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Selling Measurements - Development of the Sales Process at HP

John Minck, November 2013

The HP management and leadership up to the 1960s was by and large senior engineers, all of whom participated in the mobilization of WWII. Dave and Bill and most others then came out of the engineering culture of WWII. They had little formal business training and built up that expertise on the job, as the company kept a steady and rapid growth. In the late 1950s, they made a direct observation that upper management was all senior people, and there was no "second team" ready to take over as that level aged. Meantime, U.S. manufacturing companies were running full steam, making up for the rationing of the war. Innovations in improved production management experiences, and in one significant example resulted in a team of industrial process management experts at Ford Motor Company. They were led by Robert McNamera, and became known as the Whiz Kids.

McNamera brought this planning process to the Pentagon when he was named Secretary of Defense by President Kennedy in 1961. They utilized the new computer technology to integrate economic analysis, operations research, game theory and modern management process systems to make the defense business more efficient and effective. U.S. business schools were still growing from the initial influx of GI Bill students of the early 1950s. Those new business theories and practice soon captured the curriculum of the nation's business schools, which became the key value of their Masters in Business Administration.

So HP set out to recruit a new level of middle managers--well, they were only young MBA graduates at the time, but in less than 5 years they were destined to revolutionize HP. Into this cohort of new hires came John Young, John Doyle, Dean Morton, Tom Perkins, Frank Wesniak, and another dozen such engineers in succeeding years. They brought new insights to every corner of HP.

Marketing HP products was very traditional, field engineers selling to customer engineers. Most HP marketing people just assumed as any logical engineering problem, that merely publishing a new instrument specification data sheet, would lead any customer to see its value and justify the generally higher price of an HP product. Did HP products sell themselves? Well, yes and no.

HP embarked on formal Sales Training for "Neophyte Field Engineers." This included the required in-depth study of products and measurement theory. It was a post-grad level, with attention to the unique performance features of the HP equipment. Then in the middle 1960s, the training management added some supplementary psychology to the selling process. It was called Sales Sonics, created by a highly successful insurance salesman from Minneapolis, Larry Wilson. While his formal training course was a complete array of sales practices, the interesting part for we engineers was the partitioning of human personalities into 4 major quadrants. HP was so impressed with the value of Sales Sonics that they negotiated to purchase and modify the Wilson profiling process to be used for all HP employees, and called it MIR, Managing Interpersonal Relations. The following is a brief overview.

Sales Sonics and MIR

Larry Wilson was a highly successful insurance salesman ($5 million a year) of Minneapolis, who had created a way to classify personalities. It turned out that such profiling was important for field sales people of ANY product or service, because it enabled them to define each of their customer personalities. That way they knew the best sales approach that worked for each different personality, and yet, it was an honest process which met their needs. This was in no way deceitful, because there is no best place to be on the chart, you are where you are.

Personalities were grouped in 4 major quadrants, and each of those further divided into 4 sub-categories. The horizontal separation was passive vs. assertive, and the vertical differences were data vs people tendencies. By and large, engineers most often fitted the “analytical” personality, which liked to be approached with data facts, to be comfortable enough to make a purchase decision. Technical managers were most often “Driver” personalities, and these people liked to hear testimonial approaches, where they got success stories of other managers who purchased HP equipment.

Within HP, I believe that the MIR course was extremely successful in equipping all our people to understand each other, and to know where they were coming from. No one personality was “right,” you were what you were, and you learned how to best deal with each of the other 16 types (In practice, each of the 4 quadrants were divided into 4 more divisions. It worked for dealing with more than customers, it was useful for even understanding your own family relations. I truly believe that the MIR training across the company was one of the most successful and useful things HP ever did for the human side of its employees. In turn, figuring out the personality status of every customer offered our Field Engineers value because they could shape their sales pitch to match the psychic needs of each customer.

Selling Measurement

The measurement frame of mind could be considered to be embedded in the HP DNA for 60 years. In my sessions at Field Engineer training, I used to teach the importance of the integrity(confidence--a benefit) of the measurement process. The HP sales process recognized that by and large it was engineers selling to engineers. I would note the old marketing truism, "when you buy a 4mm drill motor, what you really want is a 4mm hole." This brings up the important distinction between features and benefits. The feature is the 4mm drill motor and the benefit is the 4mm hole. The benefit is largely in your mind; the enjoyment, pride, confidence, satisfaction, flavor, ego, and such. For engineers, this was a stunning concept.

We borrowed from the consumer sales process, and their advertising. Some called it "selling the sizzle." This simply meant that you weren't buying a New York steak but you were buying the enjoyment of the wonderful smell of that steak on your grill, the sizzle. You bought the fancy sports car for the pride and prestige it offered. Carrying that thought into the instrumentation business, you bought an instrument 0.1% uncertainty (feature) for the design or manufacturing test confidence (benefit) it offered.

So we learned to make the sales presentation leading with the benefit, and then paid it off with the feature. "Mr. Customer, you'll feel better (confidence) about the performance of your cell phone oscillator design if you test its SSB noise with this HP Phase Noise System (feature)." Like any learned process, the success of these sales processes worked better or worse, depending on the style of the sales engineer. In visits to customer plants with any given field engineer, you could watch how they handled their customers, friendly, helpful, full of useful information, advisory, and all that. Selling benefits was just another "arrow in the sales quiver," as we used to describe it.

More than once in a factory visit or a trade show, a customer might mention to me that HP meant "high priced," and it often did. My usual response would be to say that HP could also mean high performance. But in a real sense, it also meant high prestige. HP's innovative instruments usually measured to higher accuracies or performed measurements where that measuring technology was brand new. It was a measurement you couldn't buy anywhere else. HP became the "safe buy," and at times we heard HP referred to as the "Cadillac" of test instruments. HP management discouraged that last comparison, perhaps because Bill Hewlett sat on the Chrysler Corporation Board of Directors.

So an extremely important benefit of HP instruments was the knowledge of how to use them properly and efficiently and accurately. Therefore, in a real sense, HP sold measurements, not just products. And it sold measurements using tutorial publications. Over decades this has reinforced HP's reputation as the home of the most important archive of publications ever produced by a private company in the electronic and computation sciences. In the late 20th century, there were hundreds of Application Notes and Product Notes and even books on measurements. Most of these publications contain theory fundamentals of a high educational value and are perfectly timely and usable today.

A final note of clarification. About 1980, HP marketing decided to split the content of the traditional "Application Note." Before that it was the only category. By adding a new publication called "Product Note," the customer could know the basic content. A product note contained information restricted to a given product, both product performance features as well as its measurement theory and practice. They were designated with the product number, ie., 8640-1. Application notes hence held generic measurement content, such as the mathematical presentation of Time Domain vs Frequency Domain, which was useful across many product lines.

John Minck,
November 2013

John Minck

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