Hewlett, William R.

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Hewlett, William R.

(1913-2001)
Hewlett–Packard Company

Overview

In 1938, William Hewlett and his college friend David Packard invested $538 dollars to build their company's first "plant" in a garage in Palo Alto, California, starting what was to become the multi–billion dollar Hewlett–Packard Company, a leading manufacturer of information systems and products used in medical, scientific, educational, business, and engineering applications. In 2001 Hewlett–Packard was the nation's 13th largest business, with 88,000 employees in more than 120 countries and annual sales nearing $50 billion. Both Hewlett and Packard were instrumental in creating what later became known as California's "Silicon Valley," dubbed as such because of the rapid growth in that geographic area of companies manufacturing silicon–coated microchips and other electronic components. Moreover, the company's management style (having pioneered decentralized corporate culture) has been widely imitated over the decades and has left its imprint on organizational structure and control far beyond the particular industry.

Personal Life

Born in Ann Arbor, Michigan, to Albion and Louise Redington Hewlett on May 20, 1913, Hewlett's father was then teaching medicine at the University of Michigan. In 1916 he moved the family to California, where he had accepted a position at Stanford University Medical School. Young Hewlett grew up in Palo Alto. When his father died suddenly of a brain tumor in 1926, Hewlett accompanied his mother, grandmother, and sisters to Europe for a year before returning to San Francisco, where he graduated from Lowell High School. He went on to Stanford University for his undergraduate work, receiving his Bachelor of Arts degree in 1934. He did not think much of his academic talents and even believed he had been accepted at Stanford only because of his father's position. Interestingly, Hewlett's lack of confidence was due in part to his academic mediocrity; he was a slow reader, suffering from undiagnosed dyslexia at a time when the disorder was not widely known or recognized. He compensated by memorizing important facts and figures in an organized, logical way; this ultimately led to his superior skills in math and science. Hewlett's dislike for thick textbooks also contributed to an alternative knack for physically taking things apart to study the composition and function of the individual components. His mother considered it mischief when he frequently disassembled door locks, and during an interview for the Mercury News in 1997, he recalled blowing up doorknobs while a student at Stanford. The consummate tinkerer, Hewlett ultimately earned 13 patents over three decades.

It was while a freshman at Stanford that Hewlett began his friendship with David Packard. During their undergraduate days, Hewlett and Packard acquired a mentor, the legendary Stanford professor Frederick Terman, who advised them to gain experience and knowledge before starting their own business, something they had discussed. They both went east after graduation—Packard to work for General Electric and Hewlett to continue his studies at the Massachusetts Institute of Technology. Hewlett received his master's degree in electrical engineering from MIT in 1936. He returned to Stanford where Professor Terman helped him get a contract to construct an electroencephalograph—a device for recording brain waves. When Packard opted to leave General Electric and return to California in 1938, Terman arranged a research fellowship for him at Stanford and encouraged Hewlett and Packard to open their own business in 1939. That year was a milestone for the young Hewlett, during which he also received his engineering degree from Stanford, married Flora Lamson, and first became an official member of his beloved Sierra Club.

While growing up, Hewlett's family frequently vacationed in the Sierra Nevadas, where he eventually met Flora. Young Hewlett developed a lifelong love of the outdoors and became an avid hiker and rock climber. An environmental activist, he later purchased land on the shore of Lake Tahoe in 1971 and then sold it to the U.S. Forest Service to prevent the construction of a proposed massive condominium development. In 1989 he successfully sued the owner of the Squaw Valley ski resort for illegally cutting down 1,800 trees located in a cathedral–like canyon. Hewlett was an amateur botanist, a nature photographer and writer, and an avid fisherman. He and Packard maintained various ranching and cattle–raising operations in both California and Idaho.

Described as a "gentle man" with a good sense of humor, Hewlett was the recipient of several honorary degrees from such renowned institutions as Yale University, Brown University, University of Notre Dame, Dartmouth College, and the University of California at Berkeley, among others. He was also given an honorary doctor of humane letters from Johns Hopkins University. In 1985 Hewlett received the nation's highest scientific honor, the National Medal of Science, from former President Ronald Reagan. Other awards included the Corporate Leadership Award from MIT in 1970; the Henry Heald Award in 1984; the World Affairs Council Award in 1987; the Degree of Uncommon Man from Stanford in 1987; the National Business Hall of Fame Laureate Award in 1988; the Silicon Valley Engineering Hall of Fame Award in 1991; the National Academy of Engineering's Founders' Award in 1993; and the Eta Kappa Nu Association's Eminent Member Award in 1999.

Chronology: William R. Hewlett

1913: Born in Ann Arbor, MI.

1916: Moved to California with his family.

1934: Bachelor of Arts degree from Stanford University.

1936: Master of Science degree in Electrical Engineering from MIT.

1939: Formed Hewlett–Packard Company with friend David Packard.

1947: Hewlett–Packard was incorporated.

1947: Named vice president of Hewlett–Packard.

1957: Elected executive vice president.

1964: Elected president.

1969: Named CEO.

1987: Officially retired, but named director emeritus.

Hewlett was active in the electronics industry and in the community at large. He served on the board of directors of the Institute of Electrical and Electronic Engineers (IEEE) from 1950 to 1957, and in 1954 he was named president. He was co–founder of the American Electronics Association (formerly the Western Electronic Manufacturers Association), a member of the National Academy of Engineering, and an honorary life member of the Instrument Society of America. Hewlett served as a trustee of Mills College in Oakland, California, from 1958 to 1968, and of Stanford University from 1963 to 1974. He was also an honorary trustee of the California Academy of Sciences and trustee emeritus of the Carnegie Institution in Washington.

Hewlett's lifelong relationship with Packard, both within the corporate structure as well as on their cattle ranches, invoked widespread inspiration and emanation, and his personal philanthropy and involvement in charitable and other interests created a legacy that continued well beyond his lifetime. At the time of his death at age 87 in 2001, his estimated fortune was approximately $9 billion. Despite his personal wealth, Hewlett remained a publicity–shy, unassuming man, often driving himself to work and sharing lunch in the company cafeteria. Like Packard, he chose to donate most of his fortune to worthy causes. Both men contributed $300 million to their alma mater, Stanford, and another $25 million to set up the Frederick Terman Fellowship to honor their Stanford professor–mentor. Another $70 million endowment went toward the founding of the Public Policy Institute of California, a San Francisco think tank created to research economic, social, and political issues facing the state. In 1966 Hewlett created the William and Flora Hewlett Foundation, which donates approximately $120 million annually to various educational, environmental, and cultural programs. The bulk of Hewlett's estate went to the foundation following his death. He and Flora had five children together. After her death, he remarried in 1978 to Rosemary Bradford, gaining five stepchildren as well. His lifelong partner and friend Packard died in 1996; they remained close and supportive of each other until the end.

Career Details

Hewlett won the coin toss to see who would get top billing in the new company's name. The Hewlett–Packard Company was formed in 1939. The garage behind Packard's rented house became the first business address, and Mrs. Packard's kitchen oven was where the two men baked their first encapsulated transformers. Their first inventions—including a device for automatically flushing urinals, a shock machine for losing weight, a harmonica tuner, and a foul indicator for bowling alleys—did not do well. They had more success with a resistance capacitance audio oscillator based on a design from Hewlett's graduate school thesis. The device produced variable and stable signals in the low frequency needed for measurements in acoustics, medicine, oil exploration, seismology, oceanography, and many other fields involving low frequencies. A big break came when Walt Disney became interested in using them in the movie industry. Hewlett and Packard sold several oscillators to Disney, who used them in the production of Fantasia.

Hewlett and Packard had realized profits of over $1500 dollars in 1939 and built their first building in 1941. During those early years, they swept the floors, kept the books, and took the inventory themselves. From the beginning, they had decided to specialize in electronic measurement and test instruments, and the company did well, with sales of $100,000 by 1941. During World War II, Hewlett was called to serve in the armed forces. He was absent from the company until the end of the war, serving in the Army on the staff of the Chief Signal Officer and then as head of the electronics section of the New Development Division of the War Department's Special Staff. Hewlett was discharged in 1945 and returned home. In 1947, with $1.5 million in sales and 110 employees, the company was incorporated, and Hewlett was made vice president. But the end of the war also meant an end to lucrative defense contracts. A reduction in demand for products caused the company to scale back operations, and a number of employees left, primarily women returning to the home sphere after the war. Distressed by these disruptions, Hewlett and Packard resolved never again to become so dependent upon government contracts. They struggled to develop a wide range of products for a broader market, and by 1959 their product line had grown to 380. Hewlett was made executive vice president of Hewlett–Packard in 1957 and president in 1964.

In accordance with his previously announced plans for management succession, Hewlett resigned as president in 1977 and retired as CEO in 1978. However, Hewlett remained actively involved in the company, serving as chairman of the company's executive committee from 1977 until 1983, then as vice–chair of the board of directors until 1987. Upon his official retirement in 1987, he was named director emeritus. Both he and Packard, nearing their 80s in age, briefly returned to the company in 1990 to trim inefficient bureaucracy within its ranks. At that time, company stock had dropped steeply and the organization had become overly centralized. Hewlett and Packard used their influence to reduce the number of committees, which had bloated the company's overhead and weakened the power of individual managers. They also allowed the medical division more freedom in choosing payment policies and gave Lewis Platt, the head of the Computer Systems Group, free rein in building an inexpensive engineering workstation. The project was a great success, and he eventually took over as president and CEO. By 1992 the company again posted a profit while its chief competitors, IBM and DEC, were both in the red.

Social and Economic Impact

Hewlett's personal interest in the miniaturization of electronic mechanisms led to the world's first handheld scientific calculator in 1972, and the company's first consumer product. (It previously had manufactured instruments for primarily academic and professional scientific use only.) The instant success of the pocket–sized calculator made slide rules obsolete for professionals and students alike. Hewlett–Packard went on to produce numerous state–of–the–art cardiac and encephalographic monitors and recorders, scientific measurement and assessment instruments, and information systems, before focusing in the computer and printer industry.

Hewlett–Packard was one of the first companies to make use of semiconductors, and their growth attracted an increasing number of new electronics businesses to Silicon Valley, many of them started by Hewlett's own hand–picked recruits. The company influenced industry in a number of ways, but perhaps most important was the management style fostered by Hewlett and Packard, which encouraged a corporate philosophy committed to people. Hewlett referred to it as "management by walking around." This commitment involved a respect for the individual and expressed itself in management processes that included communications and direct involvement at all levels. Managers made a point of being available to their employees and offering them help as soon as it was needed. Hewlett considered the development of his managers to be his greatest accomplishment at Hewlett–Packard. Messrs. Hewlett and Packard changed the modern workplace and workforce forever by pioneering such employee perquisites as catastrophic health insurance, profit sharing, flextime hours, employee stock ownership, and most of all, the concept of teamwork—from the bottom to the top—in all important company endeavors.