Bill and Dave:
How Dave Packard and Bill Hewlett
Built the World's Greatest Company
by Michael S. Malone

For a long period in the 1960s, Hewlett-Packard could credibly boast that it was the greatest company in the world. Beyond standard accounting numbers, and indeed, the basis for those numbers, was the engineering brilliance of the company as exemplified by a stream of wondrous products.

While the company began as a supplier of testing equipment for the electronics industry, it branched into consumer products like the famous HP-35 pocket calculator, and later into computers and printers. Whatever field it entered, HP's products defined technical excellence and rock-solid support to its customers.

Undergirding the stream of products were the twin pillars upon which all rested: the founders, Hewlett and Packard. The two met in 1930 on the Stanford football field, and forged a lifelong friendship and partnership based on similar philosophies and an absolute trust in each other.

The founders ran their company in what they called "the HP way." First and foremost, this meant putting "people over profits." Though that became a cliche, HP was one of the first companies to really implement it. The founders did so by treating all their employees with respect, encouraging family life, instituting a profit-sharing plan, and maintaining a true open-door policy at all levels of the company.

HP was an engineer's dream of a workplace. The founders were engineers who looked to their engineering teams for product ideas and new manufacturing systems. Studies consistently found HP to be one of the most-admired companies in the world, and its employees were famously loyal.

The author does an excellent job evoking the feel of California in the 1940s and '50s, when most of what would become Silicon Valley was farmland with a very good but rather unassuming university, Stanford, nearby. He paints colorful portraits of the brilliant lieutenants carefully chosen from the country's top engineering programs who created the atmosphere in which innovation and a passion for excellence thrived. Blessed with the founders' managerial acumen and engineering genius, the company grew from a startup to a behemoth of 60,000 employees and sales of $3 billion dollars a year without a major hiccup.

Through its plants located in Japan, HP was the first U.S. company to embrace what was called the "Japanese" concept of "total quality manufacturing." Actually, this was an American business concept created by Deming and Juran that most U.S. companies ignored during the 1950s. Through these innovative techniques, HP was able to improve product quality by factors in the hundreds, which lead to a revolution in American manufacturing culture by the 1970s.

After the founders were gone, missteps were made by CEOs who lacked their vision, but in the end, the remarkable HP culture endured. The company has today regained its status as one of the world's greatest research and manufacturing organizations, and a world leader in computers and sophisticated electronics.

(Portfolio 2007, 391 pp, $26.95)