HP timeline — 1940s By Decade

HP timeline — 1940s By Decade

The 40s Dave Packard practices "management by walking around" Products from the fledgling company win excellent acceptance among engineers and scientists. The start of World War II turns a trickle of U.S. government orders for electronic instruments into a stream and then a flood. HP builds the first of its own buildings and adds several new products. As HP grows, Bill Hewlett and Dave Packard create a management style that forms the basis of HP's famously open corporate culture and influences how scores of later technology companies will do business. Dave practices a management technique — eventually dubbed "management by walking around" — which is marked by personal involvement, good listening skills and the recognition that "everyone in an organization wants to do a good job." As managers, Bill and Dave run the company according to the principle later called management by objective — communicating overall objectives clearly and giving employees the flexibility to work toward those goals in ways that they determine are best for their own areas of responsibility. HP also establishes its open door policy — open cubicles and executive offices without doors — to create an atmosphere of trust and mutual understanding. The open door policy encourages employees to discuss problems with a manager without reprisals or adverse consequences. Bill and Dave make other important management decisions: providing catastrophic medical insurance, using first names to address employees (including themselves), and throwing regular employee parties and picnics. 1940 HP's second location HP moves from the garage behind Dave's apartment to rented buildings at Page Mill Road and El Camino Real in Palo Alto. Shortly after completing their first year in business, Bill and Dave agreed that all employees should share directly in HP's future success. The company paid its first bonus to employees, a $5 Christmas bonus, in 1940. That same year HP adopted a production bonus. These programs later became a companywide profit-sharing plan (in 1962). In June, the young company records its first charitable donation: $5 to local charities. Revenue: $34,396. Employees: 3. 1941 Bill visits HP during WWII Bill serves as an U.S. Army officer until 1947. Dave runs the young company while Bill is gone. Revenue: $106,459. Employees: 6. 1942 Line assembly in the Redwood Building Construction begins on the first HP-owned building: a 10,000 square foot office, laboratory and factory at 395 Page Mill Road, Palo Alto (Redwood Building). The building has an open floor plan — the beginning of today's open work areas at technology companies — so that workers can easily share ideas. Ever pragmatic, Bill and Dave construct the building so that it might be converted into a grocery store if the business fails to grow. After an employee contracts tuberculosis, Bill and Dave support his family financially. Even more significant, they establish a companywide catastrophic health insurance plan, something almost unheard of at the time. Dave Packard designs a voltmeter, the HP Model 400A, that gives unprecedented reliability at a lower price than the competition. Revenue: $522,803. Employees: 8. 1943 Bill tests an audio signal generator HP enters the microwave field with signal generators developed for the Naval Research Laboratory and a radar-jamming device. At the end of the war, HP makes the critical decision to continue in the microwave field; this area quickly becomes an important and growing share of the company's business, with HP the acknowledged leader in signal generators. Revenue: $953,294. Employees: 45. 1947 HP is incorporated August 18, 1947. Dave is named president, Bill vice president. The HP catalog features 39 products, and Dave tells participants at a New York trade show, "HP's future appears very promising." Revenue: $851,287. Employees: 111. 1948 HP adopts an insured pension plan for all employees with a minimum of five years service. Dave begins what will become nine years of service on the Palo Alto school board (1948-1956). With yet another attitude ahead of its time, Bill and Dave believe that HP has a responsibility to be a good corporate citizen. Revenue: $2.2 million. Employees: 128. 1949 Revenue: $2.2 million. Employees: 166.