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Trading on the founders' well-tested template

By Graeme Hunt

Friday 29th August 2003

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Editor-at-large Graeme Hunt identifies the wackier side of an otherwise sane business

Bill Hewlett's office at the Hewlett-Packard labs at Palo Alto, Northern California, is largely as he left it. He died two and a half years ago, aged 87, but had been largely out of the executive loop since 1987.

Dave Packard's office next door is a similarly preserved example of a corporate America long gone ­ one where modesty and taste took precedence over fads. He died aged 83 in 1996 and had quit the chairmanship three years earlier.

The offices of these two remarkable men, who met as engineering students at Stanford University, are notable for their simplicity and closeness to the heart of the company ­ especially its research and development operations.

The present chairman and chief executive, Carly Fiorina, visits the labs regularly but there the similarity with the founders ends.

The difference is most notable in the recently revamped corporate headquarters nearby.

The floor I was on at HQ ­ the size of a football pitch ­ reflected the crowning glory of HP's "collaboration and co-operation" strategy dreamed up after the merging of HP and Compaq Computer Co last year.

Sterile beyond belief, it gives employees a cubicle (a "free address station" in US parlance) but not a regular one. It is what we call hotdesking but without the heat. And, like Kiwi hotdesking, it seems destined to fail.

This plan was designed to break down perceived barriers between the HP and Compaq teams. To Kiwis used to a little individuality, it is as inviting as a trip to the dentist. The executive team, suffice to say, is nowhere to be seen.

This is in sharp contrast with the labs building ­ the old corporate HQ ­ where Messrs Hewlett and Packard maintained a true open­door policy ­ so much so that the wood panelling behind the open doors has retained its original dark colour while the rest has been bleached by the California sun.

Today's open-door policy ­ "collaboration and co-operation" ­ is more virtual than real and largely contrived, though not too far out of step with much of corporate America.

To provide excitement in this carefully designed environment, the management has named certain sections after creatures such as seahorses, cheetahs and eagles. In a fit of madness (not acted upon), I considered swapping a seahorse sign with a cheetah and seeing if that would send HP into a spin. But such behaviour is decidedly un-American.

The point is that HP's reputation trades heavily on the vision and principles established by Messrs Hewlett and Packard and some of their practices. Corporate office design is not one of them, no matter how many expensive design consultants have contributed to the final plan.

This is not to say that Ms Fiorina, or Carly as she is better known, is unapproachable. Quite the reverse from what I am told. But the sterility of the part of HQ I was in does not do her or her team credit.

Messrs Hewlett and Packard had more in common with the New Zealand business tradition than that which rules HP today. Their first plant was a garage in Palo Alto (see picture on page 30), now listed as a Californian historic monument, and their initial working capital amounted to $US538. They were the ultimate hands-on team ­ benevolent in an old-fashioned paternalistic way and close to their workforce.

These perceived HP "values" probably swung Proctor & Gamble to awarding HP the $US3 billion IT outsourcing contract this year but it risks being buried in the gobbledygook that rules much of corporate America.

The plus side for HP is that it pulled off a tricky merger with Compaq against difficult odds, giving it the strength to be a major player in IT's potentially big growth areas ­ outsourcing and services.

HP contains some of the nation's smartest IT people and it retained the bulk of the talent of the companies that merged last year. But innovation is not something that can be captured in address stations. It requires real people who sometimes break silly rules and fail to conform.

Naming work areas after sea creatures or animals or meeting rooms after international cities is wacky beyond belief. It is a small failing but one that highlights a potential weakness in HP's personnel management.

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