The HP Way – misunderstood. Bottom line tops all

The HP Way was not gentle.

The principles that Bill Hewlett and David Packard set down to run Hewlett-Packard, HP, are not always accurately reported. For example, recently I heard a seminar where the speaker waxed on about corporate values. The speakers cited the HP Way,

and nowhere is there a mention of a bottom line.

I beg to differ. It’s rule number one. Packard writes,

profit, [is] a measure of success, a source of strength; maximize it so long as you do so in ways consistent with the other objectives;

The motivational speaker was wrong. David Packard once told us that without profit, we cannot do any of the other good things that HP was chartered to do.

A very senior manager related a story of when he was still a middle level manager. David Packard had been away doing his part as an Under Secretary in the Department of Defense in the Nixon Administration and Packard was at one of the Divisions, getting his feet wet, again.

A new product was under consideration. The Division General Manager made his presentation. During the first two years of introduction, the product would lose money. The third year would be break-even, and then the rewards would flow in.

The head of Marketing got up and delivered the same strategy.

People in the room noticed that Packard grew ever more grim.

The third presenter, the head of Product Management was half way through the presentation when Packard stopped the meeting and quoted them the HP Way. HP makes a profit. What had people been doing while he was away!

He then ordered everyone out of the room, save for the senior-most members, and according to legend spoke his mind to them.

The bottom line was that the bottom line at HP was the bottom line. In other words, without a profit, HP could not get anything done.

We all love the stories of the donuts and the collegiate atmosphere at HP – and there was that – but Bill and Dave insisted on the HP Way – and in a particular order.

The orders were that the order of the HP Way principles would be obeyed.

True story.

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