HP Memories

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Experiences During 40 Years at HP

- Part 2 -

The Early Years

PART 2 - Table of Contents:

The Early Years

The New Job

HP Stock IPO

The new HP shares were valued at $16 each. Dave and Bill set aside shares to gift to employees who had been with the company for some time. The number of shares gifted was determined by length of service and wage level. Those of us who had not been with the company long enough to qualify for any gifted shares were offered the chance to buy 10 shares at the offering price. This was a gift also because no IPO shares were available to the common man though brokerage houses.

To exercise my 10 share gift was impossible because we had tons of debt, and no money. I talked my father into buying 5 of my shares and Colette's father Tom Green, against his better judgment, bought 5. Tom grumbled that he had never in his life seen a stock that was worth 20 times earnings, which was the HP IPO asking multiple.

When the 10 shares were delivered to me I transferred 5 to my father and 5 to my father in law. The share price advanced rapidly in value and then split 2 for 1 and over the years split several more times. This made Tom really anxious, so each time the stock split he would sell the new shares to keep his share balance at 5. "Risky business," he would say, but finally he gave up selling the new shares and just let them pile up. He eventually passed the shares along to Colette and my father who sold none of his split shares eventually passed on his shares to me.

The Organization

It was a little hard at first to know who to talk to about a work related issue. I asked Frank Cavier if he had an organization chart that I could look at. He had a very interesting reply. He explained that Packard didn't care much for organization charts. Dave felt they could be quite limiting and when new issues arose it was too easy for the ball to fall between the boxes, or to define the problem outside of your responsibility. He was also somewhat leery of hierarchical levels and strict reporting lines. Fortunately I sat next to Betty Badenhop (later Sox) and shared the telephone between our desks with her. Her solution to this ambiguity was to memorize the names of every person in HP and when she had a name and face linked up she checked them off on the internal telephone list, a one page sheet. So when I needed to know who to talk to, I asked her.

I often walked out to the production line and machine shop with questions about new assemblies or prototype machined parts. Labor and material cost had to be estimated so that new products could be priced profitably. On one trip I talked to Swede Wild, the supervisor of HP's machine shop. He's a big raw boned, rough and ready type of guy and was very knowledgeable about machining processes. He answered all my questions and when done I found myself in the middle of the machine shop coffee break.

To an attentive group Swede told the story of a little problem he had had the night before. It seems that on highway 101 some kids in their car were taunting him in his truck. They tailgated, flashed their headlights in his rearview mirror and pulled alongside to feign a side swipe and then laughed uproariously at their own cleverness. After suffering this for several minutes Swede came to his off-ramp and the kids tailgated him off the freeway. Down the off-ramp a ways Swede hit his brakes hard and the kids crashed into his reinforced steel tail gate which was equipped with vices and other heavy tools.

The kids couldn't stop and crashed into the back of his truck. Swede and the kids got out at the same time. Big old Swede towered over them as they all inspected the damage. The damage result of the crash was kid's car 90% and Swede's truck 0%. The kids were moaning and groaning about what their parents were going to do to them and were whining about Swede's quick stop. He said simply, "Didn't you see that dog run across the road?" To me he was a prototypical HP kind of manager who had simple quick solutions to difficult problems.

When the accounting close was complete, the prospectus issued and the shares sold, we immediately started all over on another full accounting close, this time for HP's October fiscal year-end so that the first public annual report of the company could be issued. It was like Groundhog Day. It seemed like we kept doing the same thing over and over. I kept trying to convince Cavier that we should make this whole process simpler and gave him specific suggestions, but he felt that the simplifications might not be as accurate. He also knew that I would never make a great cost accountant so he came to me one day and asked if I would like to start up a Systems and Procedures department for the Company. This sounded great to me. The Company had grown rapidly and many of the internal processes had not kept pace with the growth and transaction volumes. As a result there were opportunities to streamline processes everywhere.

The first Christmas Party I attended at HP included all the employees of the company on the afternoon of Christmas eve. The construction of Building 2 in the Stanford Industrial Park complex was just completed and nothing had been moved into the 50,000 square foot upper floor yet, so its wide open spaces were prepared for the party. There was music, refreshments and Dave and Bill gave talks thanking everyone for a great year. Then the two of them announced the percent of Christmas bonuses to all assembled, and handed out the bonus checks to each of us personally, shook our hand and wished us a very Merry Christmas. These Christmas bonuses were over and above the production bonus which was an integral part each paycheck.

Systems and Procedures

As I started to put together this new activity for HP, David Bates became my new boss and mentor. The initial tasks were fun and relatively manageable. The HP campus was expanding with a large complex of new buildings being completed about 1 mile up Page Mill Road in the Stanford Industrial Park. The internal mail was not flowing well and I was asked to fix this problem and then I was asked to supervise the mail delivery people. The manual delivery system got sorted out quite quickly.

As the new six building complex was being developed I suggested the possibility of building in pneumatic tubes for mail delivery. Bates suggested I talk to Cavier. So I did and laid it all out with a design, investment expenses and projected return on investment. Cavier said I should talk to Packard. I asked how in the world would I do that and Frank said simply, just catch him at coffee break.

Packard and Hewlett almost always came out of their offices at coffee break, so I stepped up to Dave like a gnat to an elephant, and laid out my proposal. He listened respectfully and then said, "No. We don't want to do that." He explained that there is too much value in having people walk through the plant to see each other face to face. I appreciated the clear and instructive response. One highlight of Hewlett and Packard's management style was a periodic meeting at morning coffee break time. Everyone would gather somewhere in the wide open spaces of the office, factory, or lab to hear Packard and/or Hewlett give a report on the progress of the company, the results of marketing shows where HP showed their new products, the review of a new product coming from the labs, new large sales contracts, a special employee achievement of some kind, or whatever was most pertinent at the time. These were not long meetings and they happened once or twice a month as I recall. These were valued by employees at all levels.

Over the years these coffee talks were replicated by local managers worldwide throughout the company.

Office Tools

Instrument Repair Process

An early systems assignment for me was to review our instrument repair process. Carl Mahurin headed this activity and by going through the repair flow and information flow it was possible to significantly simplify the repair procedures and shorten the repair processing time.

Our First Palo Alto Home

In 1959 the owner of our leased home on Moreno told us that he wanted to sell the home we were living in. Because we had two young boys and were expecting a third child, he judged that the home was too small for us and told us he had sold it to someone else for $14,000. We were not quite ready, financially, to pay for a larger home, but we began to look, out of necessity. We found a 3 bedroom home on David Drive in Palo Alto and agreed to buy it for about $21,000. This was a mammoth stretch for us. We assumed the first mortgage of $18,000 that the seller had carried, negotiated a $1,000 second mortgage from the seller, borrowed the realtor's commission of $750 as a third mortgage, borrowed $600 from my father in law and got an unsecured bank loan for $500 and took the remaining $250 from our meager savings. It was a nice sunny, open, tract home built by Mackay and we loved it.

Annual Management Meetings

Hewlett and Packard held annual off site management meetings and in the late '50s about 40 people attended. Cavier asked me to attend one of these meetings that was to be held in Monterey, CA. I didn't qualify to be there, but he had created an important exposure opportunity for me. We had meetings the first evening and stayed overnight with a meeting through most of the next day. After dinner the first night there was a casual session where Al Bagley, Carl Cottrell and other collaborators had put together a skit which poked fun at just about everything that was going on in the company at the time.

They had some clever lines for me to read about my penurious control of office supplies and equipment. No one escaped the friendly ridicule. Hewlett played himself giving a very complex, detailed description of how the challenging new payroll system was going to work and then Packard read his script explaining how a simple straightforward payroll system was going to work. It was hilarious, and at the same time impressive to see that the company leaders could laugh at themselves without difficulty. I recall the banquet posters, which were prepared for these conferences. They had cartoon bubbles with the thoughts or spoken words of those in the picture. Very funny!!!

After this light hearted session most everyone retired to the bar where a good number of folks were drinking a gin fizz. It looked kind of interesting so I told the bartender to make one for me without the gin. Everyone in the group said that’s not a good idea. I said why not? You all say it’s great and the gin has no taste. Well the bartender made one for me without the gin and the group was right, it was not a good idea. Better to just stick to my ginger ale.

The next day leaders presented their recent results, challenges and plans for the coming year. Ray Wilbur had just been hired to be HP's first high level Personnel Manager. He gave a very stirring keynote address on the importance of our people and that it was as important for them to grow as fast as the Company did. Dave and Bill gave a wrap-up and shared their insight on what needed to change, improve and focus on for the company to continue to be successful. Dave said that Ray Wilbur's talk was the most significant thing we had heard in meeting.

After the meeting I rode back to Palo Alto with Dave. I felt intimidated at first, but we ended up having a nice conversation about our respective activities and families.

Corporate Purchasing

The Purchasing Department invited me to review their procurement processes. I designed a purchase order that created a receiving report and facilitated the payment of invoices, and streamlined the full process. Don Anderson headed the department at this time and was great to work with.

Ed Porter

One day Colette came to HP to pick something up from me. She parked in front of the 275 Page Mill building, close to the entry and little front lobby. As she left the tight parking spot with our little kids in the back of our car, she cramped the wheel a little too soon and her front end hit the rear of the car on her left. The dent she made was quite noticeable and she felt awful. She went back in and talked to Ann Laudel in the little lobby/reception area. Ann checked to see whose car it was and went to get Ed Porter, the Vice President of Production who was the driver of the damaged car. Colette's anxiety had doubled by the time he came out and she profusely apologized. Ed waved her off and said don't worry about it, no problem. He didn't even collect license or insurance numbers. We both loved him.

Porter was on the Palo Alto City Council and later became the Mayor. One Monday night I went to council meeting with some boy scouts. An interesting agenda item came up where a black man was trying to get Council approval to build a mortuary in the southern portion of the California Avenue area which would serve the residents there. The application was denied on what seemed to be a technicality. I felt sorry for the fellow. The next day at work Porter said he noticed that I was at the meeting and asked what I thought about it. I mentioned my concern about the funeral home application that had been denied. Porter said we did him a favor. There are a number of projects (a county court house and upscale apartments) coming along for that area that will change it from a less expensive residential neighborhood to professional and commercial district. He added, "We were not free to talk about these projects in public, but we did save the fellow a fortune. He would have invested his money and then would go broke when all the residents moved away."

Apricots

One summer Dave Packard announced that he had a lot of ripe apricots in his orchard that were going to go to waste and he invited anyone who wished to come and pick them. Colette and I and our three young boys went to Los Altos Hills where his house had been built in acres of apricots. While we were picking, Packard drove his car down into the orchard. I thought we were in trouble of some sort. But he got out of his car, visited with us for a while, helped us pick and then roared away. We ended up with a good supply of apricots which we dried and canned.

Sales Order Processing

When Building Number 3 in the Stanford Industrial Park (1501 Page Mill Road, Palo Alto) was complete, most of the HP administrative staff moved from 275 Page Mill by the tracks, to the new classy, glassy building on the hill. Our Systems and Procedures group made this move along with the rest of HP's admin people. During this time a couple of my BYU friends were recruited into the group. Roger Sant and Lee Simmons had spent time in the Air Force when they graduated from school as a fulfillment of their ROTC contracts. Roger then went on to the Harvard Business School for an MBA. He said the thing that attracted him to HP was the list of 7 Corporate Objectives that Dave and Bill put together. He had not seen anything like it in other companies. It focused on Profit, Customer, Field of Interest, Growth, People, Management and Citizenship.)

In 1960, a new Sperry Rand computer was purchased by HP and a small programing staff was built up.The programing group in the Electronic Data Processing department (which was separate from our Systems group) had done a great job of programing our first payroll system and several accounting processes. Then they set about to do an automated sales order processing system using our relatively new central computer installed in the lower floor or our new building number 3. A number of difficulties were encountered in this effort. It had been a courageous effort to even try at this point in computer development. Our new mainframe computer had way less memory than you would find in a small I-Pod today. [The complexity of this task became clearer when, many years later, Heart was developed.]

As a result of the problems being encountered, Noel Eldred, the VP of Marketing, asked if I could help unkink the processing of sales orders. Roger Sant worked with me and we took a very simple approach proposing 3 or 4 state-of-the-art Smith Corona Marchant (SCM) machines. These machines were programmable, had a nice keyboard plus two additional input readers for punched paper tape, or edge punched cards and two outputs for tapes or cards.

Eldred was favorable to the proposal and asked me to make a presentation to the Management council, which consisted of about 15 to 20 top managers of the company who met in the board room. This was in the days before computer generated projection or even overhead slides so we took a 2'x3' paper pad and some crayons and made about 6 panels. The presentation went well and the project was approved to proceed. At the conclusion Packard said dryly, "We should give crayons and a pad to everyone."

At that time purchase orders were typed in hard copy by customers and signed original was sent to the respective field sales representative offices around the world. There it was retyped and the retyped copy was then mailed into Palo Alto where it had to be manually entered again for the manufacturing factory, for sales statistic and for accounting functions. [Customer Orders were retyped by sales reps because they represented multiple manufacturers and they had to separate items for the appropriate supplier.] These reps were independent, non-HP people and were very good at what they did.

With the newly programmed SCM machines, the orders received from HP's sales rep offices were processed in Palo Alto by operators at each of the 4 machines. Product information was entered from pre-punched cards, as was the customer coding and address information. These cards were pulled manually and fed through the machines to give consistent data input. The output consisted of: a hard copy order for the HP factory and with carbon paper acknowledgement for the customer and one for the sales rep. In addition a summary tape was made concurrently which was used after shipment to create an invoice to the customer and finally a statistical tape was made which could be read into the company's main computer to generate sales statistics, commission reports and backlog information. Les Oliver and Bob Stephenson in Marketing were the inside champions on this project. The computer group of Matt Schmutz integrated the paper tape with sales statistics into the mainframe computer to keep sales statistics.

One day during the programing and implementation, I was eating lunch in the cafeteria and Packard with some other managers came in and sat across the table from us and asked how the sales order processing project was going. It had been a difficult day and I said, we are doing a little pioneering. Packard said "That's OK. That's what we do." When we got done the system worked well and became the pattern for the next generation of sales order processing.

After completion of this project, Roger left HP to start up a tech company of his own and was quite successful. He later went on to become Under Secretary of Energy in the Bush 41 Administration. From there he launched some successful energy producing companies. Lee transferred into the Personnel department that had been formed under Ray Wilbur.

Roger joined the group as a systems analyst and Lee came in as a support person to the group. As none of us drank coffee, at break time we grabbed a fourth person and went to one of the ping pong tables that were on most of the large porch like decks outside each buildings and played lively doubles for 10 minutes.

Community Service

HP leaders had always set a great example of serving in the community. I could see that giving service in my community was a good thing to do if the opportunity presented itself. When I was still quite new in the company, Frank Cavier worked out an invitation for me to join the Board of Directors of the Palo Alto Red Cross and gave me some good coaching on what a non-profit board member does. There were many local luminaries on the Board: Percy Mitchell (after whom Mitchell Park was named), Bill Lane who was the Managing Director of Sunset Magazine and many others. I was a very small fish in a very large pond. From there I found my way onto the Board of the Stanford Area Council of Boy Scouts of America where I served happily off and on for probably 25 years. I also had the opportunity to serve on and chair a special Committee of the Palo Alto school system and Colette and I served as co-Presidents of our local schools Parent, Teachers and Students Association. And over my career with HP I had a consistent opportunity for church service as detailed below.

By 1960, the LDS or Mormon student population at Stanford had become quite large and the Church authorized the formation of a Stanford Ward. An LDS Ward is a geographically organized congregation of 200 to 500 people and it is led by an ordained Bishop with two Counselors. These 3 and all other positions in the church are filled by lay people who serve in their spare time without pay. I was asked to be the First Counselor to Bishop Ron Poelman in the newly formed Ward. In February we began staffing the brand new Stanford student Ward.

Membership was about 250 young people. Assignments were made to more than 150 of the student-aged members to help with the operation of the organization. Two years later Ron received another Church assignment and I was called to be the bishop. It was a challenging and joyful opportunity to work with these bright and energetic young people. Mitt Romney attended the Stanford Ward in his freshman year and then left on a church mission to France. I served in this calling until 1967 at which time I was called to be the Bishop of the southern Palo Alto Ward. The dividing line between the two Palo Alto Wards was Oregon Avenue.

My change to a family ward was good because we now had 4 children and they were attending this family ward while I was serving in the student ward. Being able to attend church with them was a plus. A normal family ward like our Palo Alto Ward had a wider range of activities than a student ward and for that reason was a little more complex. There were programs for children including nursery age. There were a range of activities for teenaged youth. There were 8 times more Sunday School classes to staff and so on.

In 1972 I was released from this bishops calling and shortly after was called to be the first counselor to help lead the stake. An LDS stake is a geographical organization consisting of 8 to 12 wards and totals three to five thousand members. The leader of a stake is called a Stake President and like a Bishop he has two counselors to share the responsibilities. The boundaries of this stake included Menlo Park on the north and Cupertino on the south and everything in-between. It was called the Palo Alto Stake. After two years this Stake was divided into two Stakes; Los Altos and Menlo Park. I went with the Los Altos Stake served in this capacity for a total of 9 years and had many wonderful experiences with wide range of people.

When I was released from the Stake Presidency, in the early 1980s, I had a delightful assignment to be the scout master in my family ward. At the time I became Scout Master our ward had just 3 scouts, so I went to several Palo Alto schools and recruited more than 40 additional boys into our troop. A number of the recruited boys came from difficult home situations and benefitted from more than a normal amount of attention. Our Troop had a great time back packing in the Sierras and Trinity Alps, snow hiking, swimming in lakes, cliff jumping, skiing, rain camping, learning to cook on campfires, hang gliding, organizing service projects and learning as merit badges were earned and requirements passed off.

After 5 years of great fun with the scouts and youth, the Los Altos Stake had a boundary change and our ward was assigned to be part of the Menlo Park Stake which encompassed everything from Palo Alto on the south to San Carlos on the north. A short while after this boundary change I was asked to serve in the Stake Presidency of the Menlo Park Stake, where I continued even after I retired in 1997.

Jean Chognard

I was troubled one day when Colette and I received a fairly large bill for our home insurance from a carrier that we had dropped and replaced with another insurer. Their claim was that they insured us for two extra months beyond our policy's expiration and they wanted to be paid for 1/6^th of a year plus late fees. This demand for payment from us had been made several times. I went to talk with Jean, HP's patent attorney. At that time, HP had no resident legal counsels, and John was our only lawyer. He got a big smile on his face and became very animated at the prospect of a good legal struggle. After a moment's thought he said, "Here is what you do. Type up a letter on formal looking consultant's letter head and tell them that it is not a good practice to charge people for things that they didn't order. Then under a separate cover send them a bill for your consulting services referencing your letter of advice. Don't be cheap." This sounded good to me so that's what I did and I never heard from them again. Another simple HP-type solution to a vexing problem.

Industrial Engineering

After a few years of managing the Systems and Procedures activities in the early 1960s I was invited to come into the Industrial Engineering Group. Carl Clement, the head of Industrial Design, had designed a series of modular electronic instrument enclosures. There were many preset sizes but every size could be very easily be mounted in a standard racking system or they could stand alone on a test bench. The backbone of the cabinet system consisted of two die cast aluminum frames which supported everything else. All of the aluminum shells were all pre laminated with an attractive blue-gray vinyl so that no cabinet painting was required.

My tasks were to expedite the completion of key tooling for various cabinet components, schedule their production and availability and meet the commitments for their planned use. Prior to this every HP product was housed in a different size and shape cabinet and many could not be rack mounted. The cabinets were well received and design engineers no longer had to create a unique enclosure for each electronic test and measurement tool we produced. This was a great way for me to become more familiar with HPs lab processes, tool and die making, machine shop processes, die casting and technical documentation standards.

Experiences During 40 Years at HP

- End of Part 2 -

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