The HP Way

The HP Way. It was the distinctive corporate philosophy and set of values that defined Hewlett-Packard from its founding in a Palo Alto garage through its rise as a global technology leader. Developed by founders Bill Hewlett and David Packard, this management ethos emphasized deep respect for individuals, innovation, and community responsibility, creating a highly influential model for Silicon Valley and corporate America. The philosophy became a legendary part of the company's identity, guiding its operations, product development, and human resources policies for decades.

Origins and development

The foundational ideas emerged from the partnership and personal values of Bill Hewlett and David Packard, who established their company in 1939 with an initial investment of $538. Their early work in electronic test equipment, such as the HP 200A audio oscillator, was conducted in the now-famous HP Garage, a site later designated the Birthplace of Silicon Valley. The informal, trusting culture was crystallized into a formal management style by the late 1950s, influenced by the founders' experiences and their desire to avoid the rigid hierarchies they observed in other large corporations like General Electric or IBM. Key early managers, including Barney Oliver who founded HP Labs, helped institutionalize these practices as the company expanded globally, establishing facilities in places like Boeblingen, Germany and Yokogawa-Hewlett-Packard in Japan.

Core principles

At its heart, the philosophy was built upon a profound trust in and respect for the individual, promoting a belief that employees who are given tools, freedom, and responsibility will perform at their best. This was operationalized through policies like Management by walking around, where executives were expected to be visible and accessible on the factory floor and in R&D labs. A deep commitment to innovation and contribution was paramount, with a focus on creating technically excellent products, such as the HP 35 calculator and the HP 2100 minicomputer, that served defined market needs. Uncompromising integrity in all business dealings and a strong sense of community responsibility, demonstrated through support for institutions like Stanford University and the Packard Humanities Institute, were other foundational pillars.

Corporate culture and management practices

The culture manifested in distinctive policies that prioritized employee welfare and decentralized decision-making. The company was an early pioneer of flexible work hours, profit-sharing, and generous benefits, including its catastrophic medical insurance plan. It practiced a form of decentralization through its divisional structure, where individual business units, like those producing inkjet printers or logic analyzers, operated with significant autonomy to foster entrepreneurship. The famous "open door policy" encouraged direct communication at all levels, and layoffs were considered a last resort, a practice famously upheld during the 1970s recession. Social events and a sense of family were cultivated at sites like the HP Roseville plant and through traditions like the annual company picnic.

Impact and legacy

The approach became a benchmark for ethical and effective management, profoundly shaping the culture of Silicon Valley and inspiring generations of entrepreneurs, including the founders of Apple, Intel, and Google. It was extensively studied in business schools and cited in influential books like In Search of Excellence by Tom Peters. The model demonstrated that a values-driven, people-centric company could achieve tremendous financial success and technological leadership, as seen during the tenures of CEOs like John Young and Dave Packard's return. Its emphasis on engineering excellence and innovation led to groundbreaking products, from the HP LaserJet to contributions in fields like molecular electronics.

Evolution and challenges

As Hewlett-Packard grew into a sprawling multinational corporation through acquisitions like Apollo Computer and Compaq, maintaining the cohesive culture became increasingly difficult. The pressures of global competition, particularly from rivals like Dell and IBM, led to strategic shifts that some saw as deviations from original principles, such as the controversial tenure of CEO Carly Fiorina and the merger with Compaq. Later leadership under Mark Hurd and Léo Apotheker implemented cost-cutting measures and strategic pivots that further eroded traditional practices, culminating in the tumultuous acquisition of Autonomy Corporation. The eventual split of the company into HP Inc. and Hewlett Packard Enterprise in 2015 marked a symbolic end to the unified culture, though its core ideals continue to influence the corporate governance and operational styles of many technology firms worldwide.

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