Wozniak and Jobs in Apple, Watson in IBM, and Packard and Hewlett in HP

I know less about the details of the founding of these companies, but taking a cultural perspective and analyzing cultures from the point of view of what we do know about the founders produces some immediate insights into the cultures of these companies. This kind of analysis also helps us understand why three companies in similar technologies ended up with very different cultures. Apple was founded by Steve Jobs and Steve Wozniak, both engi­neers, with the intention of creating products for children in the educa­tion market and products that would be fun and easy to use by “yuppies.”

Their base was clearly technical, as in the case of DEC, and this showed up in the aggressively individualistic “do your own thing” mentality that I encountered there. When Apple attempted to become more market ori­ented by bringing in John Scully from PepsiCo, the company grew, but many insiders felt that the technical community within Apple never accepted this marketing-oriented executive. Scully fired Jobs who then started a second company; however, it is significant that Apple eventually returned to its roots in bringing back Steve Jobs. If you observe the direction of Apple in 2009-2010), you can see a return to its roots of creating products that are easy to use and fun, such as the I-Touch phone, the I-Pod for music, and the I-Chat camera for videoconferencing. The attractive design of products and the prolifera­tion of user-friendly stores to display them suggests that Apple now has very much a marketing orientation, but that this orientation had to be combined with its technical skills, something that perhaps only Steve Jobs could do.

Many people point out that IBM did much better in bringing in an out­side marketing executive, Lou Gerstner, in its efforts to revitalize its business in the 1990s. Why might this have worked better than Scully in Apple? The insight that cultural analysis provides is that IBM was not founded by a tech­nical entrepreneur and never built an engineering-based organization in the first place. Tom Watson was a sales/marketing manager who left National Cash Register Company to found IBM (Watson & Petre, 1990). He thought like a salesman/marketer throughout his career, and his son Tom Watson, Jr. had the same kind of marketing mentality. Building a clear image with the public became an IBM hallmark, symbolized by its insistence on blue suits and white shirts, for all its salespeople. Watson, Jr. clearly had the wisdom to become strong technically, but the deeper cultural assumptions were always derived more from sales and marketing. Is it any surprise, then, that an out­standing marketing executive would be accepted as an outsider to help the company regain its competitive edge and that he would succeed, not by really changing the culture but reinvigorating it (Gerstner, 2002)?

What of HP? Dave Packard and Bill Hewlett both came out of Stanford with the intention of building a technical business, initially in measure­ment and instrumentation technology (Packard, 1995). Computers were only brought in later as adjuncts to this core technology, which led to the discovery that the kinds of people working in these technologies were dif­ferent from each other, and to some degree incompatible, leading ultimately to the splitting off of Agilent to pursue the original technology while HP evolved computers, printers, and various other related products.

HP’s growth and success reflected an effective division of labor between Hewlett, who was primarily a technical leader, and Packard, who was more of a business leader. Their ability to collaborate well with each other was undoubtedly one basis for “teamwork” becoming such a central value in the “HP Way.” What we know of Packard’s managerial style contrasts strongly with Ken Olsen’s, in that HP formed divisions early on in its history and put much more public emphasis on teamwork and consensus, even as indi­vidual competition remained as the deeper covert assumption. HP became much more dogmatic about standardizing processes throughout the com­pany and was much more formal and deliberate than DEC, which made the computer types at HP uncomfortable.

HP’s and DEC ’s views of teamwork illustrate the importance of defin­ing abstractions such as “teamwork” very carefully in any cultural analysis. Whereas teamwork in HP was defined as coming to agreement and not fight­ing too hard for your own point of view if the consensus was headed in a dif­ferent direction, teamwork in DEC was defined as fighting for your own point of view until you either convinced others or truly changed your own mind.

Subsequent to the splitting off of Agilent, the most significant event in the HP story is the introduction of an outsider, Carly Fiorina, as CEO. It appears that her strategy for making HP a successful global player in a variety of computer-related markets was to evolve the HP culture by the mega merger with Compaq, acquiring in that process a large segment of DEC employees who had remained at Compaq. The computer market had become com­moditized so becoming an efficient, low-cost producer of commodities such as printers and ink became strategically advantageous but required the aban­donment of some of the original values of the HP Way. We can speculate that Fiorina was brought in as an outsider to start the change process but that her replacement after some years by homegrown executives reflected a desire to keep parts of the HP culture even as some elements evolved.

Source: Schein Edgar H. (2010), Organizational Culture and Leadership, Jossey-Bass; 4th edition.

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