf of HP. This was in the midst of the three years cited with "his girl friend" -- sounds like a little more money than the initial reports.

All bogus, in my view. This guy was a thug, nicknamed Mark Turd by ex-HPites who worked directly for him -- stories that have circulated in the Valley for three years. He raped HP employees (figuratively, without violating the sexual conduct code at HP) by eliminating the sixty-five year concept of profit sharing, preferring to move to obscene bonuses for himself and his five top minions -- a mere $113 million payout for them in a year he chopped everyone else's pay by 5% plus profit-sharing. These were raises for some of the five people by as much as 400% -- a tidy uptick.

He was profane, a bully, autocratic, threatening, demeaning, vindictive, and rude. Blogs over the weekend by current employees said "Hooray, the tyrant is gone!" I couldn't contain my glee on the 11pm news -- best news for HP in a very long time!

The Voice of the Workplace, HP's thirty-five year historic 'measure' of employee feelings (done every five years) showed in April an astonishing finding -- more than two-thirds of HP's employees would quit tomorrow if they had an equivalent job offer. Not a raise, not a promotion, simply an alternative. That number never used to be in double digits. Other companies in the Valley have reported an amazing rate of HP resumes being submitted; one large company saying, "we didn't know they had that many people working there".

There's lots more to "worry about", and it is easy to imagine that the HP Board was worrying about all of them, but didn't know where to "pin the blame". This "non-sexual" harassment was simply a convenient foil...

Monday, July 12, 2010

disquieting input

Barry Katz, a consulting professor at Stanford's Design School, stopped by a few weeks ago, thrilled to find that we had included nearly ten pages about industrial and HCI design in our book. He is in process of doing a "definitive historic book" about ID and HCI in the Valley, and we chatted convivially for quite a while. Barry and I taught together in Stanford's VTSS program in the 1980s. I gave him a number of names worth following up with in the Valley, including the long time head of HP's Design Group, Allen Inhelder.

Imagine my surprise with an e-mail blast a few weeks later, from Allen (his P.S. note said his name is not spelt Alan, which we got wrong in the text p. 234, but right in the footnote, p. 577 -- embarrassing!). The bigger concern though was his message: "Your creative story telling about the history of HP Industrial Design is incorrect. Your writing also denigrates by omission an outstanding body of work that has never been duplicated. Your literary alchemy has managed to turn the HP golden years of industrial design into a mound of bullshit. It is obvious that you didn't bother to fact-check your sources. I am deciding how to tell the readers of your book the facts about the early days of industrial design in general and at HP."

Allen included his phone number, and I called him directly. His chief concern seemed to do with our crediting Carl Clement as heavily as we did for the "Clement Cabinet" which Allen feels he mostly designed, but politics meant that Carl was the chief name on the patent filing. We do credit Allen with the replacement cabinet, done fourteen years later -- he calls them System 1 and System 2, but really was clear that he, not Carl, was chiefly responsible for both. Couple this with the fact that we didn't acknowledge that Allen led the Corporate Design Group for nearly twenty-five years -- you can imagine that he was pretty worked up!

I doubt that the call placated Allen much, but it was very important to hear his point of view, and reflect on so many good things that he did do or did lead. We can patch some things in a later printing perhaps; meanwhile, he will have his story told more fully in Barry's definitive work.

Joel warned me about the likelihood that this will be a common kind of occurrence, based on what he has seen with other authors trying to give credits that are elusive sometimes to pin down. Ah, well... For those of you from the ID / HCI community, our apologies if we were inadequate here; our intent (by contrast with most computing and electronics company histories which ignore ID / HCI altogether), was to try to include it and give some context for its importance as a discipline in this crazy-quilt high-tech world

Friday, May 14, 2010

interesting feedback

A longtime acquaintance whom I haven't seen in years wrote last week to say, "I was given your book by a friend as a birthday gift. I didn't tell him, but I secretly thought 'I'll never read it' since (a) I don't have much time for reading any more, and (b) if I do, it is 'books on tape' for long car trips. To boot, this was daunting, at some 600+ pages. About a week later, though, I took it to the restroom, and opened it to some middle pages. To my surprise, the story there was one I knew about. Another week, and a similar thing happened. Before you know it, I was hooked. I went back to the beginning and started fresh. It is not just the stories that hooked me; it is the exceptional writing. You and Ray have done an outstanding job, and I fully expect to finish the book. Thanks for doing such an ambitious and valuable history!"

We love to read such notes, obviously. Pretty good for engineers, huh? "exceptional writing!" I'm thinking it'd be great to pull my old English teacher out of the grave and have her chew on that one.

Wednesday, April 21, 2010

NPR in Sacramento last week

We were invited to an interview -- another 15 minutes of Andy Warhol's "fame quotient" -- last week, which is on the web, at:
I didn't name her, but our niece is working at the Roseville division there

Discussion w David Liddle

After a Brian Arthur lecture last night at Global Business Network (GBN, now part of Monitor Group), we adjourned to dinner, where the question came up about the demise of "Big R" such as Bell Labs and XeroxPARC. Both Arthur and David Liddle at the table had been at PARC during the "heyday" which they said was 1972-1982 (altho Arthur thought the best work was actually in the mid- to late-eighties, when he was there).
Liddle proferred the idea that only large, monopolistic companies have been able over time to support "Big R" and when the monopoly fails (with the AT&T consent decree in 1984, for example, or the success of HP LaserJet and other incursions into Xerox's main lines), the game is mostly up. He was more sanguine than, for example, Judy Estrin (or me for that matter) about the way in which Venture Capital is actually providing a more efficient research model for academics to get their great ideas capitalized. Arthur's clever retort was to say that in Sacramento it is pronounced "Cah-Pit'-al-ized"
The reason to include this in an HP story blog was that Liddle offered, unsolicited, that HPLabs has been the most singularly successful "R" lab in the world over time, in terms of actually transforming the parent company, as well as in keeping a "low profile" and not setting the "R" expectations particularly high. Music to my ears!

Wednesday, April 14, 2010

check out the Harvard Biz Review OnLine

Michael Schrage, the wellknown innovation commentator, now a Fellow at the MIT Sloan School, penned some nice words for the Harvard Biz Review online series two weeks ago:
"The Delicate Art of Unauthorized Innovation"

He wrote: '"Better to seek forgiveness than to ask permission.' That's been the rallying cry of organizational intrapreneurs and innovators.... The paradigmatic story is of Hewlett-Packard's Chuck House, who persisted ... despite being directly told by... David Packard to knock it off.... House was forgiven -- and has co-authored what is arguably the best book about HP."

Nice words!!! Michael e-mailed me later to say "I'm a fan. It's a terrific book. Congratulations!" I look forward to meeting him someday....

Monday, April 12, 2010

commentary from Bill Terry

Got a thoughtful note from EVP Bill Terry the other day -- he'd finished the book, and had 109 comments to share! Took us four hours to go through the material for which he had questions, additional information, or another perspective. It was a marvelous time, made all the more pleasant by a complimentary lunch and convivial mood. More importantly, it gave me some new insights, several important errata, and even more respect for a great gentleman who took more than immodest time to help on this archival project.

Many others have sent helpful illuminating notes, points of view, and corrections. All of these are sincerely appreciated; this is a harder task than you might imagine, and 'getting it right' is not an easy thing to do (maybe even an impossible belief -- who's to say 'who's right'?). ALL input is valuable

available on Kindle

not sure about when/whether it will be on i-Pad, but it is now on Kindle

Friday, March 12, 2010

the University of Illinois talk with Ray

For any who might be interested, the full 75 minute presentation at the University of Illinois, Champaign-Urbana, described earlier in February, is now available for viewing at

and what about HP alumni

I had lunch with Ken Tingley yesterday, a person not mentioned in the book. He said we met in Colorado Springs once, forty-four years ago when he was part of a Palo Alto review group and I was a presenter of some of the new displays. I didn't recall, but I had heard his name a number of times during interviews that we conducted for the book -- we just never followed up. He had been involved in HP from about 1958 through 1970 -- heydays, going from $30 million to $350M -- and he had managed International Sales as the international divisions were started, etc. He had some nice background stories, and some wonderful insights since he worked closely with Noel Eldred and the Executive team of the era.

But his chief question, at the end of an informative and pleasant luncheon, was "have you considered a book about the HP alumni?" The question he posed was a great one -- okay, this company had its great HP Way, and that turns out to have fueled the world's most consistent performing company in terms of revenue growth and consistent profitability -- how exportable was that ethos? The glib answer might say that those who left "didn't fit in" or didn't understand the HP Way, but that'd be a total cop-out. When you consider the top level management talent that was grown and nurtured at HP, and then left at the peak of their leadership days -- and we enumerated a number of them in the book -- how successfully did they take this semi-mystical methodology and culture into their next environment? If not, why not?

He named Eric Schmidt at Google, John Chambers at Cisco, Justin Rattner at Intel, Steve Wozniak at Apple, as a few who 'learned their views' at HP. I demurred, saying that each of these (and I'm not sure that they all WERE at HP to start) were only briefly at HP, and that'd be a hard thesis to defend. But certainly Rick Belluzzo, Doug Chance, Dick Hackborn's time at Microsoft, Tony Perez, and many others DID grow up in the HP milieu and did go on to lead other large companies -- how'd they do? And a number of others did startups, or near startups, such as Charlie Trimble, Bill Krause, Fred Gibbons, Ed McCracken. Tingley left HP to become CEO of Northern Tel, for example. And then a full career as a high-tech executive. How'd he feel about it? Like, this ethos was REALLY hard to transplant... and WHY could fill a volume.

It'd be a great question to examine -- another one of those Monograph opportunities!

surprises from readers

As I have mentioned before, many who first see the book say "wow, BIG, looks like War and Peace", but within fifteen minutes, say something like "but MY stuff isn't in here".... It is more interesting sometimes when "my stuff IS in here, but you got it wrong". Fortunately, we haven't had too many of the latter kinds of responses, although to be sure, I always felt when journalists covered an event for which I was a participant, that I wished I'd been at the same event they describe.

But of late, three "communities" have apparently 'ramped up' purchases, and hence readership. One is the Colorado Springs contingent, where I spent about sixty percent of my HP time; another is Boise, Idaho, the home of Dick Hackborn for the past thirty-four years (and hence the 'capital' of HP Peripherals); and a third is the CAE groups (IC Test, Board Test, PC Test, SESD, CAD tools for ME, etc.) where I spent nearly a decade.

Colorado Springs folk -- such as John Riggen, Hal Edmondson, Gene Warrington, John Strathman, Dave Dayton and many others -- have been surprised by how little of the 'Springs history (their history really) was described. My 'defense' has been of two forms -- first, I wanted to be careful that this book was not an autobiographical account, and a lot of my own career was intertwined with events there, so it would be hard not to mix it up pretty good; second, the Springs mostly was organized for a long time around oscilloscopes, not exactly HP's most shining star. To emphasize a relatively negative chapter of HP when so much was positive, especially a chapter that is a footnote to the "main story" seemed somehow inappropriate. My assessment currently is that a wonderful monograph awaits, that would capture a blended history of these tools that really ushered in the digital age, along with the historical figures who led for so long.

The Boise folk, a proud and extremely successful group on balance over many years, give perspective something like "DMD (Disc Memory Division) was once both the fastest growing and the largest single division of HP; it got extremely short shrift in the book". Or "Boise Printer Division was mostly Big Printers, and you mostly tell the story of Small Printers -- and Enterprise Printing was and is strategically valuable for HP". Or, you tell the stories of each with just a few personalities, not really the key people (or at least ALL the key people). Other views include the notion that the Peripherals Group was under-described, not just Boise, for its many contributions and magnitude in HP history from a revenue, profit, and growth momentum standpoint. A fair assessment. Again, my feeling is that this could be a powerful monograph -- HP often dominated markets (e.g. Digital Voltmeters, Spectrum Analyzers, even Logic Analzyers), but there is something awesome about a company that goes up against the world's largest most successful companies (IBM, Xerox, Canon, Konica) and takes a 50% share or more for two decades. HOW in gawd's name could this be possible? Doesn't happen in cars, planes, or candy bars, and didn't last much longer in CPUs.

The CAE groups look in vain for much description of their long sojourns, again feeling that they pioneered many incredibly valuable contributions for the discipline as well as HP. True enough, but again, this never became the field for which HP was noted, all due respects. And again, my story is intertwined, so to some degree we felt as authors that this was too loaded with our own bias to tell with much depth. Here too, a monograph awaits, but it might better prove to be the story of the field and its impact on designs everywhere rather than an HP story (personal view).

These have been interesting critiques, extremely valid perspectives, and things that were "on our mind" but for various reasons, the choices we made were not as fulfilling for folk in these areas. Our apologies -- but as Joan Didion told us, "let them write their own book"...

Sunday, February 28, 2010

Washington D C feedback

Artie Bienenstock (Stanford's Emeritus Dean of Research) came back from DC this week with the story that several told him "that HP book is terrific"... nice to hear it's getting some 'press'

I spent two days at the NSF-sponsored CyberEducation symposium Friday and Saturday. One of the key topics is educators (esp. the pedagogically pure) need "proof" that these Cyber tech ways of educating are effective. The HP book documents (mostly in Stanford Eng'g Dean Jim Gibbons' words) how well the Honors Co-op program worked -- see pp. 236-241). John Seely Brown also described this more briefly in "A Social Use of Information" a few years ago.

What the book did not describe was how and why the experiment ended, after thirty years of relatively significant success. And the ending is disturbing, to me at least. The official answer is that Stanford administrators got greedy (they use a less pejorative word) and tried to substitute faculty time via email for the on-site tutors -- the faculty, not paid extra for the extra work, said "the hell with you" and voted to end the program, and move their work to the extra-curricular extension program for which they did get extra pay. The unreported and under-researched answer is more compelling -- WHY didn't the beneficiary companies and their off-campus students rebel, go to the Stanford admin, and say, "YOU CANNOT ABANDON THIS!"

I think the answer is that the Valley changed, even more than HP changed. From a mindset that engineers are truly important, and long-term employment is a tremendous goal, the Valley has shifted dramatically to a 'hire-and-fire' mood, where outsourced R&D (yes, Virginia, Santa Claus forgot to show up for this one) and high rotation between companies is accepted if not fully encouraged. HP for four decades had less than 2% annual attrition of professional folk; the Valley average today is reputedly twenty times higher than that. In such a world, the onus is on the student, not the company, to take advantage of further education. And benefits like those that HP derived -- a common skillset and vocabulary across multiple countries that linked their labs -- seem archaic at best, and immaterial to be sure.

As for "proof" for educators today, Gibbons himself said that they never reported the results -- if the results were cited today, they'd be dismissed for their irrelevance (anything happening forty years ago cannot be of value today, right?) if not the fact that it is a "failed experiment". On the other hand, engineering is a relatively 'factual' pursuit in coursework, and some 15,000 students over thirty years outperformed (by a full third of a grade point) an equal-sized extremely selective graduate engineering pool. Wags at our meeting said "well, they were focused and motivated since they were more mature" but that ignores the fact that for the first decade, the same "motivated, focused, mature" individuals did worse by a full third of a grade point until the right technology and tutor focus was put in place.

We could in fact learn from history, if we wanted to. But NIH (not invented here) runs deep...

Sunday, February 21, 2010

HP Way interviews for CHM

For an alcove of the Computer History Museum Timeline project, due to debut at the end of 2010 or so, there is intention to have an "HP WAY" video clip since HP helped pioneer the spirit of Silicon Valley.  I interviewed four 'oldtimers' this week -- Al Bagley, Carl Cottrell, Bob Grimm, and Art Fong.  Each interview was approx 2 hours, and we covered a lot of ground.

The most interesting fact for me was the easy description each of the four had for how they decided things -- Dave and Bill were coaches, not deciders or directors.  Amazing to listen to each man describe significant events -- product strategy, marketing strategy, feature decisions, business approaches -- for which they felt responsible, and for which they made the decisions.

The range of responsibility and the level of trust that was exhibited is almost awe-inspiring.  Hard to imagine most CEOs today allowing such antics.  

errata #2

Last errata was listed Nov 4, 2009. Some additional errata below:
p. 129, 564 Emery Rogers, not Emory. Spelled correctly on p. 544
p. 180 Bill Waters was the SRI marketing person who conducted the focus groups, and concluded that the HP 35 would not sell, due to a very high price and low demand
p, 389 Hennessy, not Hennessey. Correct on pp. 263-64, 417, 629
p. 577 Mark Weiser, also a key XeroxPARC researcher, died prematurely, in 1999. Mark Stefik, still at XeroxPARC, is very much alive -- our apologies
p. 629 Add Fred Gibbons to the index, for citations on pp. 321-22. Remove those pp. from Jim Gibbons' index
p. 51 adopting Fourier analysis "and Laplace transform" mathematics...
pp. 60-61 there were in fact TWO Sonoma meetings -- the Executive Committee and a few others in January, and a General Manager's meeting in June. Bud Eldon supplied data re each
p. 65 Re "Management by Wandering Around" this long-standing practice was named by John Doyle in a speech to the GM meeting in January 1976
p. 70 Doyle also spoke German at the time, but that fact was apparently not known to Hewlett
p. 142 IBM 1401 average rental was $6,500 per month; $2,500 was the cheapest available. See Philip E. Ross, "Rebuilding the 1401", IEEE Spectrum, November 2009
p. 157 Jerry Carlson managed PAD (Palo Alto Div), not AMD (Automated Meas Div, which came later)
pp. 166, 170. 211 "network database", not a 'relational' database
p. 178 BPC stood for Binary Process Controller
p. 197 and p. 341 "Personnel", not 'Human Resources'
p. 309 the crucial product... was the HP 7470A
p. 321 the HP 85 debuted in 1980, not 1981 c.f. p. 309
p. 329 Doyle managed both the Automated Test Division and the Automated Measurements Division for two years
p. 438 "the whole company" is obviously an exaggeration. It is true though that many on the Executive and Management team resisted.
p. 506 the $3.06 million tax break for Ellison was a one-time rebate for the previous three years of taxes paid
p. 572 Footnote 32 -- Doyle gives Hewlett credit for instigating the Corp Training Prgm for high-level execs, not Packard

p. 259 'very' --> "every"
p. 630 IBM 1401, p. 142

Friday, February 19, 2010

Cisco day

Holy smokes! At noon on Wednesday Feb 17 in the Building 3 auditorium at Cisco, some 400+ attendees, 80% by remote technology, 15+ questions at the end, about evenly split between on-site attendees and those on Webex or in video conference rooms. My gracious hostess was Filomena Pereira, who had advertised the talk widely and given me great advice ahead of time.

Joel Bion, Cisco's SVP for R&D, gave me a tremendous introduction, noting that I'd been a key figure in cementing Cisco's first industrial order back in the early days (1986/7), and it accounted for two things -- in 1989 when he joined, it was about 25% of Cisco's annual revenue, and more importantly, HP provided the reference site of value for their sales efforts with other corporations. He provided this without my telling him the story -- amazing to me, but then, he's been there since the early days.... I linked it to the Medal of Defiance in terms of some of the HP exec's enthusiasm for inking this deal -- in truth, the system we built is why the Wizard award happened some years later from Smithsonian.

We had fun! A key point or two revolved around this question of what kind of 21st century corporation will prove most successful and why, and where does Cisco fit in that new world. We'll have a video of the talk online presently!

Fellowship Forum

Tuesday Feb 16 the Palo Alto Fellowship Forum had about fifty folk assembled for the 6th meeting of the 61st year at the Westin Palo Alto hotel -- including HP oldtimers Al Bagley, Don Hammond, Bob Grimm, Skip Ross, and Peter Moseley. This is a group of VERY accomplished individuals, most with long-term Bay area roots, and a lot of perspective about HP history.

I had a lot of fun with some of the sidebar anecdotes that necessarily accompany any talk these days about HP, including the one about the HP 35 market study that member Bill Waters did while at SRI, concluding that it was probably not a winner (something that Hewlett ignored...)

Out of time in the main setting, I had a lot of questions afterwards in a small group. One in particular made a point that he had lived next door to Bill Hewlett for 25 years, "an incredibly nice man". Asked for any specifics, he said, "Bill always dried dishes with his wife Flora" which of course says a lot about this genial giant.

Monday, February 15, 2010

Holiday week

This week features two talks in the local area -- one at the Fellowship Forum in Palo Alto tomorrow (Tues 2-16) and one on Wednesday at Cisco. Both allow guests, if someone from the respective organization sponsors you...

Last week on Monday, Greg Loew sponsored a talk for me at SLAC, the National Linear Accelerator lab. Physicists galore, and great questions. Lots of history from this major facility in terms of Nobel Prizes and other key physics awards. For example, the J.J.Sakurai prize for theoretical physics was awarded to a neighbor, Stan Brodsky, in 2007. The Hans Bethe prize, the Irving Langmuir prize, the James McGroddy prize and the George Pake prize are among other key prizes given annually by the American Physics Society, and this team wins an uncommon number of them.

Mike Roberts, a good friend from Washington D.C. involved in the international nuclear fusion program, has been associated with this group for years. We had a stimulating time, and a great dinner afterwards. What a privilege!

Illinois trip

Last week, landing in the middle of a "nice" snowstorm in Chicago and driving 140 miles on black ice to State Farm's headquarters in Bloomington, IL was an exciting time. Apparently readers of the HP book thought so too -- Amazon sales boomed over the three-day weekend something phenomenal. Started on Saturday morning, hitting #13,329 by 8:30am, then #9,453 by 1:20pm and #9,022 by 4:10pm (I don't watch these numbers very often...). By 6:10pm, it hit #8,080, and then on Sunday it hit #7,143 by 2:20pm, ending the day at #8.675 at 9:15pm while watching the Short Track skating at the Olympics. It has relaxed today back to #13,509 at 11:30am, still "phenomenal" given that it has been out for several months, with NO advertising

Ray Price and I did have a nice presentation at the Champaign-Urbana campus on Thursday, and we were featured on a local TV show that day as well (to be aired later). Ray's colleagues were wonderfully supportive and we had a great set of questions and discussion later. We agreed that this has been quite the experience, one to savor for the friendships and the deep inquiry that it seems to have stimulated. We are indeed "lucky pups"

Thursday, February 4, 2010

Google Engineering Management Week

A rare privilege today, to talk at Google's author series for the engineering teams and managers. Kepler's supported the event, selling a dozen or more books on site. Probably a hundred attendees, plus others in separate 'beamed-in' rooms. The theme I used was "relevance to today"

I began with the New York Times quote this morning from ex Microsoft VP Dick Blass, where he posed the question of why Microsoft is 'killing innovation'. It was a compelling article, easy to lay alongside the sad spectacle of the Presidential Commission on Competitiveness, and say "what the hell is going on in our boardrooms and at the top of our companies?"

Then posing the three issues we see at Media X -- collaboration, participation, and complexity -- I outlined how Media X comes at those questions, and then suggested that the book is a direct outgrowth of such inquiry. From there it was a simple and fun task to select a couple of projects as examples.

A key thing -- easy to do -- was to correlate Google practices today with the "old HP", especially with respect to "Citizenship" and "Employee Dignity". Another statement that resonated was about the satisfaction / happiness factor for employees. How many stay late at night, because they love what they're doing rather than fearful about losing their job?

Stimulating questions -- lots around HP Culture and its modification since 2000; some around the apparent success of HP in the last decade on Rev/Profit/Growth, with much higher feeling of pressure or worse. I left, feeling enormously energized by the teams at Google -- this is a very talented, very dedicated, very confident group!

CMU presentation

Tuesday Feb 2 I had a wonderful afternoon at Carnegie Mellon West Coast Campus, talking mostly about the HP book, but also reminiscing with some of the faculty (Steve Rosenberg, Ted Selker, Stuart Evans) about how design criteria have changed, along with the companies.

A surprise for me -- shouldn't have been, but was -- is how unaware most of the students were with the heritage of their own school. Herb Simon and Allan Newell were 'unknowns' to the entire room, and granted, it was 55 years ago that they started the AI program at Carnegie Tech (which was a name they'd not heard either). SEI -- the Software Engineering Institute -- which is celebrating its 25th anniversary this month -- was likewise a "zero" for the students. For me, SEI was a 'zero' -- they persisted in teaching process to the near-total exclusion of tools until you get to Level 4, thereby setting back software engineering practice a full ten to fifteen years, but ensuring their own consulting fees for that entire period.

Code coverage tools, which they disdain to this day, likely could have uncovered the issues bedeviling Toyota's "fly-by-wire" gas pedal -- such tools adopted twenty years ago would have altered the safety of airliners, automobiles, and most every 'real-time' software environment in the meantime. Instead, we all fly on, drive on, or ride in elevators, etc. "the lowest bidder"

Good questions at the end, especially re distinctions between invention and innovation. It is easy to think they should 'know' some of the things I find important; there is no question that they know a host of things that ARE important that I will never learn -- the kids today are smart, Smart, SMART, and it is such a privilege to get to talk with them on occasion.

Monday, February 1, 2010

I missed your speeches so far...

Well, we learned some fascinating news last week

Out of a list of hundreds of books, ours was the #3 best seller in the Stanford Press catalog for the first four months of fiscal 2009/10 (from September 1 thru Dec 31). Since ours wasn't available until late October, that's amazing. All told, sixteen or eighteen hundred books to date

The keys undoubtedly were two events in early December:
1. the NPR radio show, which is available in case you missed it, at
2. the Computer History Museum YouTube video, is at

Both of these were ably moderated by Dave Iverson, of KQED. Wonderful host

Attending a February event?

Some of the talks (listed in the last Post) are open to the public, such as the two at universities -- Carnegie Mellon, and University of Illinois @ Champaign-Urbana

The person to contact for CMU is Stacy Marshall @ (tomorrow @ 1:30pm)

The person for UIUC on Feb 11 is Ray Price @

The Google talk this Thursday is open only to Google employees and guests. Contact Shoshana Abrass with questions at

The SLAC talk, next Monday Feb 8, is hosted at the Panovsky Auditorium at 4:15pm; it is open to Stanford faculty and staff and their guests. Contact is Greg Loew,

The Fellowship Forum in Palo Alto Feb 16 is open to members and their guests only; Skip Ross is the contact at

The Cisco talk is on Feb 17, open to Cisco employees and their guests. Filomena Pereira is the organizer, at

Friday, January 29, 2010

upcoming events in February

Hard to imagine that FEBRUARY 2010 is already upon us

The book continues to do well. In fact, we are thrilled with the reception to date.

February speaking events are sort of fast and furious. Each is "tailored" to the audience, there is no way that I could ever give the same talk twice anyway...

Feb 2 -- Carnegie Mellon West, streamed to CMU Pittsburgh

Feb 4 -- Google's Engineering Development Week

Feb 8 -- SLAC, Panofsky Hall

Feb 11 -- University of Illinois, Champaign-Urbana (Ray's university)

Feb 16 -- Fellowship Forum of Palo Alto

Feb 17 -- Cisco Engineering Symposium

Whew! Much fun

Monday, January 11, 2010

HP Labs is alive and well... well, alive at least

I had a rare privilege today, invited to HP Labs in Palo Alto to talk about the book and about recent events at HP. Last Friday's ACM Communications had Prith Banerjee (HP Labs VP) featured for a full page about "8 Big Bets" and the redirection of the labs -- very timely

Counting an overflow room, we had 150+ folk show up, sort of amazing by my count. Stanford Bookstore graciously donated a person to provide some books for signing, at a 20% discount yet since the book now is on their Top Ten list (for the second month in a row).

Discussion was wide-ranging -- (a) explain 'next-bench syndrome' in today's terms; (b) what WAS the definition of a 'G-job' and how did it work (i.e. how can I get 10% time to work on things I think are important); (c) software contributions are easier today than ever, EXCEPT there are no divisions in that business, so who do you transfer to; and (d) explain again what it means to get a 'medal of defiance' without getting fired.

Afterward, at a small lunch, we got 'down and dirty' about some specific ideas, in areas that I have passion for, such as immersive communications. And I was thrilled to hear thoughts every bit as bold, exciting, and pioneering as I had ever experienced from HP Labs folk. I think the place can still thrive, if the 'leaders' get out of the way (oh, where have we heard that refrain before?).

Thursday, January 7, 2010

a long-term executive

"this book is in a word OUTSTANDING! It struck me that you had taken on 'Mission Impossible' and what a roaring success of conveying very complex organizational and strategic issues. I simply cannot imagine all the work that went into this gathering and recording of information and the horrendous book organizational issues involved in bringing the huge data base of facts/opinions into an interesting/readable book... The overall picture conveyed of what 'really' took place at HP over the years is a "REALITY SHOW" deserving of an Oscar....

"I think that this book is fair and equals reality as close as it can be approximated vs. the eulogy it could have been if done by the Packard/Hewlett families. Yes, and it's certainly obvious why HP or the families do not endorse it.

four VPs weigh in

#1 -- "I was there last night (CHM). Good job, very nice opening. You handled yourself skillfully during Q & A -- and with good humor. Sometime maybe we can have another breakfast and a friendly personal discussion over a couple of points..."

#2 -- "Many thanks for such an exhaustive history of HP and thanks also for the balanced view of my small role in the evolution of the company. You have made a valuable contribution.... I became fully aware (circa 1991) that Packard was suffering from four years without Lucile and what a marvelous and moderating influence she had been..."

#3 -- "My memory of some events involving me is slightly different than what you heard from others involved..., but I can give you an overall grade of A+. The writing and the prose was excellent, surprisingly so for this type of book. Easy reading and fascinating. The story was comprehensive and devolved into several stories. There was something for everyone."

#4 -- "Chuck doesn't just tell what worked, but also describes in details what didn't work and how challenges were solved. As with any highly successful organization there wre struggles, conflicts, and disagreements coming from a team of passionate visionaries.... Chuck, in his own unvarnished way, shares it all.... Not just a history lesson, but (it) is about what it takes to create/enable an organization to innovate and transform.... a fundamental belief in 'bottoms-up innovation' -- a trait sorely missing from many organizations today where corporate anti-bodies seem to be the norm."

a reader

From a reader: "I just finished reading The HP Phenomenon book. I am speechless. Anything I write here will fall short of the merited justice and compliments it deserves, but I'll try. I've been looking forward to the publication of the book for several years. 'What's taking them so long?' I wondered... This book about HP is not like any that I had imagined. It is awesome.
"In it there are far more details, references, interviews, individual history, product history, project history, division history, corporate history and HP history than seems possible.... I noticed, while reading each page, every line and sentence has detailed meaningful information. It surprised me how much detail is included about our competition, their history, products, and successes (or failures).
"A fine reference book. I was thankful that you covered many events, meetings, and quotes of many of our managers at HP. When I read the last page I found I had tears in my eyes because your book was a good read, sincerely appreciated, and precious. Thanks for writing it."

new month new year

And book sales are 'holding up' which is well nigh amazing. The Amazon count yesterday morning, pretty much equaled this morning, was #22,214. In "Hot New Releases" it ranks 3rd in High-Tech, 8th in Company Profiles, and 7th in Manager's Guides to Computing. 94 libraries are listed as having one, per the Google tracking site, and it managed to be on the Stanford Bookstore Best Seller list for both December and January.

More pleasing is the fact that we are getting some great testimonial letters, things that warm the cockles of your heart (or cause a tear to well in the eye). Readers, especially 'old HP' readers, seem to like it a lot. Thank goodness. If they didn't, it'd be worrisome.

And even seasoned exec's, the likes of Ely, Morton and Doyle, have read it and pronounced it sound, even as each has said something to the effect of 'here's a significant correction'