The new HP way 

What Henry Ford was to the automobile industry, William Hewlett and David Packard were to information technology.

Ford applied state-of-the-art assembly-line methods to create the first widely affordable, mass-produced cars. That helped pave the way for the giant, worldwide companies that dominate the auto industry today.

The original Silicon Valley garage entrepreneurs, Hewlett and Packard applied an open, egalitarian quest for technical excellence to the production of thinking machines. The result? The powerful company that still bears their names, and the inspiration for many subsequent entrepreneurs, including those who founded Apple, Google, and Cirrus Logic.

The Hewlett-Packard style was so distinctive it even had a name: “the HP Way.” The HP Way implied a people-focused, consensus-driven workplace in which everyone collaborated to make the company’s products better.

When CEO CarlyFiorina set out to merge HP with Compaq in 2001, many feared the move would kill the HP Way. Certainly, it was not a marriage by consensus. A bitter proxy fight broke out, with opposition led by heirs of Hewlett and Packard, including then-HP board member Walter Hewlett, a son of William.

The heirs lost that battle. And today, a year after the merger was consummated, it’s worth asking where the new HP is headed and what became of the HP Way.

Undoubtedly the new HP is different from the old one. But as Ed Scannell reports this week, HP’s managers still aim for technical excellence — so long as they can produce it at a lower cost. That’s a departure from the old HP model, in which superior technology often sold at a premium.

On the other hand, it’s hard to imagine that the founders, if they were alive today (Hewlett died in 2001, Packard in 1996), would have objected to keeping prices low. After all, technological progress usually makes things both better and cheaper. Moore’s Law says as much.

At the heart of the new HP Way, Scannell says, lay several big technology gambles the company has made — none larger than the decision to base its entire server line, starting this summer, on Intel’s 64-bit Itanium 2 processor. (Microsoft helped out by promising quick support for the Itanium in its new Windows Server 2003 software, which the InfoWorld Test Center’s Tom Yager, Mario Apicella, and P.J. Connolly pry apart.) The company also made a series of more obvious bets, including sticking with Compaq’s popular ProLiant servers, beefing up its Open View systems management software, and supporting multiple operating systems.

So how would Hewlett and Packard have felt about the new HP? I can’t speak for the corporate culture; merging companies is usually not much fun for those inside. But you have to assume the founders would have applauded HP’s focus on excellence, its obsession with affordability, and its willingness to place nervy, if somewhat risky, technological wagers.