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Book Review
Byword for humane corporate practice
ANAND PARTHASARATHY
BILL & DAVE — How Hewlett and Packard Built the World’s Greatest Company: Michael S. Malone; Penguin Portfolio, 11, Community Centre, Panchsheel Park, New Delhi-110017.
Rs. 495.
In the upper echelons of global business, there is a subtle difference between a corporate player who is successful and one who is admired. The former quality is easily measured—by looking at balance sheets, order books and stock market performance.
Media analysts are more challenged when it comes to rating the respect that a company enjoys: in a few rare instances, a financially successful operation may also rank very high in the “respect” ratings—but not too often. Money, and the means to make it, sees many compromises, en route.
One international technology player has managed for over 50 years to perform this rare “double act”— of delivering what the market place rated as sustained success, even while remaining one of the world’s most admired companies. Its co-founders, William Hewlett and David Packard, fellow engineers who graduated from Stanford University (U.S.), came together in the year that World War II began, took some of their own work on audio oscillators and signal generators, hired a garage near their home in Palo Alto, and began creating electronic testing and measuring products that found a ready market with the U.S. military departments. By the 1960s, Hewlett Packard was a world leader in the measurement field. By a decade’s end, they were foraying into pocket calculators and computers, and by the 1980s had created both the first laser printer as well as the first ink jet printer.
Hands-on control
Throughout these decades, Hewlett and Packard retained hands-on control of their company, stamping it with their unique mix of philanthropy and financial pragmatism. Their mantra included, continuously funding innovation; fostering a friendly work environment and practising ethical business. Bill and Dave did not shun profit — they just did not make it the central mission of their company, realising shrewdly that a happy, creative workforce would ensure profitability in the long run. Their trust paid off: “The HP way” became a catchword and a synonym for humane, corporate practice. After both of them retired from the HP board, David Packard documented their business practices in a book which bore the same title, The H
P Way: How Bill Hewlett and I built Our Company.
Is there anything left to say about the HP way that would justify yet another book? Sadly, recent events down Palo Alto way have made Mike Malone’s new book, necessary, in ways that the two founders both now dead, would have found ironic if not tragic. He is candid, sometimes brutally so, when narrating the recent history of the company.
One chapter begins with the bald statement: “The Carly Fiorina era at Hewlett Packard was a catastrophe.” CEO Lew Platt had ensured a smooth changeover from the founders and consolidated HP’s position as a printer leader and a formidable computer player by the end of the 1990s. But he took an extraordinary decision to spin off HP’s original test and measurement business into a separate company called Agilent. When revenues fell instead of rising, Platt in essence, fired himself. The new CEO was Carly Fiorina.
She was, as Malone observes, a new breed of “CEO as superstar... media savvy and addicted to big power play.”
The HP way
The HP way of working received another jolt when Fiorina rammed through a “marriage of convenience” with PC maker Compaq, a merger that was fought tooth and nail by surviving members of the founders in a highly publicised shareholder meeting. In 2006, the company had to weather one more assault on the HP way: the controversial internal investigations, descending to illegal methods, to plug high level information leaks. Yet again, a HP executive — Chairman Patricia Dunn — had to leave, indicted for her role in the affair. Is the HP way today, an anachronism, a piece of flotsam from an earlier, less demanding age? Malone’s racy, engrossing and candid book suggests otherwise. They tried to kill the HP way but only managed to cripple it, he feels. All indications are that the new inheritors of Bill and Dave’s legacy, may have faltered , but they will find their feet again and will remain a respected, global corporate entity that sells printers and PCs with great success — without selling its soul.
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