The HP Way

The "HP Way," considered by many people as a legendary management system and corporate lifestyle, was developed by William Hewlett and David Packard at the inception of their friendship in 1938. Both men attended Stanford University and studied electrical engineering and their friendship led to the creation of the Hewlett-Packard Company (now known as HP) on January 1, 1939. The HP Way began early in the development stage of the company and grew over time with landmark decisions, such as employee stock sharing. Their early decisions gave birth to the corporate culture found in many companies today. To gain a better understanding of what the HP Way really means, you need to understand how it evolved over time.

HP released its first product, the audio oscillator, in 1939. The company had just two employees - Dave and Bill -- and an operating capital of $538. This soon changed when Walt Disney purchased several audio oscillators from HP for the production of the Disney classic, "Fantasia", raising HP’s capital to $5,369 by the end of 1939. The start of World War II increased the demand for electronic equipment which allowed Dave and Bill to move HP out of the garage and to its own facility. This move proved instrumental in nurturing HP’s open corporate policy, which became a major part of the HP Way.

Dave and Bill established a management style at the new HP facility that came to be known as "management by walking around." Their style embraced personal involvement, recognition, and listening skills. Early on, the two HP founders realized that employees were their greatest asset and when placed in an environment that promoted ingenuity and creativity, employees would operate at their fullest potential. Their management also included a style of operations known as the "Open Door Policy." HP’s new 10,000 square foot office building incorporated an open design where none of the offices or cubicles had doors. Employees were encouraged to share ideas with each other, as well as solve technical problems with management. All employees were on a first name basis with each other, including Dave and Bill.

The 1940s saw further expansion of the HP Way. Dave and Bill implemented a profit sharing program giving each employee $5 for Christmas. An additional production bonus was added later and a full profit sharing plan was established in 1962. Dave and Bill continued this tradition of positive corporate culture giving HP’s first charitable gift to local organizations. In 1948, HP included an insured pension plan for employees at the company for 5 years or more. At that time, HP was one of the only a handful of companies that had an insured pension plan.

As the company grew and changed, the HP Board of Directors was selected to oversee the rapid expansion of the company. With the HP Board in place, the company began publicly trading at $16 a share. At the same time as the initial offering, Dave and Bill established a stock program for employees. Dave and Bill also saw the need to create business objectives that would allow the company to grow without straying from its established culture. Along with input from the HP Board, they created seven objectives under the categories of profit, customers, fields of interest, growth, people, management, and citizenship. The objectives marked the official break of HP from the normal top down management style. Today, the HP Board still operates under many of the original objectives written by Dave and Bill.

Dave continued to function in the role of HP CEO and Chairman while Bill served as President. Bill would eventually take the position of HP CEO while Dave fulfilled the duties of U.S. Deputy Secretary of Defense for President Nixon. With defined roles and business objectives, HP moved to its current headquarters in the Stanford Industrial Park. Constructed on the top of a hill overlooking San Francisco Bay, the new offices offered breathtaking views and plenty of natural light. The founders believed that if employees worked in a beautiful and pleasing environment, their production would increase, producing new and innovative products.

Throughout the years, the HP Way has played a significant role in the operations of HP and corporate involvement decisions, including establishment of the Hewlett-Packard Foundation in 1979. The company also created a hardware recycling program in 1987, and in 1991 HP created a program to recycle Laser Jet print cartridges. In 1995, Dave published the book, The HP Way.

In The HP Way, Dave explored the HP corporate philosophy by examining HP business practices, culture and management style. Today many companies are founded on and shaped by the concepts defined by the HP Way. This tradition remains in place at HP today under the stewardship of current HP CEO, President and Chairman, Mark Hurd.

Additional HP Information

The HP official Web site provides press releases concerning HP Chairman past and present. The HP Board recently named CEO and President, Mark Hurd, as the new HP Chairman.

Information about the HP Board can be found on the HP official Web site. The information provided includes biographical information about the member as well as his or her professional affiliation.

The Corporate Information section of the HP Web site provides press releases about the status of the HP Chairman. The position of HP Chairman is elected by the HP Board members.

The Pittsburgh Supercomputing Center (PSC) provides information about a visit conducted by a HP CEO. The visit was made in order to view the site of LeMieux, PSC’s HP AlphaServer Terascale Computing System.