David Packard

David Packard: The Garage and the Rulebook

The first eight units of the first product ever built by Hewlett-Packard were sold to Walt Disney Studios, which needed them to test the sound system for *Fantasia*. The company had $538 of capital, a rented Palo Alto garage, and no agreement on what to call itself; the founders tossed a coin, which is why it is not Packard-Hewlett. The thing built in that garage was not really the audio oscillator. It was a management theory.

Pueblo to Palo Alto

David Packard was born on 7 September 1912 in Pueblo, Colorado, the son of Sperry Sidney Packard, an attorney, and Ella Graber. He went west to Stanford, took his bachelor's degree in 1934, and returned for a master's in electrical engineering in 1938. Stanford supplied him with everything that mattered: an engineering training, a wife in Lucile Salter, whom he married in 1938, and a fellow student named Bill Hewlett.

He worked for General Electric before the two men set up on their own in 1939. The division of labour between them was settled early and never really changed. Hewlett was the inventor; Packard, in Britannica's assessment, "proved to be an expert administrator." One built the products, the other built the institution.

Building the Company

Hewlett-Packard grew into the largest maker of electronic testing and measurement instruments in the world before moving into calculators, computers and printers. Packard was president from 1947 to 1964, chief executive from 1964 to 1968, and chairman from 1964 to 1968 and again from 1972 to 1993 — five decades at or near the top of a company he never stopped treating as an experiment.

The experiment was in how to run the place. What became known as the HP Way was a package of practices that were close to eccentric in mid-century American industry: decentralised divisions given genuine autonomy, profit-sharing extended to ordinary employees, a commitment to avoid layoffs, an open-door policy, and the technique Packard made famous as management by walking around — executives who left their offices and talked to the people doing the work.

Packard set it all down in 1995, a year before he died, in *The HP Way: How Bill Hewlett and I Built Our Company*. The underlying claim is that a company exists to make a contribution, that profit is the requirement for continuing rather than the purpose, and that engineers treated as adults will outperform engineers treated as costs.

The Pentagon

In 1969 Richard Nixon made him United States Deputy Secretary of Defense, and Packard served until 1971. He brought a manufacturer's temperament to a bureaucracy that badly needed one: importing business resource management into military procurement, scrapping Robert McNamara's Total Package Procurement approach, and founding the Defense Systems Management College to professionalise the people who bought weapons. Britannica notes that he oversaw the initial development plans for the F-16 and the A-10 — two of the most durable aircraft the United States has ever fielded, both of them cheap by the standards of what surrounded them.

He remained a defence policy figure afterwards, and in 1972 issued the memorandum outlining exceptions to the Posse Comitatus Act governing the use of military force in domestic civil disturbances.

Giving It Away

He and Lucile founded the David and Lucile Packard Foundation in 1964, and the scale of what followed is unusual even among American industrial fortunes. He put $55 million into establishing the Monterey Bay Aquarium, which opened in 1984, and a further $13 million into the Monterey Bay Aquarium Research Institute in 1987; $40 million into the Lucile Packard Children's Hospital at Stanford, opened in 1991; and, with Hewlett, $77 million to Stanford in 1994. Lucile died in 1987. On Packard's own death he left roughly $4 billion — very nearly the entire fortune — to the foundation. It has since put more than a billion dollars into ocean research alone.

Why David Is Called a Genius

Packard was not an inventor. That was Hewlett's department, and Packard said so cheerfully for fifty years. The claim on his behalf is organisational: he worked out, decades before it was fashionable, that in a business whose only real asset is the skill of its people, the management system is the product. Decentralisation, profit-sharing, no layoffs, open doors, walking around — none of these was a nicety. Each was an engineering solution to the problem of getting good work out of clever people, and the combination created the template that Silicon Valley has been copying, formalising and occasionally betraying ever since.

The evidence is the durability. HP became the largest instrument maker on earth and then successfully entered three unrelated markets, which is exceedingly rare, and it did so while its founders were treating the workforce in ways their competitors thought sentimental. The United States awarded him the Presidential Medal of Freedom in 1988, alongside the National Medal of Technology.

The honest counter-case is that "genius" is a strained word for administrative excellence, however exceptional. Packard produced no theorem, no invention, no discovery. He had extraordinary luck of timing and place — Stanford, the war, the Cold War electronics boom — and half the credit for everything belongs to Hewlett. It is fairer to call him a genius of institutional design: a man whose medium was other people's working conditions, and whose best work outlasted every product he ever shipped.

Legacy

He died at Stanford on 26 March 1996, aged eighty-three. The Palo Alto garage is now formally designated the Birthplace of Silicon Valley; the foundation he endowed is among the largest in the United States; a research vessel named for him works the Pacific out of Monterey. But the real inheritance is a set of assumptions so thoroughly absorbed by the technology industry that they are no longer visible as choices — that engineers should own equity, that hierarchies should be flat, that a boss should be in the room. All of it was written down first by a man who started with a coin toss and $538.

Achievements

• National Medal of Technology and Innovation — 1988
• Presidential Medal of Freedom — 1988
• California Hall of Fame — 2006
• Affiliated with Hewlett-Packard and General Electric
• Educated at Stanford University and Centennial High School
• Worked as entrepreneur, engineer and computer scientist