The Lew Platt Test

The HP boardroom has been full of sturm und drang for a decade, dating back to Carly Fiorina's arrival in 1999 as an outsider CEO. It may be hard to fathom after the recent tumult, but a steadier state did actually exist at one time.

Back in 1997 Directors & Boards caught up with then chairman and CEO Lewis Platt for a cover article he authored on "Governance the H-P Way." Platt was a lifer at HP, having joined the company as an entry-level engineer in 1966 and worked his way up to being appointed CEO in 1992 and chairman in 1993.

As I am continually reminded, words from the past have a way of echoing through the ages to resonate pertinently on present circumstances. I say no more but simply share with you the concluding paragraph of Lew Platt's article:

"A good test of whether your board is functioning well is if you can answer 'yes' to the question, 'Do I feel free to discuss anything with my board . . . to talk with full candor about anything that's worrying me?' I feel fortunate in this regard. Not all CEOs can say the same. For one reason or another, something goes wrong with the relationship between the CEO and the board, or between company management and the board, which leads to secrets, to a lack of trust, to poor board performance, and ultimately to poor corporate performance. My board has been very helpful to me with its perspective and advice, and our candid dialogue takes place in an atmosphere of mutual respect, which is the key to having a good board relationship."

Upon retiring from HP in 1999, Platt went on to serve as CEO of Kendall-Jackson Wine Estates and as a corporate director. Interestingly, he was nonexecutive chairman of Boeing Co. when its board in 2005 forced the resignation of CEO Harry Stonecipher over an affair with a company employee. Platt died later that year at the age of 64.

Packard Principles

On March 15, 2002, just as the contentious merger of Hewlett-Packard and Compaq Computer was heading toward a showdown vote, David W. Packard took out a full-page ad in that day's Wall Street Journal to reprint the transcript of what he described as "an informal speech my father made in 1960 to a group of HP managers."

HP co-founder Dave Packard (pictured at left with Bill Hewlett) "spoke about HP people and values and the importance of genuine technical contributions to customers. Full of sincere and timeless truths, his words provide a window into the reasons for HP's enduring greatness," wrote his son (who was opposing the merger) in an intro to the printed speech.

The following is a passage from that 1960 speech by Dave Packard to HP's managers:

"I want to touch on other aspects of your work which are important. As supervisors you will be expected to set high standards of behavior. This is obvious and shouldn't even need to be mentioned. But the example you set is important and I am going to mention specific things which should be kept in mind. Tolerance is tremendously significant. Unless you are tolerant of the people under you, you really can't do a good job of being a supervisor. You must have understanding — understanding of the little things that affect people. You must have a sense of fairness, and you must know what is reasonable to expect of your people. You must have a good set of standards for your group but you must maintain these standards with fairness and understanding."