Why Care About HP?

Abstract

![Figure][1] The strange troubles afflicting the Hewlett-Packard company have been disclosed during the past weeks in one of those agonizingly slow news dribbles. First we learned that agents and perhaps members of the HP board had been impersonating others in order to sleuth out the identity of a director suspected of leaking secrets to the press. Next we were told more than we wanted to know about “pretexting”: the dubious and possibly illegal practice through which phone records were being obtained. Then a sting operation designed to trick a reporter into revealing information sources came to light. Finally, though this may not really be the end, the attorney general of California has indicted the former chair of the board and four others for felonious conduct. Should we care? I think so (disclosure: besides my local Silicon Valley bias, I serve on the board of the David and Lucile Packard Foundation). HP is a major science company; over time, it has developed and produced instruments that can be found in many of our research laboratories. So it's an important entry in the story of science. It's also a company known for the unusual level of social conscience that has accompanied its talent for scientific innovation. Its origin is a Silicon Valley legend that begins with “The Garage”: the Palo Alto location to which two young Stanford guys, Dave Packard and Bill Hewlett, took their research interests off campus to begin product development. The lore expanded as the company grew: Both founders had open offices visible on the HP floor, and the “HP Way” became descriptive shorthand for a democratic style of management that was the opposite of imperial CEO-ship. During the company's intense growth phase, Dave Packard regularly served on the Palo Alto School Board, a contribution later interrupted by his service as U.S. Undersecretary of Defense. ![Figure][1] CREDIT: DAVID PAUL MORRIS/GETTY There is something sad about a corporate scandal when it happens to people who have done good things and an organization that has built a treasured reputation over nearly three-quarters of a century. The behavior of some directors was highly questionable and may turn out to be illegal if the attorney general's indictment holds water. Moreover, media and public attention to the problems was surely enhanced by the occasionally bizarre character of the episodes as they unfolded. Granting all that, this case is very different from previous corporate scandals. No one profited, no shareholders were defrauded, and no one falsified accounts. In short, this isn't Enron, HealthSouth, or Global Crossing, but in media presentations, that distinction is not as clearly drawn as it might be. So it is hardly surprising that the HP scandal is generating anxiety and sympathy in Silicon Valley. HP was a prime mover in making the region a receptive haven for good academic ideas that can be taken into startup companies and turned into products for human service. Next-generation Hewletts and Packards have undertaken leadership roles in the two foundations that bear the founders' names and have helped not only local institutions and projects, but also science—including support for young science faculty, climate change research and analysis, and energy policy. There is a lot of good in the history of HP and its successors; one can hope that fair-minded readers of the negative stories will remember that. But at least this episode leaves us with a valuable lesson. The agonizing day-by-day unrolling of the bad news should have been halted by a prompt disclosure of the whole story, dirty linen and all. How to do this right is often referred to as the Jim Burke strategy, after the president of Johnson and Johnson who dealt with a fatal Tylenol tampering incident in 1982 (capsules laced with cyanide) by immediately announcing a recall, investigating the case, and changing the product. Had HP put the whole story out right away, expressed regret, and fixed matters, it could have spared the company, its family, and its friends much discomfort. But that didn't happen. How hard it is for us to learn from the mistakes of others! [1]: pending:yes