David Packard

'I think many people assume wrongly that a company exists simply to make money. While this is an important result of a company's existence, we have to go deeper to find the real reason for our being.' Consistently asked 'Do our products offer something unique? Are people's lives improved because of what we do?' Declared 'Customer satisfaction second to none is the only acceptable goal.'

'More businesses die from indigestion than starvation' became a guiding principle. Chose to 'concentrate on building a group of complementary products rather than becoming involved in a lot of unrelated things.' Consistently rejected diversification opportunities to maintain focus on electronic instruments and later computers.

Observed during the Great Depression that 'the bank simply foreclosed on firms that mortgaged their assets, and these firms were left with nothing.' Determined to 'operate the company on a pay-as-you-go basis, financing our growth primarily out of earnings rather than borrowing money.' HP remained debt-free and profitable every year for 50 years.

When HP faced crisis in 1990 due to 'committees and centralization,' the solution was reducing layers and giving business units 'greater freedom to create their own plans.' Stock price recovered from $25 to $70 after restructuring to eliminate bureaucracy and restore decentralized decision-making.

Learned at General Electric that 'personal communication was often necessary to back up written instructions.' Made this a core HP practice, with managers expected to spend time on the floor talking directly with employees, understanding problems firsthand, and maintaining open communication.

From cattle ranching experience: 'I found, after much trial and error, that applying steady, gentle pressure from the rear worked best.' Applied this philosophy throughout his management career, believing in patient persistence rather than forceful demands to achieve results.

'Bill and I knew we didn't want to be a Me Too company, merely copying products already on the market.' Started with audio oscillator that was genuinely different from existing products. Consistently emphasized creating unique value rather than competing on price or features of existing solutions.

Criticized Wall Street's quarterly focus, insisting that 'good new products are the lifeblood of technical companies.' Spent $2 billion on new product development in 1994 while competitors cut R&D. Maintained that sustainable success required patient investment in innovation over immediate profits.

Created Stanford cooperative program allowing over 400 engineers to get advanced degrees on full salary. Believed that investing in employee education would pay dividends through improved innovation and loyalty. Treated employee development as essential infrastructure, not optional benefit.

During 1970 recession, implemented '10% pay cut with 10% work reduction instead of layoffs, applied to all including executives.' Chose shared sacrifice over layoffs, ensuring that leadership took the same or greater cuts as front-line employees to maintain organizational cohesion.

'Gains in quality come from meticulous attention to detail, and every step in the manufacturing process must be done as carefully as possible, not as quickly as possible.' Learned from Japanese partners that achieving 400x better quality rates required discipline at every process step, not end-stage inspection.