The HP Way
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My venture capitalist friend says that he never would have funded Bill Hewlett and Dave Packard. After all, when they went into business together, all they knew was that they wanted to work together. They were sure that they'd figure out something profitable to do.
They started out in that now-iconic garage in Palo Alto in 1939. Start-up capital was $538.
The best story about what the two men were like involves how they decided on the name of the company. They flipped a coin to decide whether it should be Packard-Hewlett or Hewlett-Packard.
Dave Packard won the toss. But he decided that Hewlett-Packard sounded better, so that's the name he chose.
The way that Packard and Hewlett did business became the "HP Way," simple principles that guided the business for decades. The first principle was "We have trust and respect for individuals."
When Jeff Senne and I were writing two of the first practical books about e-commerce and business, I was the one on the HP beat. I interviewed and had conversations with dozens of HP people.
There was a ruthless focus on excellence. Every engineer or manager I talked to was clearly working to get better, to make a better product, to do things more efficiently.
There was incredible civility. HP people expected their peers to do the right thing. In all of my contacts, no one ever bad-mouthed another HP person. They may have disagreed vehemently with a decision or position, but it was always about the issue, never the person
That's all taken quite a beating. The news and columns and blogs have been filled lately with the details of the Mark Hurd incident. But that's only the latest mess.
On August 9, Benjamin Pimentel wrote a powerful piece in the Wall Street Journal titled: "Long Before Hurd's Departure, The 'H-P Way' Was Shown the Door." He describes the whole sordid mess from the tenure of Carly Fiorina through the messy board fight that led to her ouster and the illegal surveillance scandal that was part of it.
He goes on to describe how HP and the industry are different now. And so they are.
But I don't believe that the HP Way or similar ways of doing business are doomed. I refuse to agree with the principle that trust, respect for others, integrity and civility have no place in business today.
So, dear reader, what are we going to do about it? What can you do today to demonstrate that those good things have a place at the core of good business and strong business cultures?
Categories: Great Working Environment, Culture, HP
Tags: Great Working Environment Culture
Excellent post, Wally. Leaders of organizations bear the greatest responsibility in demonstrating these behaviors and tolerating nothing less from those in their employ. But that doesn't let the rest of us off the hook. All employees, regardless of level or "position of power" in an organization, can demonstrate these behaviors themselves and make it known, through actions and attitude, that it is these attributes they hold most dear and desire in their work relationships as well.
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I agree completely, Derek. The best proof to me are the pockets of excellence in otherwise horrid companies and pockets of awfulness in otherwise excellent companies. It's the closest boss that has the greatest effect. Jeff Immelt's dad worked on the line at GE for years. Immelt says he never knew who the president of GE was during that time, but he always knew who his dad's boss was. Thanks for coming by and commenting.
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Nice post Wally. Last month, our family toured the Stanford campus when we were on vacation in the Bay Area. The student guide pointed out the Hewlett and Packard buildings sitting across a courtyard from each other on the engineering part of the campus. He told us that Bill and Dave were randomly assigned roommates when they were freshmen at Stanford. Quite a lot of economic value was derived from that random assignment! Hope my high school junior is as fortunate with his roommate when he goes to college.
Cheers -
Scott
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That's a great story Scott and one I didn't know. Thanks for sharing it. It's amazing sometimes how much chance has to do with the way things turn out.
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Wally, another great post with lots to consider. It seems as though the HP Way began a slow deterioration over the course of time. These kinds of changes never happen all of a sudden or overnight. Leadership, for whatever reason, allows a gradual and very subtle tolerance, if not acceptance, of a behavior that is just slightly off center. It hardly gets noticed, yet it is the beginning of a precedent that begins to take an unhealthy root in the culture and character of the organization.
To thwart this from happening, smart companies engage with experts to conduct surveys, studies, focus groups and all other kind of information gathering to measure year over year changes. They don't ignore subtle changes - they commit to work on them and when they do work on them, the company retains the culture that is so important to their success.
I just read about a Hewitt Associates study measuring levels of employee engagement. Hewitt's analysis found an obvious link between employee engagement and financial performance. Organizations with high levels of engagement (65 percent or greater) outperformed the total stock market index and posted total shareholder returns 19 percent higher than the average in 2009. On the other hand, companies with low engagement (40 percent or less) had a total shareholder return that was 44 percent lower than the average.
We need more stories of how the good characteristics that you have mentioned such as trust, respect for others, integrity, etc. that are applied in other companies have proven to advance those companies and prepare more and stronger leaders. I suggest we begin to ignore the bad news the media loves to talk about and start publishing, speaking, tweeting, facebooking, etc. the stories of those companies and individuals who are committed.
Let's publicize the stories of character based leaders and character based companies.
For those organizations who want help in measuring their character, get some help. Contact me or any number of other well qualified experts who can truly help you during these critical times.
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Thanks for those kind words, Bill. You're right of course that big changes in culture don't happen all at once. There's usually a tipping point, though, and it seems to me to have happened around the time that Carly Fiorina became CEO. The Compaq merger and the board surveillance scandal, pretty much locked the changes in place. I heartily agree that part of the answer is to tell the stories of successful individuals and companies who also embody respect and civility.
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Great. I'm on board, Wally.
I don't believe that ways like the HP Way are on their way out. They may take a hit once in a while, and cultures can go through seasons, but the inherent nature of an organization founded (or re-founded) on strong values will always have a place in the world.
It sometimes takes a collaborative approach, sometimes a heroic effort of one or two to influence others back to dormant values, but the art of leadership-by-collaboration through shared purposes toward greater goals will always remain a possibility more than an impossibility.
Let's hope Bill Hewlett and Dave Packard's legacy is brought back to mind during the next appointment process.
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Thanks for those inspiring comments, David. Culture is a big ship and it takes time to get it turned around.
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Good post, Wally. I saw it via RT by @Claudia_Imhoff. I wrote with similar conclusions yesterday on my blog in a post titled "Larry Ellison is Wrong – HP Board’s Decision was Correct."
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Thanks for coming by and sharing your post Daryl. I'm sure my readers will enjoy it.
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In my opinion, the HP way was abandoned when Mark Hurd was fired. I have a post on this at my blog titled "HP uses PR Firm to Fire Mark Hurd."
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I appreciate your position, John. But I'm with Benjamin Pimentel on this one. I think the HP Way was gone long before Hurd was fired.
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Wally, I worked at a marketing communications firm that worked with over 25 HP divisions back in the late 90's, and the HP Way was alive and well then.
The business failures of late have been personal failures and great business failures that lack as you say the principles of trust, respect for others, integrity and civility -- BP, Wall Street, Main Street.
But there are many companies of all sizes where trust and integrity thrive. I've worked for one for over seven years and have worked with many more.
I agree with you -- HP can get back to the Way.
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Thanks, Kevin. I think they can, but it will take another culture change and I'm not sure the people in today's HP are ready for that. We'll see.
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