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Packard, David - Overview, Personal Life, Career Details, Chronology: David Packard, Social and Economic Impact

hewlett company packard’s stanford

(1912-1996)
Hewlett-Packard Company

Overview

David Packard’s name lent itself to one-half of the oldest and largest employer in California’s high-tech region known as Silicon Valley. He cofounded the Hewlett-Packard Company with college pal Bill Hewlett, and together they built it into the second-largest computer company in world. Hewlett-Packard first prospered by making electronic measuring equipment such as radar-jamming devices, and later branched out to space aeronautics and medical monitoring equipment before entering the burgeoning personal-computer field. Yet Packard and Hewlett became industry pioneers for a simple vision: the company was guided by a code of ethics that came to be known as “The HP Way.” Packard and his partner created a relaxed, supportive management style that fostered innovation and, some note, the very culture that allowed the high-tech industry in the United States to achieve global domination by the time of Packard’s death in 1996.

Personal Life

“As a child, Mr. Packard wished he had been born in an earlier day,” wrote the Economist in its obituary, “when America’s west was still a frontier and its people pioneers. He proved that the same spirit, channeled into technology and business rather than land and conquest, could create and cross new frontiers.” Packard was born in Pueblo, Colorado in 1912. His father was an attorney, and his mother taught school. As a child, he loved to read science books, and visited his local library often. Exhibiting an early knack for electronic tinkering, Packard built a radio while still an elementary school student.

After graduating from Pueblo’s Centennial High School in 1930, Packard went on to California’s Stanford University to study electrical engineering. He was unusually tall and athletically gifted. At Stanford he became a track star, and also continued to play football and basketball as he had done in high school. Endowed with an exuberant personality, Packard was elected president of his fraternity, Alpha Delta Phi.

Packard earned his B.A. from Stanford in 1934 at the height of the Great Depression. He took some graduate courses at the University of Colorado, and in 1935 relocated to Schenectady, New York, when General Electric hired him as a trainee. One of his early supervisors expressed disapproval of Packard’s desire to enter the field of electronics, and predicted there was little future in it. Undaunted, Packard made a successful effort to transfer into the company’s vacuum-tube department, which made the types of parts that would soon constitute one of the world’s first computers. Deciding to pursue a graduate degree in earnest, he returned to California and again enrolled at Stanford. In the graduate program he renewed an acquaintance with William Hewlett, also an electrical engineering student. Around this same time, in 1938, Packard married Lucile Salter of San Francisco, whom he had met at Stanford. The couple would raise one son and three daughters.

Packard died of pneumonia in Stanford University Hospital on March 26, 1996. His memorial service was attended by over 1,000 people, many of them leading executives in the computer industry.

Career Details

Packard’s friend Hewlett had written his master’s thesis at the Massachusetts Institute of Technology on a new type of oscillator that could measure the intensity of recorded sound. Hewlett’s invention was cheaper than similar devices on the market, and when he and Packard, who were considering going into business together, demonstrated the oscillator at a 1938 convention of radio engineers, it received a favorable response. It was also at the same gathering that they met Walt Disney, who the next year purchased eight of the oscillators and used them for sound effects for his 1940 animated classic, Fantasia.

Packard and Hewlett officially went into business in 1939 by pooling their combined savings of $538 to buy equipment. They tossed a coin to decide whose name would come first; Hewlett won. That same year, Packard received his electrical engineering graduate degree from Stanford. The company’s original purpose was the design and manufacture of instruments for electronic measurement. Hewlett oversaw the technical side, while Packard handled the business end. Their first headquarters was located in Packard’s garage on Palo Alto’s Addison Avenue, but soon they were able to move to a site near their alma mater. This initiated a decades-long connection with Stanford, and one that they considered vital to their company. Later they would become one of the first private enterprises in the country to be given university land for business use, a tie that would later cause problems during the Vietnam War.

Some of Hewlett-Packard’s first sales were for products such as a weight-reducing device, an electronic harmonica tuner, and a foul-line alarm for bowling alleys. In the first year in business, they sold over $5,300 worth of devices, some delivered by borrowing a friend’s fruit-business truck, and made a profit of $1,653. With the onset of World War II, however, the company began a quite profitable era with sales of its radar-jamming oscilloscopes, among other devices, to the U.S. military. With the American entry into the conflict in 1941, Hewlett served in the Army, while Packard ran the company. After the war’s end, however, they were forced to lay off nearly half their workforce, which greatly troubled them.

Chronology: David Packard

1912: Born.

1934: Graduated from Stanford University.

1935: Employed in vacuum-tube division at General Electric.

1939: Founded Hewlett-Packard with William Hewlett.

1947: Became president of Hewlett-Packard.

1957: Took company public.

1969: Served as U.S. Deputy Secretary of Defense.

1972: Introduced Hewlett-Packard hand-held calculator.

1984: Entered printer market for personal computers.

1989: Created the David and Lucile Packard Foundation.

1996: Died.

By 1950 the company was thriving again, and in 1957 it went public in a Wall Street stock offering. The firm continued to make a name for itself in the growing field of electronics as a producer of parts for computers; in 1966 Hewlett-Packard introduced its own computer. They also made the atomic clocks used by the National Aeronautics and Space Administration’s Apollo flights in the late 1960s. It was during this era that they first branched out into the consumer electronics industry with an innovative hand-held calculator.

Yet it was Packard’s management style that would bring him lasting fame. Early on, he and Hewlett ran their company based on some rather benevolent principles. “The HP Way,” as it became known, meant a corporate environment with no doors; neither Hewlett nor Packard had his own office. It also meant decentralized decisionmaking, and a structure that kept their thousands of employees organized into self-sufficient divisions, each with its own research and development, financial, and marketing systems. Profits were always reinvested, and when economics necessitated layoffs at other companies, Hewlett-Packard instead reduced the workweek or some worked a full week at lesser pay. If they had to trim costs, every level of employee, including Packard and Hewlett themselves, took a cut. Indeed, employee loyalty was Hewlett-Packard’s greatest asset. Firings were rare, the benefits package generous, morale high, and turnover low. As a result, Packard and Hewlett created an environment where creativity could flourish. Employees were encouraged to tinker with any product on anyone’s desk, and equipment rooms were left unlocked. Sales personnel were forbidden from saying anything negative about competitors to customers. Packard was awarded an honorary degree in jest by his staff: “M.B.W.A”—Master by Wandering Around.

Packard’s successes with his own company and ties to the Republican Party led to a Pentagon appointment. When California Republican Richard M. Nixon was elected president in 1968, he chose Packard for his Deputy Secretary of Defense under Defense Secretary Melvin Laird. It was thought that the Pentagon needed a business mind to manage its $80 billion budget, but Packard’s appointment was not without controversy. At the time, Hewlett-Packard was selling $100 million a year in equipment to the government; his nomination was seen as a conflict of interest and received much publicity. Packard’s only term in public office to date had been on the Palo Alto School Board. Critics also pointed out that he was a generous contributor to the Republican Party. To avoid charges that he might set policy that would in the end benefit his own company, Packard placed all of his Hewlett-Packard stock into a charitable trust that would return to him once he was out of office at the Pentagon. Congress voted on his nomination, and only one Senator, Albert Gore, Sr., cast a dissenting vote.

Though Packard and Hewlett were known for their far-from-lavish lifestyles, Packard earned about $1 million a year at his company and a federal salary of $30,000 a year at the Pentagon. He spent two years on the job, but grew disillusioned. “Working with the Washington bureaucracy was like pushing one end of a 40-foot rope and trying to get the other end to do what you want,” he wrote in his autobiography, The HP Way.

Packard returned to his company in 1972 as board chair and chief executive officer. With the following decade came the genesis of the northern Californian high-tech region known as Silicon Valley, and Hewlett-Packard stood at the forefront. Though they never achieved success in the personal computer or software market, they did revolutionize printing technology by entering the field in 1984, first with the ink-jet and later the laser printer. Both Packard and Hewlett retired from daily operations in 1977, but each came back in 1990 when the company was in trouble. They restructured certain aspects, and were proud to maintain their cherished no-layoff policy, a rarity in the computer industry. Packard formally retired as chair in September of 1993, and was designated chairman emeritus. The company he and Hewlett had begun in a garage had sales of $30 billion in the mid-1990s and was second only to IBM in its field. The Addison Avenue garage became a state historic landmark, its plaque designating it “the birthplace of Silicon Valley.”

Packard belonged to the Business Council beginning in 1966, a group of prominent CEOs who met with government officials. He also served on the boards of Chevron, Boeing, General Dynamics, and U.S. Steel.

Social and Economic Impact

Silicon Valley virtually grew up around Hewlett-Packard. Many famous names in the computer industry once worked for Packard’s company, including Steve Wozniak, co-founder of Apple Computer. Others went on to launch such industry leaders as Silicon Graphics and Tandem Computers.

The company’s ties to Stanford sometimes provoked controversy. During the Vietnam War years, students protested that their school was affiliated with a firm that profited from war by selling instrumentation used in bomber planes. Packard was often vilified by student protesters and even confronted them at times; on the other hand, he once served as a liaison between students and Stanford’s board of trustees. Though he was a staunch Republican, Packard supported social welfare programs to help the underprivileged, and funded ventures to employ minorities in urban areas. His support of California Republican Ronald Reagan gained him another public-service appointment in 1985. Then-President Reagan asked him to serve as vice-chair of the Packard Commission, which was charged with suggesting reform of the process by which defense contractors like Hewlett-Packard were awarded Pentagon contracts. Packard’s tenure there coincided with much public debate concerning federal spending.

Packard later served as trustee of the Ronald Reagan Presidential Foundation until 1991, and sat on the U.S.-U.S.S.R. Trade & Economic Council. His real passion, however, lay not in politics but in the outdoors. He was a major contributor and fundraiser for the Monterey Bay Aquarium, and his marine-biologist daughter would go on to serve as is its administrator. For it, Packard designed a machine to recreate ocean tides. He and Hewlett co-owned cattle ranches, and Packard was fond of riding around them on his bulldozer. He was also active in the California Nature Conservancy.

Packard was the recipient of numerous honorary degrees, as well as the Gandhi Humanitarian Award and Presidential Medal of Freedom, both bestowed in 1988. He lived in Los Altos Hills, and after the death of his wife in 1987 created the David and Lucile Packard Foundation and the Packard Center for the Future of Children. After his own passing in 1996, the Foundation received the entirety of Packard’s $6.6 billion fortune, with the Center instructed to use some of that endowment to fund projects to improve the health of minority children in the United States. Packard and Hewlett also gave a great deal of money to Stanford, estimated at a combined $300 million over the years. That figure includes a $77 million bequest in 1994 to build new science and engineering facilities. Packard also donated $10 million to historic American black colleges.

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