HP Memories

 

 

 

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INSIDE HP:
A NARRATIVE HISTORY OF HEWLETT-PACKARD FROM 1939–1990

- Part 5 -

Other Elements of HP History

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PART 5 - Table of Contents:

 

 

Other Elements of HP History

 

The HP Culture begins to Change

In a real sense, the retirement of Dave and Bill spelled the inevitability of changes in the HP culture. It was bound to happen. The periods of leadership of John Young and Lew Platt made considerable efforts to maintain the wonderful culture that Bill and Dave inspired. But the company grew and grew, and necessarily became more bureaucratic. Once the stock ownership crossed the point where Wall Street was dominant owner, that forced more attention to quarterly financial results. Bill and Dave tended to consider the long term effects rather than short term.

Many of us HP old timers were distressed when the foundation product line of test and measurement was spun off to a new corporate entity, Agilent Technologies. We recognized all the management proclamations on why it was a great idea for both companies. But, for us, Test & Measurement WAS Hewlett-Packard.

By the time the Fiorina administration came in, the company was huge, with huge stakes in product strategies and the business sectors that were far removed from the founders' vision. It all seemed to culminate in the year-2000 decision to acquire Compaq Computer, which caused a sensational proxy fight between old and new factions. Many people asked, "What would Dave and Bill have done?" It is a moot question that I won't attempt to answer. We all recognize that times change and companies change.

A Public Tribute to Dave Packard

After Dave Packard died in 1996, Stu Center, the T&M catalog manager, asked me to write a tribute piece for the front pages of his 1997 general instrument catalog. In it, I did my best to convey the impact that Dave had on our world during his remarkably-productive lifetime. I believe that this memorial page best summarizes our feelings about the man and his company. Those decades were the golden years of corporate employment in the U.S., and most all of us who lived through them would confirm that we were honored and privileged to have been along for the ride.

A Tribute to Bill Hewlett on the 10^th Anniversary of his Death

Marc Mislanghe, who created this website asked me to write a remembrance of Bill Hewlett on the occasion of the 10^th anniversary of his death.

Oral History of Fred Terman

 

Bill and Dave in the 1930s

There are three Oral Histories by Fred Terman on file in the archives room at Stanford's Green Library. The most important one for understanding the electronics situation in the 1930's is in the interviews about his Stanford academic activities. In it he describes his long rise from childhood, with a serious lung malady which caused him to remain in his home for one year. When he came to head the EE department, he mentored and cooperated with a long line of students and well-known names in the Bay Area electronics field: Charlie Litton, Heinz & Kaufman, Farnsworth of TV fame, the Varian brothers, Eitel and McCullough (Eimac) power tubes, and many, many others.

In the appendix chapter (below) to that Terman oral history, he described the details specific to Dave and Bill in those days. Although interviewed and copyrighted by the Bancroft Library at the University of California at Berkeley, I hereby state that this is a "fair use" by reproducing it here, since there is no financial gain involved, and the quantities of my Narrative are trivial.

A second oral history involved his personal observations on Herbert Hoover, an early President of Stanford and later President of the U.S. The Hoovers and Termans lived near each other on campus, and Mrs. Hoover and Terman's mother were close personal friends, so he saw quite a lot of Herbert Hoover.

The third oral history involved a final project report on Terman's management of the Radio Research Lab at Harvard during WWII. From its launch in 1942, to its closing in 1945, this countermeasures lab produced an AMAZING amount of high-tech war materials. They designed and built thousands of countermeasures receivers in many radio and radar bands, noise and signal jammers, and the old reliable fundamental jammer, aluminum "chaff." Chaff is small strips of foil of various lengths that, when dropped in big bundles, and dispersed by the air, looks like an entire fleet of airplanes, totally confusing the fire control radars for the enemy AA guns. At the end of the war, U.S. chaff production was consuming more than 50% of the aluminum foil output of the nation.

In many organizational respects, the RRL was set up much like the HP organization we came to know. The entire program was about 800 people at the end, about half engineers. They had a pilot production area where they could build a few of an early design to check performance in local model shops--like HP. They had production engineers who would take that proven pilot design and approach large industrial electronics production companies, and maybe live at that location for 6 months to bring it into large scale production smoothly--like HP. And they had "service engineers" who traveled to operational military commands to perform the retrofits for those new threat or surveillance receivers into airplanes and ships.

The report was co-authored by Oswald Villard, who was second in command at RRL, and returned with Terman to Stanford after the war. It contains a large number of tabular listings of model numbers of systems, quantities produced and an overview of performance. The accomplishments of that team during WWII in just 3.5 years were stunning.

Later, in a history book of Electronic Warfare, another industry author mentions an amusing incident related to an RRL production team visiting the Delco Corporation in Indianapolis, to negotiate technical and production matters on a new ECM receiver. The RRL team had distributed project documents and stated production requirement at 15,000 units. After long discussions, the Delco team went off to have their own discussions. They came back with the information that technically there was no problem, but they wanted the RRL team to know that they understood the military urgency of the system, and that they were going to turn over heaven and earth to reach the required 15,000 units per month. "No!" said RRL, "We only need 15,000 TOTAL-EVER." Delco, of course, had been used to producing car radios for General Motors in the millions of units per year.

Interestingly, Bill Hewlett's job in the Pentagon, working for James McRae, was to serve as the technical overview and procurement manager for much of the countermeasures equipment that came out of RRL. McRae later went on to lead Western Electric Co., a division of AT&T. Terman credits Hewlett's keen technical mind with matching the military service needs with the RRL design team and their technologies. This also led to Hewlett-Packard making job offers to a number of the engineers at Harvard and MIT after the war ended. Bruce Wholey and Art Fong are typical names. Art's expertise was designing klystron signal generators used to test countermeasures receivers.

TERMAN APPENDIX 2: REMINISCENCES OF HEWLETT-PACKARD COMPANY

Scanned and edited from a chapter of a book of Oral History by Dr. Fred Terman, Provost, Stanford University. Copyright 1984, Bancroft Library, UC Berkeley

William Hewlett and David Packard as Stanford Students

Terman: A lot of hams went into the communications industries; they'd liked Eimac tubes when they were hams, and they kept on using them in the equipment that they built for communications systems. If they were putting up a ground station for an airline, they'd use Eimac tubes. They were still devoted to them based on their ham experience. So you got a lot of good commercial business through the strong position developed before when they were in grammar school, high school, and college, with their ham radio clubs.

Susskind: I started to ask you about connections between this first era of development and the EE department of Stanford.

Terman: There weren't really any connections other than the fact that Stanford was the launching platform for Elwell. When I came into the picture, I was interested in these activities and I used to get people from these things to come to talk to students. We used to go out and visit them sometimes; when I knew the people, I made a special effort because I had a personal interest. Some of them were my friends.

Susskind: You mentioned you had been a consultant to Heintz and Kaufman. Was that a common practice for other professors?

Terman: From 1925 to 1937, I was the only one at Stanford who had really any interest in electronics at all. There weren't any other professors even closely related to the field. I did some consulting for a period, not very heavy, and it wasn't terribly significant.

Susskind: Why don't you tell about when Hewlett and Packard graduated?

Terman: As of the middle 1930s, we didn't have very much activity in electrical engineering on the West Coast. There was a little more in Los Angeles, southern California, than around here.

My better students who were interested in electronics ordinarily couldn't find jobs in this area that would be appropriate for their abilities and promise. They'd have to go east and work for General Electric or Bell Labs or Crosley Radio, or something like that. I had a selfish interest in these little companies around here because now and then they might hire one of my fellows. For instance, I got Eldred the job working for Heintz and Kaufman, and so Eldred, who just died, became one of the top men at Hewlett-Packard.

Susskind: And mayor of Palo Alto?

Terman: No, that was Ed Porter, a little later. But Eldred was a very bright fellow and very good engineer, but also good round-about qualities; he got his engineering degree from Stanford in '33. I managed to get him a job at Heintz and Kaufman; he'd grown up in this area and this enabled him to stay here. The alternative was to go east, wear out a lot of shoe leather, and pick up a job from some company. God-knows-where, where he wouldn't want to live anyway.

In the 1920s the best students went to Bell Labs or General Electric. In the 1930s Bell Labs and General Electric didn't do much hiring. But Packard got a job with General Electric, to use him as an example; in 1934 General Electric hired one or two fellows out of Stanford and he was one of them. I was quite annoyed at them because they talked him out of doing graduate work. At the time I thought it would be better for Packard if he'd gone on and gotten a little more training, because he was one of the brightest students we had and obviously had a lot of future.

Susskind: He came back, though.

Terman: Yes, he came back later to do graduate work and got his Engineer's degree with us. But that was a means to an end. I'll tell you that story. I don't know if you know Phil Ekstrand who worked for the Navy up in Bolinas. He was a very bright boy, and he's been submerged, disappeared up in that Mare Island area in the Navy. I developed an interest in these companies partly because they were doing interesting things and partly because they now and then offered an opportunity to place a student.

We had several things going on in here during those depression years that were creative and interesting. There was Litton's operation. Phil Farnsworth began in the late '20s functioning in this area, the first one to demonstrate television pictures with an all-electronic pickup, no mechanical whirling discs. Federal Telegraph had some interesting things until they left; also Heintz and Kaufman, and Eitel-McCullough.

There were some companies here that were independent, owner-managed; that is, the owners were also the entrepreneurs and the technical people. Heintz's company was that way for a number of years and then he tied up with the Dollar Steamship Company. He still ran his end of the show, although he wasn't a complete sole owner anymore. Eitel and McCullough were the entrepreneurs who built the company and also were the top technical people, and Litton was the same way. They were not copying things that people were doing in other parts of the country or trying to do them a little cheaper or carve out a little local market for them.

Hewlett and Packard were two students, both in the class of 1934, who'd gotten acquainted as undergraduates. They came from different parts of the country, and belonged to different fraternities at Stanford, but somehow they were both electrical engineering majors and got acquainted. They decided by the time they were seniors that someday they would like to go into business together, and it would be some kind of electronics business, because they were both electrical engineers.

Dave Packard had a lot of ham radio; Hewlett didn't have any particular background of that sort, but electronics seemed to be the growing and interesting thing, so it would probably be some kind of an electronics business. I got wind of this about the time of their senior year. I had Packard in my class all through the senior year; he took my graduate course in electronics, using my book [ Radio Engineering ], when he was a senior, which was a year before the normal sequence. Packard had been offered a job by General Electric and took it, as I said, to my annoyance, but he was so flattered at being offered this job in the depths of the depression that he worked for General Electric for a few years and did extremely well there.

Hewlett stayed on at Stanford for a year of graduate work. I really got acquainted with Hewlett in that period. Then he went to MIT and did a year of graduate work there, and then came back here. His father was then deceased but had been head of the internal medicine department at Stanford Medical School. He was an M.D. of some note. His father was brought out here to take over internal medicine at Stanford Medical School at the time Ray Lyman Wilbur was made president of Stanford. Wilbur before then had been dean of the Medical School, but also was head of the Department of Internal Medicine and taught regularly as dean. When he became president of the University, he had to quit all those things, and he scoured the country and brought in a man who'd already had distinction; that was Bill Hewlett's father. I think Bill's father grew up in this area somehow, or at least Bill's mother did. There used to be a Coffin-Redington Drug Company in San Francisco; it's now part of a larger, national company.

Bill's mother's name was Redington; she was from that family. It's William R. Hewlett and the R is Redington. There was a certain degree of money, so unlike most of the students during the depression, Bill had, I believe, an independent income from his father's estate, so he wasn't under dire straits to find a job. He finished at MIT and then came back to Stanford and puttered around our electronics lab, playing with some things. There was a woman in the Medical School who was interested in brain-wave phenomena and he built some equipment around 1937 to record these on a roll of paper which passed through and a stylus wrote on it.

Negative feedback had come along; papers had been published on it. I was greatly intrigued by this, and one term I ran a seminar for graduate students in electronics and took the whole term to talk about negative feedback. First we handled it in a tutorial way: I did some of the lecturing; I got students to look up individual articles and make reports on them; and we got several boys building stuff around the laboratory, a dozen students, eight or ten. This was a great new idea, really.

Right in the middle of the seminar, which Dave was auditing, an article came out in the IRE proceedings from General Radio about an audio oscillator using what they called a Wein bridge, a bridge with a frequency-determining element in it. You used a resistance-capacity bridge, a Wheatstone bridge made up of resistances [undecipherable on original tape] and capacities in the arms in such a way that the bridge would balance at a certain frequency and that was the frequency at which this thing would oscillate. So instead of using a coil and condenser as the tuned circuit frequency-determining element, you used a resistance and a condenser.

It was a negative feedback concept involved. You took the output of the bridge and you fed it back to the input; this was an application of feedback concepts. General Radio had developed a push-button oscillator. You push a button and you can get this frequency or that frequency; you had ten buttons and you could get ten frequencies.

I looked at this thing. You know how universities talk about how they have no money, and their guts are being cut out of them. Well, we were too poor to buy anything back in those depression days and we'd been building our own laboratory instruments, since, we couldn't afford to buy anything. I'd been building oscillators, among other things; we used the students to do these things. These were pretty cumbersome things. I looked at this article and said, "Gee, here, if you just change this thing, and instead of using fixed condenser and fixed resistors and these push buttons, put in a four-gang broadcast tuning condenser, something like ten megohm resistors, you can get this bridge so it will balance as low as 100 cycles." These standard condensers were available very cheaply because they were a standard item in broadcaster receivers. You could get a ten-to-one tuning range; the frequency was in inverse proportion to the capacity, instead of to square root of capacity as in ordinary tuning.

These were designed to tune over three-plus-to-one range, and you square three-plus, and you get around ten. You can get ten-to-one tuning range, and it turns out that if you did, you had enough capacity that, with something like a five or ten megohm resistor, you could get down into the 100 cycles, which was about as low as we were interested in. Then you could change this resistance by factors of ten and you could get a ten-to-one frequency by turning the dial once, and then you throw a switch and you'd get ten-to-one on the next higher range, and you'd go from ten to 100 to 1000, 100 cycles to 1000 cycles by turning the dial once, and you throw a range switch one and you get from 1000 to 10,000, and maybe you could get from 100 down to ten cycles. This would be cheap to build.

So I suggested to Bill, who was looking for something to do, "Why don't you try building this? Here's a really good way to build an audio oscillator. If you're interested, why don't you build one of these things? There are certain problems that you haven't solved about avoiding too much distortion, and if you can get these problems under control, it looks to me like this might be something for which there would be a market. Then you could make these and sell them; they ought to be a lot cheaper than the things that are already on the market. They're simple, and they'd be so much cheaper that people might be willing ii to accept them even though they are different.

So he built one of these things and worked out a wonderful solution for the principal problem of controlling the amplitude without introducing distortion of the waves. The problem was that you had a pretty good audio amplifier; when you introduced second harmonics you didn't get much tuned circuit discrimination against the harmonics. He had a filament of a lamp that was in one arm of the bridge, a little limiter. As the amplitude and oscillations built up, the filament would get hot, its resistance would change, the bridge would come in the balance, and this would counteract the tendency for the oscillations to build up. It was a device that didn't introduce any nonlinearity, but stabilized the amplitude at the level where the amplifier didn't overload.

This was the real contribution that he made, and this was just a marvelous solution; I think they're still using it. He got a patent on that. He built a really nice model of this thing and demonstrated it to the [IRE-AIEE] Convention in Portland [1938]. I presented the general idea about the application of negative feedback concepts to laboratory instruments in a paper that was given in New York. This paper has got my name as author, and Hewlett's name as author, and I think Bob Buss was involved. We had three or four different ways in which we used negative feedback in laboratory instruments, and Hewlett's thing was a little section of this.

Formation of Hewlett-Packard Company

Terman: Well, Hewlett felt that they were ready to start a company. I traveled east once a year and I used to be a kind of go-between Packard and Hewlett. You didn't use the long-distance telephone as freely in those days as you do now. Hewlett wasn't much of a letter writer; I don't know if Packard was one or not. Hewlett was interested in forming a company, and was trying to coax Packard to come back and do this. Packard wasn't too sure. He had just gotten married; he was doing very well at General Electric. He'd gotten married by his wife going back there, which saved an extra round trip across the country for him. Remember, this was the depression. He could have had a much fancier wedding here but they didn't; they gave that up. He was a little bit conservative and cautious about giving up a job when he'd just gotten married, and he was very hesitant; it was tentative.

After the invention of the klystron, as a by-product of this, we got [the] $1000 [I mentioned earlier] given to us by Charlie Litton, who made some observations of something or other; a tube and a number of grids that seemed, under certain conditions of virtual space charge, to get some oscillations generated. Charlie gave some of the patent rights of some of these ideas to Stanford, and Stanford got $1000 from Sperry, through Litton, to work on these things. It was Sperry's money, but it was Litton's gift. We had just started building some facilities to make tubes over in the electrical engineering department, and we were looking for somebody who could perhaps start using that background and make something.

So Bill wrote a letter to Dave Packard saying we would pay him $500 to work half time for nine months on this vacuum tube project, [with an additional] $500 for equipment and material. Packard bought it and came out here. He took a leave of absence from General Electric, and so he didn't burn any bridges behind him. This was what made it practical. I picked up from General Electric during the following year that they just couldn't understand why a fellow as smart as Packard with such great promise in the company, in a company with an internal education program, would leave the great General Electric Company and go back to school and do some more studying.

Susskind: The General Electric program was a pretty good graduate course.

Terman: Packard had gone through their so-called advanced course. Mr. Bowen, who was head of their employment service and the chief man to visit the universities, was the one who was telling them that he just couldn't understand; it just didn't make sense to him, but of course, he didn't have half the story. I didn't tell him the rest of it; I didn't think there was any point in it.

So I hired one David Packard to work half time for me for nine months for $55 a month. [They] had a little [ceremony] when I retired, in Dinkelspiel Auditorium [at Stanford]. Packard was presiding, and I was telling about the good old days in our lab and the circumstances of work. I said, "We didn't have much money in those depression years, but when you did get a little money, it went a lot further than it does today." To illustrate this, I said that I had once hired a fellow by the name of David Packard to work half time for $55 a month, and you just can't get people as good as David Packard to work for such salaries today! In fact, Packard hadn't been out here a week until he knew that he would never go back to General Electric.

Hahn: It was a permanent leave of absence?

Terman: That's right. He had the option to return, you see, if it turned out that this wouldn't work.

Susskind: Where did the capital to start the business come from?

Terman: After she graduated from Stanford, and while Dave was working, Lucile Packard tried to get enough money together so that they could get married. She got a job as secretary to the registrar at the University, Pearce Mitchell--the equivalent of the dean of students today. She did this for a couple of years until they got married, and she quit. When she came back, six or eight months after they got married, it turned out her successor as Mitchell's secretary hadn't worked out too well or left, and she got her old job back. She worked a regular 40-hour week as secretary to the registrar of the University, did the Hewlett-Packard bookkeeping and secretarial work in the evening, and kept house as well. [She] made enough money to support the two of them.

Packard had to pay his tuition out of this $55 a month, too; you didn't get a tuition grant in those days. Bill Hewlett, as I've said, had some independent means, and they put $538 in a joint bank account. I think Packard had saved up money from General Electric, too. The Hewlett-Packard Company was launched with $538 of what you might say subscribed capital, and except for stock that employees have been able to buy since 1957, there's never been a dime raised from the public since. The company was started in 1938 or 1939, and in 1957, the only stockholders were Hewlett, Packard, and their wives. The $538 was the book value of their holdings.

Then they sold ten percent of their stock in 1957 to the public, and that established an over-the-counter market. They later sold another ten percent of their holdings to the public in some private sales. Then they've done mergers where they've traded stock since, and so now the two families only own about 60 percent of the stock, spread out through the children and a couple of grandchildren as well.

Packard was up for confirmation as Deputy Secretary of Defense, and somebody was concerned about the $300 million worth of stock--that was real. It wasn't make-believe, because the value of the Packard family's Hewlett-Packard holdings as of that time, if you take all the members of the family, was just about that: the number of shares times the market price on the New York Stock Exchange. Now he owns other things too, including a big ranch down here at Mt. Hamilton, but that was built up entirely from reinvested earnings.

Now the only thing that that company had to sell when they went into business was this oscillator, and they sold it for about $60 a crack. The competitive article that General Radio made--not of this type, but the normal one where you had coils with taps on them, and you'd switch condensers and you'd get resonant circuits at 120 cycles and so on, that sort of thing-the cheapest you could buy cost $300 or so.

Susskind: There's some story about General Radio encouraging them in their early days.

Terman: Yes, I can furnish something about this. This was the only thing that they had to sell. Now, they started working on some other ideas of things they might sell later, but for the first year this was it, and they began to sell a few. There was a very aggressive man in Chicago, a sales representative. He got a sample, and was their Midwest representative. He used to carry one of these around; they were small enough to be portable. Portable in the Western Electric sense, or in the General Radio sense, meant that it had handles, but it weighed maybe 60 or 80 pounds.

This thing was in a box (demonstrates) so high, so deep, and so long, and you could carry it in a carrying case on a train with no trouble at all. Every time he made a call he'd show the people this marvelous oscillator that cost so little. People got to buying them whether they really badly needed them or not; an oscillator at that price was so cheap that you knew that it was worthwhile. So he got selling a lot.

An early customer was a fellow named John Hawkins, who was doing the sound work for Fantasia , this motion picture with some very special sound effects. He discovered these oscillators and he bought ten or twelve of them in one crack. He used them to tune up the sound systems in that Fantasia film, which, of course, got them publicity and helped them very much in the very beginning.

Susskind: Who was the Midwest representative, do you remember?

Terman: A fellow named Crossley.

Susskind: No relation to Crosley Radio?

Terman: No. They started as a partnership, just a legal partnership; it wasn't incorporated. Finally, after ten or a dozen years of operation, it got to the point where tax-wise it was advantageous to incorporate. Now Packard was married but had no children; they had been married only a very short time. Hewlett at that time was unmarried. Packard rented a house down at Palo Alto, and in the back yard it had a two-car garage, and a one-and-a-half room apartment attached to the garage. Hewlett rented the apartment and lived there, so they were right close to each other. When they got orders, they would park their cars in the driveway and use the garage as the factory. When they didn't have orders, they'd park their cars in the garage, so you could see how business was by just driving past it in the evenings, for example, and seeing where the cars were. If the cars were in the driveway, you knew they had a good backlog.

For the first six-months or so, they did everything themselves. They may have taken something out to get it engraved in a shop, but they had a drill press and a soldering iron. It was a kind of a sheet metal soldering iron technique, and they did it all themselves except to take out for the engraving and painting to some job shops. After about a year of this, Hewlett got married; his wife came from an East Bay family. After she'd graduated from Stanford, she'd gotten a job as secretary to Murray Luck, who was putting out these science reviews.

Hewlett has a kind of funny streak, playing tricks and other little things he does. He got a story circulated; I'm sure he started it. The story was circulating that the reason Hewlett had gotten married at this time was because the Hewlett-Packard Company was getting so successful that the secretarial work was more than Lucile Packard could handle. Maybe she had quit her job, but she was still housekeeping, and doing this work while she was pregnant was more than she could handle. It was up to Bill to provide his share of the support, and that meant that he'd better get married now instead of putting it off. I heard this story from other people, but I'm sure that Bill started it.

Help from Melville Eastham and General Radio Company

Susskind: What about the General Radio support?

Terman: The boys around 1940 or so had a nice little company. By this time they had a few employees. Bob Sink was a graduate student by the time that they were starting; Bill had known him quite well. Bob Sink was a completely self-supporting student; he used to have a room in some faculty home down in Palo Alto; he cooked meals for his board and room, and had done this ever since he was a freshman. But he needed finances, and when he was a graduate student they used to use him to help them when they got more things than they could put together in the speed that they ought to service the customer. They'd get him to come down and work on Saturday morning to help them wire up these things.

So Sink worked there for maybe six months until he got his Engineer's' degree at Stanford finished, on a part-time basis after they'd gotten to the point where they needed occasional help. For years he used to go around saying that he was the first employee that Hewlett-Packard had other than Hewlett and Packard themselves. He worked for them for nearly a year, and then he quit. Within the next year they had hired five people to take his place.

The company was beginning to take off. They had a few employees, and they rented a little space down there by Polly and Jake, the antique shop on El Camino and Page Mill Road [in Palo Alto], not more than 15-foot frontage and maybe 25 feet deep. They outgrew the garage because they had continuous work by this time.

Melville Eastham was the founder of General Radio Company around 1915; it was the big electronic instrument company in the United States at that time. They were the ones who created--really invented--the electronic instrument business. A very nice company, very nice, good people; Melville Eastham never went to college but he had a great instinct for design, how to meet a need, and also had some advanced ideas on how to run a company. General Radio was kind of a social institution as well as a very successful company.

Eastham's home was, well, he grew up as a boy in Portland, and he owned a ranch out there in Portland, and he often came out here for a period, of the summer. Sometimes he went to Europe for the summer, but he often came out here and spent two months on the Pacific Coast with his wife and he bought them their ranch. He'd come swimming through San Francisco; when he didn't have a convention in San Francisco, then sometimes he'd just come down and visit some of his friends like myself.

Once, around 1940, he was visiting here, and I was telling him about Hewlett and Packard. He'd heard about them because they were mild competitors. So I arranged to take him down there, and I briefed him ahead of time. Eastham was a very unselfish man, but with a great deal of insight. I said, "These are good boys, they've got good ideas, they're very capable, they're well-rounded; I think they're going to make a go of this thing. They've certainly been off to a good start, and this will continue. They're also the kind of people that you'd enjoy having in the business with you, because they won't try to copy your ideas; they have enough ideas of their own. They'll be making their own contributions to the field." Eastham was a great believer in this; he never worried about competition. He disclosed all their secrets, and if he had some difficulty making some part that some competitor wanted to use, he'd sell this component to his competitor, to put something in the market, because if he couldn't compete with the man, then there was something wrong with his organization.

Susskind: He really believed in competition?

Terman: That's right. And cooperation--working together for the common good, and feeling that it was actually in the interest of everybody. I knew he had these ideas, and General Radio became an employee-owned cooperative. They had very, very generous benefits and profit-sharing, and retirement benefits, and so on, and finally ended up with a retirement fund owned by the radio company, which means that it's owned by the employees. When Mr. Eastham retired many years later, he had to sell all his own personal stock back to the General Radio Company, because they had a policy.

The early pioneers who'd owned some stock on their own when the company was founded didn't have to sell back (if you weren't an employee, if you'd been an investor). But he was an employee, and the newer employees had to sell their stock back that they'd acquired through stock purchase plans; they could own it during the years they worked for the company, but when they retired they had to sell it back. So he applied the same rule to himself. He used to say that Mrs. Eastham owned quite a little chunk of General Radio stock, he didn't know her share; this was after he retired. She was an investor and she didn't have to sell her stock back.

I briefed Bill and Dave privately, and said, "Now, here, open up with this fellow because he'll give you a lot of good advice on how to be successful in business. Listen to him, because he started from nothing and he's made a go at it, and he's interested in sharing his knowledge with people like you." I left him there for the whole afternoon and picked him up at five o'clock or so, and apparently they had a marvelously good visit, because they both said they'd picked up a lot of valuable advice. He was fascinated, he told me after; he'd had a wonderful time looking at what they were doing, talking with them, making suggestions, and leaving much impressed. This was the beginning of a friendly relationship.

Susskind: When did they overtake General Radio in volume?

Terman: At the time of Korea, General Radio suffered from the fact that Melvin Eastham basically retired around 1941, became inactive, and turned over the leadership of the company over to the younger people. He was getting around the middle sixties and was in good health, but he figured that the next generation had better learn how to do this.

During the early stages, 1941-43, he was spending all his time over at the Radiation Lab. He helped set up the RCC reconstruction. He helped them recruit people at first. I've always had a suspicion that he may have been the man that put the finger on me, or suggested me for doing this countermeasures job [at Radio Research Lab]. He never admitted to it. I posed the question to him once; he just said, "No, you were well known; your name came up spontaneously."

I was under the suspicion that he had a hand in tossing my name into the ring in a way that got attention. I didn't know Lee DuBridge, for example, who was the boss man there, and I didn't know the top people that were running that show, the Rabis and the top young fellows, the Alvarezes. I met Luis once. They had to use oscillators and cyclotron, and all the boys at Lawrence's lab had read certain chapters of my book for the electronics they were using in cyclotron work, but they didn't know me personally, so I never did quite know how I'd been suggested.

Wartime Expansion

Suskind: It is said that World War II put Hewlett-Packard onto the [map?].

Terman: They had developed a small line of products by the time the war came on. Hewlett was a reserve officer in the Signal Corps, and I tried to hire him for the Radio Research Lab after Pearl Harbor, on the basis that otherwise the Signal Corps would call him out, and maybe he ought to work for me instead if he was going to do something. They hadn't gotten established enough to know whether they could get deferments for their owners or not at that time. But Hewlett turned me down, and when the call from the Signal Corps came, he accepted that. He could have gotten out of that and stayed there, but he accepted it, so Packard took over and ran the company during the war.

From '39 to early '42, there was a period of roughly three years in which the company was in existence. Hewlett had done most of the product development and Packard had supervised the production and the accounting and business side of it. Packard had had his fun doing development of commercial equipment for General Electric. He'd done this and demonstrated that he could do it. The business side was a new challenge for him. Hewlett had never played around in the shops, and this was great fun, great sport for Hewlett; he's got tendencies this way anyway. It was great sport for him to create a piece of apparatus that really worked and that other people wanted, so he tended to do more of that in the early days, a good deal more than Packard did. But when Hewlett left to go to Signal Corps, then Packard took over and also did the product development during the early stages of the war, and then other people got involved as the war came to an end.

Susskind: What did the Signal Corps do with Hewlett that was more important than what he was doing?

Terman: Jim McRae was kind of a fabulous figure. For maybe two years in the war, McRae and Hewlett had adjacent desks in the Pentagon. McRae was servicing the generals and colonels that were looking after radar and Bill was servicing the ones that were looking after the rest of electronics. They were personal advisors, guides, on what was sound and what was unreasonable. He didn't have high rank, but he had important responsibilities in the military, and of course he saw a lot of what was going on, so maybe this was good. Maybe Hewlett-Packard's ahead because of that seasoning that Hewlett got.

Susskind: I thought that you meant that he was a line officer somewhere.

Terman: No, he had a desk job. They were tapping his technical ability. McRae was one of the top people in the countermeasures program. He was the one who really got countermeasures apparatus into the air force. He took the steps that enabled us to get our stuff onto the airplanes. The consequences of what he did and his foresight got our stuff on the airplanes.

Let's finish up the Hewlett-Packard business. They developed a nice little company during the war; they expanded and leased some more space, and I think built their redwood building toward the end of the war. During the war there wasn't much business in antiques, and. they took over Polly and Jake's front end, and then they built a redwood building, half a block down the same street, which they still own and use. At the peak of the war, they had maybe 200 employees; they gradually built up so that when the war was over, there were nearly 180 to 200 people working for them. It was quite a successful operation. Partly they were providing things that they'd originated that other people needed, and things that they were making on contract with the military services which they didn't originate.

For instance, we planted that signal generator program for them; we developed wide-band tunable oscillators using lighthouse tubes at our Radio Research Lab at Harvard. We also had some wide-band tuning klystrons, reflex klystrons that would tune over two-to-one frequency range or out of any holes in the tuning curves. There was a need for these; we were using them for local oscillators and our long tuning range receivers. But there was also used the same oscillators in some signal generators that we built ourselves in connection with our receivers. The military wanted a source of signal generators that could be bought, and so we worked out an arrangement to take what we had in the laboratory out to a manufacturer who had the competence to build a commercial product.

Well, we brought our signal generator ideas to Hewlett-Packard somewhere around 1944. We sent Bruce Wholey, whom you probably know, a Stanford boy whom I took east with me, out here to teach Hewlett and Packard what we'd already learned. He was one of the engineers who had developed this stuff, worked on it for a year, a long time, with three or four other boys. When the war ended he was still out here, and Hewlett-Packard hired him; he stayed on and runs the division for them now. He was running at one time a medical electronics division.

They had a good business developing. At the end of the war, the husbands came back and wives quit, and out of all of this the company had dropped back naturally to about 110 to 120 people, and then it gradually began to build up again in size. They made certain market decisions which turned out to be very good ones, and General Radio made some different decisions which turned out not to be as good. General Radio, having subsisted all during the depression days, when money was terribly scarce, had the feeling that people wouldn't buy elaborate and expensive equipment, no matter how good it was or what marvelous things it could do; they just wouldn't buy in peacetime a $5000 or $3000 instrument for their own use. So General Radio took the policy that they'd try to keep the unit prices of all their equipment below $1000 or some number like that. They wouldn't build a $5000 thing or a $3000 thing at all.

Hewlett and Packard did not make this decision, and they felt that there was an opportunity for microwave signal generators that would be more expensive and that there would be a continuing market. They developed products--some, but not all of them, were fairly high-priced--but they could do things that lower-priced equipment could not do, and they did fairly well in this. Their company was growing steadily and then when Korea broke, there was a big, sudden expansion in the military in electronics activity and military equipment.

In all the companies that supplied military equipment, new things were being developed, and the companies bought a lot of instruments to help them with the new developments. It just turned out that these expensive things that Hewlett-Packard had developed just were right in where the line of great progress was. Electronics in certain channels opened up a great sudden expansion of business, with lots of people getting involved in new areas. They had the instruments that were needed in these new areas, and these people had plenty of money. All at once the company grew very rapidly for a few years, and that's when they passed General Radio and became the number one company in the field.

Relationship between Terman, Stanford, and Hewlett-Packard Company

Stanford 'played a very important role in getting Hewlett-Packard on the rails because Hewlett was hanging around Stanford and being there, at the right time when an idea turned up and doing the right things with it. I was the one who suggested it to him; I think I even suggested that if he worked this thing out, it would lead to something that he could market and found this company that he'd thought about. [It was a matter of] encouraging him to take a hard look at it. I don't think that Packard would have really come back at that time--maybe he would have come back a year or two later--but Hewlett would have had to struggle along by himself and he would have gone much more slowly. Again, we gave them a kind of a lift at that time.

We don't really take a leadership role but you're dealing with a lot of students. Some of them are bright and have potential, some of them do some great things, and then you look back and you've helped them in some stages, which were at times really unobtrusive but fairly important. You couldn't tell which things would be important; this thing might never have gotten anywhere. They might have built this one oscillator, a pretty good idea, and somehow they'd maybe fumble the ball and not use this as a mechanism for really getting established anywhere, and it would peter out. Now there are simple things that other people don't copy in competition with Hewlett-Packard.

Hahn: Were there other businesses that went the other way among your students?

Terman: It was clear at the time that Kaar didn't have total qualities that Hewlett and Packard had.

Susskind: Oh, but hundreds of businesses go broke in California every year.

Terman: Kaar Engineering is still in existence. I think he sold it about 15 years ago and retired, and he's probably worth a good fraction of a million dollars. But the point was that he didn't have the potential that these boys had, either in technical ability or just overall business sense.

Hewlett and Packard are interesting. Commonly you get two people together, and they're complementary, but actually these people are not. Either of them can do all of the things that the other does and at times has done them. Hewlett's been running the company; Packard's really gone. Hewlett, for instance, for a number of years concentrated on the new product development. Then they started their international operation and Hewlett took that on. On the domestic operations, back in the 1930s through most of the 1950s, if you talked to Hewlett about what was going on in the marketing, the accounting problem: the cost factors, and so on, you found that Hewlett knew just as much about them as Packard did, and if you'd talk to him about some of these things alone, you could get just as quick and clear and quantitative answers as Packard was giving. But Packard was the guy riding herd on the fellows that were actually making entries in the system and setting up the pattern of the system.

Then when they decided that the international market really ought to be given serious attention, Hewlett was the one who did I it. Now this was a business operation, this was setting up. The first thing they did was set up a sales operation for Europe based in Switzerland, and after they got that going, they set up a manufacturing operation in Germany, and subsequently a manufacturing operation in England.

But this was a purely commercial thing in the foreign field. Neither of them knew much about it, but one of them had to learn, and so Hewlett took the job of learning about this and setting it up. This was a business operation and not a technical one. It's been very successful: in the recent six months, something like 20 percent of total sales are foreign, either manufactured abroad or exported.

This is really before Packard left for Washington. They decided that they were getting pretty close to 60 years old, that in eight or ten years, they're likely not to be there or [be] very active; by that time, their company might be a billion dollar-a-year business. They're going to have to teach some fellows now in the company to run a billion dollar-a-year business an their own with father and grandfather not around. That's what Hewlett is carrying on now, their program of increasing responsibility on the younger people.

Susskind: Hewlett and Packard are among the largest participants in Stanford Industrial Park. They occupy about the most space.

Terman: They and Varian between them?

Susskind: They were not in on it in the beginning. They stayed on their side [of the street]?

Terman: They built the redwood building during the war, and then they built a building adjacent to it shortly after the war. When they had to do something more, they came onto the Industrial Park, but they weren't the first tenant. They came in early, but Varian had been there for maybe a couple of years. They got to a point where they had outgrown their existing headquarters building.

Hewlett and Packard each have a remarkable ability to learn as they go along, to stay ahead of their problems, and to establish themselves in new things. Packard was put on the Stanford Board of Trustees in the middle 1950s or so, the youngest member of the board. Here was a younger alumnus who was prominent and public-spirited, and so some of the old fathers of Stanford selected him and invited him to come on the board. About four years later he was asked to be chairman of the board, and he was still the youngest member on the board. He'd made a position for himself with people like Jim Black, who ran PG&E. Dave got on the Stanford board and a couple of years later, Dave turns up on the board of PG&E. You see, Black was impressed with him. And there were people like Black, or Charlie Blythe of Blythe and Company, and John Cushing of the English shipping interests, and so on. This older crowd, much older men, gave him a great deal of respect, and they made him the chairman. You put these fellows anyplace and they rise to the top.

Another time and independently, some of us out here in the West put Bill Hewlett up for one of the national directors of the IRE. There were two people nominated for every one to be elected, and he got elected. About three years later, I was on the nominating committee, and Bill Dougherty was chairman of the nominating committee, and was on the board at the time, in 1954. I had in mind, quietly, without being too aggressive about it, trying to promote Hewlett as a possible candidate. I was president in 1941, and at the time I was made president I was the first president of that society who'd lived west of Rochester. It was an East Coast operation.

After the war Bill Everett was made president from the Midwest, but Bill Hewlett was the second fellow from west of the Mississippi River who was president. I figured over ten years had elapsed since I'd been president; electronics was growing here; it was about time; and I was ready to promote Bill. Well, it turned out I didn't have to, because Bill Dougherty said, "I've been on this board watching things, and if you look over the board as a source for the new president of this society, a fellow who clearly stands out in terms of his effectiveness and contributions is Bill Hewlett." So Dougherty promoted the thing; I just sat down and enjoyed it.

Now we were required to submit two names, and I had a heck of a time finding a second name that would make some common sense against Hewlett. You didn't want to put up somebody who would be really competitive, but there really wasn't any danger. The real problem, it turned out, of getting a second name was getting someone that would really look reasonably sensible, but wouldn't generate any hard feelings if the board turned him down. [Bill Hewlett] hadn't run with this eastern IRE crowd at all until he got elected director, and he made a position for himself fairly quickly. Again, this is somewhat characteristic.

If you look at the history of the company, it's never had, from the beginning, a really bad year. Now they've had some years where they didn't make more profit than the year before, maybe even a little less profit. But they never had a year of no profit, or even of very small profit. Now most companies that start this way with two technical fellows having an idea and building up, they get built up, and then it gets to a point where they run in some difficulties and have a bad year or two, when they learn how to straighten those out and what they weren't doing right, and then they go along. But Hewlett-Packard just never had a really bad year. Sure, now it isn't so good, their profits are ten percent less than last year, and their sales are running two percent higher than last year. They're only making six and a half percent net profit after taxes on their sales. But for Varian, that would be enormous prosperity, because Varian never made six and a half percent after taxes on its sales.

Hewlett-Packard's target is eight or nine percent, and they're not doing as well as they'd like to do and feel they ought to do. But somehow they learned the things about management, problems that the company has gotten through in successive stages of size, and they've had to delegate more and more things down the line and other people doing them second, third, and fourth-hand. They've somehow managed to handle management problems in such a way that they haven't had these periodic catastrophes. And I must say, most companies have them.

HP Lights

I thought a fitting ending for this narrative for the culture of "our" HP, in what we old-timers consider the golden years of ordinary workers, was a monograph that was published in the HP Retired Employee Club newsletter. It was written by Norena Gutierrez, a 23-year employee, most recently working at Boise. I confess that it left me and a lot of us with a lump in our throat and perhaps a tear in our eyes. It absolutely expressed the way most of us felt inside, as we looked back on our own decades of hard work for OUR company.

Although the HPREC newsletter noted that Norena was an HP Retiree living in Spain, it turned out that she was still working in Boise. I contacted her and asked for permission to reproduce her words here. But the really bad news was that she had just been told that she had been Work Force Managed (WFM). WFM, a nasty little modern business acronym (and euphemism) which means you are out of a job. The term hides a strange feeling for most of us because on one hand we know that the external business situation has forced drastic organizational downsizing upon HP and Agilent. But on the other hand, we all know personally some of those thousands of people similarly affected. In this case, Norena has prepared for her future life in real estate, and we thank her for her dedicated service and wish her well. Happy Trails, Norena.

 

General References:

During 2005-2011, I became aware of several HP-related instrument and document museums, in unexpected places. There were accumulations of large numbers of vintage HP instruments, website archives for a variety of HP documents.

1. This 2011 HPNAR11NNNN narrative history by Minck is available by Googling it for a pdf format download. It has been reformatted for a complete web presentation on this website, a remarkable web resource created by Marc Mislanghe, a retired French Field Support Engineer. Or see Ken Kuhn or Glenn Robb's websites (below) for a download. The HPMemory website also contains a growing number of fascinating HP Memoirs by other retired HP career employees.

2. The HP Alumni.org organization provides a long list of HP historical items, I don't think you have to join to download or link to these items. This is an invaluable source of information on job networking, alumni benefits, medical payments, job training, job counseling, historical documents and links to interesting HP lore.

3. HP 35 Calculator museum.

4. HP 9825 Calculator website.

5. An HP history collection of Kenneth Kuhn. Amazingly, Mr. Kuhn never worked at HP, but through his own career in instrumentation, always found HP and its products admirable. He has assembled a huge inventory of 400+ vintage HP products, many of which are refurbished into working condition.

6. Another museum site of Jon Johnston in Melbourne, Australia, who has established an HP museum (garage)

7. A large assembly of HP historical documentation and a hardware museum of old computers, by Marc Mislanghe, a retired HP Field Engineer in France. It is called the HP Memory Project.

8. A useful website for anyone looking for old documentation from HP and Agilent, run by Glenn Robb. The The Vintage Hewlett Packard Archive includes application notes, product notes, service notes, catalogs and a LONG list of product instruction manuals. Glenn never worked for HP either, but shares an admiration for the company and its products.

9. An interesting interview by Calculator expert Steve Leibson with Tom Osborne, who brought the basic idea for the HP 9100A to Hewlett. Tom describes his years of inventing some unique calculator software and how he built a calculator model without any test equipment.

10. Michael Malone's book, "Bill & Dave,"presents excellent insights into the culture of the company, and is especially good on revealing heretofore little known facts about Bill and Dave's personal lives as students. For example, Bill was dyslexic, which few people who worked with him ever knew.

11. A new book was published in Oct, 2009, by Chuck House and Roy Price, called "The HP Phenomenon." It is extensively researched, with thousands of footnotes and perhaps 300 interviews of key players at HP. It is especially insightful for the CEO period of John Young, when all the crucial decisions were made on computer operating systems. At times HP was selling products with 5 different computer operating systems. It gives Young good marks for 15 years of HP leadership, not seemingly recognized by Packard himself. Few people remember that John took the company from $1.9 to $16.4 billion from 1978 to 1992, a remarkable achievement.

In Conclusion

Surely, these 120+ pages may have been more than you might have wanted to know about the inside of the HP culture in the fun growth years. And my personal history sidebars were perhaps too much of an extension of what happened to me inside HP. Clearly, every person who worked for HP in those decades of the "Golden Years of High Tech" would have been able to write about a lot of the same kinds of experiences and friendships.

It was an honor and privilege to be part of the HP/Agilent history. I can only hope that all of our HP/Agilent employees, of the present and future years, will find as much challenge and pleasure in their life's work as I have. I truly doubt that the dot-comers of our age had as much fun.

 

Transition

 

Rev. #0	Circa 1980	Misc. lecture notes
Rev. #1	Circa 2002	Compilation urged by Jim Hall
Rev. #2	Oct. 2004	Many HP comments added
Rev. #3	Nov. 2004	Updated
Rev. #4	Feb. 2006	Terman Oral History chap. added
HPNAR29	Jul. 2006	Engineering creativity, Chance/Barnholt, Snyder bios added
HPNAR30	Sep. 2009	Minor changes, Polly & Jake pix, Anal Spectrumyzer story, more references
HPNAR101107	Nov. 2010	Added Chalfant story and Office moves
HPNAR110227	Feb. 2011	Added Monterey posters, Grubby Grape calendar, and Bill Hewlett Tribute
HPNAR111109	Nov. 2011	Reformat for publication on this website

 

 

 

 

 

 

 

 

 

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--- Click here to download John Minck's Narrative - (HPNAR111109) - The 115 pages document is a 4 Mb PDF file.

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Acknowledgements

My original HP narrative was a series of various lecture content and continuing work that I used during the 80's. Since I worked in Bldg 5, overlooking the corporate training facilities on Page Mill Hill at Foothill Expy, I was often asked to brief new field engineers and division employees, in their new employee orientations. I used different portions of these materials.

Along about 2001, I sent a copy to Jim Hall, a Microwave Division engineer and old friend, who moved to Boise in the 70's and made major contributions to our laser printer business. Jim enthusiastically urged me to pick up the task again, to expand and deepen the history and memories of HP's "golden years."

That took about a year, and review comments by a number of people resulted in a reasonably useful history. Rev. #1 was publicized by Ray Tatman in the HP Retired Employees Club newsletter, resulting in something like 250 hits on their website link the first week. It also resulted in an outpouring of commentary from dozens of HP readers who wanted me to know some of their most memorable moments at HP. I saved them all and decided to do a further expansion and correction as Rev. #2.

More recent revisions have come from interesting stories and experiences, and most recently the appearance of two booklets of Monterey Management conference posters.

I am indebted to many people, both for their review comments and corrections and for new, interesting stories of that period; Al Bagley, Dave Kirby, George Stanley, Dave Cochran, Bob DeVries, Ken Kuhn, Dick Rucker, Cort Van Rensselaer, Ron Pratt, Chuck House, Larry Johnson, Jim Macrie, Harry Lewenstein, Jim Nagy, Ross Snyder, Monte Smith, and others. In some cases I referenced their names along with their complete stories when they were significant.

This most recent revision is the result of Marc Mislanghe, who created this website in 2006, and who was anxious to re-format my Narrative to create a HP Memoir for his web section on HP Memories. For this historical perspective from many HP retirees, Marc takes time to re-create many of the images of products and events for the content of each story. Accordingly I went back to look for additional images and pictures from my career period at HP, including many years I spent working for an industrial volunteer metrology trade association, NCSLI, which was one of my greatest life satisfactions. I am indebted to Marc for nagging me to authorize him to re-format my Narrative History of HP.

Palo Alto
CA, 2011

 

John Minck

 

Various Documents Linked from this Page for References:

 

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--- Click here to download John Minck's "Life and Times" - The 85 pages document is a 2 Mb PDF file.

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INSIDE HP:
A NARRATIVE HISTORY OF HEWLETT-PACKARD FROM 1939–1990

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