One of our main objectives in starting this website five years ago was (and still is today) to get in touch with people who have worked at HP from the birth of the company up to today. We are interested in hearing your memories no matter what division or country you worked in, or whether you were in engineering, marketing, finance, administration, or worked in a factory. This is because all of you have contributed to the story of this unique and successful enterprise.
Your memories are a treasure for this website. While product and technology are our main concern, other writings related to the company life are highly welcome, as far as they stay inside the HP Way guidelines.
The contributions made by Ray Smelek during his career at HP are illustrated in this chapter. This chapter is a good example of the type of memories we would like to present on this website.
Many thanks Ray for this highly valuable contribution.
Anybody Else ? Please get in touch using the Contact US form.
Foreword by John Minck
THOSE INTREPID HP MANAGERS IN A FOREIGN LAND
The Internationalization of the HP Way
In the "Golden Years" of high-tech from 1950 to 2000, Hewlett-Packard was justifiably acknowledged for its brilliant execution of a new work culture, termed The HP Way. HP employees enjoyed a company work environment that was second to none, respecting the dignity of every worker, exploiting the creativity of people with a "management by objective" which took hands off previous top-down styles which stifled personal initiative. The HP Way built a team spirit, with an ethical approach to business relationships, offering a management style that encouraged employees to achieve their highest potential.
And yet, a whole area of business strategy is by and large ignored in management texts of HP, and that is the remarkable way HP approached the work culture side of International business. Both Bill and Dave were keenly aware that their company must do FAR MORE than sell and ship products to other countries. Early on they recognized that they must create industrial partnerships in many countries to establish an HP presence beyond just modern sales and service offices.
Starting in the 1960s, in one country after another, HP set up manufacturing operations, first in Germany, UK, and Japan. Significantly, these operations included more than just assembly lines, such that local R&D facilities were co-located, and specific instrument product line responsibilities allocated to those factories. Then, as business grew and grew some more, and HP became a global giant in the late 20 th century, manufacturing moved to many more countries globally.
Little acknowledged were the teams of HP employees who became the managers of those first international outposts, buying land, building HP-style buildings, hiring entire factories full of every skill, from janitors to R&D geniuses. They trained local teams and inculcated the HP Way into those foreign cultures, until they became almost congruent. I can recall one of our expatriates, John Doyle, one of the first to travel back to his native land, to set up facilities in Bedford, England. He told of a finance meeting with London bankers. It involved a formal lunch in a posh mahogany-paneled dining room with one uniformed waiter for every guest. John mused later that HP culture had much to offer to some elements of that class society.
One of our workhorse players in managing a foreign factory was Ray Smelek. His period, as manufacturing manager at the UK Bedford plant and then leading the UK-government-mandated transfer to an Edinburgh, Scotland venue is one subject of a book Ray has written chronicling his life, "Making My Own Luck." In a real sense, a whole legion of HP employees left their comfortable HP surroundings in the U.S. to bring their families to a strange land and to bring HP values to those great countries. While I used to joke about "marketing mercenaries," and "finance mercenaries," Ray certainly embodied the best of the legion of HP "Management Mercenaries" over those decades.
This HP Memoir consists of some selected chapters from Ray's book which capture some of the experiences of those intrepid HP team players who were crucial to setting up and running many overseas factories, then returning to take up their previous work. Ray's career path through HP ranged from his summer intern stint to the F&T Division to Microwave Division, then to the UK. But the UK assignment represents only a few years of his 37-year career. For 12 years, from 1973 to 1985, he led the enormously successful HP Boise Division, introducing numerous printer products, culminating with the Laserjet Printer in 1984. In 1985 he was asked to return to the UK to define a product strategy for the fledgling disk drive operation in Bristol, England. The result of that effort produced the introduction of a DAT(digital audio tape) drive that has produced multi-million dollars in revenue for HP. He returned to Boise in 1988 where he became the general manager of the Mass Storage Group.
(Some of my - and others - favorite stuff)
Ray's book is a nice blend of detailed genealogy of his immigrant grandparents, growing up in Pueblo, Colorado, jobs, school, culture, and his family life over those same years. Latter chapters in his book, not chronicled in this HP Memoir, include sage and comprehensive advice on Business Development and Lessons of Life. There is one impressive Appendix on detailed business organizing strategies. They also cover his life work after retirement in 1994, with his consulting activity and multiple Boards of Directors and as a Trustee of the Albertson College (College of Idaho). He accepted chairmanships of numerous charity and community organizations, being true to the HP objective of community service.
You can get your hard copy of Ray's book,
at a price of $15 + shipping, by contacting:
180 N. 8th St
Boise, Idaho 83702
For details email: laurarediscoveredbookshop
This HP Memoir consists of some selected chapters from Ray's book.
This is the Complete Index of "Making My Own Luck" with Chapters Published Here in BLUE
I saw my first television set in 1949 while on a family vacation in California. The picture was dim, the screen was only about 10 inches in diameter, and it was in black and white. The shows that night included The Ed Sullivan Show and Roller Derby.
TV at that time was brand new and shows were aired only from 7-10 p.m., and then the screen went to a "test pattern," something unheard of today with hundreds of channels going 24 hours a day. As the technology was still being improved though, the test pattern came in handy. It allowed you to readjust settings for brightness, contrast, and sharpness, each of which would drift a bit each time you used the set.
I was 15 years old and thought "This is really cool, how does it work?"
We didn't have a TV at home in Pueblo, Colorado. No one did back then. TVs were new on the market and no one was selling them. Even if we'd had one, there was nothing to watch. There were no channels in our area.
The technology world I'd spend my life in and around hadn't been developed yet. It hadn't been thought of yet; in some cases, the inventors still hadn't been born.
This was 1949, remember? Computers smaller than a Hummer didn't exist. There were no iPods and no Internet. No copier machines, home printers, digital cameras, cell phones, email, FaceBook, or Google. We were still in the age of vacuum tubes. Transistors were conceived, but not developed. Integrated circuits did not exist, nor even conceived at that point in time.
In the technology world, 1949 was several life spans ago. I've seen the birth of many technologies, many of which never made it off the shelf - but those that did changed the way of life for multitudes of people. It was very exciting to have been a part of some of that.
I was a kid from a small steel mill town in Pueblo, Colorado and all my grandparents were immigrants from Eastern Europe. I was the first generation in my family to even attend high school, let alone finish it. Both my parents had to leave school early - my dad in the 8th grade, my mom in the 6th grade - to go to work to help support their families. Kids were expected to work as soon as they were old enough to handle a job, and school was an unnecessary luxury.
At age 15, I had already been working for eight years, first selling war stamps door-to-door, and then starting as a golf caddy in the sixth grade on weekends and summers. At age 14, I was made caddy master and worked in the pro shop. The next year I got a summer job at a Texaco gas station and continued to work part time during school.
What goals should I have had? Well at that age one is not thinking much about goals nor careers, but mainly about girls and cars and stuff like that. Not that there is anything wrong with that, given that even as we get older we do not have a clear picture of what we want to be when we grow up. Remember, career-wise, it is just as important to know what you do not want to do as it is to know what you do want to do.
Unbeknownst to me at the time, my destiny may have been solidified that day in 1949 when I saw that television set. And my drive to succeed in the business world had roots even earlier than that. My grandparents moved to America for a better life for their families and to live in a place where a man could build on his aspirations.
I had high aspirations, but didn't know how to achieve them.
Maybe every generation feels unique, as though they are the ones who see and experience great changes. I know I have felt that way in my life.
I was the first in my family fortunate enough to get a college education. I was also the first to work in many places around the world. I was also fortunate to get into a field of work where there was a lot of excitement, interesting and challenging jobs. When I looked around me, it seemed that so many people were content with uninteresting jobs and with doing uninteresting things. I always wanted more. Perhaps that made me somewhat unique.
It has always been a little frustrating to me when people don't give themselves the opportunity to compete in the world because they don't prepare themselves. What's a memoir without a little advice? So, here's my first lesson: Always prepare yourself to compete. Stay in the game.
You might not know when opportunity is coming your way, or even what that opportunity might look like. Be ready. The first way you can do that is to get a college education. With my children, not going to college was never an option - it was expected.
Being in the right place at the right time is a factor in success, but when opportunity arises, you need to take advantage of it. Many times during my long career with Hewlett-Packard Company (HP) I was given the choice of taking a risk. Every single time I went for it. I never regretted it. You can't move forward if you don't put yourself in the game.
My goals have frequently been monetary. Does that come from my childhood? Maybe so, but from my perspective money is good for three things: It brings personal security, it's good for helping others, and it's good for fun. While it may not necessarily be the key to happiness, it sure helps to know where to shop, so to speak. Looking back, we didn't have much, but we always had enough. I don't remember ever feeling that we were short of money to do the things we needed and wanted to do. I guess I just always wanted more.
I'd have to say the pinnacle of my success, and the high point in my career, was the day in March of 1992 I was finally made vice president at HP. Let me tell you, it was a long time in coming.
There weren't many vice presidents in the company at that time. Being made vice president meant I was among 35 people at the top, in a company with about 100,000 employees worldwide. It also had great meaning because as a member of the 35 members of the executive council, I now took part in making strategic decisions and helped shape the mission of HP. Being made a VP was a real exclamation point to my career at HP and a validation of the contributions that I had made to the company over the years.
I found my greatest successes in my work with HP. But there were low points too. A notable one was when I thought for sure I was going to be made general manager for the Mountain View, California division back in the late '60s. My boss was retiring and I thought I was up for the job. I didn't get it. A friend of mine got it and I thought I was every bit as qualified. I called my staff in to tell them the announcement of who was going to be the new general manager. I was so flustered; I think I stammered through the whole speech.
Anyone who knows me will realize I'm going to write a lot about my career at HP. It defined me. I'm proud of my career there. I think I can share some interesting stories about rising to be an executive at a major worldwide company, and - for those that want it - perhaps provide some pretty good business advice that I learned along the way. I've always tried to keep active both in mind and body, and consequently. . . "There ain't no flies on me." I considered this to be the title of this autobiography --- but was advised that there are more appropriate titles, hence the one on the cover.
I'm writing this primarily for my grandchildren and beyond. But I think my children might be surprised by some of the things written in this memoir as well. I don't mean they'll be surprised because there are secrets that are going to be unveiled. I just mean that many of the stories here are those I've probably never taken the time to tell before. Some stories are ones I haven't thought of in years, maybe since they occurred more than a half century ago.
I've taken time to reminisce about my parents and grandparents and what life was like during World War II in an ethnic neighborhood in a small steel town in the western United States. I lived through the dawn of a technology revolution - and played a role in its development.
I'm not writing this because my life has been so fantastic, but because I often think about my grandparents and wonder who they were and what their lives were like. My father's parents died before I was born so I never knew them and, to this day, know very little about their history. I did know my mother's parents and you'll read stories about them later. And I wish I knew even more.
Our stories and lives shouldn't be lost. We should know who came before us and how our family has been shaped over the years. I wouldn't be the person I am without spending time with Grandpa Kochevar, doing beer runs for him (more about that later) and watching him make his smoked sausage.
I'm writing this because this is our family's heritage.
I hope this is useful to future generations, or at least provides an incentive to them to keep adding to this record by writing about their own lives in turn. It's a chance to pass a legacy onto future generations.
I hope you enjoy it, learn from it, and pass it along to your own children and grandchildren.
|My “perfect baby” certificate from a contest my mother entered me in. At right is me at age 2|
|Me, Audrey, Dad and Gene with our brand new 1949 Chevrolet on our trip to California|
|The house I grew up in|
My first official job as an engineer at HP was in the Frequency and Time Lab working with a team of engineers designing a very accurate clock that would be used by the U.S. Navy on submarines. One might question what's the big deal about what time it is? The truth of the matter is that having the ability to know the exact time is critical for telecommunications, broadcasting, military, navigation and other scientific experiments. In 2008's space age, for example, a one-second error would cause the shuttle to miss docking with the space station by 7.8 kilometers, which would be very embarrassing to say the least.
Our clock requirement back in 1959 was only to be accurate to one second in 32 years. Requirements for the space age are accuracies of one second in one million years. That's why it's possible to always find the space station and to get back to Earth as well.
I worked in the lab for about a year and a half until we had the product ready to go to production. Then I took it out of the lab as a production engineer and shepherded it through the pilot stage and into production in the Microwave Division, which was skilled in electromechanical devices. I was excited about this new responsibility as production engineer, but it wasn't until I had moved to the Microwave Division that I found out they were also giving me 11 other instruments to be responsible for. There I was, in charge of one instrument I had in-depth expertise with - and 11 others that I knew nothing about. It was a challenge.
I enjoyed manufacturing a great deal. It was very interesting because it dealt with all aspects of the product, from fabrication to testing. It provided me a wide breadth of responsibility. I liked that much more than just designing new products in a lab. It was at that point that I decided to focus on the manufacturing side of the business.
As production engineer, I was responsible for all technical aspects of the products in all stages of the manufacturing process. I reported to the production manager, who was responsible for lower level part fabrication, wiring and assembly and production testing. He reported to the manufacturing manager who had the additional responsibilities of scheduling, forecasting, planning, inventory, warehousing and shipping. I set my goal that production manager and then manufacturing manager was something I would aspire to.
After a short time in the production engineering role, I expressed an interest in management during a meeting with my boss. Shortly thereafter, he selected me to take some management training courses that HP offered. These classes were offered on company time. I also enrolled in the MBA program at the University of Santa Clara, which offered courses in the early morning and at night to accommodate nontraditional students. HP encouraged its employees to improve skills relating to work and would reimburse all expenses as long as you achieved a grade of C or higher. My plan was to take one or two courses at a time, thinking I would get my MBA in about four years.
HP had only recently at this time started to expand outside of Palo Alto. They opened a facility in Germany first, in 1958, and then opened in the United Kingdom in 1960. Also in 1960, they moved one of their four divisions to Loveland, Colo., and another division to Colorado Springs, Colo. a year later. The manufacturing engineering manager in the design lab was picked to be the manufacturing manager in Colorado Springs. That left his job in Palo Alto open. They picked me as their preferred candidate and asked me if I was interested.
I didn't hesitate. I jumped at it. I was very pleased to have been selected, considering I had only been with the company as a full time employee for two years. The company was growing very rapidly during these past two years, going from under 2,000 people in 1958 to over 6,000 in 1962. In any case, I must have convinced them I had the drive, potential ability and dedication to take on greater responsibility. Like in any company, there are those who are movers and shakers and there are those who are just putting in their time. I was recognized as someone who could take on more responsibility as the company grew. I didn't know how that worked at the time, but years into the future, I was in many management meetings where we talked about the challenge of finding the right people to take on the responsibilities for the things we needed done.
I was the manufacturing engineering manager in the Microwave Division from late 1960, when I was 26 years old, until 1963. Maybe others saw that I was just a young guy, but I never thought I was too young for the job. It was a steep learning curve. The guy who left trained me a bit, but he wasn't around for long. I was ready for the challenge of the technical parts of the job, but I wasn't ready to manage 12-15 people. The crew had a wide range of experience and their backgrounds were from clerical to tool engineers. The toughest job I had was a guy that ran the manufacturing specifications department. He was 50 years old and had many years of experience in this area, both in business and in the government/military as well. I struggled with trying to get him to adapt to our way of doing business and managing people. He was very set in his ways and to make things worse, apparently was a friend of my boss' boss.
HP was unique for its time in how management worked with employees to improve their performance. As a manager, you didn't just tell someone they were fired. Long before there was government intervention for fairness to employees, HP had a process so that terminations were logical and fair. You didn't fire someone when you were angry. You had to make sure they understood the expectation, and then there would be a verbal warning, followed by a written warning. People were given every opportunity to respond and fix their behavior. Only after an employee had failed to heed any of these steps could they be fired. This guy would not let me, as a young whippersnapper, coach him to success, and frankly, he was just causing problems.
The thing that surprised me in the end - and the thing I was to learn over and over in similar situations - was that the other employees reacted favorably when they found out a problem employee had been terminated. The reaction typically was "It's about time." Firing someone is not a fun thing to do. In fact, if you think it's fun, then you're probably not a good manager. My boss' boss was also supportive when he reviewed the entire situation. In fact, he offered to let him go - but I said no - I was ready to do it, even though inside I felt it would have been a lot easier to take him up on the offer. I was very nervous, but resolute, because I felt I had given him more than ample opportunity to be successful over a period of time and he had refused to do so.
HP's policy was to hire the best person they could find for every job they had. We were a company that succeeded on unique innovation, providing solutions for engineers that had problems to solve. We were not a marketing company. We would hire good engineers, they would talk to other engineers, understand their problems and then invent products that solved their problems and they then would buy the products. That's how it worked and we built a reputation doing this in the early years. It was a model that lasted for a long time.
There were some unique engineering challenges that I brainstormed with people during this stint in my career. My main challenges, however, were on the management side - and this was the part of my job that I enjoyed the most.
Being manufacturing engineering manager, I started to learn about the breadth of the Microwave Division. There were probably 50 different products in production at that time. There were about 250 people in manufacturing, about 40 engineers in the Research & Development (R&D) lab, and a total of 400-500 people in the whole Microwave Division. I had the opportunity to start seeing the bigger picture and be a part of the strategic thinking about how a division would operate.
I loved the fact that I was working with dynamic people, everyone was very focused on what they were doing. When I was a production engineer, my co-workers would talk about things they would do at home on weekends or after work, or how they were just waiting for the weekend to roll around again. My colleagues now didn't talk about life outside of work - everyone was focused on the job at hand. I was definitely drawn into the culture and extremely focused on ensuring our team did their part to ensure success for the division.
In retrospect, I think I should have spent more time at home with my family. Funny how perspective hits when only it's too late to do anything about it. My family was growing at home - Kathy was born in March of 1960 and Steve was born in April of 1962. Just prior to my graduation, we had moved into a two-bedroom duplex, paying $110 a month, and spent a lot of weekends looking at model homes preparing for our first purchase. There were homes going up everywhere in the valley, and all the fruit orchards were starting to disappear. It became more and more difficult to distinguish where one town ended and another began.
When I got my promotion to manufacturing manager in 1960, we purchased a house on the west side of San Jose, on the border of Saratoga and Sunnyvale. The house cost $17,200 - $200 down and payments of about $135 a month. It was 1,300 square feet with three bedrooms, with one main bath and a bath off the master, and a small family room. I had a lot of pride about buying my first house and put a lot of time and work into the landscaping.
The first major chore was to level out the back yard. The yard backed up to a canal, with the yard sloping from the bank of the canal to the back of the house. I didn't like that, so I rented a tractor and reshaped the lot, creating a two-tiered yard, shored up by a retaining wall. Over time, I poured concrete for a patio as well as a pad for the clothes line where Barbara would hang out the diapers to dry and air out (no Pampers available then). I also built an open roof patio cover, a fountain and a lot of planter boxes.
The nice thing was that all the guys I was working with were in the same age range and also were buying and fixing their first homes. We all would help each other with various projects when we weren't working so it made the work fun and certainly much easier. I learned a lot doing these weekend projects on the house and I read a lot of Sunset Magazines for ideas too. To this day I still enjoy woodworking to the extent that I have a shop where I can do some cabinetry work.
While I was home, I kept busy on household projects. I always had a high energy level and always wanted to be busy. Our main family activities were going to church on Sundays and then to the pancake house afterwards. It was our little ritual and the enticement of chocolate pancakes and chocolate milk was something that perhaps helped make our young children behave in church and gave them something to look forward to. We had a great friendly neighborhood too and all the neighbors on our street would have a party about once a month where we'd all get together. There were three couples in particular that we got to know and would play bridge with, and the guys would get together to play basketball. Everyone had kids so we had lots in common and our kids were all friends.
All of this was set to change, however, as nothing stayed the same long in my life or career. In late 1962, I was offered an opportunity that would greatly change my career path and my family's lives.
John Doyle had started HP Ltd in the United Kingdom (UK) in 1960 and he was a great visionary in the company and someone I highly respected. When a new division manger (managing director in England), David Simpson, was hired for the UK, he visited me in Palo Alto and asked if I would be interested in going to England for two years as a liaison engineer to help transfer the know-how on two high-frequency signal generators. I talked to John about this potential move as it meant giving up a management position and going back to being a production engineer. He told me that HP was a company that was really going places. He was enthusiastic about HP growing and expanding internationally and re-emphasized that there would be lots of opportunity for the people who took on the necessary responsibilities. John also told me that the international experience would be great for me and my future. He sold me. Now, I just needed to sell Barbara on the idea of picking up our three young children, leaving our house and moving to a different country. She had never been out of Colorado before we moved to California so I wasn't sure how she'd react to this big of a move. But she said "Ok, if that's what you want to do, let's go for it."
In June of 1963, we rented out our house, put our stuff in storage, and were off to Bedford, England. In those days, the only way you could get to England was through New York and they were flying 707s, which were considerably slower than today's super jets. It was a pretty long trip with three tired little kids, ages 1, 3, and 5.
It didn't take long at all to feel like we were living in an entirely different country. The drive from the airport was unnerving with everyone driving on the wrong side of the road. There were a lot of challenges and interesting experiences to living in England. The biggest problem we faced was that baby Steve developed a serious skin allergy so we immediately had to deal with the national health system. Health care in England was free, but doctors didn't take appointments. You had to show up and wait. With each doctor having about 2,000 patients, the waits could be very long, especially when you had a miserable baby in tow. Fortunately, Steve's skin problems gradually went away, probably as his system adjusted to whatever was bothering him. Not before, however, we tried various concoctions of soy milk, special powders and salves to ease the itching.
As a matter of fact, it was Steve again who gave us another memorable experience dealing with the English health care system another year or two later. He was spinning around in the yard, got dizzy and fell, hitting his tooth on a rock. His baby tooth was firmly in place, but broken. We took him to the dentist, but the dentist refused to pull the tooth unless he could put his patient to sleep - and then he informed us that he didn't put young children to sleep. We couldn't leave Steve with his tooth the way it was, so I finally told the dentist we weren't leaving until the tooth was pulled. He finally saw it our way and pulled the tooth.
Our house in Bedford was on Kimbolten Road. It was owned by HP to whom we paid rent. The company also paid for Mike and Kathy to attend Polam, a private school. The kids had to wear uniforms with ties and blazers. They did not have kindergarten in English schools, but started kids right into school at age four. Interestingly, in the private schools, they actually started kids at age three - so Kathy went to school at age three. Everything seemed a little more formal there. The man who took care of our yard wore a suit and tie while mowing our lawn. We had to get used to a new language - gasoline was called "petrol," the hood of the car was a "bonnet," the freeway was the "motorway," and a divided highway was called a "dual carriage way." Money, of course, was very different and difficult to get used to. We had to learn the difference between pounds and schillings and pence. With 20 schillings to the pound and 12 pence to the schilling, it made balancing one's checkbook a bit of a challenge. Then, of course, there were guineas (1 pound, one schilling), and the coins; crowns (5 schillings), half crowns (2 schillings and 6 pence), Threp'ny bits (3 pence) and tupence hapnies (2 ½ pence), plus a few more.
Even going to the grocery store was a learning experience, even though we were fortunate to have a Safeway in Bedford. There were no big carts like we had in the U.S., just very small carts, since people typically would shop each day for their needs. We went in and filled four carts and people there looked at us as though we were from outer space. Fortunately, we had neighbors who were a U.S. Air Force couple that were stationed at a nearby airbase, and they would take Barbara to the PX for essentials that she couldn't get at the Bedford stores. I'm sure people thought we were just slow Americans.
Over time, we sunk into the culture there, enjoying traveling to London and into the countryside. Our excursions with the kids were limited because they didn't find sightseeing through backseat windows too much fun. But we found a housekeeper who would baby-sit and Barbara and I were able to visit Stratford on Avon, Warwick castle and various other sights.
In the early spring of 1964, we decided to take an English holiday at one of their famous holiday camps. We chose Billie Butlin's Holiday Camp at Clacton by the Sea, which is on the southeast coast of England, about a three-hour drive from Bedford. We signed up for a one-week stay. We arrived around noon on a Sunday afternoon and were shown to our quarters, which was a small one-room cabin (I would guess maybe 12' x 12', with three bunk beds formed in a U shape). We then went to get lunch which was cafeteria-style with long rows of tables and benches. They had numerous rides for the kids, boating, swimming, etc. At one point, I had to rush out to catch Steve, who was falling asleep on the little merry-go-round and about to fall off his horse. The kids absolutely loved the place. I thought 'How in the world did I get talked into this???' The next morning was the back-breaker. At 7 a.m. over the loud speaker came "Zippety Doo Dah, Zippity A. . . " etc, and a very loud "Good morning campers - time to rise and shine!" I left that morning and went back to work. I told Barbara and the kids that I would be back to get them the next Saturday. Before I was able to leave the camp, however, I had a very difficult time getting my car, as it had been put away for the week. The attendants were dismayed that I was leaving, as apparently no one had ever done so before.
One significant event that occurred after we had settled in, about 10 months after we had moved, was that my parents took their first plane trip and came to visit us. When we had initially purchased our tickets over to England, we had gotten tickets that would go through to Rome. At that time, airlines let you travel one leg of a trip at one time and then gave you up to a year to take the rest of your trip. So, we had traveled the first leg to get to England, but still had airfare paid through to Rome - and a few stops before then - all for the same price as if we had just scheduled the trip to London .
With the kids so young, we left them with our trustworthy housekeeper and went with my parents onto Paris. We toured for about two weeks altogether, flying on to Nice, renting a car and driving along the Mediterranean coast to Pisa and then south to Naples and then to Rome where we spent a few days sightseeing. Along the way we discovered the Italians love to use their automobile horns and as we traveled through narrow winding roads through the mountains, where there was no hope of passing, the hills echoed with the sounds of unhappy Italian drivers.
When we arrived in Naples, it was rush hour and we quickly became lost looking for our hotel. Instead of asking for directions, I had a better idea. I pulled over and had Barbara and my mother hail a taxicab. They told the taxi driver the name of the hotel and he took off with them, winding through side streets and zigzagging his way - with me frantically trying to follow with my father next to me in our rental car. I had a hard time keeping up but we eventually all ended up at the same place.
From Rome, we went on to Madrid, went to a bullfight among other things, and then flew back to London and drove to our home in Bedford. It truly was a memorable vacation. All in all, it was quite an experience for all of us, but especially my parents found it to be a very enjoyable time with many memories that they spoke about to friends and family for the rest of their lives.
Several months later, Barbara was not feeling well. She went to the local doctor and he was not sure what it was but he didn't feel it was anything to be concerned about. He advised her to give it some time and to come back in a month or so if she was still feeling poorly. It did not get better. Eventually, our friends from the Air Force were able to get us an appointment with a doctor on an Air Force base near London. He ran some tests and after the second visit concluded that Barbara, who had never had such symptoms before, was pregnant. On April 5, 1965, Susan was born in the local hospital in Bedford, England. The nurse came out of the delivery room and handed me Susan. I was in my street clothes, the window was open and a stiff breeze was blowing the curtains through the unscreened window. I expressed some concern and the nurse said it was no problem. In fact, most women - except for their first child - had their babies at home with a midwife, not a doctor. Ironically, then, they put Barbara in a 10-bed ward with the baby and wanted her to stay for a week. We checked out two days later as there was no rest for mother in that zoo.
By this time, my job had changed considerably. When I first arrived, my responsibility was to train our people in England how to manufacture our products. I was the expert and had spent my previous months in the U.S. before coming over learning all aspects of production and writing detailed procedures, down to virtually every nut and bolt involved.
When we built our first units it involved using a high-frequency tube, called a klystron, which would be mounted into a machine's cavity and then tightened down with a special wrench. When we turned them on, they ran for awhile, but when they heated up, the klystron broke. It was very embarrassing and it certainly didn't help that the klyston was a specialty item that cost $120 each. We replaced the first one and restarted operations, only to break the second one. We systematically went through all five that we had in stock and my boss was very unhappy over this problem. I spent quite a bit of time on the phone talking to my counterpart in Palo Alto, California trying to figure out why it would work there and not over here. We finally figured out we were doing everything right - it was the box of tubes that was defective. We ordered more and they worked perfectly. That was a big relief. It was embarrassing for me for the first month or so on the job - and I could sense my English coworkers thought I didn't know what I was doing.
Our manufacturing manager at the Bedford facility was an English gentleman, hired from another electronics manufacturing company in the UK. There was a wide difference between the working class that you'd find out on the production floor and the management class. This manager would spend a lot of time in his office and kept separate from his employees. He wore a suit and tie every day, and when he did come down to the production area, he acted very much the proper Englishman. He didn't get along real well with the production workers because of the difference in classes, but also because of a rift between the English and the Scots. This problem among nationalities was subtle to me and I wasn't aware of it at first. After a number of counseling sessions with David Simpson, our managing director, the manufacturing manager decided to resign. David called me into his office to tell me the news and he, much to my surprise, offered me the job. This was a gigantic promotion and a goal I had set for myself several years earlier. I had no idea I would achieve this position so quickly. Of course I jumped at the opportunity, even though it came with the condition that we would have to stay overseas at least one extra year. A company car came with the job as well. I had purchased a Vauxhall estate car (station wagon) for Barbara and now selected a Vauxhall Velox sedan for myself.
Along with the nationalistic issues, there were other political issues that impacted our operations. The UK government had won the previous election by promising to solve the high unemployment rates in many areas across the country. Their platform was to encourage business to locate in these areas and to provide incentives to companies, such as tax relief, bearing the cost of moving key employees, training and low-cost housing for employees. They designated development districts throughout the country where unemployment was greater than 6 percent. Those development areas were the only areas that companies could expand into, unless they had been long established in their area or if they were deemed to be immobile due to their business need. When HP first opened in Bedford, it was allowed there only on a conditional basis. We could lease facilities but we were not allowed to build or lease space beyond the original operations' space. That meant HP wasn't there long before it needed to start scouting for another location. We were a rapidly growing company and the ability for expansion was crucial. Our management team was made up of mostly Englishmen but both our managing director and production manager were Scottish. Not surprisingly, the Scots thought Scotland would be a perfect place to open a new site, and the English thought HP should fight for the right to expand in Bedford - or, if that was not possible, to relocate to one of the development districts in the southwest of England.
The inability to expand in England was very concerning for HP. There was one dinner meeting at David Simpson's house in Bedford where Bill Hewlett came over and we met with the UK Minister of Trade to discuss possible solutions. We explained our operation and what we were trying to accomplish over time as a long-term employer in the UK and how having to relocate would create a major setback in those plans. Hewlett told the trade minister that HP had made a big investment into England and employed more than 200 people there and that HP was prepared to invest much more over time, but that the company might have to make a business decision to move everything to its plant in Germany if it couldn't expand. The answer was quite astonishing. He said, "Do what you have to do."
I had the task of driving the Minister back to London - it was a very quiet drive.
The issue created a political storm within HP Ltd and, as I was the only American in Bedford, and thus neutral to this issue, I was asked to lead site visits to investigate where HP should expand.
I thought this was a great opportunity and was pleased to be asked to play a role in this strategic decision for the company. I took an English manager with me while scouting English sites, and took a Scottish manager with me when visiting Scotland. I then wrote a report describing the pros and cons of each location, and ultimately concluded that Edinburgh, Scotland was the best place for us to go. My decision was primarily based upon Edinburgh having a two good engineering schools where we would have access to engineering graduates, along with an easily accessible international airport close by where we could easily import parts from the U.S. and ship finished products to customers in Europe. There was also a fair number of electronics firms in Scotland so there was a trained workforce available and a good amount of high-tech synergy occurring.
This recommendation caused an up-roar. One of our managers, in charge of R&D, apparently called David Packard and complained that our managing director was ineffective and that if he were in charge he would have ensured that the company need not move. He went on to say that the company either stayed in England or he was quitting. Packard told him "David Simpson is our man at HP Ltd." The manager resigned.
Ultimately, David Packard made the final decision to go to South Queensferry on the northern outskirts of Edinburgh, Scotland and the entire R&D team made it clear they would not move and eventually quit. To them, it would mean moving to another country and 300 miles was too far to go.
By early 1965, work started to move forward on launching in Scotland and, in the meantime, I had been enjoying my promotion in Bedford, recognizing that it would be phased out over time. David asked me to stay on to manage the manufacturing effort as well as the start-up activity in Scotland. Of course, that meant staying at least an additional year making my tour four years. I readily accepted. The tasks of working with two opposing viewpoints in the relocation issue, the new start-up in Scotland and the phase out in Bedford were an exceptional challenge. There were many different points of view as well as different personalities from different cultures.
One thing that really helped me was a management course I had taken at HP shortly before I departed for England. It dealt with how to identify different personalities/styles (including your own), to recognize these styles and to adapt to each of them by expanding your adaptability or flexibility index. This would help me adapt to the style and needs of each person, enabling me to manage a diverse team of people effectively. The four styles are: driver, analytical, amiable and expressive. Each person lines up somewhere in this matrix. I spent a lot of time based on the course content figuring out the styles of each of the people on the various teams I was managing through these activities. That's me (the X) in the following matrix. Knowing that I am in the driver quadrant (and more specifically an analytical driver - the analytical quadrant within the driver quadrant) and knowing where my people are, helped me a lot in assessing their strengths and weaknesses and understanding their needs - all of which helped me manage the teams more effectively. I found this to be a great tool - but not a panacea. It is interesting that I have used this extensively throughout my career (although somewhat unconsciously), but never really applied it to my home life.
We began to hire a number of people in Scotland to back fill for those who chose not to move as well as for the expansion we needed to meet increasing customer needs. One of our first hires was Mike Farrell. Mike had been working for Hughes semiconductors in Scotland as their facilities manager and he was exactly what we needed to manage the construction, move and ongoing facilities requirements for us in Scotland. Mike was an excellent addition to our staff and also he and his wife Sylvia became close friends as well.
In mid 1965 we were entitled to a paid two-week home leave as part of HP's foreign assignment policy. We visited the Grandparents in Colorado and went on to California to visit friends and neighbors.
Our move from England to Scotland was a much easier transition than our move from the U.S. Part of the ease came with HP's offer to build us a brand new house in Scotland, and we selected and purchased all new furniture for that house as well. The company would own the house and we would pay a nominal rent. That was a very nice perk. We got to work with the architect, and plan its layout as well. It was about 3,500 square feet and quite large for a house in Scotland and we were very happy with it. We chose a lot in a new town, called Dalgety Bay. It was located on the north side of the Firth of Forth near the water with a great view of the lights of Edinburgh across the Forth. The kids went to a public school in Kircady, Scotland, which was just a few miles away.
For six months, however, while the new HP facility was being completed, I would go back and forth between Bedford and Scotland. I would drive up the 300-mile trip up on Sunday after dinner and then return home Friday afternoon.
In Scotland, we were also able to get three different au pair girls, each for a three-month period. The first and third were French - Monique from Lyon and Ailiene from Paris. The second was Danielle from Denmark. They would help in taking care of the kids and doing light housework as well as attend school to improve their English language skills. It was nice because they taught the kids to speak French, and it gave these 18-19-year-old girls a chance to improve their English. The kids really bonded with the girls, and Mike actually went to live in Paris with one of the girls' families for four months as we returned to the U.S. He flew home alone from Paris to San Francisco.
Barbara and I had a chance for more socializing in Scotland and the Scots certainly did like to socialize and have fun. We joined a little golf club and there were a number of people that we socialized with. (the Farrells, Jim and Judy Farren, Alan and Morag Grant to mention a few). We worked hard and we played hard. There were a lot of sing-a-longs - can you imagine me singing in public? One of my favorite songs was "Black Bird" and I still remember all the words. I've included it at the end of this chapter.
One of the memorable trips I took in Scotland while site hunting allowed me the opportunity to play golf at St. Andrew's in the County of Fife. The first and eighteenth holes are parallel, running in opposite directions to each another. From the first tee I was hitting into a ferocious wind. I took a mighty swing and heeled it over near the eighteenth green. My caddie, made as to hand me my putter, saying "Make tha' poot an you'll be roun' in two." Of course, I played the normal course and ended with a somewhat higher score than that.
HP had a lot more employees in Scotland than in England. HP's European sales force was making more inroads to companies that wanted our products and not surprisingly that resulted in more UK and European sales, which led to more growth in the manufacturing arena. We also started more internal manufacturing processes so as to reduce the number of parts being imported from the HP facilities in the U.S. HP was still selling mostly to other engineering companies and to engineers who had a need to use test equipment. A small percentage of our products went to the military.
One thing I find ironic about my experience in Scotland is that we implemented a four and a half day work week there - four 9-hour days and one 4-hour day. You'd think that would go over very well with people but it was very unpopular with our German staff members. They complained so bitterly about the new schedule, in fact, that it eventually was changed back to more traditional hours. The irony is that HP became known as one of the first companies to offer flex hours and alternative hours to employees, and its facility in Germany was the place that it was first implemented. I think the timing in Scotland was just against us - even though World War II had been over for awhile, the English, German and Scots were still very much fighting the war and didn't get along well. That may have played a role.
In early 1967 I purchased, for export, a new left-hand drive MGB-GT from the dealer in London. It was a great little car and at a very reasonable price as the 25 percent purchase tax was waived if the car was exported within six months of purchase. As HP was willing to pay for the shipping home it was a very good deal and would be a nice car for work when we got back to the U.S. Several months before we returned to the U.S., Barbara and I took a road trip through Europe in the MG. We went to The Hague, Amsterdam, Brussels, down the Rhine in Germany to Baden Baden, Lake Constance, Salzberg and into Venice. From there we went to Lubljanna, Yugoslavia, where my grandmother was born and raised, back to Munich and to Copenhagen where we hoisted the MG on a boat and sailed to Leith, Scotland, where we disembarked and drove back to Dalgety Bay - all in two weeks.
The sixties had been quite a decade so far. President Kennedy was assassinated. The U.S. had won the space race to the moon over the Russians. The Vietnam War began in 1965 and the civil rights movement was beginning to make major changes in our society. The Beatles had taken the music world by storm and there was a general feeling, especially amongst the younger people, that peace and love were the new way of thinking and living. The hippie generation had begun - "Make love, not war" and "Flower Power" were the "in" slogans - pot and love-ins were the way to go. It was a decade of no responsibilities and no cares. This created quite a change in the philosophy of life in many young people and there was basically a rebellion against all areas of established society.
It was in this time of change, in mid-1967, that I had finished my two years in Scotland and was given my choice of manufacturing manager jobs in either Colorado Springs or Mountain View, Calif.
Colorado Springs had great appeal since it was near home for both Barbara and me. The Oscilloscope division was based there. The Mountain View division, in contrast, was home to a company that HP had acquired and they focused on making magnetic tape drives that could store data for the new mini computer line that HP had acquired in 1966. This seemed to me to have a potentially brighter future so I ended up opting for Mountain View.
In 1967, we began the process of packing up our lives again and moving back to California to start our next chapter.
|HP Bedford, about 1965
Photo Courtesy of the Hewlett Packard Company
| First sod of HP South Queensferry on May 1965, by Bill Hewlett on the Caterpillar
Photo Courtesy of the Hewlett Packard Company
|The HP South Queensferry Factory Building in 1966
Photo Courtesy of the Hewlett Packard Company
|Playing golf (against wind) in Scotland|
In 1967, I started as manufacturing manager at HP's new Mountain View, California facility - heading into an unexpectedly hostile environment. My management skills had to work double time during this period, and I believe this experience helped solidify my management style.
I arrived on the scene just three months after HP had purchased a small company called Datamec, which made magnetic tape drives. HP had gotten into the mini computer business in 1966, believing that it made sense because it would connect a lot of the test equipment they made. These mini computers could be used to quickly manipulate large amounts of data generated by the test equipment. In those days, HP saw mini computers as enabling technology for their main product line of test and measurement equipment, and not as a business computer.
While they were called "mini computers," these early machines had large bodies with small brains, with just 4K of magnetic core memory expandable to 32K, and costing up to $50,000. But unlike other computers of the day, these were the first "go-anywhere, do-anything" computers, and they were built to withstand rugged environments such as sea-going vessels.
As the company learned more about the mini computer and what it took to bring these instruments together, they needed similar products - like printers to print information and tape drives to store information. Initially, they were going to buy these products from other manufacturers, but when Datamec became available, HP saw an opportunity to bring tape drives into the fold of our product portfolio.
By the time I arrived, a division manager from HP had just taken over and a lot of the top Datamec managers were gone. The employees missed their former managers and had the perception they had been tossed out. The fact was that many of the former managers had received tidy buyout packages and were quite happy with the situation, but their employees didn't know that. HP had not done a good job in defining exactly what the roles of the remaining Datamec employees were going to be so people were frightened that they might also lose their jobs. They were used to a small environment and now they were one part of a much larger company. HP's growth continued to accelerate. Remember that when I started as a student just 10 years earlier, there were just 1,600 people in the company. Now, in 1967, there were more than 12,000 employees and we were a global company.
On top of all this, their former manufacturing manager - the person I was replacing - had just been diagnosed with terminal cancer, escalating the emotions of the situation. I walked into a fairly hostile environment. I felt I needed to focus on trying to win over the people and try to make them feel more comfortable about being a part of HP. I spent a good amount of time trying to reassure them, telling them that their jobs were valuable to the company and that HP didn't buy the company with the intent to fire everyone. Then it dawned on me one day something that Dave Packard had said a long time before: "Managers often waste a lot of time trying to solve a problem that isn't a problem at all - but merely a fact. A fact can not be solved." He went on to say, "You can solve a problem, not a fact, and it's important to know the difference."
That changed how I dealt with the Datamec people. I told them "The fact is HP bought your company. The problem is how to make it work and how to make this division successful." That seemed to help. That lesson really stuck with me over the years, and helped me in confronting future problems as well and not dwell on trying to define a fact as a problem.
The other thing I did was a lot of management by wandering around. I would get out of my office and chit chat with people on their territory and make people feel comfortable talking about their personal lives, not just the problems of the company. This was something that had worked well for me when I had moved with the company from England to Scotland and had to deal with a lot of employee apprehensions and the anxieties of new people joining the company. By necessity, I had to engage more of the human side of myself as a manager - and dealing with these issues made me a stronger, more compassionate manager, and helped build morale and teamwork. Understanding that this was required all seemed logical to me although I never felt comfortable about going out and making idle chatter. I had to make myself set aside a certain amount of time to go out and do that. And it had to be with no other mission that to talk about how people were doing, how their families were doing, when the baby was due, etc. This was a difficult task for a 'driver' type like me.
I implemented a division-wide "coffee talk" every Friday. We talked about business, but also about people's birthdays and who was getting married and other things of interest. Later, I took this same idea with me to Boise and actually had a platform on wheels made that we would roll into the production area so everyone could gather around. It was a much bigger operation in Boise, with production taking place in several buildings on a campus, but we would have everyone gather together in one place. I always made sure all my managers were involved too; each had to bring something to the meeting to talk about. It took some work, but it was worthwhile as long as the information was meaningful to the employees.
Over time in Mountain View, that type of management reaped rewards. If people always see the boss in terms of business, they wonder what they did wrong when he comes around. It seemed to me that having this balance led people to ask questions about the business and to care more about where they worked.
The technical side was really much easier for me to deal with. Even though this was a facility where we were making new products for a whole new business area related to mini computers, the basic techniques in procuring materials and building a product were similar. I had to learn the new markets and who the customers were, and these were also mostly customized products, with customers wanting specific functionality and even special colors to match their system. But overall I found going to Mountain View to be a very easy transition.
Our division was a bit of an anomaly at HP. The company had to this date always functioned by designing and developing its own products and owning the technology. Now we were starting to acquire companies and their technologies. We would then improve on their designs with next generation products using the profits from their products to fund the new designs. The whole arena of mini computers was new to the company and I guess we were looked on as a little funny. We also weren't as profitable a division as the traditional test and measurement divisions which posed another fundamental problem for the company.
One day a buyer in our purchasing department told me that his wife who worked as a teller for a local bank recognized another buyer from the division in her line at the bank. She had not really met him before but she had seen him at a company function. She went on to say how he deposited a check from our division that was made out to a company. Upon investigation I discovered this buyer had set up a fake company, was issuing purchase orders for parts, showing the parts had been received and put in stock, and then issuing them out over time. I called in the local police and went through the details with a detective. We then confronted the buyer and he denied everything. After extensive questioning and continued denials he produced records for us that he had kept in his desk drawer. Ironically the records solidified the accusations and actually proved him guilty. It was a strange experience and got even stranger when it came out that he was secretly dating my secretary who thought he was divorced and planned to marry her. He was convicted and sent to prison and my secretary eventually married someone else who really was single.
The philosophy at HP as it grew was that each individual division was operated like its own business, with its own business plan. Each was responsible for its own profitability. We had to figure out how to grow our division's business. We added engineers to our R&D team and designed a new version of the magnetic tape drives and HP's first disk drive. The first product was a state of the art disk drive. It had only 5 megabytes of storage and used a 16 inches diameter magnetic media disk. The whole package with electronics was larger than a home computer is today. And this wasn't for home or business. These disk drives were strictly used for storing the data gathered in bringing together test instruments and making measurements with the tape drives being used for storage backup applications.
The new tape drive family, model 7970A, played an important role in the next 20 years of my future. That product family was the mainstay revenue generator for the division in the late '60s and early '70s. Several years after the disk drive was invented major improvements in reducing size, lowering cost and increasing storage capacity led many to believe the disk drive would replace the magnetic tape drives as a backup device. This resulted in a reduction in R&D investment in tape drives and an increased investment in disk drives as the industry moved to disk to disk backup. As this occurred, the tape drive family was destined to becoming obsolete. However, with little R&D investment it became a cash cow that I took with me later to Boise, then to England and later to Colorado. I used that cash cow to fund the development of other technologies for the company. It was interesting that I was able to hold onto that product as I moved because divisions were always looked at for how much profit they contributed to the company. I continued to hang onto a product that was almost obsolete, but little R&D investment was needed to go back into it - it was all profit, and very profitable. The truth of the matter was that I did not believe disk to disk backup would ever become the industry standard simply because of the high reliability of tape as a backup and that people are very weary of changing something that works very well. This proved to be true.
In the late '60s and into the early '70s, our traditional instrumentation business was doing very well. The company had expanded also in the early '60s into some other areas, such as medical electronics (like EKG machines) and gas chromatographs (which analyze unknown materials). HP bought out sales representatives companies throughout the world as well. By 1967, HP ended the year at $242 million in revenue and had a little over 12,000 employees.
This rapid growth and expansion was good for me. A very nice HP benefit was stock options for key employees and managers especially as the HP stock kept going up - so there was a lot of excitement among employees about the growth. Stock options are a device that became very popular in high tech companies in the early '60s. They were used a lot by new companies to attract people when the company was not making any money and the stock had little or no value. An employee would be given an option to purchase stock in the future (i.e. 5 years) at today's price. That way, if the stock went up over time, the employee could buy it and sell it making a nice profit. HP has used stock options as a key employee retention benefit since the company went public in 1956. The stock has continued to grow over the years and, as an example, $100 invested in 1970 would be worth $15,184 today. As the company continued to grow and expand into new markets, it was recognized more and more as a real force in the technology field.
In 1965, the company also started HP Laboratories as the advanced R&D arm of the company. Barney Oliver, who had been VP of R&D over the years, was given the responsibility of managing it. All divisions contributed 1 percent of sales revenue to fund it, and HP Labs hired the smartest engineers and physicists in the world. They would work on state-of-the-art technologies that would be sent back to the various divisions for incorporation into new product designs. That became a real factor when we later developed the LaserJet printer in the '70s.
In 1968, HP introduced a desktop scientific calculator that was 10 times faster than most machines at solving scientific and engineering problems. It was advertised as a "personal computer," the first ever device so named.
In the midst of all these changes, growth and development, Dave Packard was requested by President Nixon to be U.S. Deputy Secretary of Defense. He resigned from HP and Bill Hewlett served as HP's CEO during Packard's term of service from 1969-71. I personally didn't notice much of a change at the company, but I think it made a difference to the company. Management lost sight of the basic principles Dave had supported over the years. Bill was more of the scientific engineering type and not as much into business fundamentals. During the time Dave was gone, we had spent a lot of money on various projects and the company was faced with potentially needing to borrow money for the first time in its history. When Dave returned he was concerned that we were going to borrow money. Growing up during the Depression years, Dave felt we needed to finance our own growth. He went around to all the divisions and talked to all the managers. I remember he gave a speech where he said "Some of you may be miscast in your role as managers." That got everyone's attention. The managers got the company back on track and we did not need to borrow that money and the company has never done so.
Some people have said that the "HP Way" promotes soft and fuzzy business practices, and it's true they wouldn't fire people on the spot. But there was never a doubt in my mind during my career that they had high expectations and held people accountable - at least that was very true during the time that Bill and Dave ran the company.
On the home front, we were happily in a new neighborhood that our previous neighbors and friends in California, Maryann and Terry Short, had helped us find. We had kids in the same age range as their kids and before we had left for England, they all played together. We had kept in touch with Maryann and Terry while we were gone and our house in the old neighborhood was rented out. While we were still in Scotland preparing to return, they told us that they were buying a new house and that we should consider buying there as well. They sent the information to us in Scotland and we looked at the plans and plats where the lots were and we ended up picking a lot that backed up to their house. We told them to put our name down on that lot and sent a deposit to secure it. When we got back, we went to look at the lot in person and signed all the papers. When the house was built and we put our fences in, we installed a gate between our two yards so the kids could go back and forth.
Upon returning from Scotland, our old house sold quickly. There was significant growth in the San Francisco Bay Area and prices were escalating rapidly. It sold for around $30,000, which was quite a nice profit for the five years since we bought it for $17,200.
Before we had left for England, I had talked to a stockbroker regarding managing my HP stock. One day he told me about an investment opportunity in a brand new company that made high quality audio tapes - so I invested several thousand dollars. The company was called Memorex and it ended up doing very well. By the time we moved back to California, my investment was worth about $10,000 so I sold it and put a swimming pool in our new backyard. We thoroughly enjoyed our yard and continued to add to it. I had a shuffleboard slab put in and tetherball area. I built a fire pit and a redwood deck with an open roof cover. Our yard became popular for the neighborhood kids and we enjoyed having people there. We spent a lot of time there and it was a great yard for our kids, who were ages 10, 8, 6, and 3 when we came back from Scotland.
One interesting thing about the kids was they developed mobile accents with all the moving we did while they were little. They were amazing because while we were in England they talked just like the Brits. When we moved to Scotland, they talked like the kids in Scotland within a matter of days. When we returned to the U.S. for home leave for two weeks in 1965, they dropped their accents and spoke like Americans again - and then picked up their accents when we returned. It was amazing how quickly they adapted. Probably from peer pressure from kids that thought they sounded funny.
I had shipped the MGB-GT I had purchased in London back to California, intending to use it for going to work. When I arrived, I was informed a company car came with my position and was given a new Chevrolet. As the MG was a little small for Barbara and the kids, shortly after our arrival we purchased a new Plymouth station wagon and sold the MG.
In 1969 our division manager at Mountain View was retiring and I was sure I was the likely person to succeed him. I was very disappointed when they gave the job to a guy from corporate HP, someone I had known for a long time. I really had assumed the promotion was mine and being passed over shook me up quite a bit and worried me as well. Had I gone as far as I would go with HP? It turned out that by not being promoted at that time that I would go on to launch HP's most profitable business ever, but at the time I wondered if it just was a signal that it was time to leave the company.
So that's the first time I started to explore my options elsewhere. I had been introduced to a guy named Gene Kleiner, who had retired from Fairchild Semiconductor Company after a very successful career and started Kleiner Perkins, a Venture Capital firm with Tom Perkins, one of the leaders in HP's early computer development. Kleiner Perkins would become one of the best-known names in venture capital in the Silicon Valley, with investments in an impressive portfolio of big names from Sun Microsystems, Tandem Computers, and Amazon.com to Google, Netscape, Genentech and many others.
I met with Gene about a little company they were looking for someone to run. They had a product that would take copies off a copy machine and multiple drill and bind it all together, creating an inexpensive way to put things into a book form. At the time, this was a revolutionary device. I thought about the potential of all this, but felt it had a limited market opportunity. I quickly decided to stay with HP.
This wouldn't be the last time I was tempted to look at other options outside HP. Over the years, I would have several intriguing offers - and the temptation to try something else was often considerable.
Loyalty was certainly one reason I stayed with HP, but it was also the fact that I always had dynamic jobs. Although HP was a big company now and politics were becoming more pervasive, it seemed that every job I took was like starting at a new company - with that excitement of doing something new and being part of something different - without having to learn the intricacies of being at a new company. Never a dull moment - so to speak!
I certainly never regretted staying with HP, and as I entered the early '70s with the company, I was poised for some incredible opportunities. The biggest part of my career growth was still ahead, along with the opportunity to play a key role in HP's historical launch of its printer division.
|Early Computer Room, by 1968|
| I'm receiving an engraved pen set from employees at the HP Mountain View Division
as I was leaving for Boise in 1973
One day, probably in September or October of 1972, Bill Abbott, my boss in Mountain View, asked if I was free for lunch one day that week. We agreed on a day and headed off to a restaurant in Sunnyvale, Calif. called The Velvet Turtle. There at the restaurant to meet us was my boss's boss, Bill Terry, who was the executive vice president responsible for the entire computer business at HP, and Bill Hewlett.
By then, I had been in my manufacturing manager position in Mountain View for five years. I had recovered (mostly) from being passed over for an expected promotion a couple of years earlier and had convinced myself that I still had a promising future ahead at HP.
I had no idea that this day would set into motion a major new division at HP.
Earlier that year, HP expanded into business computing, introducing its first general-purpose minicomputer, which introduced the era of distributed data processing. This served high-technology engineering and research needs and at the same time handling day-to-day administrative data processing operations. Distributing data processing was not a popular concept as it threatened the power of data processing management, who had always kept close control of all data processing operations in secured "glass houses" (areas that were secured typically in temperature controlled rooms with limited access to personnel).
Our lunch on this particular day started with a discussion about how the company needed to provide all of the peripherals necessary to go with our mini computer into the future. As a technology company, HP had over the years typically designed all of the products in their own portfolio to ensure a high level of quality and state-of-the-art technology. Currently, we had HP-designed tape drives and disk drives, but we were buying printers from several companies that required modifications and extensive testing. Additionally, we were having a significant number of quality and reliability problems with these products.
Bill Hewlett said, "We'd like to get into the printer business ourselves and we'd like you, Ray, to help us get there."
My boss added that they felt really positive about my potential to accomplish this. I asked, "Can you give me some idea about how to do this?" They offered a few suggestions, such as buying a company, perhaps doing some R&D work on our own, but they had very little to offer me in the way of advice or direction. I was a little shocked, but thought this is a wonderful opportunity and challenge.
The one thing Bill Hewlett was clear about, however, is that HP didn't want it to happen in California. "We have enough going on in California that we're going to grow and we don't want all our eggs in one state basket," he said. "There are a lot of other great places to be. We've grown our two locations in Colorado to be successful and we've purchased companies back East. I think we should not add this activity to our California or Colorado operations."
Bill Hewlett said that over time we want to design and manufacture this equipment. "Would you be interested?" he asked. And I said "Oh yeah."
Not only was I charged with getting HP into the printer business, I also needed to find a new place for us to do business and create this new division literally from the ground up. It would also mean moving my family again. There were many places to consider so the first task was to narrow the geography. My boss and I agreed that the new location should be no more than two hours by direct air travel away from the Bay Area because our major customer would be HP and our computer business was located in Cupertino, Calif. We looked at direct flights out of San Francisco 's airport that were within that two-hour limit and were outside of California . We came up with 11 cities: in Arizona, New Mexico, Wyoming, Nevada, Utah, Idaho, Washington and Oregon.
Then I went home with this great news. It was not well received. Of course, no one wanted to move. The kids at this time were all school aged - 7, 10, 12, and 14 - and we had been in one place for the past five years, a long time for kids. To this day, with my kids now adults with kids of their own, they still remember the feelings of that time and being adamantly against the move. But with my convincing manner of "You are moving, get used to the idea," they sort of accepted the concept begrudgingly.
At that time, they immediately said they would not like moving to Arizona or New Mexico. When I asked why, they just said "Because, we just don't want to." Even though there was no rationality behind that, their words had an impact on me in that I focused the search first on three northwest cities: Boise, Idaho; Spokane, Wash.; and Corvallis, Ore.
There were four of us from HP that would be on the site selection crew. Barbara and the wife of one of the other guys also joined us as we toured those three cities. HP had a list of criteria for site selection. It didn't involve anything too special. It included such things as: a place with affordable housing for our employees, a diversity of population in terms of ethnicity and religion, low crime and quality of life, etc - about 20 or so items. Of course, we found that every place we went, locals said they had all of those qualities and they truly believed they did.
The first place we went, in February 1973, was Boise. Right away, it felt like home to me. In fact, it even looked a lot like my hometown (Pueblo) in Colorado. We spent two to three days in Boise, meeting with the governor, mayor and various business people. I made a presentation about HP, what we wanted to do and what we were looking for. Governor Cecil Andrus immediately said, "Sounds good to me. Let's do it." It was a very positive visit and everyone was very supportive. Then we went on for similar visits in Spokane and Corvallis.
I went back to Palo Alto and told my boss, who was now Bill Terry, that we could continue our site selection tour of the remaining eight cities, but I didn't see the point. I told him that any of the places would likely work. I said I would rather spend our time and money pursuing one place until it proved itself to be the wrong choice, rather than spending time and money looking at all the options. I thought this would be much more cost effective and time effective. Bill's response was "Why not?"
I then talked to my kids again, this time to sell them on Boise specifically. That's where I wanted to go and the reality is that HP could have located its printer division in any one of the three cities we initially toured. In fact, over time, HP ended up developing facilities in all three of those initial cities. I told my kids that Idaho had lots of advantages - like you can get your drivers license at age 14, ski passes were inexpensive, and we could join a country club for $900. I basically bribed the kids into agreeing it was a good idea. I didn't tell anyone at the time what the truth was about how we site selected Boise - it seemed such a dumb reason. But in reality, I believe that the decision-maker's affinity for a specific place plays a large part in any site selection when there is no specific business reason (i.e. natural resources, customer proximity, etc.). From a personal point of view, though, it seemed like a nice move for our family. The climate was not very extreme and it was a nice, affordable place. I liked the people and the amenities it had to offer. The only thing Boise didn't have at the time was an engineering school, but HP had already established an arrangement with Stanford for engineers in remote locations to take courses via a closed TV circuit. University of Idaho in Moscow, where there was an engineering school, said they'd be willing to do the same thing.
So Boise it was. We had taken our site exploration trip there in February and by May 1, 1973 had made the decision. I had a tremendous amount of freedom in my decision-making powers. In the middle of all this my boss, Bill Terry, had moved to a different position in the company and my new boss was Paul Ely. He was someone I had worked with way back before my England days when I was in the Microwave Division. Paul assumed his new job while we were in a panic as a company because the HP 3000 computer was having a tremendous amount of problems in the field and he was embroiled in figuring all this out. When it came to my project, he said, "Ray, I'm not sure what you're doing or why you're doing it, but I trust you to do it." After that, I was pretty much on my own as long as I kept Paul informed.
I started going regularly to Boise once the decision was made, with the first task to look for a site as well as temporary quarters that we could occupy while our first building was built. That was a big problem because Boise in the early '70s was a small city and there were no acceptable sites, just some warehousing areas next to the railroad tracks or sites near the airport which were not conducive to high tech facilities. With our other facilities, we had been able to get what we called 'residentially compatible business zoning.' No such thing existed in Boise but there was also nothing like what we intended to build, either.
Prior to announcing our decision to come to Boise I continued to look for a suitable site. We were being hosted by Idaho Power and Intermountain Gas and we were sitting in the lobby of the Rodeway Inn (now the Doubletree Riverside). I told our hosts that we had found a great site on a hill and were told "Oh, that's farmland." I asked, "Well can we get a Realtor over here and see who owns that land?" So, a Realtor was called to meet with us. We didn't say who we were or where we were from. We just pointed to a map and said "We'd like to buy this land." He told us he knew the owner and that he wouldn't sell since he had plans to someday develop it himself into home sites. We told him that we wanted to buy 100 acres and we wanted him to talk to the owner. He reluctantly said "OK, when can I get back to you?" I said, "We'll be right here." "You want me to go right now?" he asked, and I said, "Yes, right now." He took off and came back a few hours later, saying the owner would sell but he was embarrassed to tell us how much the owner wanted for his land.
Land in that area at the time was selling for about $1,000 to $1,200 an acre; this guy was asking for $6,000 an acre. After a few other meetings, I left town and I got someone from corporate to follow up on negotiations. We ultimately agreed to pay $4,200 an acre for 100 acres. Over succeeding years, we purchased for HP another adjacent 200 acres for an average price of about $8,000 an acre. Today, in 2008, it is worth about $350,000 an acre --- a tidy profit.
Before we could move forward though with plans for the site, there were some homeowners I needed to deal with personally. One couple had lived in their home for years and we needed to take over their property and reroute their road. They said they weren't moving. So I said how about if we build you another road to your house from another direction, and we'll also buy your house and let you live in it free for the rest of your lives. We'll also let you farm the property and graze the land at no cost. The guy said "Sounds like a good idea."
The other two houses on the property were fairly new so we offered to buy them at market appraisal and then we would give the houses back to them and pay for the houses to be moved to wherever they wanted. That all went very smoothly as well.
Another issue was getting the land zoned properly for our use. We wanted the site to be residentially compatible so that employees could live nearby. At the same time we wanted to be virtually invisible by using berms and other landscaping techniques around the site to screen buildings and parking lots with low illumination lighting and other amenities. There was no such ordinance at that time so after I explained what we needed I suggested I write a rough draft for them to consider. They agreed and a short time later the city created a T-1 zoning ordinance for which we applied and were granted. We were annexed into the city of Boise in 1975 which we had also requested, as it was our policy to pay our fair share.
Not everyone wanted HP to move in and some people wrote letters to the editor. Some didn't want a big corporation buying up and changing the countryside. I read the letters in the newspaper and called up every single person who expressed a concern and would invite them to come for a visit to talk about their concerns. That would also give me a chance to explain what we were doing. I couldn't make everyone happy, but 99 percent of those who took the time to come in and talk, went away satisfied that we were doing something positive in providing jobs and stimulating economic growth.
While all this was going on, my main job was to get HP's printer business moving. Back in Palo Alto, my boss, Paul Ely, was contacted by a man who owned Tally, a company in Kent, Wash., that was making a dot matrix impact printer and he was about to go out of business. Paul set up a meeting with him and called me to talk to this guy too. The owner basically wanted HP to show a commitment to purchase some of his printers so that he could demonstrate to the bank that he was still liquid. I asked a couple of engineers who had already expressed an interest in moving to Boise to evaluate the printer. It had a number of performance and reliability problems, but the engineers felt we could improve the design to meet customer requirements. The agreement we eventually hammered out was that HP would purchase 200 of his printers over the next couple of years - and in return, he would give HP the manufacturing rights to make it ourselves. This was a fantastic opportunity to leverage ourselves into the printer business. We needed to learn how to make that printer and transcribe its documentation into HP nomenclature. We sent one of our engineers, Wayne Stewart, to Kent to learn how to manufacture that printer and he also put together what we called a "know-how book" that would describe the product in HP nomenclature.
Things were moving along. We had our site selected and land purchased, and we had a product to manufacture. That took care of our mid-term; now we needed to take care of our short-term issues and set up our long-term goals. Short-term, we needed immediate office space so that we would have a place in Boise to do paperwork for all this activity. We arranged to lease the Eastman Building in downtown Boise, but we did so with the understanding that we only could occupy the space for three months since the building was due for demolition.
I mention this only because it's an infamous Boise story. HP ended up being the last occupant of that site in 1973. The building was going to be demolished as part of a redevelopment plan for the downtown area in 1973. For a myriad of reasons, that didn't happen. The building didn't get torn down until sometime in the '80s, when a fire mostly destroyed it. After that, the site remained a dirt lot and a few developers took unsuccessful stabs at developing that site. Today, in 2008, it still is a hole in the ground. At one point in time, in 1998 I believe, Candy and I put a deposit on one of the penthouses that was to be built in the tower. But five years later the developer, who only did a small amount of work on the foundation, finally gave up as he could not arrange the financing. It was kind of ironic that we were going to end up back on the Eastman Building site after all of those years. But it was not to be, and our deposit was returned.
During our three months in the Eastman Building, we worked on preparing to start manufacturing in November. We found a 30,000-square-foot warehouse to rent on Phillippi Street, between Emerald and Franklin roads, by the railroad tracks. We began preparing it for manufacturing, adding restrooms, lighting, heating, air conditioning, additional power, wiring and a computer room. We tried to keep it spartan, spending the minimal amount of money, but enough to start producing several transferred products from California that were nearly obsolete but would be good products on which to train our locally hired new employees. Those other products, including the 7970 tape drive, were the cash cow products for our division for quite some time and I used those to develop the printer business until it could stand on its own. That first dot matrix impact printer printed at 200 lines a minute. Our goal was to start with that, build our own R&D team and make better generations of printers.
Originally, I had selected 10 other people, mostly engineers, to come to Boise with me. We all arrived in Boise with our families in early September of 1973, just seven months after my first visit to Boise back in February. When we moved to Boise in September 1973, the kids were still very apprehensive about having to move, go to new schools and make new friends. We decided to go back to California over the Thanksgiving vacation. The kids quickly realized that their friends and they had moved on and now their interests and friends were different. They were anxious to get back to Boise. On the way back we encountered a winter storm in northern Nevada and we hit black ice and had a harrowing spinout. The car seemed to be out of control for a very long time, spinning down into the barrow pit; back onto the road and down again. Fortunately, we came through it unscathed and everyone was happy to be safely back in Boise.
Our first hire in Boise was a facilities engineer, Jerry Hill. Neither personal computers nor email had been invented yet so we needed to hire a secretary for correspondence and other office activities. Our second hire was a secretary - Candy Fitzpatrick. Candy had worked for HP in Santa Clara, Calif. and in the HP sales office in Denver while her husband was getting his masters and doctorate degrees at Universities of Santa Clara and Colorado. He had just been hired onto the Boise State University faculty a few months earlier.
In those days while each production line, which was staffed primarily by women, had a supervisor, it was customary to have a senior woman who trained the production women in proper soldering techniques and generally looked after them. To fill that role we hired Kay Fisher who had worked for HP in Mountain View and who was already living in Idaho for the past year or so.
There were large numbers of people in HP lined up to apply to come to Boise, many because they wanted to leave California and many who wanted to live in a smaller area in the northwest. Our engineers started working on our own design for a dot matrix printer right away. As we needed more people, we tried to hire locally and in the spring of 1974, we started recruiting new graduate engineers. Our engineering team began by studying the mechanism of the Tally machine we were already manufacturing and reengineered part of it including the electronics. Since we wouldn't be ready to move into our new buildings until January 1976, we introduced our own 200-line per minute printer in 1974 while still in our rented warehouse space in that nondescript area of industrial Boise. We continued our R&D projects and subsequently over the next few years came out with faster products that eventually went up to 1,500-lines per minute. All of the basic core technology came from that original printer we assumed manufacturing rights for from that Kent, Wash. company that was floundering.
All of this was a difficult process. There was no instant success. In fact, even backing dot matrix technology wasn't seen as terribly smart, and we had difficulty selling them to our existing customers. Dot matrix worked by imprinting a number of tiny dots that would make up each character or number, and in the early days it was often hard to read. Dot matrix was much less expensive than full font printing, the more common printing technology of the time. It was difficult to get acceptance in the market until our engineers came up with a solution to improve the print quality. We invented "half-dot shifts," which basically meant that you would get double the density of dots, leading to a very good clarity. That change came in early 1975 and started the shift toward acceptance among our customers.
There were still those who said that dot matrix would never catch on, but we gained ground little by little. It was neither an evolutionary nor a revolutionary device - and was very slow to get acceptance. But like most engineers, we knew we were going to solve the problem, it was just a matter of time. In the meantime, we kept a low profile in the company. Our division was showing a profit - just not from our printers yet, and I think being away from Palo Alto and corporate headquarters we were left alone for the most part.
That doesn't mean Bill Hewlett and Dave Packard didn't know what was going on with their new printer division in Boise. Being technical people, they had a great appreciation for technology and weren't afraid of new stuff. As long as we had a vision for where we were going, they were ok with how we were doing. They weren't expecting an overnight success. We would have meetings and Barney Oliver, one of the foremost engineers in the electronics field and who ran HP Labs, would quiz our engineers quite a bit. It was my perception that they always left feeling we were on the right track.
The division grew steadily over the early years. By the end of 1975, we were at 300 employees. We had created a number of management positions which we tried to fill from within for the most part. We instituted a policy of posting all job openings so that every employee had a chance to apply. This policy came about early on after our marketing manager appointed his secretary to head up the order processing department. Candy came to see me expressing her concern about not being interviewed for the position, considering she had previous experience in order processing at HP. We had inappropriately overlooked her as a candidate. After that, we used the job posting approach for virtually every opening. I used that policy in all my future management roles.
In 1974, my boss Paul Ely informed me he had recommended me and I had been selected to attend the Stanford School of Business Executive Program in California. It was a full time six-week program each summer. There were 180 executives from companies around the world. We were divided into three groups of 60 each. Each participant was part of a new 10-man team each week (there were no women in the class then) so that over the six-week period I worked with everyone in my group. We stayed in a dorm on campus. Each day we attended class in the mornings and did assignments in the afternoon. We met each night after dinner and discussed the business cases that had been assigned. It was a rigorous compact program taught by the most renowned faculty members from Stanford and other distinguished institutions. I met a lot of interesting people and learned a lot about a wide range of different businesses, their issues and successes. Back in Boise the division carried on and when I returned my management team had a party for me, presenting me with a sombrero and a serape along with a proclamation stating that I had earned my Mexican MBA (which is what the program is frequently referred to).
Later that year, on Nov. 19, 1974 to be exact, our entire family drove to Colorado for my parents' 50 th wedding anniversary. My brother and sister and their respective families all went as well. It was a great celebration with family and friends. Mom and dad were very pleased and as excited as I can ever remember. It was the first time the entire family, complete with grandchildren, were all together. Unfortunately, it was also the last.
During the '70s the country went through a number of changes. The Vietnam War continued to be very unpopular and eventually ended in 1975. We went through a period of gas shortages and people were lined up at the stations trying to get gas as prices rose. Unemployment also rose and the growth of the economy slowed significantly. Rock and Roll music lost some momentum as the Beatles broke up and Elvis Presley died. Pop music splintered into a multitude of styles from soft rock to shock rock and disco dancing was the in thing. Women and minorities began pushing for equal rights and privileges in society including equality in jobs and education. The number of women in politics grew dramatically and Affirmative Action got a lot of attention.
HP became a leader in Affirmative Action and began training their managers in providing promotional opportunities for women as well as modifying behavior from a sexual harassment perspective. In Boise, as in other HP sites, there was a very proactive effort to get women qualified and into positions of management. This resulted in a number of disgruntled men who thought it was unfair to them to be giving preferential treatment to women. We very quickly trained and promoted about six or seven women, all of whom happened to have light hair. They were very dedicated and focused as they felt I am sure, that they had a point to make and were excellent managers as they clearly set objectives and held their people accountable. This further made some of their charges unhappy as they felt the women managers were too demanding.
They became known, I found out sometime later, as the "Blonde Mafia" by the disgruntled. It turned out they all did an excellent job and many of them moved on to higher positions over time. We also made sure that as we promoted more women that there were some with dark colored hair in the group as well. It wasn't that they were selected by hair color. That was just an early coincidence, but one that did cause some short term problems amongst the employees.
There was also a renewed commitment to healthier lifestyles and more awareness of the potential problems of smoking and secondhand smoke. When I started at HP it seemed as though the majority of people smoked. It was something I grew up with, although I personally resisted taking it up until I started full time at HP. One day in 1979 I went to see the doctor for a physical exam and he had me do a dynamic treadmill EKG. I called him for the results and he said there was an irregularity and he wanted to conduct an additional test of injecting an isotope into my bloodstream and to take a series of X-rays to check my arteries for blockages. We ran that test and he called to tell me it did not look good and he wanted to run another test. He also said "You know we have talked a number of times that you should quit smoking - this may be a good time to do so." I reached into my shirt pocket and threw the cigarette package into the waste paper basket - and have never smoked again. The good news was that after the second test his nurse called and said everything was OK and that the first test had been a false positive.
HP was one of the earlier companies to adopt no-smoking policies on the premises. When Extended Systems began operations in 1984 it was their practice to not hire anyone who used tobacco and in fact, Candy, after joining them as HR manager had to terminate a few people who were discovered to be users after they had joined the company.
In late 1975, another opportunity came our way. Bill Hewlett called me and said that I should take a look at a printer Canon in Japan had developed to print Kanji characters. Kanji characters are Japanese language characters and, unlike the 26 characters in the English language, there are 10,000 characters in Kanji. That created a tremendous challenge for a printer and Canon had figured out a way to use laser technology with a copier engine to do this. Of interest to us was the potential of using this quieter technology to move our own printer business forward.
There were some significant drawbacks to the existing technology that would first need to be overcome. For instance, the Canon printer used liquid toner, which emitted a very strong kerosene-like smell, and as the printer dryer heated up, it could sometimes ignite the paper on fire - not a good feature. In addition to those significant issues, the mechanism would create frequent paper jams as well as poor print quality. These were just a few of the problems we needed to solve.
We initiated a partnership with Canon in Japan, HP Laboratories in Palo Alto, California ands our Boise division engineering team to collaborate on R&D to further the potential of this printer technology. We needed to find someone to lead this project for HP in Boise . After going to different HP locations looking for a senior R&D engineer who would take on this project, we selected Jim Hall, who was working in the Microwave Division in Palo Alto, California. Jim thought tackling a challenge like this was great and he jumped at the chance to head up the project. His charge was to assemble his engineering team in Boise and to work with Canon engineers in Japan and HP Labs engineers in Palo Alto, California to reinvent that Canon printer into a product for us. Canon was happy to work on this project - our markets were separate and we would all share in the success as well as in the rights to use any technology that came out of our collaborative research. Jim began assembling his R&D team immediately to begin the design effort. While the challenges were significant, the engineering team was dedicated and anxious to work on solutions. The greater the challenge, the more excited they seemed.
Success was a long time in coming. We transferred a couple of our engineers to Japan for a year, and they sent a couple of their engineers to Boise to work in our R&D lab. The whole process was long and involved a lot of testing and redesign. It also involved the development of a relationship between the two companies, which was an interesting process because of the cultural difference. In Japan, developing a business relationship feels almost like a courtship - there are lots of settings where the purpose is simply to get to know one another better and to develop a bond of trust. At HP, we hadn't done anything like this before.
When we first started out, it was mostly in the hands of our lawyers who worked out the detailed legal contract. After a while, though, we took it over on the management side. We knew what we could expect and what would be delivered and really didn't want the lawyers to overcomplicate the agreement.
Developing a business relationship with the Japanese was a more intense process - and more gracious and more genteel than we have in the United States. For instance, each time we visited, we would bring a gift - and would receive one as well. I did note that as the relationship got better, the gifts got better too. To this day, I have a piece of artwork from that time period - a gift from Canon executives - that hangs in the entryway to our Boise home. Bonding with the Japanese also meant I ate sushi and sashimi for the first time. This was before sushi became popular in the United States - back then, I was pretty much a meat and potatoes kind of guy. I heard stories about being served things like eel, which sounded terrible at the time, but I found that barbecued eel and sushi are very good. Of course, with enough Japanese beer and sake, everything was good.
I think at times, our Japanese hosts tried to either impress or shock us Americans with various foods. We had blowfish once, which is considered a delicacy and I've been told, if cooked improperly, can be deadly. One time, my hosts brought out a live fish flopping around in a basket, perhaps to show how robust and fresh dinner would be. They brought it back a short time later, skinned, deboned and thinly sliced on a platter, but still raw and with the head still attached. I was offered the choicest part - the eyeballs. What could I do? I reached in with my chopsticks and plucked one out, but the eyeball slipped out of my chopsticks and went rolling across the floor. For a moment, I was horrified, thinking I had greatly insulted my hosts, but everyone laughed and it was ok - and I didn't have to eat a fish eyeball.
Back in Boise, in 1976, we had moved into our first building at what would ultimately become a full campus of HP buildings (with more than 1 million square feet today). We had barely settled in when a decision was made at the corporate level to move another division from California - the Disk Memory Division (DMD) - to Boise. After all, we had the space, with 100 acres purchased and zoned. Dick Hackborn was the division manager for DMD and I was the division manager for printers; we both reported up to Paul Ely. I was also named the overall site manager.
It was strange having two divisions on one site and there were some initial issues with how each division operated. Each division was responsible for its own business plan and profitability. DMD had great profitability having HP as their sole customer and their own way of doing things. They built their building with highly upgraded carpets and low-noise ceilings, special lighting and nice partitions. We were noticeably more frugal over in my division, where we were working hard to build an entirely new business line. Not surprisingly, some of my people left to go work for DMD - the grass certainly looked greener over there. There was certainly a feeling of the "haves" and the "have-nots" between our two buildings for a time, but we eventually built two more buildings and connected them all. That helped us feel like we were all part of one company and reduced whatever feeling of separation people had.
Later, in 1979, Paul Ely reorganized the computer business creating the "Peripheral Group," which would include the two divisions in Boise, San Diego, Calif., and Vancouver, Wash. Dick Hackborn was selected to manage this new group and became my new boss.
In addition to my division manager job and site manager job, I was also designated as the HP "face" out in the Boise community. That meant I needed to be visible, partly for public relations purposes, but mainly to fulfill HP's philosophy of corporate responsibility to communities. Even though the company had just surpassed the $1 billion revenue mark and had more than 30,000 employees worldwide, The HP Way was still very important all the way from the boardroom to the individual employee level.
I wasn't entirely comfortable with my high visibility outside of HP's walls in the beginning, but learned to enjoy it over time. I ended up taking many of my community activities to heart and, over the years, played a role in building many of Boise 's organizations and institutions. I won't name them all, but a few include: Chairing Boise State University's first advisory board for creating the College of Engineering (I served for 6 years and helped them raise $6 million in matching funds against Micron Technology's $6 million gift); Co-Chairing the Treasure Valley's YMCA $13 million capital campaign; Chairing the Board of Trustees at Albertson College (now re-named College of Idaho); Being appointed by Gov. Dirk Kempthorne to serve on the Governor's Technology Task Force and the Governor's Excellence in Education board; and numerous boards from the United Way and both regional hospitals to industry groups and the University of Idaho. In 1979 my contributions to the community were recognized when I was given the Distinguished Citizen Award by the Idaho Statesman newspaper in Boise. In 2002, I was awarded an honorary doctorate degree by Albertson College (now called College of Idaho) after having served some 20-plus years on the board of trustees.
The laser printer project continued through the '70s and into the early '80s, with Jim Hall heading the project for the Boise division R&D, Don Hammond leading HP Laboratories, and Dr. Hajime Mitarai and Mr. Takashi Kitamura leading Canon's effort. These key people and their teams resolved a very large number of difficult and challenging problems. It was these three groups of engineers from Boise, Palo Alto and Japan, and these three only, working together that made the LaserJet a reality. The first laser product that we launched in 1981 as a culmination of all this work was for use in data centers. It was as large as a refrigerator/freezer laid on its side and sold for $125,000. The next milestone for us to achieve was to shrink this bulky piece of equipment - both in size and price. I knew that if we could do this, we would make a major impact in the printer marketplace. Four years later, we announced the first LaserJet. The personal computing era was just getting launched and computer functions were becoming decentralized. In 1980, HP released its first personal computer and, in 1982, HP started an electronic mail system (soon to be called email), the first major wide-area commercial network of its kind based on minicomputers.
Another interesting facet of the development was the name LaserJet. Up until that time all products had only a model number. Our marketing team wanted a name to market the product. There were many names suggested. LaserJet was not on my favorite list. I guess it was the engineer in me. It did not print with a laser nor did it contain a jet - so why name it this way? In any case, the name LaserJet won out. The engineers in the development lab had the same feeling as me. They spent some time contemplating marketing future choices of names on new products, i.e. JumboJet for a larger version, JetLag for products that were late, and on and on. However, a short time after the introduction, I had to give the marketing guys credit when LaserJet was mentioned in Gary Trudeau's Doonesbury comic strip one day when one of his characters said: "Just LaserJet it" when he wanted a printout.
Early in the development of the LaserJet, some Canon employees were personally delivering two units to us in Boise from the factory in Japan. This was a big event and a major milestone for the product. When the units came off the baggage ramp at the Boise airport, one of the straps on the case became caught in the turntable carousel and the product in its carrying case started to bounce violently on the carousel. The Canon folks ran as quickly as possible and leapt onto the carousel and of course, they slipped and fell and were moving around on the carousel as the product continued to bounce. While it didn't seem all that funny at the time, we had many laughs about that over the years - particularly since, when the products were opened at the division in Boise and were powered up, they both worked flawlessly.
While we were busily working on perfecting the laser technology, the application of distributed processing with minicomputers and related peripherals was gaining momentum. The most popular printer product customers chose was a daisy wheel printer, so-called because there was a daisy-shaped wheel with characters molded at the end of each petal that could be hit with a hammer as it rotated, thereby imprinting through a ribbon onto the paper. This occurred at a rapid speed such that one could print 30 characters a second. The disadvantages were that they were very noisy, making them non-conducive to office environments, were limited in font flexibility, graphics and could not print forms.
By January of 1984, as we had the world's first LaserJet printer just about ready to introduce to the marketplace, I headed off to HP's annual general managers' meeting in Napa, Calif. At these annual meetings various aspects of business were presented to everyone and this year I had been asked to make a presentation on our progress on the laser printer project. I stepped to the front of the room and told HP's top leaders from around the world that we were ready to launch a remarkable product, one that would have significant impact in the marketplace, one that virtually addressed all of the disadvantages of currently dominating daisy wheel printers and, given that, we could potentially sell as many as 50,000 a year. This would be a new era for HP from a volume point of view as we dominated the worldwide printer marketplace. I was virtually laughed off the podium. Everyone in the room knew that HP never had a product that had sold 50,000 units a year - ever. Plus, they concluded HP did not even own the technology and we were not a marketing company so we would not dominate anything. But I wasn't naïve in my optimism. I knew we had something revolutionary that was cheaper, quieter, more flexible, and able to print graphics and forms. My team knew this product could replace the daisy wheel printer, the standard of the day.
It turns out I was far off the mark. I never dreamed the company by 2006 would sell over 100 million LaserJet printers as the engineers continued to improve price/performance over the years or that it would become the company's most successful single product.
We were successful almost at once. In May 1984, we showcased the LaserJet at the Atlanta Comdex show, which was the most prestigious show for computer-related products. The LaserJet was named the "product of the show." A bit of luck also came our way in that HP had hired a number of sales people to sell its first desktop computer. It turned out the product was not very reliable and did not meet customer needs very effectively. The computer people at HP had convinced top management to hire a dedicated sales force to sell these computers through a large dealer channel (a newly emerging sales channel for desktop computers and peripherals). But since the product was a bust, they really had very little to do so we were able to enlist the sales force to sell the LaserJet. And it took off like wildfire. Without that dedicated and focused sales force and channel, it could have been a very different outcome for HP. We launched with a sales price of $3,495, but after selling 1,000 units, were able to lower the price to $2,995. That undercut the existing product on the market - the daisy wheel printer - which was selling for around $3,200.
It's hard to explain how dominant the LaserJet became in the market. But it basically put our competitors out of the printer business overnight. Our product was quieter, faster, had better print flexibility, was more reliable, printed business forms, graphics AND was less expensive. We made the daisy wheel printers that were common in offices virtually obsolete in a short period of time. Additionally, because of its ability to print forms, it eliminated a huge market for preprinted forms and because it was so quiet it eliminated the need for sound proof cabinets. There were other companies that, also, over time introduced their laser printers, but none of them met customer needs in price and performance as well as ours. We truly had hit the market with the right product at the right time, revolutionizing the printer business.
In those days, when HP was divisionalized and each division had its own profit and loss responsibility, there was a lot of time for recognition and celebration within the team because everyone was together and results were measured monthly. There were a number of people at corporate who were very supportive of the product and they persevered for a number of years in supporting us through some very difficult times. There was a lot of concern, however, that our sales forecasts were highly over-optimistic and consequently, they may not have always taken us as seriously as they might have.
This project was a tremendous challenge for the division and there were many many people who stepped forward and over-extended themselves to ensure the product was successful. Not only did these people come from R&D, but also from Manufacturing, Marketing, Quality Assurance, and the other support functions in the division. It became more complex after the introduction as the demand for the product was exceptional and everyone needed to turn to meet customer requirements.
It truly showed me the power of teamwork - it would be very difficult for me to single out any one person or persons since so many people contributed so much. Also, the joint cooperation between HP and Canon on the LaserJet printer development and their ongoing business relationship is still referred to today as one of the most successful in global business history.
| At the Boise Division, I introduced Dave Packard to Candy and Connie Brusseau in 1978.
I later married Candy Sept, 1984
| I'm standing with John Young, HP President and CEO,
and Gov. John Evans at an open house at the Boise Division in 1980
| The computer-room business Laser printer 2680 was introduced in 1981,
and became a highly successful business machine
| The office/personal LaserJet printer was an instantaneous success and outsold our most aggressive projections.
This product line continues to be HP's most successful and most profitable product line today,
having sold 100 million units from its introduction in 1984 to 2006
This was a pretty amazing time in my life. We had just succeeded in launching what was going to become the single-most profitable product in HP history and was newly married with all the elation and hope that brings. My kids were mostly grown and moving on with their own lives. I had a sense of satisfaction and renewed energy.
It was truly amazing to see numerous people in the company become very interested in the laser printer business, now that we had proven the technology and cost goals could be met and were poised to dominate the printer market. Some were people who in the past had been standing on the sidelines not taking risks and even nay-sayers who thought the whole thing was a bad idea. The sudden interest reeked of company politics and I quickly realized I was ready for a change. From my perspective we had finally reached the goal I was charged with by Bill Hewlett: Put us in the printer business. I had been working on this for 11 years now (the longest time I'd spent in any single job in my career) and I was ready for a change.
This was also a time when I was heavily courted by other companies, who had seen what I had done at HP and wanted me to go work for them. The LaserJet came out in May 1984 and it was an instant success. Almost immediately, I was getting other offers from within HP. One major offer that I couldn't ignore was the opportunity to move to HP's corporate offices in Palo Alto to take over Human Resources for the entire corporation. HP had a long history of not hiring HR experts but rather operational experts who understood how the company worked. This was a huge opportunity since this would place me in a position where upward potential was even more likely to occur.
HP had revenues of $6 billion and more than 80,000 employees in 1984, and there were no signs of slowing in its growth. In fact, this was the dawning of the consumer computer age. IBM had only three years earlier introduced its first personal computer, Nintendo had just launched its entertainment system (with Super Mario games), and Microsoft had come out with its first version of Microsoft Windows operating system. There seemed to be no limit to where this new industry would go and HP had an advantage with established markets all around the world.
I also was approached by a relatively new company, Sun Microsystems in Sunnyvale, Calif., to manage a new division they were establishing. I had met with Scott McNealy, the president and CEO, as well as their technical founder, Bill Joy. They were very persistent. I ended up talking to them on several occasions. John Doerr, who was now one of the partners in the big Silicon Valley venture capital firm of Kleiner Perkins, even flew to Boise to try to convince me to take the job at Sun Microsystems.
I called my old boss, Paul Ely, who had left HP and was managing a startup company called Convergent Technology. I asked him about how it was to leave HP. He indicated it was a difficult decision for him but in his case the time was right to run his own show. I told him about the Sun offer and he said, "If you are considering leaving HP, come to work for me." He made me an attractive offer to be their VP of operations, which I found interesting, but I had concerns about the long term viability of the product line given the competition.
Another offer came from Mannesmann Tally. Mannesmann was a German company that had acquired Tally, the company we had bailed out years ago by ordering their printers in return for manufacturing rights. They flew me, first class, to Germany for an interview with their top management people. They wanted me to manage Tally, which they had acquired. They didn't really understand the market at that time, focusing their resources on impact printing rather than laser or ink technologies. I declined.
Other offers that came my way weren't quite as interesting. One came from the Exxon Oil Company several years earlier when they were diversifying into other businesses during the energy crisis. They had purchased 10-12 little companies that were in the computer peripherals business. They flew me back to Philadelphia to talk to one of their VPs. A guy who had worked for me as an R&D manager in Boise was there and said it was a good opportunity. But after talking to their VP, I thought "These guys don't have a clue what they're doing, and they don't understand the business." They had some funny ideas of how the market operated and the idea of working there was not compelling to me. I think they eventually ended up selling all those small companies over time. When I had returned home from visiting Exxon, I casually mentioned at the dinner table that I had this offer from a company in Philadelphia. I found out a number of years later that I had really freaked out the kids with that statement - but that they chose not to bring it up.
There were numerous reasons I didn't take any of those offers. Frankly, some just didn't measure up to what I was being offered within HP. There were other reasons too. For the first time in my life, I made personal considerations - such as ensuring the success of my relationship with Candy - the deciding factor in what opportunities I would pursue. Candy had a career of her own and was, also, a manager at HP. If we moved, it would affect her job as well. This made it more complicated, but I didn't mind. I had my priorities straight this time.
While I was weighing the various options, my boss asked me to consider going to Bristol, England to manage the division that had been set up 18 months earlier. My first reaction was "I've been to England and overseen manufacturing operations before." Been there, done that. He indicated it was to be more than a manufacturing operation in that it needed to develop its own business/technology charter. I thought that this was not a step in the right direction, but I indicated we would consider it. I added that there was still Candy to think about so I pondered aloud, "Candy is working in the Boise Disk Memory Division - what would she do in Bristol ?" "We can fix that," he said. I said we would be interested in what might be possible.
Candy was offered a position within the human resources offices of Hewlett Packard UK, which oversaw all of HP's UK manufacturing and sales activities offices and she would, coincidentally, be stationed in Bristol. While she wouldn't be a manager, which was a compromising move on her part, we both felt this was a good solution that we could live with, and given the growth in HP, might develop into an opportunity for the two of us. We both were excited about this new chapter in our lives and looked forward to moving to Bristol. We left for Bristol in June 1985 and found our next three years to be challenging career-wise but with an added feature of being like something out of a fairy tale romance.
About six months after we moved to Bristol, Candy was offered a promotion to a management position, putting her in charge of compensation for all of the UK. The "gotcha" however was that the job was at HP UK headquarters near London, some 100 miles away from Bristol. The company provided her a flat (apartment) near headquarters and she began to commute, driving to her office on Monday mornings, coming home on Wednesday evening, driving back on Thursday morning, coming home on Friday night. This new responsibility, also, meant she had to travel to the various HP locations throughout Europe. Meanwhile, I had been given additional responsibilities as well which would require me to visit other European sites, plus I was assigned a division in Greeley, Colorado to manage in addition to the Bristol division. All of this activity put us both in various places at various times. With good planning we managed to spend weekends in Paris, Berlin, London, Cannes France, St Tropez, Grenoble France, Vienna, Geneva, Amsterdam, Venice, Milan and others. Additionally we were able to spend a lot of weekends traveling in the UK throughout England, Scotland and Wales, frequently staying at romantic country hotels, which had once been country manors.
At one such manor house in Scotland when we went down to dinner the main course was rabbit. I had not eaten rabbit since that day back in 1957 or so that I had to help Barbara kill that bunny for the pregnancy test. I will say it was delicious and perhaps we didn't have the right recipe back then. Candy and I spent many weekends in London sightseeing, shopping, going to the theater and going to great restaurants.
We also had the opportunity to take in a little culture. We were invited to go to a dedication of a naval museum by Her Majesty Queen Elizabeth in Bristol, to a steeplechase (horses jumping fences and other things against the clock) in Badminton: the Henley Regatta (rowing team competition), Ascot (horse racing) and a cricket match in Glouchester.
We had a royal visitor, the Duke of Kent, dedicate our new HP building in Bristol. It was quite a big affair with attendees from the Counsels of Bristol City, Mid Lothian and Stoke Gifford - all clamoring to be properly recognized - from who they toured the building with, where they were seated during the dedication and at which table they were seated at lunch. It was quite an eye opener to see the political posturing. Of course we Americans were somewhat oblivious to the situation and were not even aware that we got it all wrong. We heard plenty from their representatives after it was over, however.
One Easter Candy and I flew to Venice and returned to London on the Orient Express. It was a lot of fun with everyone dressing formally for dinner each night - tuxedos and gowns - just like in the old days. On another occasion when I was returning from a trip to the U.S., Candy met me in Miami and we flew to St. Thomas in the Caribbean for a week in the sun. It was all quite fantastic and gave us a chance to build a relationship together. I think it helped put to rest any remaining doubts each of us had about embarking on a second marriage.
The employees in Bristol were a great group of people. They really enjoyed having fun. They had gotten into Halloween from the first group of Americans who started the division and it had become a tradition to wear costumes on Halloween. Starting after lunch, people would get their costumes on. It became very competitive between departments and the costumes were really creative. After work we would have a parade in the cafeteria and award prizes, have some beer and burgers and then head off to the pub. They also had their various community activities. Once every two years there is something called Comic Relief Day. It is a fund raiser for projects to eliminate poverty around the world. Everyone who gives gets a red clown nose. So in 1987 I had a make-up artist come in early in the morning to make me up like a clown, big red nose and all. The night before Candy sewed some strings of lights and a battery into some boxer shorts that had clowns all over them. With my make-up and shorts with flashing red lights I came into the cafeteria where all of the employees were assembled for the weekly coffee talk. I was quite a hit giving the coffee talk in that outfit.
We had a great house near Bristol in a tiny community called Stone. It was seven miles from Thornbury where we shopped. There was a Safeway store, a butcher, fish monger, and bakery and a variety of other shops. There, also, was Thornbury Castle which had been converted to a hotel and restaurant. We dined there frequently. Our house was owned by HP and we paid a nominal monthly rent. It was a two-story house that was named "The Old Coach House." Naming a house, rather than having an address, is customary in the UK, especially if there is historical significance. In our case there was a coach house there years ago behind a hotel. The coach house is where the coach and horses were kept overnight. The drivers slept upstairs. This house was completely rebuilt around one wall of the original coach house. It was more than 4,000 square feet, with three bedrooms, 2 ½ baths, kitchen, laundry room, living room, dining room and a granny flat (living room kitchenette, bedroom and bath), all located on two acres with a pond. And it came with ghosts. Yes, ghosts.
On one occasion we were outside in the yard one Sunday afternoon. Suddenly we heard music coming out of the opened upstairs window. We went inside and discovered the clock radio playing in the guest bedroom. It was 2 p.m. and the alarm was set for 7 a.m. and in the off position. Another time Candy got up in the middle of the night and heard people talking downstairs. She asked Sally, who helped with the house, if she ever felt there were ghosts and she laughed and said "Oh yes, frequently, but they seem to be very friendly." The time I really was convinced was one night when Candy was filing my fingernails. We were sitting on the floor watching TV and suddenly we could not find the nail board. We looked everywhere - under the couch, the cushions - everywhere. The next morning, there was the nail board in plain sight under the side table. There was no way it was there the night before.
The historical significance of the Old Coach House is that in 1645 Lord Cromwell and his army camped on this site as they prepared to besiege Berkley Castle which is locate about three miles away. There is an archer's target, which was unearthed on the site during construction, imbedded in the stone work on the front wall of the house.
On April 14, 1986, we were awakened early in the morning by a large number of airplanes flying over our house. We found out later that they were U.S. bombers on their way to bomb Libya . Libya had been identified as a bastion for terrorists for a number of years and the U.S. was retaliating. The planes left from an air base not far from our house and were flying south over the Atlantic and then east onto Libya. It was the long way to go but necessary as France refused to allow the attack flight to use their air space. The whole incident caused quite a furor in Europe. We were notified by HP European headquarters in Geneva to be aware that retaliation on Americans in Europe was very likely. We were immediately trained to be more vigilant, to be aware of our surroundings, to change routines and alter routes to and from work, and to watch out in case we were being followed. The company added flood lights to the Old Coach House and a security system with panic buttons at the doors, etc. It was a very exciting time for awhile and fortunately nothing happened. However, it was a good experience given the ongoing terrorist activities and has made me more aware of what's going on around me.
In 1987 we made a combination business/pleasure trip to Colorado, Boise, Seattle and onto Singapore, Hong Kong, Tokyo, San Francisco, and then to England.
When we landed in Denver, Colorado, my parents were going to meet us at the airport. As we were walking down the concourse on our way to baggage claim we saw my dad coming toward us. We asked where mother was and he said he did not know as he had dropped her off at the entrance and then parked the car. We continued onto the baggage claim area hoping that she would meet us there. We got our luggage and waited but mother did not appear. I wondered how we were going to find her in this large airport when the solution occurred to me. I told Candy and my dad to wait right there and that I would go and get mother. I had suddenly remembered that when I was a little kid my mother always told me that if I got separated from her in a store to go the entrance and wait there and she would find me. I went upstairs to the main entrance to airport and found her there. She said "I knew you would find me."
Each Christmas, for the three years we were in Europe, we went to Hawaii. We always wanted to go somewhere warm and the easiest place to get to always seemed to be Hawaii. One year, however, we messed up when making our flight arrangements and ended up flying on Christmas Day. We also had a very long trip - stopping in New York, then L.A., before continuing on to Honolulu. That day - back when airlines still served nice meals in first class - we had three turkey dinners, one on each leg of the trip.
While we were in England we had a number of visitors. Candy's mom and dad visited in 1985. Susan came in January of 1986. My mom and dad came in mid-1986. We drove them to Scotland and London to the theater to see "42 nd Street," and rented a Rolls Royce and a driver for a tour of London. Mike and Kathy came with their spouses in early 1987. We all went to Scotland where Mike and I played golf at Carnoustie and Turnberry - both sites of the British Open periodically. We all stayed at Gleneagles, a fine hotel resort with three golf courses. Steve came over to visit in late 1987. We also went to Scotland and played golf at St Andrews and Troon, which are also British Open courses. At St. Andrews Steve, much to all of our delight, had a birdie on the 17th hole which is probably the most famous and most difficult 17th hole in the world - a hole where numerous British Open hopefuls have lost their chance to win the tournament. Upon returning to our house in Stone we had a party for the managers from HP and Steve was quite the celebrity as many of the men had played St. Andrews, but none had ever birdied the 17th.
One particularly nice thing about my new assignment was that I also was given responsibility for the Greeley, Colo. division. I would visit Greeley every two to three months and would make sure I'd end up in Greeley on a Friday. I could then drive down for the weekend to my hometown of Pueblo and visit my parents. It's ironic that it was while I was stationed in Bristol, England that I saw my parents more on a regular basis than I had since I had left home to go to college. My mother never understood what kind of job I had, where I would fly back and forth across the Atlantic and sit in meetings all day. She would say "I don't understand why they would pay you money for that."After getting the Boise site up and running and launching the printer business, running the Bristol and Greeley, Colo. operations was comparatively easy. The one thing Bristol didn't have was any type of product charter. They were building peripheral disk drives and some other related items. The first thing we did to better serve the European market, to increase revenue and fund R&D activities, was to transfer the old 7970 tape drive production from Boise to Bristol. We also transferred it to Greeley to serve the rest of the world market, to raise revenue and to fund R&D investment. With all the activity in Boise with the Laser printer business, no one objected to losing the tape activity.
Some engineers in the disk division had begun a project to convert a video recorder (VCR) into a tape backup device. This project had been transferred to Bristol earlier and had been their main R&D focus for several months. They had entered into an agreement with a Japanese company called Matsushita (Mat-shoes-ta) and they were committed to make certain changes to the mechanism to meet the engineering team's requirement. As I observed this activity, I concluded that the basic video recorder mechanism just was not robust enough to be a reliable backup device. I made the decision to stop the development and we started looking into other technologies.
As a result of this decision we needed to break the news to Matsushita. As it was my decision I asked the engineering team leader to let them know I would travel to Osaka, Japan to explain the rationale for our decision to their president. I arrived on the morning of the scheduled meeting and was told the president was detained but that he would be with me shortly. Some four hours later he showed up. This was their way of expressing their displeasure with my decision. I was livid. I told him I was sorry for the cost and inconvenience to his company, but if he and his people had any sense for the different requirements for computer peripheral products versus home entertainment they should never have attempted the project in the first place and they obviously had not carefully studied the reliability requirements delineated in the specifications of our product definition which they were given at the beginning of the agreement. He was quite taken aback by my outburst and they quickly had a lengthy discussion in Japanese. As usual I had brought along an American engineer who worked at YHP (HP Japan) who spoke Japanese, so he understood everything was being said. The gist of their discussion was they had messed up and should explore other opportunities to partner with HP in someway. To make a long story short the president apologized extensively and asked me to join him for dinner. I declined on the basis that I had other commitments in Tokyo and was already late, given the delay in our meeting. I had other ideas about a backup solution!
Before we decided to pull the plug on the VCR mechanism our engineers in Bristol evaluated a number of other technologies for backup. The technology that looked the most promising was something called DAT (Digital Audio Tape), a technology that was invented by Sony of Japan and Philips of Holland in a joint venture. I had visited Philips in Holland several weeks earlier to confidentially explore their interest in a backup device. They had no interest as they were focused on developing it as it was originally intended - a high quality digital audio music tape product.
When we arrived in Tokyo we visited Mr. Junichi Kodera, who was the President of Business and Industrial Systems at Sony in Tokyo. We discussed the feasibility of using the DAT mechanism as a backup device and he and his teams were very enthusiastic about moving ahead with the concept.
I initiated a relationship with Sony, very much like the relationship I developed with Canon on the Laser printer. We entered into a joint development agreement to introduce a DAT backup product, and this became the first DDS/DAT tape drive product. We ended up making quite a splash in the market with that product. It was a new standard in backup drives and still is a widely used technology today because of its high reliable mechanism and high capabilities. HP introduced it in 1989 and, by 1994 it had grown into a $300 million/year business.
As with most technologies a number of companies were developing products on the DAT platform. This could potentially lead to a fragmented market. In order to enhance our opportunity for success with this new technology we formed a DDS Manufacturer's Forum to create and promote an industry standard, the DAT tape drive. This was of benefit to all manufacturers because then we all could develop products that had a ready market. Of course, it was then up to each company to go out and capture that market through good products and sales and marketing excellence.
Meanwhile in the Greeley Division the management team had been exploring a relatively new technology called optical disk storage as a backup device and made the proposal to acquire a small startup company that had made some progress in this area. After more investigation we were able to make the acquisition and defined optical storage libraries as a product development focus. So now we had both divisions - Bristol and Greeley - involved in this backup storage business with state of the art technologies.
As we were nearing the end of our time in the UK we ordered a left hand drive Jaguar XJ-S sports coupe which we picked up from the factory in Coventry, England. As we were moving back to Boise we had it shipped to Los Angeles where the Jag dealer retrofitted it with U.S. pollution control gear. I flew down to LA, picked it up and drove it to San Francisco where Candy met me. After spending several days in San Francisco, we drove back to Boise together.
Also, prior to moving we had flown to Boise to house hunt. We had rented out our condo when we left for England and wanted something else now. We ended up making an offer on a house that was only six months old located on the banks of the Boise River. We were able to secure the deal and have lived there since our return in 1988.
At the time Candy and I were preparing to return to Boise from our three-year assignment overseas, my boss Dick Hackborn had decided to reorganize his area of responsibility into groups. His part of the business had grown to be so large and dominant, with so many various products, that further division was necessary. This was a new organizational structure for HP; now the company was structured with the president/CEO at the top, then a level of executive vice presidents, and then groups. In our business segment, there were four groups to be formed - Laser Printers, Inkjet Printers, Personal Computers and my group, Mass Storage.
In the summer of 1988, we moved back to Boise and I took on both the Disk Memory Division and Storage Systems Division in Boise, the Greeley Division, Bristol Division, manufacturing operations in Boise and Grenoble, France; and marketing centers in England, Germany, California, Singapore and Japan. All together, my group was responsible for about half a billion a year in business. About 82 percent of that business was with other divisions inside of HP with only 18 percent with external customers. I knew that in order to survive, we had to be competitive on a global basis and needed to capitalize on the worldwide opportunity. That meant growing the non-HP business aggressively by producing state-of-the-art products at lower costs through innovation and high volumes while continuing to be the most cost-effective supplier to HP.
I was about to embark on one of my most complicated assignments for HP yet, as well as suffer some painful personal experiences.
| In 1986, the Duke of Kent formally dedicated our new facility at Bristol, England,
and I am describing the full build-out plan of the site over time
| Dave Packard reminded me that employee concern's matter,
with this personal note in response to a complaint,
which I had quickly addressed
|This is the picture we posed for our 1985 Christmas card for friend and family in the US|
Back in Boise, my job as general manager of the Mass Storage Group was a new level of responsibility for me. It was more of a strategic planning and coordinating job and more closely tied to what was happening in the marketplace and in the future than meeting today's customers' needs. It was a strategic role rather than an operations role. This was difficult for me on the disk/storage side of the business because I really didn't know a lot about the market there. But I felt pretty good about the backup side of the business so I focused my efforts on learning the disk business and figuring out with my team how HP would become the dominant player in that business.
Some interesting things were happening in the disk business at this time. Up until the time I became general manager of this group, HP was the only customer of the disk business. In their mind, the differentiation they brought to the table was they could design it better than the competition, thus giving them an edge. But the industry was changing rapidly and converging because of the new industry standards. Disk drives were becoming a commodity and as users were learning more about how they could utilize their computers the demand for storage was increasing. As we looked at all this, we concluded that if we were going to survive in that business in the long term, we needed to dramatically increase our volume so as to drive our cost per unit down. To accomplish this we needed to generate more sales outside of HP. As we studied all this and looked at our competition, we came to the conclusion that in the next 5-10 years there would remain only two or three major suppliers of disk mechanisms and if we wanted to be one of those, we needed to expand our business very rapidly. We had an edge in technology as we focused on the high storage capacity drives but we needed much higher volumes to gain a cost advantage. If we didn't, we would likely end up out of the business. We concluded our best path forward toward expanding this business, and keeping HP in the running, was to acquire another company.
As we looked over the marketplace, we saw an opportunity to acquire a very large company that was making a broad range of lower capacity disk drives that would be very complementary to HP's line. We felt it was a very good complement to what we were doing and they had a low-cost manufacturing facility in Japan that could also give us an edge on the manufacturing side. We went to my boss, Dick Hackborn, and his boss, Dean Morton, who was HP's chief operating officer at the time, and made a proposal to acquire this company. It was approved and we entered into a non binding letter of intent and started the due diligence process, looking at how we could merge the two businesses together and gain synergies. We worked with their team diligently for a number of weeks reviewing all aspects of their business and planning how to integrate them into the Mass Storage Group. We had gotten very far into the process and we were just days away from signing a definitive agreement and making an announcement when John Young, HP's president and CEO, who had been briefed on this project all along, called us in and asked for a meeting. We went to Palo Alto for the meeting and, in that meeting John Young quashed the whole deal. He felt that the $.07/share cost to earnings from a stock buyout, which would have been the impact of the deal was too great to bear. Likewise he felt a cash buyout was not acceptable either. We didn't think this was a very significant issue and was not anything that had not been discussed early in the process. In any event my boss and Dean Morton basically folded and the deal was off from HP's perspective. I had to go break the news to the company owners that the deal was off. It was very embarrassing. I was shocked that the two people I was working with on this deal folded so quickly under pressure from the top. I said that the decision meant we would be exiting the disk drive business over time and that HP would not be among the survivors competing for that business. Later on, of course, that proved true. In 1996, after I retired, HP did go out of the disk drive business. Ironically, they were back in it with their acquisition of Compaq just a few years later. The market by then had evolved to just three or four players. HP was not one of them. If we had stuck with our initial strategy, we could have owned two of the companies that later became the top competitors in that business. Meanwhile, an opportunity to meet our growth objective was developing on another front.
For the years from the mid '40s to early 1990 the United States and Russia and their respective allies were engaged in a Cold War which was a period of conflict, tension and competition. Throughout this time period the two superpowers engaged in multiple arenas: military coalitions, ideology, psychology, and espionage; military, industrial and technological developments, including the space race, costly defense spending; a massive conventional and nuclear arms race and many proxy wars. When Mikhail Gorbachev became the Soviet President in 1985 he felt strongly that the Soviet Union was overextended and headed for serious economic disaster. The country was in a state of turmoil with many businesses failing, high unemployment, corruption, crime, severe food shortages, and devaluing currency, etc. Therefore he emphasized two major themes: "glasnost" (openness) and perestroika (reform). His goal was to shift resources to the civilian sector of the Soviet economy and to move to end the Cold War and particularly the arms race with the West. One aspect of his initiatives was presented to me in the form of a request to open negotiations with us (HP) to engage in a joint venture to produce a high capacity disk drive mechanism in Russia.
Prior to the end of the Cold War these products and many other HP products were not allowed to be sold to Russia by the U.S. government. With the Cold War ending a huge opportunity was now opened to HP that would be greatly enhanced if some sort of joint venture could be consummated. A meeting was arranged through our sales office in Moscow between officials from the Ministry of Radio and one of my staff members. Their proposal was to have HP provide the technology and engineering support and they would provide financial resources, clean room facilities and local engineering. In January of 1991 I traveled to Moscow to meet with them to get a better understanding of their proposal. Moscow in January is extremely cold and the wind constantly blew. There was no evidence of maintenance as the streets were full of snow and sidewalks were not cleared at all. Things were generally in a state of disrepair. When you parked your car you took your wiper blades with you as they would be stolen while you were away. People formed lines in grocery stores to buy limited amounts of food. Restaurants had very limited selections. One restaurant we went into was offering only one dish for lunch - rice pudding. The people looked very sad and un-energized. On the other hand there were restaurants for people with western currency where you could get a meal from a huge selection that was as good as any of the finest restaurants in the West, which showed that food could be made available for the right price and western currency.
I was invited to visit a facility in Penza, Russia which was about 400 miles southeast of Moscow. We were to meet at an airport at 7 a.m. and cautioned to not be late as the crew might not like it. We were there bright and early at 7 a.m. The crew showed up at 9:30 a.m. Not a good start to a day I was not looking forward to. We were driven down a snow packed runway to a small jet sitting in about a foot of snow. We climbed on board and inside it looked like something out of a Lil' Abner comic strip. The seats were made out of metal sheet and pipe with thin 1 inch padding. The floor was bare metal. There was a large radar screen and radio with wires hanging off of it mid way between the rear entrance and the cockpit. We were instructed to fasten our seat belts. The pilot revved the engines. The plane bounced out of the deep snow, turned onto the runway and we took off. We had been told that breakfast would be provided on the plane, so there would be no need to eat at the hotel. The guy at the radio/radar position was the navigator as well as the flight attendant. After takeoff he brought us trays of food with the thinnest chicken leg I had ever seen. The chicken must have been anorexic. There was also a stack of sugar wafers and a glass of watered down Kool-Aid. It was an overcast day so we saw nothing but clouds. All the while, after breakfast was over, the navigator sat and read a newspaper. We began to descend through the clouds and eventually I could see the ground. It was very windy so we were going in with a severe cross wind, which enabled me to see the runway as we approached. Suddenly it became obvious to me that the plane was considerably left of the runway. In fact, as we touched down I could see the runway next to us. As we slowed I could see foliage coming through the snow below the plane. I inquired and was told the runway was too icy so the pilot landed next to it. I was sorry I'd asked.
As we deplaned a bus pulled up to take us to the terminal. The bus was in a terrible state. The seats were all ripped, there was graffiti sprayed throughout, the headliner had been slashed and was hanging down. When we came to a stop there was a welcoming committee of several local dignitaries and their wives, decked out in big overcoats and typical fur hats. The women had bouquets of roses. It was quite a sight with all of us standing there doing introductions and shaking hands in the howling wind and snow. We loaded into a couple of vans. Ours would not start so the Russians got out and gave us a push. The visit to the factory was interesting. They manufactured everything from pots and pans to microwave ovens to computers. The technology was about 20 years behind the U.S. and I was amazed at how they were able to have a space program.
We also visited the technical institute which was adjacent to the factory and a partially completed clean room that would become the area where the disk drives would be assembled. There were about 300 engineers at the institute at our disposal with nothing to do. I guessed that they had been working on the arms programs that had been cancelled, but no one was willing to answer that question. There was a lot of hijacking going on throughout the country so I asked how the disk drives would be delivered. They said engineers would be sent by train to physically pick them up. I said that seemed very expensive and they said "No, engineers only get paid a very small amount, and we have many."
After we returned to Moscow I indicated my skepticism for the workability of a joint venture. However, after my European colleagues emphasized the importance of such a venture for the long term HP opportunity in Russia, I said we would consider it if they (the Russians) could make a cash contribution of $2 million to the joint venture in addition to what they had proposed. They said that was doable. I wanted to visit with someone who could guarantee the investment, given the current state of the economy. We visited an official at the Ministry of Finance and he assured us they would have no trouble getting the funds from the World Bank, although when pushed he could not guarantee it. Nevertheless I returned to Boise and assembled a small team to develop a business plan. The Russians sent about 10 people to Boise to visit our facility and to help to flush out the business plan details. One issue was housing for the team and their families we were going to send to Russia to get the project going. We had plenty of volunteers who wanted to go to Russia, but housing was difficult. One of our engineers contacted a local mobile home builder in Boise who was willing to fabricate up to 20 custom mobile homes. The Russians were to provide several giant Russian transport jets, get U.S. clearance to fly to the U.S., land in Boise, load on the fabricated homes and fly them to Russia. This all sounded great and everything was progressing. I then asked for a $500,000 deposit and a timetable of payment to assure our solvency.
In the summer of 1991 I was in Moscow the night Gorbachev was taken out of office by a coup of hardliners who disagreed with his vision for the country. According to the media in the West tanks had rolled through the streets in Moscow and had taken a position about a block from my hotel. I read this in the papers on the flight home from London, but had no knowledge it had even happened just outside my hotel. In any case, the Ministry of Radio was unable to come up with the deposit and we ended up canceling the project.
Even with these setbacks we were able to hire a small focused sales team in the U.S. and Europe and began to slowly add new external customers. We also began manufacturing high capacity disk drives in Penang, Malaysia so that we could take advantage of lower cost labor, but more importantly to be closer to the major suppliers of parts all of which were manufactured in the Asia-Pacific. The operation was very successful and we started to see the cost benefit from that activity.
Also in the early 90s, a new product category called "mobile computing" was beginning to emerge. It was touted as a complete reinvention of personal computing. Such a device would need large amounts of low cost onboard storage, with a small footprint and low power usage. No disk drive at that time met the criteria and solid state memory was too expensive. Our engineering team began to work with some of the computer companies and defined a new breed of disk drive that would meet the criteria they defined. The project was code named Kittyhawk. It was a 1.3 inch disk drive that would store 40 MB of memory. To ensure the high volume/low cost would be met we formed a partnership with Citizen Watch Company in Japan. Citizen is the world's largest supplier of watch mechanisms and they had the technology we needed to manufacture Kittyhawk. They designed an automatic/robotic assembly line capable of producing a complete Kittyhawk in minutes. They had the capability of installing miniature screws automatically in this assembly process - screws that were so small they were difficult to see with the human eye. One of the technical challenges in the design of a disk drive like Kittyhawk was how to protect the disk surface from damage by the read/write heads which flew over the surface in case the device was dropped. Since the heads actually fly over the disk surface at about 0.5 micro-inches (to put this in perspective a human hair is 2,000 micro-inches) there is not much room for error if something caused the head to crash into the disk surface. The solution was to incorporate an automobile airbag sensor so that when it sensed Kittyhawk was falling the heads would retract from the disk so as not to cause any damage.
The product was introduced in Japan with a great deal of fanfare. We had over 60 Japanese reporters from various newspapers and magazines. To demonstrate the ruggedness of Kittyhawk our engineers mounted it onto a remote control model car and allowed the reporters to drive it into walls at high speed. They had installed a glass cover so the mechanism could be viewed and showed that Kittyhawk kept working properly through all of the collisions. The press event was a huge success and we received excellent reviews. I was a featured speaker at an annual seminar for the storage companies. I introduced the Kittyhawk drive and during a panel discussion a number of my competitors commented that they didn't think there was a market for that particular form factor. I commented that if I didn't have a drive in this form factor and one of you did, I would probably say the same thing. Unfortunately, like many technologies, the mobile computing paradigm failed to materialize at that time as the manufacturers could not meet their product cost goals nor their functionality. Eventually Kittyhawk was shelved when HP exited the disk drive business after I retired.
Outside critics have labeled Kittyhawk a failure because it was too early into the market and in fact there is a case study that is used at Yale (for one) in the MBA program that students read and discuss as a learning tool. In reality, when the mobile computing paradigm became a reality in the late 1990s other companies successfully introduced small form factor Kittyhawk type of disk drives for use in those products - including those panel members who felt there was no market for the drive. Timing is everything.
Meanwhile, back on the tape backup front, we had become the dominant supplier of high capacity tape backup but had not covered the low end. There was a product class that was quite popular, using a tape cartridge, for back up on stand alone PCs and entry level servers, making it very complimentary to our DAT products. We were interested in having that product class in our portfolio so we could supply our customers the full line of price/performance products to meet their needs. Coincidently I was introduced to the owner of a company that had considerable market share in this product category. At the time I met him he was in the process of making arrangements to have an IPO (initial public offering). He was very interested in the possibility of having HP purchase them, rather than going through the IPO process. After some planning with my team we set up a meeting with my boss, Dick Hackborn, and Lew Platt, our CEO at the time. I was not about to go through another project to acquire a company and then get shot down at the last minute. I was assured the project seemed sound and Lew was totally committed. We began to meet to discuss the pros and cons of an acquisition. At an early meeting in Palo Alto we offered $220 million. He was very disappointed as his number was more like $500 million. He stormed out of the meeting expressing a great deal of disappointment.
These two numbers were very far apart. It is important to remember that there are various formulae that can be used in calculating the value of a company. Some may be low and favor the buyer and some may be high favoring the seller. In the final analysis, however, it comes down to what one is willing to pay and for what the other is willing to sell. It's, also, very important to try to keep emotion out of the negotiation - never fall in love with a deal. Always know when to walk away and be committed to do so. In any case several months went by before we reconnected and agreed that we should reopen discussions. I made it very clear that his original number was absolutely out of the question and that there was no reason to resume discussions if that was his expectation. I added "I don't want to hurt your feelings again." We met and again offered $220 million. He was not happy that we had not moved up, but kept his composure and eventually did counteroffer at $350 million. At that point I thanked him for coming to the meeting, but told him I felt we were so far apart that I did not see us getting to an agreeable number and wished him good luck with his IPO. He left the meeting expressing regret that we did not see the value of his company. A few weeks later he engaged an investment banker to negotiate on his behalf, who had a reputation of being a very aggressive and effective negotiator. He called me and started his process of trying to get us to raise the offer. He was very persistent. He tracked me down wherever I was in order to explain why our offer was too low and try to edge us up. I'm not sure how he found me but once he even called me while I was in Paris and kept me up most of the night in discussion. I was not happy with his approach and in retrospect while we paid more than our original offer it was below my walk-away price. Over time we agreed to something around $232 million. I don't know what the banker's fee was but it very typically is around 7 percent of the deal. So if that were true he got $16 million and the owner got $216 million which was less that what we offered him originally.
While all of this negotiation was going on the owner of the company was continuing along the IPO path as well. In fact when we finally signed everything it was on a Sunday night and the IPO was scheduled for the next morning. While the offering price per share in his IPO was greater that what we were offering there was always the risk that there would not be buyers in the market willing to pay the asking price. I am sure that his investment banker continued to try to get him to go for the IPO but he was persuaded by the sure thing of getting our price and to not have to worry about having to sell his stock over time in the public market without driving the price too low. In any case, given that he opted to take our deal, it left a very awkward situation at the company as all of the employees had left work on Friday afternoon thinking there would be an IPO on Monday. Consequently I had to be at the company first thing on Monday morning as the owner told everyone the IPO was off and that HP now owned the company and they were now part of my group at HP. They were quite shocked, dismayed and generally not happy about becoming part of a giant company. I had to give them the "fact is" speech again and to encourage them that the problem we needed to solve was how to work together to make it a success. Their VP of Operations had agreed to stay on after the acquisition to manage the division, but after a month he informed me was leaving to pursue other interests. To ensure the continued success of the division I spent quite a bit of time at that facility over the next few months personally managing the transition.
One day as I was driving from the airport to the company I got a call from Bill Hewlett (we now had mobile telephones which we kept plugged into the cigarette lighter in the car). Bill congratulated me on the acquisition and said "You know, we have not been all that successful over the years with our acquisitions. We go out and buy good companies and then we screw them up by trying to make them just like HP. We should be careful here." I assured him our business plan specifically stated they would remain as independent as they liked, for as long as they liked and that our goal was to focus on maximizing their growth and profitability. A few months later I named a new division manager and was able to get back to my group responsibilities on a full time basis. The acquisition turned out to be highly successful.
I traveled extensively in the mass storage group job. In those days we didn't have the email communication we have today. It was starting but the communication among our locations typically occurred through telephone conversations or when I traveled to meet people in person. I would visit all of the entities in the group - Europe, the Far East and U.S. divisions - once a quarter. At each location, we would have quarterly meetings with the management teams for a day or so and going over results, new product progress, product demonstrations, strategies, issues and concerns, etc. I would go to corporate headquarters in Palo Alto, California and make presentations to top management and the executive council periodically.
All in all, from when airlines began keeping track, my air travel reached 1 million miles with United Airlines and another million on Pan Am, Delta and all the others. On one occasion I actually flew around the world in one week. I left from Boise to San Francisco and onto London on Sunday for a Monday meeting, to Moscow on Tuesday for an afternoon/morning meeting, to Tokyo on Wednesday (losing a day) for a Friday meeting, leaving for San Francisco Friday night arriving Friday morning for a meeting in Palo Alto and then flying back to Boise Friday night. That's when I was much younger.
On one trip to England, in 1992, I took some time off and took a train to Folkestone which is on the east coast where the Chunnel was under construction. The Chunnel was a massive engineering feat, where a tunnel for trains and cars to travel through was created underneath the English Channel, connecting England to France. A good friend of ours from Boise (Jack Lemley) had been hired to manage the entire project in 1989 after it had fallen way behind schedule and into very high cost overruns. It was quite an experience seeing how it was built with tunnel boring machines leaving from Folkestone and Calais, France and meeting in the middle. The boring machines had broken through several months earlier, exactly on the mark they were supposed to, so when I went into the tunnel I had to have my passport to get out. They considered that I had left the country and gone to France - even though I went only a few feet into the tunnel. There was an immigration officer waiting for me and he stamped my passport - two years before the tunnel actually opened.
I was at a level now at HP that was higher than I ever had aspired to. Years prior, I thought that if I could achieve division manager, that would be a level I would be quite happy with. I never had aspirations to be CEO of the company. Even though I had reached a level higher than I ever thought I would achieve, it didn't really surprise me either. Each step was evolutionary. There were a few factors to my success. Of course, I had to perform well. I was also lucky to be in the right place at the right time. I think I was also driven to keep achieving. Earlier in my career, I was driven by financial rewards. After all, when I first began my career, my biggest goal was to achieve an annual salary of $10,000. Now, between my executive salary and stock options, combined with having my kids out of college and those expenses gone, I had achieved a level of financial freedom. Now my motivation came from the thrill and satisfaction of being involved in the high levels of the company, knowing I had created jobs for people and having the opportunity to be involved and influential in the community. I had a lot of satisfaction in the recognition I achieved among my peers, and that's why becoming a vice president at HP was so meaningful to me.
Vice president was not a defined job level at HP and that title was given out sparingly and almost begrudgingly in those days. There were only about 30 vice presidents at HP in the early '90s even though the company had 90,000 employees. It was not easy to achieve this level and when they finally named me a vice president, it conveyed a very high level of confidence and recognition within the organization.
I learned of my promotion through a phone call from John Young. I was in Cupertino, California meeting with a high level management team from 3M. I was called out of the meeting to talk to him and he said simply, "I just wanted to let you know the board wants to make you vice president." I said "Oh, that's great. Thank you very much." It was a pretty brief conversation but he told me that he thought the move was way overdue. I thought it was too.
Aside from adding the term vice president to my business card and qualifying for HP's early retirement option, it also made me a member of the company's executive council. This group would meet once a quarter to review company results, issues and concerns, policies, benefits, strategies and any other business that needed to be brought to the group. It was very satisfying to me to be a vice president and be included in this group.
While all this was going on with me, Candy's career was also evolving and changing. When we first returned to Boise, internal politics made it difficult for her to find the role she wanted within HP since I was general manager of the group. She ended up taking a job in marketing in the Laser printer division but only stayed there briefly before taking a job as HR manager for a relatively new company called Extended Systems. She had enjoyed marketing but really felt like a duck out of water. The move to Extended Systems gave her a role in management in an area she enjoyed more, and also removed her from the HP internal politics that sometimes made things difficult for the two of us both working at HP.
Our lives together were much different than they had been while we were in Europe. We had enjoyed our three-year honeymoon to the fullest, but now enjoyed a more settled life and a normal routine. We went to Hawaii every year for our birthdays in December and that became a tradition for us. When I was not traveling on business and in Boise, I golfed and Candy took it up as well. I'd occasionally go out and play with the guys, and Candy had a couple of good friends she would go shopping with. She also enjoyed gardening and earned her master gardener certification.
In 1993 Candy and I went back to Bristol. I was there for a meeting and Candy was visiting friends. My brother Gene and his wife Betty joined us and we went to the Ryder Cup golf match at The Belfry near Liverpool. The U.S won. We then went on to London, went to the theater and sent them on a tour of London. I went off to another meeting in Istanbul, Turkey; Candy flew back to the U.S., and Gene and Betty went on a tour of Europe.
In the early '90s, it became increasingly evident that Dick Hackborn was the heir apparent to John Young's role as HP's CEO. Dick's role had continued to expand and he had the reputation for being an excellent strategist. He had been given a significant amount of credit for evolving the printer business into being a major profit generator at HP. He also had an amazing ability to make very difficult issues understandable and to postulate reasonable solutions. It became a foregone conclusion among many that he would get the job when Young retired. Dick had spoken to me on a number of occasions about if and when that happened, that he would like me to play a role in some restructuring at the corporate level in Palo Alto. He didn't totally define his vision, but he made it clear he wanted me on his team and that I would be involved. The idea of moving one more step up the ladder had appeal to me.
Then the day came in 1992 when a decision on the new CEO needed to be made. The HP board met; Hewlett and Packard were there and Hackborn - who was on the board by this time - was in the room as well. We were all waiting at the group controller's desk for the meeting to end and the announcement to go out that Dick was the new CEO. Then Dick came out and said "I didn't get it. Lew Platt is the new CEO." We were shocked, but Dick didn't tell us any more. To this day I don't know exactly what happened. I don't know if he didn't accept it or if something else happened. I heard later he wanted to be chairman, not CEO, but whatever went on, a short time later he announced he was going to retire from his executive position but would stay on the board. In subsequent years I have seen Dick on various occasions, but I never asked him what had happened, nor has he made any effort to tell me. I figured if he wanted to tell me, he would.The announcement by Dick that he was retiring was a turning point for me. Up until that moment, I had given no thought to retiring. I was only 58 after all and was responsible for a successful and significant part of the company. About a year later, I was in a meeting with the new president, Lew Platt, and he asked me if I had given retirement any thought. I responded that I didn't want to just kick back and play golf for the rest of my life, and he talked about how other retired executives find consulting jobs, work for other companies or start up other businesses. He clarified that as an HP vice president, I could take early retirement and given my time with the company would get about 50 percent of my salary until I hit age 65. That added up to about $1 million - not a bad deal. It was a strange conversation and it didn't strike me until I left his office that Lew had been suggesting that maybe it was time for me to retire. It got me thinking about it. Dick's retirement occurred in November 1993, and mine came shortly afterward in June 1994.
By then we had grown the Mass Storage business for HP from $500 million in 1988 when I took over to $2.0 billion in 1994 with 82 percent in business external to HP - just the opposite mix from 1988. We were number one in the world in optical disk drive jukebox storage devices, number one in DAT tape drives, number one in DC2000 tape drives, number one in 1.3 inch disk drives, and high end disk drives were growing at 65 percent a year in revenue with units doubling every year for the last three years. It had been a very very good run - and perhaps - time to retire.
It's funny how life never stands still. Candy and I had a number of major life events hit us - some good, some not - in the late '80s and early '90s. On the good side, I saw three of my children get married and several grandchildren born. That is always rewarding and special.
On the bad side, I lost both of my parents in 1990. I was on a business trip and had some time between flights in San Francisco. I called my dad on the telephone and asked how he was doing. "Not very well" he replied. I asked what was wrong and he began to tell me that there was something wrong with mom. She was on the floor and he could not get her up. I asked if he had called 911 and he said no. I told him to do that because it sounded like she needed help. He said he would do it so I got off the phone. I called my brother Gene in Iowa and told him what had happened. He said he would follow up and call me when I got back to Boise that night. When he called he said the ambulance had taken mom to the hospital and she was in a coma. Dad also had suffered a broken foot. Gene and Betty were on their way to Pueblo. The next morning I flew to Denver, picked up my sister Audrey and we drove to Pueblo. We visited mom but I don't think she knew we were there. The prognosis was not good and the doctor said we could only wait to see how she responded. The next day was Friday and since Gene and Betty were going to stay I went back to Boise. On Saturday I was at the golf course and a guy came out to get me with a message to call Gene right away. When I called I was shocked to have him tell me that dad had died of a heart attack a few hours earlier. Candy and I flew to Colorado and we had the funeral for dad. Candy and I drove to Denver that night and were in a hotel when Gene called to tell us that mom had just died without ever coming out of the coma. We returned to Pueblo and had a funeral for mom. Gene and Betty stayed in Pueblo over the next few weeks and tended to all of the necessary details that comes with such a catastrophe. The only good news is that neither one of them had to suffer the death of the other. Gene did a great job in handling everything with all of the pertinent parties. I don't know what Audrey and I would have done without him. Dad was 85 and mom was 83.
Candy lost her mom in 1990 as well after a 9-month-long battle with cancer. That was a very difficult year for both of us.
Through this time I was also dealing with some strange physical symptoms that began to get somewhat worrisome. I had noticed some numbness on the soles of my feet while we were still living in England but the doctor didn't seem concerned. I guess we just wrote it off to wear and tear from jogging. Candy and I went on a trip to Hawaii in 1989 and while we were out jogging together Candy began to pass me up. I tried to jog faster but couldn't. When we finished the run I had a tight wrapped feeling in my lower legs. When we returned to Boise I consulted with a neurologist who took a series of tests but found nothing conclusive. After he exhausted his options, he referred me to the Mayo Clinic in Rochester, Minnesota. They also ran exhaustive tests and at the end of a week there, they actually took a nerve biopsy from my ankle to study. The results were inconclusive and they could not identify it other than as some sort of neuromuscular neuropathy of which there were thousands of types.
I knew my older brother had some type of physical ailment but he had never really talked about it. After returning from the Mayo Clinic, I telephoned him and inquired about it. He said he had something but understood that it was not hereditary. I asked him to describe the symptoms. After he went through them I told him it sounded very much like my symptoms as well. When I relayed this conversation to the doctors at the Mayo Clinic they thought we indeed had some sort of hereditary disease, but as they were not able to identify it, the best thing for me to do was to observe my brother as it appeared to be a slowly progressing disease relative to some others. While it was a relief to finally know something about what was happening to me, it was also difficult to learn I had a chronic progressive disease that had no cure and that my body would be experiencing some significant changes over time.
At this time, however, few people could tell there was anything visibly wrong with me and I had a few more things to accomplish before putting my career in the back seat. In later years, my malady would be identified as Kennedy's Disease.
|First Generation of Digital Data Storage Tape (DAT) 1.3 Gb - A Quarter Dollar for Scale - Kittyhawk Hard-Disk 40 Mb Capacity|
It was very satisfying to have my years of service acknowledged
| In 2002, I was honored to receive an honorary doctorate
from Albertson College (now College of Idaho)
where I had been a longtime member of the Board of Trustees
I've been fortunate to have some great teachers over the years. They were people I met, in school, in life and in work. Having people willing to be a mentor - helping you with advice, patience and steady coaching with your best interests at heart - is a gift. I've had many mentors in my life.
My parents, of course, were good mentors to me. They taught me a lot about what it takes to have a family and to persevere through tough times. They also taught me to spend less than you earn, to put a little away for a rainy day, and that hard work doesn't hurt.
Joe Egan and Al Evans, owners of the gas station where I worked as a teenager, were other mentors while I was growing up. Al was a good mechanic and taught me how to repair cars. He was also quite the ladies' man and had a few tips about women and sex. Back in those days, before there was the Internet and information in school was very limited, details about sex were pretty sparse and a guy had to learn from word of mouth. Certainly, no one would talk to their parents about it. I also learned a great deal about customer service and the commitment it takes to run a business from Joe and Al.
After about a year at the station Joe and Al had a falling out and Joe bought Al's share of the station. When Joe wanted a day off he would usually ask me to manage the station on those days. He taught me how to measure how much gas we had in the station tanks and to order a tanker load from Texaco, schedule the delivery and write them the check, how to close and balance the cash against sales at the end of the day, and other details of the business. Joe had an ex-girlfriend, whose son was in my high school class. She did not take well to the "ex" part of their relationship and apparently she confronted Joe at the bank one day. Joe apparently said something derogatory and left - heading back to the station. He came speeding into the station, with her son right on his tail. He jumped out of his car and hit Joe from behind. Not knowing what had transpired at the bank, I ran out and grabbed him from behind pinning his arms to his side so he could no longer attack Joe and tried to calm him down. To my surprise, as I held him, Joe turned and smacked him in the jaw - nearly putting us both down. I spun him around out of Joe's reach and yelled for help from another employee. We got them both settled down shortly and were able to release them. Joe was quite grateful for my help, but my classmate was less than happy with me. Lesson learned? Sometimes it's better to mind your own business.
When I first joined HP my mentor was Edna Mclean. She was the person I worked for in production engineering. After I graduated from college, each of my bosses was my mentor but overall it was Bill Hewlett and Dave Packard who were my primary mentors. This wasn't a personal, one-on-one mentoring; it was more of what happened by being a part of their company and the culture they created. This was no small thing. The HP Way defined my career and my beliefs about a company's responsibility to its employees and its communities.
I was also impressed by both men and the way they conducted themselves. Once, probably around 1964 when I was working in England, I was invited to a dinner that Bill and his wife attended. At this dinner, Bill said that he was going from England to Japan and his wife was heading home to California. They had been hiking in the Pyrenees Mountains in Spain and Bill told his wife that he would pack her boots in his luggage so her luggage wouldn't be overweight, incurring an extra charge at the airport. I thought it was interesting that this man, very wealthy by now with a company rapidly growing globally, would be so concerned about a few dollars. Bill said "Even though I can afford it, that's no reason to squander money." That impressed me and stuck with me through my life as well.
Years later, when he asked me to launch HP into the printer business, he talked a bit about the need to have divisions operating independently, with their own business plan and responsibility toward profitability. He taught me a lot about the use of having small businesses within a larger organization. Before then, I hadn't thought much about how or why the company was structured the way it was. Bill also talked about having good interactions with the community because it would be difficult doing business in a place that didn't care whether you were there or not.
I'm not sure when it was that I discovered Dave Packard and I were both from the same hometown of Pueblo, Colo. That was amazing to me. In his book "The HP Way," Dave wrote about another coincidence that may have brought him in contact with my grandparents or at least their neighborhood. Apparently, Dave returned to Pueblo for summer work during his college years at Stanford. In the early 1930s, he had a job delivering ice. He wrote this about that experience:
"Since the ice was in large blocks, I had to cut it into pieces for my customers. This was about a year before the repeal of Prohibition, and my most important customers were the beer joints heavily frequented by steel mill workers in the tough part of Pueblo that I had avoided when I was in high school. I had to sell ice for cash to be able to buy another supply of ice the next day. I can't recall how much money I made that summer, but I believe I did pretty well."(From "The HP Way.")
His memories of Pueblo recalled that it resembled a tough "frontier city."
"There was a steel mill and several foundries that smelted ore from Leadville and other mines in the Rocky Mountains to the west. Pueblo was tough and violent, with immigrant workers, a few gangsters, and lots of brothels and saloons. Street fights and shootings were not uncommon."(From "The HP Way .")
Dave and I never really discussed our Pueblo connection, other than a comment or two in casual conversation.
Both Bill and Dave were regular guys. They didn't put on airs and they dressed casually. You'd never call them Mr. Hewlett or Mr. Packard; it was always Bill and Dave. One story I heard was how they ended up deciding whether the company would be Hewlett-Packard vs. Packard-Hewlett: They flipped a coin.
In the early days their offices were always open. They did have secretaries to schedule through, and it was better, but not mandatory, to have an appointment to see them so that you didn't waste time waiting for them if they were busy with someone else. Their basic philosophy was to empower people to make the right decisions, but if you needed to see them, then you should just come in. It was a very informal feeling.
A very important part of the "HP Way" was that decisions would be made at the lowest possible level of the company. That would enable operations to be as flexible as possible, with no delays waiting for upper-level approvals. They also encouraged employees and managers to not be afraid of making a mistake. The thought was that if you didn't make mistakes, you weren't working at your potential. On the other hand, if you made a lot of mistakes, they wouldn't hesitate to replace you. Some people thought the HP Way was easy and meant you could never get fired. That wasn't the case. It was very much about taking responsibility, making decisions, and following through.
As the company grew, I saw Bill and Dave less and less - usually just a few times a year at division review meetings and then at general managers' meetings, and occasionally if I was in Palo Alto, or if we would cross paths somewhere in the world.
Another mentor was Ralph Lee. Ralph was the one who actually hired me full time when I was about to graduate with my engineering degree. He was the company expert on operations and while over time he held many positions in the company he stands out as the one who always simplified problems to make them easy to solve and always took a matter-of-fact approach. You always knew where you stood with Ralph. He would not hesitate to speak his mind. His most memorable saying was, "That's really a dim bulb idea."
Next on my "mentor" list would be John Doyle. He was a Brit who had been in the Royal Air Force and signed on with HP a year or two before I did. When I first went to England for HP, John was the one who taught me how the English were different and what to do and not to do. He also gave me a lot of information on living in that country. When we ran into a controversy over where HP would expand, I talked to John about what was happening and why. I just didn't understand why moving 300 miles to Scotland was such a big deal to the HP employees from England. He explained the dynamics involved and that helped me navigate those times.
John actually became my boss' boss for a short period of time and when I went back to Bristol later in my career, he helped me again with the culture there and providing career advice as well. He had left the company at one point and then returned, so he had good advice to offer about life outside HP.
David Simpson was my boss in England and Scotland. He was a Scotsman and had worked for Hughes Semiconductors prior to coming to HP. He taught me a lot about management and evaluating potential sites for HP as I visited many potential locations throughout the UK in 1964-1965. He was also very helpful as I worked on moving the operation from England to Scotland in 1965. We had a good relationship and on one occasion in the early 80's sometime after he had left HP and joined a company called Gould, he visited me in Boise where upon he offered me a job managing a company in Santa Clara, California that was part of the group of companies for which he was responsible. It was an interesting offer, but did not have the appeal of what I was working on in the printer arena.
Paul Ely was a good mentor to me on how to run a negotiation and especially helped me when we were negotiating our first printer deal with Tally. He taught me about understanding the other party's needs and interests and working out a win-win solution. It was between Paul Ely and John Young to ascend when Dave Packard stepped down. Young got the nod and Paul later left the company after he was moved to lead more non-mainstream parts of the business. Paul was very good at listening to situations and making a decision while John was more inclined to go for a consensus, or not even make a decision until late in the game.
I was very fortunate to have had a great group of managers to work with in the Mass Storage Group. Because I was in charge, I guess I would qualify as their mentor. I find it much easier to know who mentored me than who I mentored. As a manager, you would like to think you mentored all of your people, but I think in the final analysis it would be up to them to make that decision as to whether I helped them or just got in the way. In any case, many of them went on to do great things so hopefully I had some influence in developing them.
Some of them were:
John Boose rose through the ranks from the sales and marketing side to lead the Greeley, Colo. division. He went on to manage the Bristol division until I brought him back to manage the acquisition we made in Colorado. John retired from HP and now has a successful management consultancy firm and teaches in the Business College at Colorado State University as well.
Jim Hall, who I brought in as R&D manager for the first laser printer project, was another one. I worked with Jim through the entire LaserJet printer development. He and his team did an outstanding job working with Canon in Japan and HP Labs in Palo Alto, California to develop the technology into marketable products. Without his dedication and perseverance I am not sure HP would have been successful in bringing out this world renowned product line. However, as the division grew and we broadened into other technologies I eventually had to take him out of his job and give him a laser printer specific role. He just couldn't handle the changes and growth. It was a traumatic decision and one that I felt bad about. Ten to 12 years later, when Jim retired, he came to me and thanked me for having made that decision. He said he wasn't having fun anymore at his job and it was good that I had recognized that. I had learned some time before that when you think someone has reached their level of competency, then it's time to make the decision for them.
Bob Tillman replaced me in Bristol when we moved back to Boise in 1988. Bob was one of my most successful managers. He finished getting the DAT tape drive business launched and when he returned to the U.S. after four years in Bristol he took over the Greeley division and eventually a division in Boise. He later left HP and became the CEO of a company in San Luis Obispo, California which eventually was acquired by Intel. He is now retired and shares his time between his California home and one in Bend, Oregon.
Roger Archibald was my Group Marketing Manager and a key player in the Colorado acquisition. He is now the CEO of a mass storage company in Minnesota.
John Gannon was my marketing manager who went on to manage the Bristol division. He became the vice president of a tape storage company in California.
Bruce Spenner, who replaced me when I retired, has since left HP to become a founder of new company in Colorado that makes solid state display modules. You may have one in your car.
Doug Clifford was the manager of the data storage systems division. He left HP to become chief engineer and vice president of a tape storage company in Utah.
Rich Raimondi was my Group Marketing Manager as well. He became the manager of an HP division in Barcelona, Spain. He now manages worldwide sales for HP printers.
Lou Aldecoa was Group Controller. He now is the CFO for a chain of gas station/convenience stores based in Boise with 41 locations throughout Idaho.
Steve Simpson, who worked for us in the Boise Division, became our group marketing manager and then division manager of the LaserJet Division in the early '90s. I recruited him to Extended Systems in late 1994 as VP of Sales and Marketing and then he became President and CEO in 1996. He now works with a number of startup companies in Boise.
There were a number of other managers and staff members over the years that I have worked with who have continued to progress both within HP and out. The one person that I have had the longest association with over the years would be Chuck Jepson. I first met Chuck at the Mountain View Division of Hewlett-Packard in the late '60s. I was the manufacturing manager and Chuck, who had just graduated from the University of California at Berkeley, had just joined HP as a cost accountant. When we became a division in Boise, Chuck joined us as our division controller. In the early '80s, Chuck applied for the position of division marketing manager. Even though he had never held a marketing position at HP he made a very compelling argument as to why he should get the job, how he would manage the team and how he would be successful in marketing our newly introduced laser printer (not the LaserJet, but our first giant-sized very expensive printer.) He did it very successfully.
Several years later, he left our division and became the peripheral group marketing manager and eventually moved back to California in a marketing role for the computer business. I then lost contact with Chuck for awhile as he left HP, joining several startup companies. In the late '80s, I recruited him to join the board of directors of Learned and Mahn, then Apexx Technology. A short time later, after we sold these companies, Chuck became the President and CEO of Inference, a company in Novato, California. He asked me to join his board of directors, which I did. Several years later we sold Inference to a company called Egain Communications and Chuck worked for them for a short time. I recruited him to join the board at Extended Systems after we went public in the late '90s and a short time later he became VP of Marketing. In 2004 when Steve Simpson left Extended Systems, Chuck became President and CEO and he held that position until we sold Extended Systems to Sybase in 2005. Chuck now lives in Scottsdale, Arizona and we communicate via e-mail frequently and meet occasionally for dinner.
After I retired, I was called upon often for advice. I counseled individuals and city leaders and over time was even talked about as the "father of Boise 's technology community." Almost immediately after I retired one of the Boise city leaders came to me and asked if I would talk to a group about what it would take to recruit another company like HP to the area. I began to share my own story - about bringing HP's printer business to Boise and how it was a personal decision. So many places are good cities to do business in - when you are looking at several good places, the deciding factor is often personal to the decision maker. Find that decision maker who has an affinity for the area and you'll have a greater chance at success, I told them. Of course I also talked about the need for building infrastructure conducive to new companies and entrepreneurs.
When HP went through downsizing a number of years after I retired, I was asked to talk to groups of employees who had received pink slips about life after HP. I did that a number of times, telling them that they had good skills and they needed to continue doing what they did well. I enjoyed doing that, helping people who were very down on themselves or the company. I helped one guy set up a marketing company in town and another guy bought an ad agency that does very well today.
I joined the board of Learned-Mahn in the late '70s. By the late '80s, it had become an application software company focused on banking transactions and medical payment processing. Kevin Learned was president and his wife, Nancy, was in charge of software development. There were two other partners in the business originally, but both had left to pursue other interests. In 1991, Kevin and Nancy divorced and Kevin left the company while Nancy became president. The owners asked me to take on a mentor role to Nancy, meeting with her once a week for a year, talking about a number of subjects from how to manage people to how to manage projects. Later on we met on a less regular basis. In return for the mentoring I was given a number of shares of stock in the company. Additionally, one of the other original partners was in need of cash so two of us board members bought her shares. This made me the second largest owner. The end result was that in 1994, we sold the company to National Data Corp in Atlanta for a significant amount. Nancy remarried and moved to England but the Atlanta company kept her on as a management consultant for years. So I must have been able to help her in some way. Kevin went to get his doctorate in entrepreneurship from Texas Tech. He then began to teach at Boise State University and subsequently became the President of Albertson College (now called College of Idaho) while I was chairman of the Board of Trustees.
There were other ways I believe I've been able to share what I've learned. Tom Loutzenheiser left Extended Systems to start Apexx Technology and I helped him quite a bit in getting that going. In 1999, we sold Apexx Technology to Esoft, a company in northern Colorado, for their stock when it was at $8 a share. It was during the big stock market runaway and Esoft stock went to over $40 a share. I invested some of that money into The Network Group. Now I'm on the board of TitleOne, a title company in Boise, and am able to give some mentoring advice to the president and his team.
It's a lot more satisfying to give advice and see a person develop than to receive it. I feel it's almost an obligation, even though at times I think advice is sought to re-enforce the decision one has already made. I continue to get calls from people - but I've learned to ask if it's advice they want or are they trying to sell me something or are they looking for a job. It's easy to get overwhelmed by the requests too. I have learned not to take on too much at one time and have created a rule to not be involved in more than three things at one time.