Sobering signs from a high-tech revolution
Hewlett-Packard split this week, raising angst about the future of theindustry.
SAN FRANCISCO — It's not as big as IBM or as well known as Apple Computer, but Hewlett-Packard Co. more than any other institution has defined the 20th-century economic and social phenomenon known as Silicon Valley.
From the founders' start-up garage to HP's renowned worker-friendly culture, the company has been an icon of the technology age, melding big opportunity, big heart, and big profits.
This week, though, the company split into two. And while Wall Street applauded the action, HP's troubles raised issues far broader than the future of an individual company.
In particular, has the speed of the technology revolution reached an r.p.m. that grinds up even its own, best practitioners?
What's more, as pace-setters for the American economy, are the emerging technology winners, those that HP is struggling to keep up with, thriving on a workplace model that includes treating workers less well?
That question joins a growing list of ways in which social norms are being challenged and in some cases reshaped by the technology sector, including issues of privacy, competitive behavior, and now, workplace values.
"We are at an important juncture in terms of what the emerging model will be of the relationship between employees and their businesses," says Jim Koch, director of the Center for Science, Technology and Society at Santa Clara University. "Right now, the technology sector is driven almost purely by speed and agility. But is that a sustainable model? I don't know that it is."
HP is separating its smaller, traditional business in testing and measuring equipment from its larger and better-known computer and printer division. Explained chief executive Lewis Platt, "We are taking this action to sharpen the stra-tegic focus of our businesses, improve their agility, and increase their responsiveness to customers and partners."
What most analysts saw in that explanation was an admission that HP is having trouble matching the competitive, breakneck pace of the technology age's latest chapter, the Internet explosion.
For 60 years, HP pioneered a work ethic that shaped the culture of Silicon Valley, a place that has become a model for economic development nationally and internationally.
"In many ways, HP is the mother of Silicon Valley," says Haim Mendelson, a professor of information systems at Stanford University. "It was really the first company that defined the technology culture beginning in the late 1930s and 1940s."
The "HP way," as it is called, is as genteel as the sprawling, grassy campuses of its various Silicon Valley sites. It's a set of values that seem to come right from Norman Rockwell: respect for the individual, open communication, consensus, and uncompromising integrity.
In tangible terms, that has translated into a model of good American corporate stewardship, a place famous for treating its employees well and in ways that often contrast sharply with the newer generation of companies.
While the technology industry is renowned for high turnover, HP workers tend to stay put for years. While many technology firms reward workers with future money, in the form of stock options that grow only if the company's fortunes rise, HP was an early corporate leader in profit sharing, giving each employee a slice of each year's profits. And HP employees can expect a gift with they get married and a blanket when they have a baby.
"We like to make people feel like they're part of a family," says HP spokesman Michael Fournell.
Increasingly, the technology industry is not always driven by family-friendly values. Speed is preeminent. The market demands it. A decade ago, the average life span of a personal computer was two years. Today, computer companies need a new product every four months to stay competitive.
HP pledges to hold true to its values, but change its practices. That will, inevitably, involve collisions between values like consensus and the goals of greater speed in decisionmaking.
Still, many analysts believe that is possible, particularly from a company like HP where worker-friendly values are so deeply embedded. But others see HP succumbing to forces that are shaping a different workplace in the technology field, and beyond.
Forces of globalism, and its inherent volatility, and the changing demographics of workers are producing monumental changes in the relationship between employee and employer, says Amy Dean, the AFL-CIO's chief representative in Silicon Valley. "The culture of cooperation and trust is in great jeopardy," she says.
Jerry Porras, co-author of "Built to Last," which explores what makes companies successful for the long term, is optimistic HP will be able to retain its values and compete. But he's not so sure about many of today's rapid successes in the technology field.
"We are in a very precarious position in terms of building something that will serve the country and economy well," says Mr. Porras. "We look back and see that great companies had a sense of going beyond themselves and leaving a legacy. I don't see that mentality very strongly in the valley right now."