Throughout the book are references to “the HP Way”, the managerial values of HP. These values are explained in a remembrance style, almost as if Packard remembered that he had not talked about a particular subject yet so he will talk about it now. Although the structure is somewhat less than coherent and, in fact, the principles are overwhelmed by the examples, by the end of the book a consistent picture emerges that the “HP Way” is composed primarily of innovation and concern for people. Unlike the commercial buzzword that innovation has become, Packard stresses the importance of true innovation: creating something that pushes the edges of what is available, usually in a technological fashion for HP although sometimes in a manufacturing standpoint as well. While innovation describes the products, concern for people describes the managerial style. Hewlett and Packard considered it their duty to provide steady and secure employment in return for the efforts of their employees, especially at a time when companies considered labor to be disposable.
HP’s concern for people extended beyond a secure job, however. HP management is described as placing a high value on treating employees almost as friends. People are referred to as much as possible on an informal, first name basis. Engineering teams are encouraged to work independently to create products that they feel live up to HP standards. Supplies are freely available and employees are trusted to use them honestly. Company and departmental picnics to help management get to know employees are an annual tradition. The company even purchased land for employees’ use as vacation spots. Much of the HP Way is about treating employees as people.
As a managerial memoir The HP Way describes the history and principles of the Hewlett-Packard Company in interesting and entertaining fashion. It touches on the important mangerial values of Packard, innovation and relationships, and provides a fairly complete set of principles and examples . Sometimes important principles come in a casual package and while The HP Way is by no means a managerial handbook, the comments by the founder of the one of the best technology companies or the twentieth century1 are certainly well worth reading.
1 While Packard would have supported the Agilent spinoff as an application of his principle of keeping divisions small and manageable, he would most likely have decried the HP-Compaq merger as an example of corporate ego-acquisition (or perhaps, the career builder of Carly Fiorina), as evidenced by his statement “Bill and I had no desire to see HP become a conglomerate, since, as I’ve already pointed out, more companies die from indigestion than starvation.” (pg. 142)
(Rates as 9 for a memoir, but the title suggests the primary content is the HP Way. In fact, each managerial principle is only briefly touched upon. Many examples are given, but often the storytelling obscures the purpose of the example.)
- Innovate: each product should make a contribution. No me-too products were allowed.
- Listen to customers and produce what they want. However, each revision should provide more for less. (e.g. printers, where successive printers lowered prices and improved print quality. In the case of InkJets, color printing was added, since while customers did not value it much by itself, they preferred to buy a printer the could print in color if they wanted)
- Quality/Reliability: perform manufacturing carefully not quickly. The Japanese branch produced excellent manufacturing quality by carefully keeping the machinese at their maximum efficiency while the American counterparts just quickly tuned it to be in spec.
- People want to do a good job; create an environment that enables them to do so.
- Management should ultimately be about building relationships.
- Management by walking around: do it frequently and informally. Find out what people are working on, their problems, their ideas. Also this helps make sure that the ideas are communicated effectively—written instructions are not always enough—and that good ideas are discovered.
- Employees should be frequently appraised of performance, preferably in informal settings
- Management by objective: make sure that everyone clearly understands the objective and let them do it their own way
- Open door policy: any employee can talk about personal or
work concerns to any manager without fear of reprisal.
- Allow for flexibility in people:
- flex time: enables employees to work preferred hours, might let them do (or survive) things in their personal lives that are not possible with strict hours.
- rehiring policy: we’d love to rehire you as long as you did a good job at your other companies and you didn’t work for a direct competitor.
- Management shares the ups and downs: instead of laying off people after WWII, everyone took a 10% work reduction (and therefore, pay cut).
- Keep things decentralized to maintain personal interactions within the group. Give the smaller groups the same responsibilities and authorities as if they were a separate busines (this also helps ensure that there are many managers capable of running the entire business since they already have experience running a business)
- Promote from within unless outside talent is needed.
- Make the local community better for having the company (aesthetic building, contributions to community, charities, etc.)