Packard, David

(b. 7 September 1912 in Pueblo, Colorado; d. 26 March 1996 in Palo Alto, California), electrical engineer and industrialist who substantially influenced the rise of the global electronics industry and new management practices in high-technology companies.

Packard was the son of Sperry Sidney Packard, an attorney, and Ella Lorna Graber, a high-school teacher. Packard had two siblings, a brother who died in infancy and a sister who died at age twenty. Educated in Pueblo public schools, Packard took an early interest in radio and other things electrical. He built a ham radio system and frequently visited the technicians at a small local radio station. While his parents had little direct interest in this area, both encouraged Packard. One area of mutual interest to Packard and his father was athletics. The six foot, six inch tall young man excelled at football, basketball, and track in high school and college. Although he was raised in a comfortable home, he was not immune to hardships in the steel town of Pueblo. As the Great Depression deepened, Packard’s father was appointed as a bankruptcy judge for the area. Through the elder Packard’s compassionate approach to cases, the young Packard absorbed a philosophy of helping one’s community, which guided many of his actions in corporate social programs for his Hewlett-Packard (HP) employees, the communities with HP facilities, and the nation.

While on visit to Palo Alto, California, in the summer of 1929, Packard toured Stanford University. He decided to apply to Stanford to study electrical engineering, a career choice he had made several years earlier. He graduated from Centennial High School in Pueblo in 1930, and entered Stanford that fall. There he formed several influential and enduring relationships. Two of the most significant were those with Professor Frederick E. Terman, who served as dean and provost, and later became known as the “father” of “Silicon Valley,” and with fellow student William R. Hewlett, with whom he later cofounded the Hewlett-Packard Corporation in 1939. Terman encouraged the two men in radio engineering and nurtured the growing bond between Packard and Hewlett.

On graduating from Stanford, with a B.A. degree in 1934, Packard entered an economy still mired in the Great Depression. He felt he could not take the risk of an uncertain income at the time and accepted a position with General Electric in Schenectady, New York. He joined the section that made mercury-vapor rectifier tubes for the control of spot and seam welding. This position provided training that was important to him later. Many tubes were failing quality-control tests. Engineers and production employees worked together to conduct tests and identify every cause of failure. Packard later reported that he “found the factory people eager to do the job right.” Personal communication helped both groups to correct the problem. At HP, Packard spent much time on the floor talking to and helping employees, hence increasing performance, productivity, and loyalty.

On 8 April 1938, Packard married Lucile Laura Salter; they had four children. A few months later, Terman arranged a fellowship for Packard to complete his engineering degree at Stanford (which required a fifth year of study). Packard obtained a leave from General Electric and returned to Stanford, where his friend Hewlett was also studying and where he earned an E.E. degree in 1939. While in the engineering program, Packard enrolled in business courses, believing that they would provide him with useful skills as he embarked that year on an electronics company with Hewlett.

With an initial investment of $538 and some used equipment, Packard and Hewlett responded to the requests of several electronics entrepreneurs in the area for custom products. They worked on a weight-reducing machine, an electronic harmonica tuner, and a bowling alley foul-line indicator. Their initial success, and HP’s first product, was a resistance-stabilized audio oscillator designed by Hewlett as part of a class exercise. It was the first low-cost method of generating high-quality audio frequencies needed in communications, geophysics, medicine, and defense work. By the end of 1939, they had sold eight audio oscillators to Disney Studios for use in making the film Fantasia. HP went on to develop a full line of audio-frequency-measuring instruments. Even in their first full year of business (1939), HP sales totaled $5,369 with a profit of $1,653, the start of a long trend of profit.

During World War II, HP continued to expand its product line and develop new products, especially those associated with the needs of others in the defense effort. Hewlett served in the U.S. Armed Forces and Packard ran the company. Many of the new electronic concepts spawned during the war in radio frequency and microwave engineering were put to good use in new products. With the end of the war and the drive to establish a new technology-based economy, HP was well positioned to thrive. Although there was an inevitable slowdown in the late 1940s, the company continued to stay profitable and take care of its employees. Hewlett stayed closer to the engineering side of the company, and Packard moved over more into the business side. Decisions were always made jointly. They maintained a close bond with Stanford and Terman, and attracted able people to the company as it expanded throughout the 1950s.

Packard believed that the company should only make products that contributed to the economy and the nation, not just the company’s bottom line. They achieved this by knowing customer needs and building quality products. Most products were successful as a result of HP’s policy of only becoming involved in areas they knew well. They began with electrical engineering equipment designed by Hewlett and Packard that performed better and were cheaper than those on the market in 1939. Beginning with an audio oscillator for use in communications, geophysics, and medicine, they added a full line of audio-frequency measuring instruments. They excelled in this line of products and slowly acquired companies whose lines of business were on the boundaries of the HP product line. As high technology changed, HP kept pace with the change, often directing it.

Three things contributed to the HP’s spectacular growth after 1955. The first was the internationalization of operations. HP opened manufacturing plants in Europe and began a joint venture with a Japanese firm. A second was the acquisition of companies whose product lines bordered on those of HP. Often these were companies HP had decided not to compete with because their products were handled by the same agents, and marketing would have been adversely affected if competition for certain products intensified. The third was the initial public offering of HP stock in 1957. Publicly traded stock allowed HP to acquire other companies through a stock exchange, alleviating the need for cash and helping employees benefit from HP growth through a stock option plan.

From HP’s beginning in the late 1930s, Packard and Hewlett paid keen attention to their employees’ welfare. Packard and Hewlett frequently interacted with employees at their work stations; gave generous benefits packages (with far-reaching implications for the general industry); provided opportunities for employees to socialize outside of the work place; placed offices and officers in a way that enhanced and encouraged communication among workers; frequently evaluated of the goals of the entire work force; and established what came to be called “management by objectives Packard and Hewlett downplayed their own special status in the company and rarely used authority as a means of control. Employees were not released, even for poor performance. Instead, more suitable positions were found for them. In difficult economic times, HP did not lay off workers. Instead, everyone’s time was reduced by some percentage to ensure a talented and dedicated work force at all times.

As the company grew, the founders needed additional personnel to manage the multi-dimensional company. They developed a list of corporate objectives, modified only slightly after broad consultation within the company, to guide the firm after their departure. The objectives encapsulated all the aims and policies of Packard and Hewlett for the company. Long before the partners approached retirement, they began to groom successors imbued with these ideals. This “HP way” became the model for other companies. Packard became a model in other ways as well. HP was not just a good place to work, it also became a good community partner. Gifts from the company to civic and social programs, encouragement of community participation by employees, and public service away from the company represented Packard’s initial philanthropic contributions. As his personal wealth increased, he and his wife began sharing their largesse with other groups.

Packard’s main residence after 1937 was in Palo Alto, having lived in only two homes there. In 1952 the Packard and Hewlett families decided to engage in a ranching partnership. They purchased a ranch south of San Jose, California, in an area called San Felipe. Later they added Los Huecos to the south of the original tract. Packard actually helped to build twenty miles of road on the land piloting his own bulldozer to level the way. Ranch land in Idaho and California’s Central Valley came later still. The families used these tracts for vacations, hunting trips to which they often brought guests, cattle raising, and fishing, all favorite hobbies of Packard.

President Richard Nixon asked Packard to serve as deputy secretary of defense in late 1968. Packard accepted the position, at great personal financial sacrifice, because he considered it his civic responsibility. Some detractors, however, suspected him of having self-serving motives. During his three years in defense, Packard devoted himself to reforming costly procurement and management practices, played a prominent role in the administration’s Vietnamization policy, oversaw daily departmental operations, and represented it to the National Security Council. He participated in such monumental discussions as the bailout of the Lockheed Corporation, the development of the B-l bomber, and the government wage freeze, which he opposed for military personnel. After leaving the department, he continued to serve presidents in many capacities. Meanwhile, he shared his wealth with various educational and charitable organizations, mostly through the David and Lucile Packard Foundation he and his wife had established in 1964. Through this foundation, the Packards made extensive donations to scientific research, community organizations, education, health care, conservation, population projects, and the arts.

Packard received many awards and commendations for his work and donations, including six honorary degrees. He served at various times as a trustee of Stanford University, the Hoover Institution, Colorado College, and the American Enterprise Institute. He was a member of the White House Science Council, the Institute of Electrical and Electronics Engineers, and the American Management Association. He died of complications from pneumonia in Palo Alto, California.

Packard’s view of his life’s accomplishments can be found in his book The HP Way: How Bill Hewlett and I Built Our Company (1995). For a useful discussion of the Hewlett-Packard Company and “Silicon Valley,” see Michael S. Malone, The Big Score: The Billion Dollar Story of Silicon Valley (1985). An obituary is in the New York Times (27 Mar. 1996).

Arthur L. Norberg