Business Ideas – How to Build a Business the HP Way by Evan Carmichael


bill hewlett and dave packard


Evan Carmichael discusses how you can build a business like Bill Hewlett and Dave Packard, founders of one of the world’s largest information technology companies, Hewlett-Packard.


“Believe you can change the world.” — Bill Hewlett


Bill Hewlett and Dave Packard were university friends who graduated in electrical engineering from Stanford in 1935. Eager to become entrepreneurs, Packard and Hewlett established Hewlett-Packard (HP) in 1939 in Packard’s garage with all the startup money they could put together – a grand total of US$538. They then tossed a coin to decide whether the company would be called Hewlett-Packard or Packard-Hewlett.


60 years after its founding, HP has developed a reputation for innovative and reliable products and in 2009 had revenue of $115 billion, making it one of the largest companies in the world.


Action Item #1: Think About More Than Money


Hewlett and Packard believed that a business had a purpose beyond just making money. Businesses had responsibilities to employees, customers, and the community at large. It was a controversial viewpoint in the 1940s but many of the management practices that are now standard in many work environments were pioneered by Bill Hewlett and Dave Packard.


Some of the initiatives they launched included: worker bonuses based on productivity, profit sharing plans, flex-time schedules, companywide health-insurance, pay cuts and Fridays off instead of layoffs in hard times, addressing everybody in the company by their first names, having an open-door policy, and creating a wall-free environment to encourage teamwork and the flow of ideas.


As an entrepreneur you have to worry about money and making enough to first survive and then build a lasting company – but don’t make it your only priority. Remember to think about the people who work for you, the people who buy from you, and the rest of your community to make your business a force for good. Strangely enough when you focus on helping these people around you, the money comes in on its own.


Action Item #2: Adopt a Survival Mentality


The early days of a new business can be challenging. You may not be selling the right product or service and you rarely hit the targets that you set for yourself. This is where it’s crucial to adopt a survival mentality – listen to your customers until you find the product or service that will really solve their problems and in turn help you build a lasting business.


When Bill Hewlett talked about the early days of Hewlett-Packard he said: “We were just opportunistic. We made a bowling alley foul-line indicator, a clock drive for a telescope, a thing to make a urinal flush automatically, and a shock machine to make people lose weight. We did anything to bring in a nickel.”


The best way to build a business is around customers with problems who will pay you to solve them. Adopt a survival mentality like Hewlett and Packard and look for opportunities to help your customers. In the midst of solving their problems you’ll find a business idea that you can build into a successful and enduring company.


Action Item #3: Make Innovation a Part of Everything You Do


For a business to succeed today it needs to always be thinking about what’s next and how it can innovate. If you can offer a more innovative solution that your competitors don’t have yet it can be your chance to win new business and grow your company.


In HP’s early years, Hewlett and Packard had made one rule, above all the others, the golden rule: To encourage innovation, no parts bins or storerooms should ever be locked. To outsiders, this was a mind-boggling phenomenon. Visitors to the company’s headquarters would be shocked that millions of dollars worth of parts and equipment were lying around free for anyone to use, and nobody ever suspected anyone else of theft.


Are you innovating enough with your business? Do you take time every week to think about ways to make your product or service better? Follow Hewlett and Packard’s lead and stay on the cutting edge of technology and your customers and pocketbook will thank you for it!


Do you have a management philosophy that guides your business? What are the core beliefs that define your company beyond simply making money? As always, I’ve love to hear your thoughts if you leave a comment below!



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