HP Way

HP Way. The HP Way was the distinctive corporate culture and set of management principles established by Bill Hewlett and David Packard, the founders of the Hewlett-Packard Company. It became a legendary model for Silicon Valley and global business, emphasizing respect for individuals, innovation, and community responsibility. This philosophy was integral to the company's identity and success for decades, influencing its approach to engineering, employee relations, and corporate governance.

Origins and development

The foundations of this management style were laid in a one-car garage in Palo Alto, California, where Bill Hewlett and David Packard began their partnership in 1939. Its informal principles were crystallized during the post-World War II expansion of the Hewlett-Packard Company, as the founders sought to maintain a small-company feel despite rapid growth. Key early practices, such as management by walking around and an open-door policy, were developed to foster direct communication and trust. The ethos was formally documented in 1957 by David Packard in a speech to HP managers, coinciding with the company's first public offering and the establishment of formal corporate objectives.

Core principles

At its heart were deeply held beliefs about treating people with trust and respect, encapsulated in the practice of management by objective rather than excessive control. A fundamental tenet was a belief in providing job security and sharing the company's success through profit-sharing and stock plans, long before such practices were common. It championed innovation and engineering excellence, encouraging technical contribution and measured risk-taking from all employees. Furthermore, it emphasized corporate citizenship, with a strong commitment to contributing to the communities where HP employees lived and worked, including through early environmental initiatives.

Corporate culture and management practices

This philosophy manifested in tangible policies that defined daily work life at the Hewlett-Packard Company. The company was known for its flexible work hours and its iconic practice of providing a daily fruit break to all employees. It avoided mass layoffs, even during economic downturns like the 1970s recession, opting instead for organization-wide pay cuts and reduced workweeks. The physical work environment, including the famous scattered low-rise buildings at the Stanford Research Park, was designed to avoid hierarchies and encourage collaboration. Management practices were decentralized, granting divisions significant autonomy to foster entrepreneurship and accountability.

Impact and legacy

The influence of this management model extended far beyond Palo Alto, making the Hewlett-Packard Company a "model employer" studied in business schools like the Stanford Graduate School of Business. It directly inspired a generation of Silicon Valley leaders, including Steve Jobs of Apple Inc., and shaped the people-centric cultures at companies like Intel and Genentech. The emphasis on engineering meritocracy and innovation is credited with fueling decades of technological breakthroughs, from the HP 9100A calculator to pioneering work in laser printing. Its principles were widely disseminated through books like David Packard's "The HP Way" and became a global benchmark for ethical and effective corporate governance.

Evolution and challenges

The application of these principles faced significant strain during the intense competition of the 1980s and 1990s, particularly from rivals like IBM and Dell. The arrival of externally hired CEOs, beginning with Lew Platt and accelerating with Carly Fiorina, initiated a series of strategic shifts that many longtime employees felt diluted the original ethos. Major events, such as the contentious Compaq merger orchestrated by Carly Fiorina and later separations like the creation of Agilent Technologies, were seen as breaks from traditional practices. In the 21st century, following further splits into HP Inc. and Hewlett Packard Enterprise, the modern entities have sought to reinterpret its core values of innovation and integrity for a new era, though its classic form remains a celebrated chapter in the history of American business.

Category:Hewlett-Packard Category:Corporate culture Category:Management Category:Business ethics Category:Silicon Valley