Packard, David

(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.

Sources of Information

Contact at: Hewlett-Packard Company
3000 Hanover St.
Palo Alto, CA 94304
Business Phone: (650)857-1501
URL: http://www.hp.com

Bibliography

Bicknell, David. "A Pioneer Who Built His Success on Teamwork." Computer Weekly, 4 April 1996.

Byers, Paula K., and Suzanne M. Bourgoin, eds. Encyclopedia of World Biography. Detroit: Gale Research, 1998.

Current Biography Yearbook 1969. New York: H. W. Wilson, 1969.

"David Packard." Economist, 13 April 1996.

Erkanat, Judy. "Hewlett-Packard CoFounder Dies." Electronic News, 1 April 1996.

Geier, Thom. "The Visionary in a Palo Alto Garage." U.S. News & World Report, 8 April 1996.

Howe, Harlan. "In Memoriam: David Packard (1912-1996)." Telecommunications, May 1996.

Notable Twentieth-Century Scientists. Detroit: Gale Research, 1995.

Postrel, Virginia I. "Legacies." Reason, June 1996.

Rostky, George. "Hewlett-Packard Pioneer David Packard Dies at 83." Electronic Engineering Times, 1 April 1996.

David Packard

Born: September 7, 1912
Pueblo, Colorado
Died: March 26, 1996
Palo Alto, California
Cofounder, Hewlett-Packard Company

When he formed Hewlett-Packard (HP) with his partner William "Bill" Hewlett (1913-2001), David Packard honored his personal pledge to advance science and technology. HP introduced several innovative products, including the handheld calculator and the ink-jet printer. It also influenced other businesses with its management style. Packard insisted that managers stay in contact with employees, and he practiced what he called "management by walking around." HP workers called him Dave, and they recounted stories that showed he was just one of the gang, not the wealthy owner of a leading technology company.

"We wanted to direct our efforts toward making important technical contributions to the advancement of science, industry, and human welfare.… Right from the beginning, Bill and I knew we didn't want to be a 'me too' company merely copying products already on the market."

Friends in Science

Pueblo, Colorado, still had the feel of the old Wild West when David Packard was born there on September 7, 1912. His father was a lawyer and his mother was a high school teacher. The family lived on a prairie not far from the Rocky Mountains, and Packard had a lifelong love of the outdoors. (After his success at HP, Packard bought ranches in California and Idaho.)

Packard was fascinated by electronics at an early age. He built his first radio in elementary school and joined the radio club at Centennial High School. He also excelled in sports, playing football, basketball and track. In 1930, Packard enrolled at Stanford University to study electrical engineering. During his first semester, he met William Hewlett, another freshman at the school. They often took the same classes, but their friendship didn't develop until their senior year.

The two men were different in some ways: Hewlett was short and stocky, Packard was tall and lean. Hewlett came from a wealthy family, while Packard worked in a local cafeteria to earn extra money. But they shared a love of the outdoors and electronics. In 1934, they talked about starting a business with several other classmates. That plan, however, was delayed when Packard took a job at General Electric (GE) in Schenectady, New York.

Packard spent four years at GE, learning more about electronics and picking up management skills. He and Hewlett stayed in contact, and had their first official business meeting in August 1937 with plans to start a firm called the Engineering Service Company. Packard took a leave of absence from GE the next year, shortly after marrying Lucile Salter. Returning to Palo Alto, he began his partnership with Hewlett while taking classes and working nights.

Creating the HP Way

By the end of 1938, Packard and Hewlett had their first product ready for sale. They discovered that each partner had his own talents. As Packard wrote in The HP Way, "Bill was better trained in circuit technology and I was better trained and more experienced in manufacturing processes. This combination of abilities was particularly useful in designing and manufacturing electronics products."

David Packard built his first radio using a vacuum tube—a common device in early electronic equipment—two batteries, and a few other parts. With this simple radio, he picked up a station 600 miles away.

World War II (1939-45) fueled the company's growth. With Hewlett serving in the army, Packard ran the company. The HP plant operated all day long, and Packard often slept there on a cot. His wife also worked for the company, serving as a secretary and bookkeeper. Later, Lucile Packard bought presents for HP workers who got married or had a baby. Packard credited his wife with starting many of the traditions that helped make HP feel like a family.

Carleton Fiorina: Breaking the Glass Ceiling

For decades, female executives have struggled to reach the top spots at major U.S. corporations. Some people claimed a "glass ceiling," put in place by corporate boards, let women see the opportunities available, but kept them from reaching those positions. In July 1999, Hewlett-Packard helped crack the glass ceiling when it named Carleton "Carly" Fiorina its president and chief executive officer (CEO). She became the first female to lead a major high-tech business, and the CEO of the largest U.S. company ever run by a woman. In 2000, HP also made her chairwoman of the board.

Fiorina was born in California in 1954. Like HP founders William Hewlett and David Packard, she graduated from Stanford University, although her specialty was medieval history, not electronics. She considered a career in law (her father was a judge), then worked at a number of jobs before earning a master's of business administration (MBA) from the University of Maryland. In 1980, she began working in sales for AT&T, then moved up the corporate ladder and earned a second master's degree in 1988.

When AT&T formed Lucent Technologies (see entry) to make and sell telephone and Internet equipment, Fiorina took a top position at the new company. In 1998, she was named president of Lucent's largest group, and Fortune named her the most powerful woman in business. She won the honor a second time shortly after taking the job at HP.

Fiorina's appointment won her and HP prominent attention in the press. She, however, insisted on downplaying her historical role as the most powerful U.S. businesswoman ever. Instead she focused on the job of adding spark to an old business while continuing the HP tradition. Fiorina faced resistance from some HP employees, as she came across as flashy and tough. Slowly, however, she won support from top managers and the board of directors. By 2001, however, Fiorina was still struggling to change HP.

The battle to take control of Compaq raised questions in the media about Fiorina's commitment to the legendary HP Way. She told the San Jose Mercury News that the first objective of the HP Way was to make a profit, and that was what she was after. "If you don't make money," she said, "then all this other stuff isn't possible—you can't preserve jobs, you can't innovate, you can't contribute to the community."

After the war, HP recruited new scientists and managers, and the business grew quickly. As the company expanded, Packard was not able to have direct contact with all the employees, as he once had. He and Hewlett decided to hold a two-day meeting with senior managers to make sure they knew how to treat customers and employees, and to let the managers help shape the company's goals.

From HP to D.C.

HP always encouraged its employees to be active in the community and give time to others. Packard's outside service included serving as chairman of the board of trustees for Stanford University during the late 1950s. In that position, he met Congressman Mel Laird. In December 1968, Laird was named U.S. secretary of defense by President-elect Richard Nixon (1913-1994). Laird then asked Packard to come to Washington to serve as his deputy secretary.

Some people outside of government questioned Packard's appointment. He had almost no political experience, and HP had contracts with the military worth $100 million, raising the possibility of a conflict of interest. Packard, however, was easily confirmed for the job. While in Washington, he used the HP Way, meeting with military leaders and getting their input on budget cuts. He also set up new methods for purchasing military equipment.

Packard served as the United States was fighting the Vietnam War (1959-75), a conflict that divided many Americans. Working for the Defense Department was difficult during those years, and Packard was often criticized by politicians and the media. He also found it hard to work with the government bureaucracy—the layers of officials who decide what gets done and how. Packard wrote in The HP Way that dealing with the bureaucracy was "like pushing on one end of a forty-foot rope, and trying to get the other end to do what you want!" Packard left his position at the end of 1971, although he later served on several government commissions that addressed defense issues.

Last Days at HP

Packard returned to Hewlett-Packard in 1972 and resumed his role as chairman of the board. During the next several years, he made two trips to China. On the second, Packard began a relationship with Chinese officials that led to a joint venture in 1985. During this period, both Packard and Hewlett were not involved in HP's daily operations. Their roles changed, however, in 1990, when HP faced a slowdown. Packard especially took a more active role in the company, helping to reorganize the computer operations. He finally stepped down as chairman of the board in 1993.

Throughout his career, Packard was extremely generous, giving money to Stanford, the Monterey Bay (California) Aquarium, and the David and Lucile Packard Foundation. In 1988, he gave the foundation Hewlett-Packard shares worth $2 billion. After Packard died in 1996, the foundation received the rest of his fortune. Some of the money was used by the foundation's Children, Families, and Communities Program to help minority children. Packard used his scientific and business achievements to advance human welfare, just as he had hoped.

For More Information

Books

Packard, David. The HP Way. New York: HarperBusiness, 1995.

Periodicals

Allen, Frederick E. "Present at the Creation." American Heritage (May-June 2001): p. 21.

"Carly Fiorina: Catching the Big Mo." Business Week (February 18, 2002): p. 46.

"Compaq: Fiorina's Folly or HP's Only Way Out?" Time (September 17, 2001): p. 46.

Hardy, Quentin. "The Cult of Carly." Forbes (December 13, 1999): p. 138.

"Hewlett Explains Why He Opposes HP-Compaq Deal." San lose Mercury News (February 1, 2002).

"Hewlett-Packard Chief Executive Discusses Battle for Merger." San Jose Mercury News (February 22, 2002).

King, Peter H. "One Who Took the High Road." Los Angeles Times (March 31, 1996): p. 1.

Lohr, Steve. "It's the Scion vs. the Board in Merger Fight." New York Times (February 4, 2002): p. C4.

Nee, Eric. "Open Season on Carly." Fortune (July 23, 2001): p. 114.

Saporito, Bill. "Hewlett-Packard Discovers Marketing." Fortune (October 1, 1984): p. 50.

"$2 Billion Poorer." The Economist (May 7, 1988): p. 26.

Weigner, Kathleen K. "Back into the Race." Forbes (October 10,1983): p.30.

. "Good-bye to the HP Way?" Forbes (November 26, 1990): p. 36.

Zesiger, Sue. "Cover Girl Storms Silicon Valley." Fortune (August 16,1999): p. 29.

Web Sites

Agilent Technologies. [On-line] http://www.agilent.com.org (accessed on August 15, 2002).

Hewlett-Packard Company. [On-line] http://www.hp.com (accessed on August 15, 2002).

Packard, David

(b. 7 September 1912 in Pueblo, Colorado; d. 26 March 1996 in Palo Alto, California), electrical engineer and industrialist who substantially influenced the rise of the global electronics industry and new management practices in high-technology companies.

Packard was the son of Sperry Sidney Packard, an attorney, and Ella Lorna Graber, a high-school teacher. Packard had two siblings, a brother who died in infancy and a sister who died at age twenty. Educated in Pueblo public schools, Packard took an early interest in radio and other things electrical. He built a ham radio system and frequently visited the technicians at a small local radio station. While his parents had little direct interest in this area, both encouraged Packard. One area of mutual interest to Packard and his father was athletics. The six foot, six inch tall young man excelled at football, basketball, and track in high school and college. Although he was raised in a comfortable home, he was not immune to hardships in the steel town of Pueblo. As the Great Depression deepened, Packard’s father was appointed as a bankruptcy judge for the area. Through the elder Packard’s compassionate approach to cases, the young Packard absorbed a philosophy of helping one’s community, which guided many of his actions in corporate social programs for his Hewlett-Packard (HP) employees, the communities with HP facilities, and the nation.

While on visit to Palo Alto, California, in the summer of 1929, Packard toured Stanford University. He decided to apply to Stanford to study electrical engineering, a career choice he had made several years earlier. He graduated from Centennial High School in Pueblo in 1930, and entered Stanford that fall. There he formed several influential and enduring relationships. Two of the most significant were those with Professor Frederick E. Terman, who served as dean and provost, and later became known as the “father” of “Silicon Valley,” and with fellow student William R. Hewlett, with whom he later cofounded the Hewlett-Packard Corporation in 1939. Terman encouraged the two men in radio engineering and nurtured the growing bond between Packard and Hewlett.

On graduating from Stanford, with a B.A. degree in 1934, Packard entered an economy still mired in the Great Depression. He felt he could not take the risk of an uncertain income at the time and accepted a position with General Electric in Schenectady, New York. He joined the section that made mercury-vapor rectifier tubes for the control of spot and seam welding. This position provided training that was important to him later. Many tubes were failing quality-control tests. Engineers and production employees worked together to conduct tests and identify every cause of failure. Packard later reported that he “found the factory people eager to do the job right.” Personal communication helped both groups to correct the problem. At HP, Packard spent much time on the floor talking to and helping employees, hence increasing performance, productivity, and loyalty.

On 8 April 1938, Packard married Lucile Laura Salter; they had four children. A few months later, Terman arranged a fellowship for Packard to complete his engineering degree at Stanford (which required a fifth year of study). Packard obtained a leave from General Electric and returned to Stanford, where his friend Hewlett was also studying and where he earned an E.E. degree in 1939. While in the engineering program, Packard enrolled in business courses, believing that they would provide him with useful skills as he embarked that year on an electronics company with Hewlett.

With an initial investment of $538 and some used equipment, Packard and Hewlett responded to the requests of several electronics entrepreneurs in the area for custom products. They worked on a weight-reducing machine, an electronic harmonica tuner, and a bowling alley foul-line indicator. Their initial success, and HP’s first product, was a resistance-stabilized audio oscillator designed by Hewlett as part of a class exercise. It was the first low-cost method of generating high-quality audio frequencies needed in communications, geophysics, medicine, and defense work. By the end of 1939, they had sold eight audio oscillators to Disney Studios for use in making the film Fantasia. HP went on to develop a full line of audio-frequency-measuring instruments. Even in their first full year of business (1939), HP sales totaled $5,369 with a profit of $1,653, the start of a long trend of profit.

During World War II, HP continued to expand its product line and develop new products, especially those associated with the needs of others in the defense effort. Hewlett served in the U.S. Armed Forces and Packard ran the company. Many of the new electronic concepts spawned during the war in radio frequency and microwave engineering were put to good use in new products. With the end of the war and the drive to establish a new technology-based economy, HP was well positioned to thrive. Although there was an inevitable slowdown in the late 1940s, the company continued to stay profitable and take care of its employees. Hewlett stayed closer to the engineering side of the company, and Packard moved over more into the business side. Decisions were always made jointly. They maintained a close bond with Stanford and Terman, and attracted able people to the company as it expanded throughout the 1950s.

Packard believed that the company should only make products that contributed to the economy and the nation, not just the company’s bottom line. They achieved this by knowing customer needs and building quality products. Most products were successful as a result of HP’s policy of only becoming involved in areas they knew well. They began with electrical engineering equipment designed by Hewlett and Packard that performed better and were cheaper than those on the market in 1939. Beginning with an audio oscillator for use in communications, geophysics, and medicine, they added a full line of audio-frequency measuring instruments. They excelled in this line of products and slowly acquired companies whose lines of business were on the boundaries of the HP product line. As high technology changed, HP kept pace with the change, often directing it.

Three things contributed to the HP’s spectacular growth after 1955. The first was the internationalization of operations. HP opened manufacturing plants in Europe and began a joint venture with a Japanese firm. A second was the acquisition of companies whose product lines bordered on those of HP. Often these were companies HP had decided not to compete with because their products were handled by the same agents, and marketing would have been adversely affected if competition for certain products intensified. The third was the initial public offering of HP stock in 1957. Publicly traded stock allowed HP to acquire other companies through a stock exchange, alleviating the need for cash and helping employees benefit from HP growth through a stock option plan.

From HP’s beginning in the late 1930s, Packard and Hewlett paid keen attention to their employees’ welfare. Packard and Hewlett frequently interacted with employees at their work stations; gave generous benefits packages (with far-reaching implications for the general industry); provided opportunities for employees to socialize outside of the work place; placed offices and officers in a way that enhanced and encouraged communication among workers; frequently evaluated of the goals of the entire work force; and established what came to be called “management by objectives Packard and Hewlett downplayed their own special status in the company and rarely used authority as a means of control. Employees were not released, even for poor performance. Instead, more suitable positions were found for them. In difficult economic times, HP did not lay off workers. Instead, everyone’s time was reduced by some percentage to ensure a talented and dedicated work force at all times.

As the company grew, the founders needed additional personnel to manage the multi-dimensional company. They developed a list of corporate objectives, modified only slightly after broad consultation within the company, to guide the firm after their departure. The objectives encapsulated all the aims and policies of Packard and Hewlett for the company. Long before the partners approached retirement, they began to groom successors imbued with these ideals. This “HP way” became the model for other companies. Packard became a model in other ways as well. HP was not just a good place to work, it also became a good community partner. Gifts from the company to civic and social programs, encouragement of community participation by employees, and public service away from the company represented Packard’s initial philanthropic contributions. As his personal wealth increased, he and his wife began sharing their largesse with other groups.

Packard’s main residence after 1937 was in Palo Alto, having lived in only two homes there. In 1952 the Packard and Hewlett families decided to engage in a ranching partnership. They purchased a ranch south of San Jose, California, in an area called San Felipe. Later they added Los Huecos to the south of the original tract. Packard actually helped to build twenty miles of road on the land piloting his own bulldozer to level the way. Ranch land in Idaho and California’s Central Valley came later still. The families used these tracts for vacations, hunting trips to which they often brought guests, cattle raising, and fishing, all favorite hobbies of Packard.

President Richard Nixon asked Packard to serve as deputy secretary of defense in late 1968. Packard accepted the position, at great personal financial sacrifice, because he considered it his civic responsibility. Some detractors, however, suspected him of having self-serving motives. During his three years in defense, Packard devoted himself to reforming costly procurement and management practices, played a prominent role in the administration’s Vietnamization policy, oversaw daily departmental operations, and represented it to the National Security Council. He participated in such monumental discussions as the bailout of the Lockheed Corporation, the development of the B-l bomber, and the government wage freeze, which he opposed for military personnel. After leaving the department, he continued to serve presidents in many capacities. Meanwhile, he shared his wealth with various educational and charitable organizations, mostly through the David and Lucile Packard Foundation he and his wife had established in 1964. Through this foundation, the Packards made extensive donations to scientific research, community organizations, education, health care, conservation, population projects, and the arts.

Packard received many awards and commendations for his work and donations, including six honorary degrees. He served at various times as a trustee of Stanford University, the Hoover Institution, Colorado College, and the American Enterprise Institute. He was a member of the White House Science Council, the Institute of Electrical and Electronics Engineers, and the American Management Association. He died of complications from pneumonia in Palo Alto, California.

Packard’s view of his life’s accomplishments can be found in his book The HP Way: How Bill Hewlett and I Built Our Company (1995). For a useful discussion of the Hewlett-Packard Company and “Silicon Valley,” see Michael S. Malone, The Big Score: The Billion Dollar Story of Silicon Valley (1985). An obituary is in the New York Times (27 Mar. 1996).

Arthur L. Norberg

David Packard

David Packard (1912-1996) was the co-founder and a longtime executive officer of Hewlett-Packard Company, a leading manufacturer of electronic measuring devices, calculators, and computers. He also served as deputy secretary of defense under President Richard Nixon and was a major benefactor to many philanthropic organizations.

David Packard was born September 7, 1912, in Pueblo, Colorado, the son of a lawyer and a high school teacher. He avidly read library books on science and electricity, and built his first radio while still in elementary school. After graduating from his local public high school, Packard enrolled as an electrical engineering student at Stanford University in California. There he met William Hewlett, a fellow student who shared his interest in electronics and the out-of-doors. In college he was a varsity athlete and president of his fraternity. He received a B.A. with honors in 1934.

Packard went to Schenectady, New York, to work in the vacuum tube engineering department of General Electric Company. He returned to Stanford in 1938 to study the theory of the vacuum tube. That year he also married Lucile Salter of San Francisco, whom he had met at Stanford; the Packards had four children.

In 1939 Packard finished his electrical engineering degree under Stanford professor, Frederick Terman. By then he had renewed his friendship with Hewlett, who had developed considerable expertise on negative feedback circuits. Hewlett and Packard set up a laboratory in the Packard family garage and soon were taking orders for apparatus ranging from air conditioning control units to electronic harmonica tuners to exercise machines. In 1939 Hewlett-Packard turned its emphasis from custom orders to mass produced instruments. Particularly important were its audio oscillators, devices that generate a controlled signal at a predetermined frequency. These were generally used to check the performance of amplifiers and broadcast transmitters, but some provided sound effects for Walt Disney's movie Fantasia.

During World War II Hewlett-Packard expanded rapidly to meet the needs of various defense projects. Packard ran the company alone, as Hewlett was in the U.S. Army. Business declined sharply at the end of the war, and Hewlett-Packard was forced to lay off employees for the only time in Packard's career. Demand rebounded by 1950; in 1957 the company's stock began to trade on the open market. Hewlett-Packard's product line grew to include not only thousands of electronic measuring devices for a wide range of frequencies but, beginning in 1972, hand-held scientific calculators. The company had done custom work in computer manufacture as early as the 1940s, but did not begin to market its own computers until the late 1960s. Experienced in supplying engineers and scientists, Hewlett-Packard had some difficulty with wider business and consumer markets. Nonetheless, it developed a wide range of programmable calculators, minicomputers, and microcomputers.

Hewlett-Packard was one of the first and largest electronics companies in the region of California now called Silicon Valley. It gradually expanded its sales force from a handful of representatives into a national and then an international network. Manufacturing facilities also extended out of California, not only to Colorado and Oregon but to Europe, South America, and Asia. At the same time, staff trained at Hewlett-Packard came to have important posts at other electronics firms. For example, Stephen Wozniak, co-founder of Apple Computer, first worked at Hewlett-Packard.

With Packard as manager and Hewlett as technical expert, Hewlett-Packard followed conservative but unconventional business practices. Profits were reinvested in the company so that debt was low. Following General Electric's example, the company preferred to hire employees directly out of school. Staff received generous benefits, were entrusted with considerable responsibility, and rarely were fired. Hewlett and Packard set general objectives, assisted those who carried them out, and chose not to flaunt their wealth and power. Engineering, sales, and management were done by men, while women did much of the actual assembly work. Emphasis was on high quality, not low price. To retain the atmosphere of a small business when the staff came to number thousands, Hewlett and Packard divided the company according to product types, with each division having its own marketing, production, and research groups. Support functions such as sales and advertising often were handled by outside contractors.

In addition to his business activities, Packard took an active interest in civic affairs. From 1948 until 1956 he chaired the Palo Alto School Board; he also gave money to the Republican Party. In 1964 he founded the David and Lucile Packard Foundation in Los Altos, California, to support universities, national institutions, community groups, youth agencies, hospitals, and other organizations that are dependent on private funding and volunteer leadership; he also served as president and chairman of the foundation. When President Richard Nixon was elected, he sought a skilled administrator to serve as deputy secretary for defense. Packard agreed to take the position, decreasing his salary from nearly a million dollars a year to about $30,000. Congressional critics pointed out that Packard owned about one-third of the stock in Hewlett-Packard and that the company did about $100 million in defense-related business each year. To avoid conflicts of interest, Packard put his stock in a trust fund, with all dividends and capital increases going to charity.

In 1971 Packard returned to his post at Hewlett-Packard. Even after he retired from direct administration in 1977, he continued as chairman of the board. He also served on the boards of directors of corporations such as Caterpillar Tractor Co. (1972-83), Chevron Corp. (1972-85), The Boeing Co. (1978-86), Genentech Inc. (1981-92), and Beckman Laser Institute& Medical Clinic (1992-96). He was a trustee of the Herbert Hoover Foundation and of the American Enterprise Institute, conservative research groups. He was a member of The Trilateral Commission from 1973 to 1981 and chaired the U.S.-Japan Advisory Commission from 1983 to 1985. In 1985 he was appointed by President Reagan to chair the Blue Ribbon Commission on Defense Management. He also was a member of the President's Council of Advisors on Science and Technology from 1990 to 1992 and founding vice chairman of the California Roundtable.

In addition to his own foundation, Packard held top positions in many philanthropic organizations. He was chairman of the Monterey Bay Aquarium Foundation; chairman and president of the Monterey Bay Aquarium Research; vice chairman of the California Nature Conservancy in 1983; and director of the Wolf Trap Foundation in Vienna, Virginia, a society dedicated to the performing arts, from 1983 to 1989.

Packard held several patents in the area of electronics measurement and published papers in that field. He received honorary degrees from Pepperdine University, University of Notre Dame, Colorado College, the University of California, Catholic University, and elsewhere. The numerous awards he received in his lifetime for both his contributions to technology and for his philanthropic work include The Gandhi Humanitarian Award in 1988, the Presidential Medal of Freedom in 1988, and induction into the Information Industry Hall of Fame, (presented jointly to Packard and Hewlett) in 1996.

In January 1989 he created the David and Lucile Packard Center for the Future of Children as a part of his foundation. The center was established to target the health and social problems of minority children under seven years old. Packard felt the center was perhaps the most important aspect of his foundation. In September 1993, Packard retired as chairman of the board at Hewlett-Packard and was named chairman emeritus, a position he held until his death at the age of 83.

Packard died on March 26, 1996 at Stanford Medical Center, after being hospitalized for ten days with pneumonia. His entire $6.6 billion fortune was given to the David and Lucile Packard Foundation, making it one of the nation's largest philanthropic organizations.

Further Reading

There is no full-length biography of David Packard. For information about his life see magazine articles such as N.W., "The Maverick of Electronics," Dun's Review (August 1967); "Lessons of Leadership: David Packard of Hewlett-Packard," Nation's Business (January 1974); and "David Packard—1981 DPMA Distinguished Information Sciences Award Winner," Data Management (October 1981). Michael S. Malone discusses Packard, Hewlett, and the Hewlett-Packard Company at some length in his book The Big Score: The Billion Dollar Story of Silicon Valley (1985).

Additional Sources

San Jose Mercury News (March 27, 1996).

Hewlett-Packard Homepage, "David Packard 1912-1996," http://www.hp.com/abouthp/packard.htm □

PACKARD, DAVID

David Packard, along with fellow Stanford University graduate William Hewlett, founded California-based Hewlett-Packard Co. (HP) in 1939. Due in large part to their revolutionary management practices, Packard's and Hewlett's brainchild grew from a small testing-device manufacturer into the world's second largest computer company, behind IBM Corp., with nearly 85,000 employees and annual revenues in excess of $48 billion.

Packard was born in Pueblo, Colorado, in 1912. He studied radio engineering at Stanford University, where he met Hewlett. General Electric Co. hired Packard as an engineer in 1936, but two years later, Packard resigned and returned to Stanford to pursue a graduate fellowship. That year, with $538 in capital, he and Hewlett started a business in Packard's one-car garage. Stanford professor Frederick Terman advised the partners to market a resistance capacity audio oscillator—a sound equipment tester—that Hewlett had created as a graduate student. Packard and Hewlett named their first major product the HP 200A. The fledgling partnership's first major order came when Walt Disney requested eight of the new oscillators for the production of Fantasia . In January of 1939, Packard and Hewlett officially named their business Hewlett-Packard Co. The order of their names had been decided by a coin toss, which Packard lost.

When HP incorporated in 1947, Packard was appointed president. It was during the late 1940s, that Packard and Hewlett, who was serving as vice president, began putting in place the management practices that would later earn them recognition as the pioneers of Silicon Valley. According to Computer Reseller News columnist Jeff Bliss, "The best talent at Eastern institutions such as the Massachusetts Institute of Technology and Bell Labs took notice, and the Western migration of the country's technological brain trust began. The environment awaiting these scientists, teachers, and engineers could not have been more conducive to encouraging technology." These practices—which eventually became known as the "HP Way"—included an Open Door Policy that was created to help facilitate frequent, comfortable, and candid communication between employees and management. Employees worked in open cubicles, while the offices inhabited by managers had no doors. Packard and Hewlett also frequently walked through their facility, making themselves as accessible as possible to employees.

Packard took HP public in November of 1957. He also created a set of written objectives for HP, believing that a tangible mission would help ensure all employees were working toward the same goals. The following year, Packard oversaw HP's first acquisition, a maker of graphics recorders. In addition, he steered the firm's initial international growth efforts, which included the establishment of a manufacturing plant in Germany and a European headquarters office in Geneva, Switzerland, in 1959. By the end of the decade, Packard and Hewlett had put in place a highly decentralized structure that would endure for the next forty years. Each of HP's autonomous divisions over-saw its own research and development, manufacturing, and advertising activities. To help the firm retain its entrepreneurial climate despite rapid growth, Packard and Hewlett also decreed that each time a division's employee count exceeded 1,500, the division would be divided into two separate entities.

Hewlett replaced Packard as president in 1964. Packard spent the next three years serving as chairman and CEO. He left HP in 1969 to serve the Nixon administration as Secretary of Defense. After returning to the firm in 1971, Packard was reappointed HP's chairman. Although he had resigned as Secretary of Defense, Packard continue his governmental work throughout his career. From 1975 to 1982, he was a member of the science and technology committee of the U.S.-U.S.S.R. Trade and Economic Council. In 1985, Ronald Reagan named him chairman of the Blue Ribbon Commission on Defense Management. He also served on the President's Council of Advisors on Science and Technology between 1990 and 1992.

One year after Packard's return to HP, the firm launched the world's first scientific pocket calculator, the HP 35. HP also began its foray into computers when it unveiled the HP 3000 minicomputer. By that time, the firm had become one of the first to eliminate time clocks, to grant employees a flexible work schedule, and to add profit sharing to compensation packages. HP created its first personal computer, the HP-85, in 1980, and its first desktop mainframe machine, the HP 9000, in 1982. Two years later, HP created its most successful product ever, the LaserJet printer. While Packard was not at the helm of operations when these blockbuster products were shipped to market, he did help to create an atmosphere that fostered the development of new technology.

In 1990, after earnings dipped nearly 11 percent, Packard decided to take a more active role in HP's daily operations. Roughly 3,000 employees were laid off. In 1991, earnings rebounded, reaching $755 million on revenues of $14.4 billion. Two years later, Packard retired as chairman. He served HP as chairman emeritus until his death in 1996.

FURTHER READING:

Akin, David. "Hewlett Helped Define Silicon Valley Success." National Post, January 13, 2001.

Bliss, Jeff. "William Hewlett." Computer Reseller News, November 16, 1997.

Hewlett-Packard Co. "David Packard." Palo Alto, CA: Hewlett-Packard Co., 2001 Available from www.hp.com.

"Hewlett-Packard Co." In Notable Corporate Chronologies. Farmington Hills, MI: Gale Research, 1999.

O'Hanlon, Charlene. "High-Tech Visionary—David Packard." Computer Reseller News, November 13, 2000.

SEE ALSO: Hewlett, William R.; Hewlett-Packard Co.