David Packard

• Born: September 7, 1912
• Birthplace: Pueblo, Colorado
• Died: March 26, 1996
• Place of death: Palo Alto, California

Cofounder and former CEO of Hewlett-Packard

Primary Field: Business and commerce

Specialty: Management, executives, and investors

Primary Company/Organization: Hewlett-Packard

Introduction

David Packard worked with his longtime friend and associate William Redington “Bill” Hewlett to create the Hewlett-Packard Company. As outgoing and gregarious as his partner was quiet and self-effacing, Packard was known for his administrative and sales abilities and served as president, chief executive officer (CEO), and chairman. Packard also took a break from Hewlett-Packard to serve as the U.S. Deputy Secretary of Defense, afterward returning to the company he helped create. Well known for his deep commitment to a variety of philanthropic activities, he was awarded the Presidential Medal of Freedom in 1988.

Early Life

David “Dave” Packard was born on September 7, 1912, in Pueblo, Colorado, to a family that respected and valued education. Packard's father was a lawyer and his mother a schoolteacher, and they encouraged their son in his academic endeavors. Packard excelled in science courses as a high school student, and he was well known for his athletic prowess. Fascinated by radios from an early age, Packard applied to Stanford University to study electrical engineering and was enrolled in 1930. Once at Stanford, Packard became a strong presence on campus, winning varsity letters from both the football and basketball teams and being inducted into the national honor society, Phi Beta Kappa. He was also a member of the literary society Alpha Delta Phi. Successful in his studies, Packard earned his bachelor's degree from Stanford in 1934.

As prodigious as his accomplishments were in the classroom and on the playing fields, Packard considered his most important accomplishment at Stanford to have been his introduction to two fellow students: Bill Hewlett, who would become his friend and business partner, and Lucile Salter, who became his wife. Upon graduation from Stanford, Packard returned home, where he briefly enrolled at the University of Colorado and then accepted a job offer from the General Electric Company at a facility in Schenectady, New York. Keeping in touch with Hewlett during this time, he met with him in California in 1937, where they discussed going into business together and decided the company should concentrate on manufacturing medical equipment, high-frequency receivers, and components for televisions. At that point, the two young entrepreneurs determined that they would name their endeavor the Engineering Service Company. In 1938, Packard returned to Stanford to earn a master's degree in electrical engineering.

Life's Work

Hewlett and Packard formed the Hewlett-Packard Company on January 1, 1939. The order of the two men's names in the company was based on the results of a coin flipped to decide the matter. Had Packard not lost, the company would have been named the Packard-Hewlett Company. Friends since they had been undergraduates, Packard and Hewlett made a good team. While Packard was social and outgoing, Hewlett was quiet and withdrawn. Both men, however, shared a love for blowing things up, as well as hunting, fishing, skiing, and mountain climbing. Both men also had a passion to discover and invent. The company began inauspiciously, in a garage behind Packard's home in Palo Alto. In the beginning, Packard and Hewlett pooled their belongings to provide the new company with a start, Hewlett contributing the $538 he had invested in a savings account and Packard contributing some tools and equipment that he had brought back with him from Schenectady.

The talents each man brought to the company soon became apparent. Hewlett proved adept at making technical adjustments to existing products and innovations that resulted in new products, while Packard proved to be an exemplary administrator. The company's first product, an audio frequency oscillator, stemmed from work Hewlett had done for his master's thesis at Stanford. The oscillator was given the model number 200A so that potential customers would not know that it was their first offering. The 200A had a variety of uses; it represented the first low-cost, practical means of ensuring high-quality audio frequencies. As high-quality audio frequencies were needed by communications companies, the defense industry, geophysicists, and medicine, the 200A proved to have a waiting market. The duo decided to price the 200A at $54.40, mainly because they liked the sound of the amount. Since the 200A cost more to produce, however, the new company actually lost money on its first sale. Fortunately, its nearest competitor charged more than $400 for its machine, so Packard was able to raise the price to $71.50 each. The initial 200A units were handmade by Packard and Hewlett, who sawed lumber, nailed together cabinets, and spray-painted the panels. The Hewlett-Packard Company famously sold eight 200A machines to the Walt Disney Company, which used them to make the film Fantasia. Because this film received a great deal of attention for its technical proficiency, Hewlett-Packard soon made more sales to movie studios and record companies.

By the end of 1940, Hewlett-Packard was doing well: It had moved to a new building, had engaged a secretary, and expanded to ten employees to meet growing sales. In 1941, however, Hewlett was drafted to serve in the armed forces during World War II, while Packard remained at home to run their company. As many of Hewlett-Packard's products were needed for the war effort, the company grew quickly. When Hewlett returned, he found that the company had grown to more than two hundred employees and was generating revenues of almost $1 million per year. Hewlett also discovered that in his absence, no employee, including Packard, had made more than his officer's salary; Packard had felt that Hewlett's service to his country should be recognized as more valuable than his own. Soon after his return, Hewlett was named vice president of the company. In order to recognize the efforts of their employees, Packard and Hewlett soon instituted an incentive program that offered bonuses when the company met incentives. It is a testament to Packard's administrative skills that the company never ran an annual deficit during his tenure.

The 1950s saw the company develop a wide range of electronic devices for industrial and agricultural use. During the 1960s, Hewlett-Packard began developing semiconductors for use in a variety of calculators and other business devices. At this time the company also entered into a partnership with Sony Corporation and Yokogawa Electric Corporation to license production of some of Hewlett-Packard's products in Japan. In 1968, Hewlett-Packard introduced the 9100A, a programmable calculator that has since been referred to as the first personal computer (PC). During the 1970s, the company introduced the first handheld scientific electronic calculator and the first symbolic and graphing calculator. These products had a reputation as sturdy and usable, and they were popular with corporate users.

Packard and Hewlett feared having their company accrue debt, so research and development initiatives were funded by reinvested profits, not long-term borrowing. This approach permitted Hewlett-Packard to weather economic downturns. Financially, the 1950s were a boom era for the company and saw sales revenue double in most years. During this period, Hewlett-Packard also instituted a program that paid employee full wages and tuition while they were enrolled in graduate programs at Stanford provided that they agreed to return to the company upon graduation. This program allowed the company access to some of the best engineering talent in the United States. By 1957, Hewlett-Packard had grown to more than twelve hundred employees and made an initial public offering (IPO) of its stock. The late 1950s also saw the company open its first international sales office and become increasingly involved in the development of microwave technology. The company funded a consistent research and development program, which provided it with a steady stream of new products.

Until 1980, Hewlett-Packard had little experience with consumer markets, which changed when it introduced its laser-jet printer in 1984. The company was able to do very well in the printer market, and subsequent models of the laser-jet printer contained more features for less money. Under Packard's leadership, Hewlett-Packard was one of the first companies to offer employees and their families health insurance, and it also was a leader in providing wellness services to its workers. This sense of social responsibility extended to the communities in which Hewlett-Packard was present, since the company made efforts to behave in environmentally and socially responsible ways.

Packard served as Hewlett-Packard's president from 1947 until 1964, at which point he was elected CEO and chairman of the board of directors, posts in which he served until 1968. In 1969, President Richard Nixon appointed Packard deputy secretary of defense. Serving under Secretary of Defense Melvin Laird, Packard continued in this role until the end of 1971. Although he continued to serve in various advisory positions to the Defense Department throughout the 1980s, Packard returned to Hewlett-Packard in 1972 as chairman of the board, where he served until 1993. Packard died on March 26, 1996, and was buried in Alta Mesa Memorial Park in Palo Alto, California.

Personal Life

Packard was keenly interested in athletics his entire life, and he was a fan of baseball, football, and basketball, all of which he had played at a competitive level in high school or college. Packard and his wife, Lucile, who predeceased him in 1987, had four children. The couple were committed to a broad array of charitable activities, to which they devoted time and money. For example, the Packard family gave $55 million to assist in the establishment of the Monterey Bay Aquarium, and Packard served as vice chairman of the California Nature Conservancy. A supporter of the arts, Packard also served as a director for the Wolf Trap Foundation, a national organization located in Vienna, Virginia, devoted to music and other performing arts.

Packard and his wife founded the David and Lucile Packard Foundation in 1964, which has provided support to colleges and universities, community groups, hospitals and health centers, national organizations, and youth groups. The couple funded the construction of the Lucile Packard Children's Hospital, located on the Stanford campus, which is one of the United States' most highly regarded children's hospitals. Packard was honored by a variety of organizations and received the National Medal of Technology, the Institute of Electrical and Electronics Engineers (IEEE) Founders Medal, the Presidential Medal of Freedom, and the Lemelson-MIT Prize. Several colleges and universities conferred honorary doctorates on Packard, including Colorado College, Catholic University, and the University of Notre Dame. Upon his death, Packard left the David and Lucile Packard Foundation an amount in excess of $4 billion.

Bibliography

House, C. H., and R. L. Price. The HP Phenomenon: Innovation and Business Transformation. Stanford: Stanford UP, 2009. Print. Explores how Hewlett-Packard's culture has allowed the company to transform itself numerous times while many of its rivals were unable to adapt to changing times, resulting in their failure.

Malone, M. S. Bill and Dave: How Hewlett and Packard Built the World's Greatest Company. New York: Portfolio, 2007. Print. Concentrates on the formation of Hewlett-Packard and how the actions and leadership of its founders have continued to affect the company's culture to the present day.

Packard, D. The HP Way: How Bill Hewlett and I Built Our Company. New York: HarperBusiness, 1995. Print. Packard's memoir, in which he explores how two young friends used vision, innovation, and hard work to build Hewlett-Packard into a global corporation.