Reluctant Tycoons

David Packard, 50, and William R. Hewlett, 49, are shirtsleeved electrical engineers whose idea of a satisfying day's work is just puttering about in a laboratory. Somewhat to their bemusement, Packard and Hewlett now find themselves running a $100 million corporation that won't stop growing. In the 24 years since they went into business together, their Hewlett-Packard Co. of Palo Alto, Calif., has grown from a combined office-laboratory in a one-car garage into the world's biggest manufacturer of electronic measuring devices. Last year, true to a growth pattern the company has maintained for almost a decade, Hewlett-Packard's sales rose 25% to $109 million, and its profits increased 17% to $7,000,000.

Up from Disney. Packard and Hewlett have made a success out of two deceptively simple decisions: to make nothing but electronic measuring instruments, and to insist on rigid standards of quality. At Hewlett-Packard, specialization is only relative. The company's catalogue lists more than 900 devices designed for such esoteric tasks as timing electrical impulses that last only one-thousandth of a millionth of a second. The surge in the company's 1962 sales was not because any single product was a bestseller, but because H.-P.'s fertile research department turned out so many new products to sell. Rangy (6 ft. 5 in.) Dave Packard and compact (5 ft. 10 in.) Bill Hewlett decided to go into business together while both were studying at Stanford University under famed Electrical Engineering Professor Frederick E. Terman. They set up their company in the shadow of Stanford to be near Terman and Stanford's vast research services. Their first sale of any consequence ($489.60) came when Walt Disney bought nine Hewlett-developed audio oscillators for the sound effects of Fantasia. "Bill and I did everything from design to sales in those days," Packard recalls. "I'm afraid our standards of quality weren't quite what they are now."

In the Bullpen. Nowadays Packard, who is the company's president, and Hewlett, who is executive vice president in charge of the product line, put quality above all else. To give their factory hands some pride of accomplishment, they periodically have individual workers put together an instrument from start to finish rather than pass it down an assembly line. And they strive to preserve the creative informality of their old garage days. Even though Hewlett-Packard operates out of a modern six-building complex in Stanford's industrial park and has subsidiaries all over the U.S. and Europe, only six of the company's top executives in Palo Alto have private offices. The rest work in a giant, noisy bullpen together with clerks and secretaries.

Hewlett and Packard are resigned to the fact that they cannot stop developing new products. To adjust to bigness, they have decentralized and delegated authority. "There are advantages to bigness, too," says Hewlett briskly. "We want to combine the strength of the big with the "initiative of the small."

This file is automatically generated by a robot program, so reader's discretion is required.