IXDS5503 - Media History and Theory Professor: Jason Occhipinti
Hewlett & Packard
A Tale of Two Guys and a Garage
Nick Gingericn March 14, 2015
Hewlett William Redington Hewlett was born 20 May 1913 in Ann Arbor, Michigan, where his father, a respected physician, served on the faculty of the university’s medical school. The family’s subsequent move to California when Bill was three years old, occasioned by his father’s acceptance of a faculty position at Stanford University, introduced young Bill to the cultural, scientific, and literary world of a dynamic and growing San Francisco Bay Area, anchored on the East Bay by the University of California at Berkeley and on the West Bay by Stanford University, and centered in the vibrant, brash, and whimsical city of San Francisco, where the family lived. Although the father died suddenly when Bill was twelve, the family rallied. Bill was enrolled in San Francisco’s Lowell High School, and life moved on. His high school years were not academically noteworthy, doubtless influenced by the then little noticed and rarely accommodated dyslexia with
which he dealt all of his life; but his intellectual curiosity, his incessant “tinkering” as he called it when he sought to understand how things worked, and his sterling character, won the admiration and respect of his high school principal, who encouraged Stanford to take a chance on Bill. Bill was admitted as a freshman in 1930.(Gardner, 2003, p.1) With his poor high school grades, he had only been admitted to Stanford through influence and family connections - and this was the era when Stanford was still well known as the place where rich farmers’ sons could earn “gentlemen’s C’s.” Underlying Bill’s apparent failure as a student was a learning disability - severe dyslexia that not only hadn’t been diagnosed but wouldn’t even be named for another three decades. All that frustrated his mother and teachers knew of Bill’s predicament was the he was an indifferent reader - indeed, the boy only seemed to go through the motions of looking at the words on the page because nothing seemed to register. To his credit Bill seemed to have a real gift even a spark of native genius - for listening to people (indeed, it was the only thing that got him through school). (Malone, 2007, “Friendship” paragraph 12-13)
Packard David Packard was born in 1912 in Pueblo, Colorado. His father and mother were both professionals: a lawyer and high school teacher, respectively, and had both been educated at Colorado College. Packard showed an early interest in science and engineering, using the World Book Encyclopedia as his source for material. Like most young boys (and some girls), he experimented with blowing things up, until the day he nearly blew off his left thumb. Then he quit, and turned to making homemade radios as a safer pastime. In high school, Packard excelled in everything: schoolwork, sports, and leadership. He was president of his class all 4 years, all-state basketball center, and won the high jump, the broad jump, the low hurdles, the high hurdles, and the discus at the all-state track meet. He knew more math and science than his teachers. Packard enrolled at Stanford University in 1930.
The tuition at that time was $114 per quarter, a whopping sum during the Depression. Fortunately, his father had been appointed a bankruptcy referee the year before, so was one of the very few to have real job security in that decade. At Stanford, Packard chose Electrical Engineering as his major, and lettered freshman year in football, basketball, and track. He eventually gave up all sports in order to concentrate on his studies, except for football, which he continued in response to peer pressure. (McNutt, 2000, pp.1-2)
Friends, Partners & a Garage
In partnerships, as in marriage, opposites attract only if they have shared interests. And at this point in their young lives, Bill and dave were headed on different trajectories. Though they would run into one another often over the next three years, occasionally finding themselves in the same classes, it wouldn’t be until their senior year that the two men would make their lifelong bond. Thus for most of their undergraduate years, the famous friendship of bill Hewlett and David Packard might best be described as casual acquaintances. (Malone, 2007, “Friendship” paragraph 22)
After graduation, Dave took a job with General Electric and moved to Schenectady, New York, where he married his college sweetheart Lucile Salter in 1938. But he and Bill stayed in touch. The two were encouraged by their former professor Fred Terman to start a technology company of their own. Taking a leave of absence from his job at GE, Dave and his new bride drove to California with a used drill press (an important piece of equipment for the new venture) in the rumble seat. Bill scouted for places where the newlyweds could live. He found the ideal rental at 367 Addison Avenue in Palo Alto for $45 per month.
Dave and Lucile would live in the downstairs flat, while Bill would bunk in a tiny backyard shed where there was indoor plumbing and just enough room for a cot. But what made the property truly perfect for their needs was the small garage that the landlady told them they could use as a workshop. (Founding, 2015, paragraph 2-3)
The duo’s first venture was an automatic foul-line indicator for bowling alleys. Although it was ingenious, the product really had no market. Undaunted by this initial failure, the two began working on a design Hewlett had outlined in his master’s thesis-they created an audio oscillator, which they dubbed the HP200A. (Packard would later reveal that the name was selected to give customers the impression that they weren’t dealing with an upstart company offering its first product.) The HP200A was designed to test sound equipment-and also tuned harmonicas. The second feature didn’t do much for sales, but Walt Disney, at work on “Fantasia,” bought eight of the devices. The tale of The Garage that launched a hightech revolution is now official legend, a silicon cliché. Too bad it mostly misses the point. Sure, college pals Bill Hewlett and Dave Packard started in that Palo Alto garage 60 years ago. They had a mere $538 in start-up capital, banked from sources like Lucile Packard’s job as secretary to the Stanford registrar. Hunkered down in a one-car shed in a valley of fruit orchards, they were green engineers taking on oddball contract work, stuff like bowling alley foot-fault indicators and harmonica tuners. (Jacobson, 1998, 1-2)
Inspired by the sale to Disney, Hewlett and Packard decided to try selling their new product via mail order, so they sent out letters, mostly to university laboratories. A few orders trickled in, so they sent out more letters. At the same time, they began work on a new product. “We figured that if people needed the HP200A as a source of sound, they would also need something to measure it,” Hewlett explains in an interview in Electronic News. “So we brought out a voltmeter to measure what happened.” (William, 2008, paragraph 5-6) Flush with their success, the two men pooled their resources of cash and equipment (to a grand total of $538) and formalized their partnership on January 1, 1939, deciding the company name on a coin toss.
In 1987 the garage was registered as California Historical Landmark No. 976 and officially declared the “Birthplace of Silicon Valley.”(Founding, 2015, paragraph 9-13)
For the next year, Bill and Dave worked together until, with the addition of two employees, they finally outgrew the cramped garage and moved to new headquarters on Palo Alto’s Page Mill Road in 1940. Dave and Lucile, who were expecting their first child, moved to a house in another neighborhood. After the Packards left, the house at 367 Addison was eventually subdivided and changed hands several times. In the early 1980s, after a series of owners and various house remodels, a group of Palo Alto citizens, HP employees and company management worked together to protect the garage and give it landmark status.
Business & Management During World War II (in which Hewlett served as a chief signal officer), Hewlett-Packard expanded rapidly to meet the needs of various defense projects. What began as a trickle of orders turned into a stream, and then a flood, which boosted company sales to $1 million by 1943. During that time, the company began developing what would become known throughout Silicon Valley as “The HP Way.” This paternalistic set of practices and policies offered HP workers generous benefits, including medical insurance to cover catastrophic health problems, something that was virtually unheard of in business at the time.
The partners further refined “The HP Way” by establishing a novel management philosophy in which managers at all levels were given a wide berth to develop plans, make decisions and follow them up. As Hewlett explains in Electronic News, “Dave and I set up this philosophy of management by objective. We felt that fundamentally, people wanted to do a good job, but they needed guidelines. So we set up corporate objectives.” In addition to increased autonomy for managers, the partners also increased the number of benefits they offered their employees. HP became the first U.S. company to offer workers flexible hours. It also introduced profit-sharing and established such management innovations as open offices and employee “coffee talks.” This maverick management philosophy broke down the barriers between management and employees, encouraged creativity and innovation, and fostered the respect and trust of the workers.
As the number of HP’s employees grew from the hundreds into the thousands, to maintain a small-business atmosphere, Hewlett and Packard divided the company according to product types, with each division having its own marketing, producAfter World War II, orders dipped, but the tion and research groups. Support functions such as sales and emerging technology of electronics quickly filled advertising were handled by outside contractors. As a result, the void. Inundated with orders, HP was proHP continued on the fast track throughout the 1960s, with the pelled into going public in 1957. As HP’s prodcompany growing from a single entity in Palo Alto to more than uct line expanded, so did its number of employ- a dozen manufacturing divisions organized into four product ees. More responsibility had to be delegated. groups. (William, 2008, paragraph 7-11)
Hewlett left shortly after he helped right the listing company. Packard remained on as chairman until three years before his death in 1996. Today, William Hewlett and David Packard are hailed as two of the nation’s most respected businessmen and philanthropists. From a tiny mail order business started in a Palo Alto garage, they built a company whose technical excellence, innovative management practices and consistent commercial success will remain an inspiration and model for generations of high-tech entrepreneurs to come. (William, 2008, paragraph 13-15) While HP continued to grow and prosper throughout the 1970s, Hewlett and Packard, both now approaching their 60s, began a careful withdrawal from active management. In 1977, Packard stepped down as chairman of the board. The following year, Hewlett handed over the title of president and CEO to HP executive John Young, but stayed with the company as chairman of HP’s executive committee. He then became vice chairman of the board in 1983, where he remained until his retirement in 1987. In 1990, Hewlett and Packard briefly returned to active management duties to spearhead an overhaul that is widely credited with revitalizing the company and preventing the losses and layoffs that plagued IBM and Digital.
But if that genesis story has inspired generations of engineer-entrepreneurs, from Apple to Yahoo, it doesn’t explain Hewlett and Packards’ true greatness. Far from being lone-wolf inventors, their contribution (to use an HP corporate mantra) was ultimately social, not solitary, and as much organizational as technological. Their own engineering prowess aside, Hewlett, ’34, Engr. ’39, and Packard, ’34, Engr. ’39, were visionaries in creating a corporate culture and management style -- the HP Way -- that could keep pace with the ever-accelerating evolution of the electronics industry. They came up with an approach that respected personal autonomy and stressed corporate decentralization. They systematically nurtured employee satisfaction and morale, which led to a steady stream of leading-edge, highly profitable products. (Jacobson, 1998, paragraph 4)
Refrences
Gardner, D. (2003, June) William Redding Hewlett. Proceedings of the American Philosophical Society, vol. 147 McNutt, M (2000, February) How One Man Made a Difference: David Packard . A talk by MBARI President and CEO, Monterey Bay. Malone, M. S. (2007) Bill & Dave [kindle version]. Retrieved from http://www.amazon.com/Bill-Dave-Hewlett-Packard-Greatest/dp/1591841526/ref=sr_1_1?s=books&ie=UTF8&qid=1426346921&sr=1-1&keywords=bill+and+dave Founding HP (2015) Retrieved from http://www8.hp.com/us/en/ hp-information/about-hp/history/founders.html Jacobson, D. (1998, July) Founding Fathers. Stanford Alumni . Retrieved from https://alumni.stanford.edu/get/page/magazine/article/?article_ id=42103 William Hewlett & David Packard Maverick Managers (2008, October) Retrieved from http://www.entrepreneur.com/article/197644
Images
Cover Image. Retrieved from http://www.logomaker.com/blog/2012/05/28/11-inspirational-quotes-from-bill-hewlett-and-david-packard/ Cover logo. Retrieved from http://www.totaltele.com/show.aspx?i=811 Image of Hewlett. Retrieved from http://www.bloomberg.com/money-gallery/2011-09-23/ the-hp-ways-a-look-at-ceos-from-packard-to-whitman. html#slide3 Image of Packard. Retrieved from http://www.nadicent.com/theclassichpway/5-simple-rules-for-business-success-from-dave-packard Image of Garage. Retrieved from http://www.panoramio.com/photo/3331542 Image of Audio Oscillator. Retrieved from http://www.hp.com/hpinfo/abouthp/histnfacts/museum/ earlyinstruments/0002/0002history.html Image of Marker. Retrieved from http://siliconvalley.sutromedia.com/hp-garage.html Image of Hewlett & Packard. Retrieved from http://www.telmexhub.com.mx/blog/01-de-enero-1939bill-hewlett-y-dave-packard-formalizan-su-negocionace-hewlett-packard-hp-