Lew Platt: A Balanced Strategy For Success
"HP's only sustainable advantage is its people"
by Richard Cole
Since being appointed president and CEO of Hewlett-Packard in 1992, Lew
Platt has guided the company through an impressive period of growth. Both
the HP 9000 and HP 3000 product lines have been greatly expanded, the HP-UX
operating system has been significantly enhanced and a number of other new
products and services have been added. Sales figures reflect this growth
in offerings: from 1992 to the present, HP annual sales have increased from
$16.4 billion to $31.5 billion, and the company is now the second largest
computer supplier in the United States.
Lew recently answered a few questions for UniNews as he left for
a trip to the Far East. He talked candidly about his career, his philosophy
of business, the industry at large and the future of the company he has
worked with since 1966.
Q: Who was the greatest influence in your early years?
My parents, probably. My father had his own business most of the time I
was growing up, so I learned from him the relationship between hard work
and success. Since my parents were brought up during the Depression, they
were very careful about the way they spent their money and were always saving
for the future. This taught me to live well within my means.
Also, both my parents were always very active in the community. Although
they were busy people, they found time for extensive community service,
and this led me to develop an interest in community service also, which
I enjoy very much.
Q: What were the most important things you learned while getting your
engineering degree at Cornell and your MBA at Wharton?
A: I received a wonderful engineering education at Cornell and then went
on to Wharton where I sharpened my analytical and business abilities. It
truly was a great experience. I got to go back to Wharton a few years ago
as commencement speaker. I told the grads about three lessons which I learned
on the job that could help them build on what they learned in class. My
first lesson was on the "human side" of management. What I mean
is that the fun of management--the real accomplishments of management--comes
mostly through other people. Management means multiplying your ability to
get things done by inspiring other people to respond to your leadership.
I discovered this lesson when I was given my first management job at HP
a few years after joining the company. I was put in charge of the maintenance
department, and suddenly found that my MBA was a disadvantage.
The second lesson was the value of intuition. In the electronics and computer
industries, each product has a life of about a year, and many last only
a few months. The notion of speed--doing things not just well, but fast--is
what some people call "survival of the quickest." In this environment,
you can't always have as much data and analysis as you'd like; you have
to be willing to go with your gut feeling.
The third lesson is on the importance of flexibility. I'm a person who likes
to have things very well planned, but I've come to learn that the unexpected
isn't always bad. There's a saying: "Watch out for emergencies; they're
your biggest chance."
Q: Is there a secret to HP's success?
A: HP is the only company that has Bill Hewlett and Dave Packard as founders,
so I would say that their combination is one key to our success that can't
be duplicated by others. It's phenomenal to think about how the core values
Bill and Dave identified have guided this company through five decades and
around the globe.
The zeal of our people to constantly make contributions is a constant source
of pride for me, for all of us. And our employees contribute not only in
technological ways but also directly to their communities through things
like the United Way and various volunteer outreaches to schools and the
needy.
Q: What makes HP distinctive compared to other companies?
A: Much of our success today reflects the risks we took in the last 10 or
15 years. In fact, I think one of the truly different things about HP is
our willingness to invest and focus on the longer term. We were one of the
first companies to bring to market leading-edge technologies that are standards
today, such as open client/server computing and RISC, and a commitment to
standards. We've been open in working with partners in the industry and
growing our consulting and integration services. We're a leading Unix vendor
today, we collaborate on standards technology with many companies such as
Intel and SCO, and we have products such as OpenView, OpenMail and SoftBench
that are being licensed by other computer companies.
Q: Where would you like to take HP in the next several years?
A: In terms of our work environment, I'd like to ensure that HP remains
the "employer of choice." This will require constant attention
to employee survey data which helps us understand concerns and improve the
environment. We will also have to ensure that our increasingly diverse work
force feels comfortable at HP and that everyone feels they can contribute
to the company and grow with it. Finally, we'll have to do a much better
job of helping employees balance their work and home lives.
I'd also like to see HP continue to capitalize on this thing we call MC2.
HP has an arsenal of expertise that few companies possess. We have three
core competencies--measurement, computing and communication--"MC-squared."
We are advancing the state of the art in each of these areas, and we're
combining them in new ways. Here's an illustration of what I mean: Let's
say that if each field is pursued separately and if each has 1,000 opportunities
for innovation and growth, then HP has 3 x 1,000 or 3,000 possibilities
for growth. But if we think of the three fields as defining a 3-D cube instead
of being viewed as three lines going in separate directions, then the formula
to quantify our growth opportunities isn't 3 x 1,000 but MC-squared, or
1,000 to the third order, which means a billion possible ways to innovate
and grow.
This blend allows us to think broadly to solve customer problems. There's
a saying that if you own a hammer, you are likely to think every problem
needs hammering. My general goal for customers is to "delight them."
This won't be easy; the target keeps moving. But it's a goal we all are
committed to achieving.
Q: What about new markets for HP?
A: We are really excited about the communications industry--an MC-squared
opportunity. We are very fortunate at HP to be able to say that we are touching
or enabling almost every aspect of the communications revolution. In fact,
if you have sent or received a fax or an e-mail, or made a cellular phone
call this week, chances are almost 100 percent that the message touched
an HP communications component.
I spent some time at the big Telecom '95 show and was impressed with the
huge progress HP has made serving communications customers since the previous
Telecom show four years earlier. Last year, HP's sales to communications
customers were about $2.5 billion--that's five times more business in that
market than we had in 1991. It translates to roughly a 50-percent annual
growth rate. Almost every HP business has chosen to focus on communications.
We're investing heavily in R&D to create technologies and tools for this
market, and our customers seem to like what we're offering.
Q: In addition to the usual issues about technology and markets, what
else takes up your time and thoughts as a CEO?
A: The work/life balance issue is something all CEOs need to address, regardless
of the size, age or type of company. You know, especially in Silicon Valley,
products come and go, often at a dizzying pace. But people are a different
story. I believe HP's only sustainable advantage is its people, and it's
my responsibility to encourage a balance in the work/life seesaw. When we
create a desirable work/life balance, we attract and retain the best people--and
that's our competitive advantage.
We don't claim to have all the answers, but we have made tangible progress
that I'm proud of. We adopted flexible work hours, we reimburse employees
for some educational expenses and we liberalized our leave-of-absence policy.
Most recently, we offered a long-term health care insurance plan that also
is open to each U.S. employee's spouse, both sets of parents and all four
sets of grandparents. These programs can do a lot to reduce an employee's
stress and improve work/life balance.
Q: As a CEO, what have you learned most recently?
A: It's hard to single out one item. If forced, I guess I would say I've
learned an old lesson again, and that's of organizational resilience when
you put an organization through a major change.
Q: How would you characterize your management style?
A: It's very much an HP style. Pretty informal. I try to be open, warm,
fair. I won't ask people to do things that I wouldn't do myself. I try to
visit as many HP facilities around the world as I possibly can so that I
can interact personally with HP employees and listen to them. With more
than 100,000 employees and operations in something like 120 countries, I'll
never be satisfied with my "face-time" with our employees. But
staying in touch with HP people certainly is a priority with me; and I've
got the frequent-flyer miles to prove it.
Q: Did you ever have an ambition different from what you've actually
done in your life?
A: At one time, I wished that I had gone into hotel management instead of
engineering. I like people, and I like running large, complicated organizations.
Furthermore, I felt hotel management would have given me an opportunity
to live in many parts of the world. Through the years as I've stayed at
thousands of different hotels, I've decided hotel management is probably
much less interesting than what I'm doing.
Q: What is your proudest achievement so far?
A: On the professional side, it's becoming CEO and chairman of HP. I honestly
feel that I have one of the best jobs in the world, and I truly enjoy leading
this great company. On the personal side, I'd have to say it's the pride
that comes from helping raise four daughters who are now happy and successful
young adults. Getting children through the teenage years is not easy, and
when you've done it, it seems like a great achievement.
ABOUT LOU PLATT
Present Position: Chairman of the board, president and CEO of Hewlett-Packard
Co.
Age: 54
Years with Hewlett-Packard: 30
Car He Drives: A red 1996 Taurus, an HP company car
Place of Birth: Johnson City, a small town in south central New York
Latest Book Read: Profit From Experience by Gilbert Amelio
with William Simon. The story of how Amelio rebuilt National Semiconductor.
Latest Vacation: Eight days in the Tuscan wine country of Italy.
"It's a very rural environment, a big change of pace from Silicon Valley.
It's full of great people, great food and great wine."
Favorite Nonwork Activity: Fishing and wine-collecting
On the Relation of Work and Life: "We don't think of a work/life
balanceas a "nice-to-have." We see it as a business issue. When
employees' lives have reasonable balance, they're more likely to stay on
at the company--reducing the cost and hassle of recruiting and training.
They'll be more productive. They'll also be more committed to the company,
which helps tremendously when companies need their employees to embrace
change rather than run from it."