Apropos of this discussion, I've attached Hewlett-Packard's Corporate
Objectives. They've been around since the late 1950's with only
minimum revision and present a balance between profit and other values
that I admire and find effective in practice.
If you have questions about how they are actually used, I'd be happy
to answer them.
Joe Podolsky
joe_podolsky@hp.com
Corporate Objectives
--------------------
The achievements of an organization are the result of the combined
efforts of each individual in the organization working toward common
objectives. These objectives should be realistic, should be clearly
understood by everyone in the organization and should reflect the
organization's basic character and personality.
Profit
------
To achieve sufficient profit to finance our company growth and to provide
the resources we need to achieve our other corporate objectives.
The profit we generate from our operations is the ultimate source of the
funds we need to prosper and grow. We measure our profitability not just
as a return on sales but, increasingly important, as a return on the value
of assets needed to produce our pr ofits. These profitability measures,
which will vary among our individual businesses, are absolutely essential
indicators of our corporate performance over the long term. Only if we
continue to meet our profit objectives can we achieve our other corporate
objectives.
Our long-standing policy has been to reinvest most of our profits and to
depend on this reinvestment, plus funds from employee stock purchases and
other cash-flow items, to finance our growth. Effective asset management
is essential to our ability to self -fund our growth. We will use debt
from time to time as part of a prudent currency and tax-management program
or to provide a source of financing for customers who prefer to lease
(rather than buy) our products, but not as a basic instrument for
financing growth.
Our rate of growth varies from year to year, reflecting changing economic
conditions and varying demand for our products. To deal with these
fluctuations, it is important we be consistently profitable. When our
business grows slowly, our profits allow us to accumulate cash reserves
for future investment. Conversely, during periods of rapid growth, we tend
to draw down these reserves to supplement profit reinvestment.
Meeting our profit objective requires that each and every HP product and
service is considered a good value by our customers, yet is priced to
include an adequate profit. Maintaining this competitiveness in the
marketplace also requires that we focus on businesses where we can make a
contribution and that we perform our research and development,
manufacturing, marketing, support and administrative functions as
economically as possible.
Profit is not something that can be put off until tomorrow; it must be
achieved today. It means that myriad jobs be done correctly and
efficiently. The day-to-day performance of each individual adds to-or
subtracts from-our profit. Profit is the responsibility of all.
Customers
---------
To provide products and services of the highest quality and the greatest
possible value to our customers, thereby gaining and holding their respect
and loyalty.
HP's view of its relationships with customers has been shaped by two basic
beliefs. First, we believe the reason HP exists is to satisfy real
customer needs. Second, we believe those needs can be fully satisfied only
with the active participation and dedication of everyone in the company.
We must listen attentively to our customers to understand and respond to
their current needs and to anticipate their future needs.
The essence of customer satisfaction is a commitment to quality, a
commitment that extends into every phase of our operations. Products must
be designed to provide superior performance and long, safe, trouble-free
service. We must work closely with suppliers to ensure that we receive
high-quality materials, components and subassemblies at reasonable prices
and with assurance of supply. Once in production, our products must be
manufactured at a competitive cost and with superior workmanship. It's
important that we choose our suppliers and production partners carefully
to ensure they share our commitment to quality, safety and environmental
protection. Careful attention to quality not only enables us to meet or
exceed customer expectations, but it also has a direct and substantial
effect on our operating costs and profitability. Doing a job properly the
first time, and doing it consistently, allows us to employ fewer assets,
reduces our costs, and contributes significantly to higher productivity
and profits. This applies to every aspect of our business, from research
and development to order fulfillment and support. Each of us must strive
for quality and efficiency in everything we do.
Providing innovative, reliable products and services is a key element in
satisfying customer needs, but there are other important elements as well.
HP offers many different products and services to a broad set of
customers. It is imperative that the products and services recommended to
a specific customer are those that will best fulfill the customer's
overall, long-term needs. This requires that our field-sales and support
people and our extensive network of dealers, resellers and other channel
partners work closely with customers to determine the most appropriate,
effective solutions to their needs. It requires, as well, that our
products be readily available through our customers' preferred source, be
easy to order and configure, and be supported with prompt, efficient
services that will optimize their usefulness. When problems arise, we must
respond in a way that demonstrates ownership and a desire to resolve
matters quickly and effectively, thereby enhancing customer loyalty and
trust.
Our fundamental goal is to build positive, long-term relationships with
our customers, relationships characterized by mutual respect, by courtesy
and integrity, by a helpful, effective response to customer needs and
concerns, and by a strong commitment to providing products and services of
the highest quality, value and usefulness.
Fields of Interest
------------------
To participate in those fields of interest that build upon our
technologies, competencies and customer interests, that offer
opportunities for continuing growth, and that enable us to make a needed
and profitable contribution.
Our company's growth has been generated by a strong commitment to research
and development in electronics and computer technology. That growth has
been accomplished by providing a rapid flow of new products and services
to markets we already serve, and by expanding into new areas that build
upon our existing technologies, competencies and customer interests. In
addition, we've actively pursued emerging opportunities in related fields
that our company is well-positioned to serve.
Our first products were electronic measuring instruments used primarily by
engineers and scientists. In time, we extended our range of measurement
expertise to serve the areas of medicine and chemical analysis.
Recognizing our customers' needs to gather and use large quantities of
measurement data, we developed a small family of computers which later
evolved into a broad line of computer and computer-based products,
including associated software, peripherals, support and services.
Today, HP is one of the world's foremost suppliers of measurement,
computation and communication products and services. Our product offerings
range from consumer products for home offices, small businesses and
on-the-go professionals to precision instruments and extremely powerful
computer systems for the most advanced applications. Service and support
offerings also cover a broad spectrum, from world-class hardware
maintenance and support to professional services, such as consulting and
outsourcing.
We continue to invest heavily in research and development to strengthen
our capabilities in measurement, computation and communication. Further,
we've learned that combining and effectively applying our expertise in
these three areas creates major new opportunities, both in our traditional
markets as well as in important new fields, such as electronic commerce.
HP's basic purpose is to accelerate the advancement of knowledge and
fundamentally improve the effectiveness of individuals and organizations.
We provide products and services that help customers acquire, display,
analyze, communicate, store and manage information. Customers' information
needs may require a solution where HP must work in partnership with other
companies to meet those needs. For that reason, our design goal is to
provide highly functional, interactive hardware and software that can be
integrated easily by HP, customers and other organizations.
Within its broad fields of interest, HP has ample opportunities to pursue
a variety of businesses. In evaluating those opportunities, we favor those
that link to or complement our existing technology and customer base or
that build on an established competency (such as a strong presence in a
key distribution channel). In addition, we evaluate those businesses on
the basis of their profit potential, long-term stability, our ability to
make a distinguishing contribution and achieve market leadership, and
their likelihood of generating the cash flow needed to continue HP's
tradition of self-financing.
Growth
-------
To let our growth be limited only by our profits and our ability to
develop and produce innovative products that satisfy real customer needs.
HP does not believe that large size is important for its own sake;
however, for at least two basic reasons, continuous growth in sales and
profits is essential for us to create shareholder value and achieve our
other objectives.
We serve a dynamic and rapidly growing segment of our technological
society. To remain static would be to lose ground. We cannot maintain a
position of strength and leadership in our fields without sustained and
profitable growth.
Growth is also important in order to attract and retain high-caliber
people. These individuals will align their future only with a company that
offers them considerable opportunity for personal progress. Opportunities
are greater and more challenging in a growing company. Increasing global
competition and worldwide demand for technology products require that we
establish ourselves successfully in every corner of the world. To compete
effectively we must be close to our customers. We must also capitalize on
our size and global presence to realize important economies of scale and
to make best use of the broad array of skills and resources available to
us.
Our People
----------
To help HP people share in the company's success which they make
possible; to provide them employment security based on performance; to
create with them an injury-free, pleasant and inclusive work environment
that values their diversity and recognizes individual contributions; and
to help them gain a sense of satisfaction and accomplishment from their
work.
We are proud of the people we have in our organization, their performance,
and their attitude toward one another, their jobs and the company. The
company has been built around the individual, the personal dignity of each
and the recognition of personal contributions.
Relationships within the company depend upon a spirit of cooperation among
individuals and groups, a commitment to teamwork, and an attitude of trust
and understanding on the part of managers toward their people. These
relationships will be good only if employees have faith in the motives and
integrity of their peers, managers and the company itself.
On occasion, situations will arise where people have personal problems
which temporarily affect their performance, and it is important that
people in such circumstances be treated with understanding while the
problems are being resolved.
HP selects and manages its businesses with a goal of providing long-term
employment for its people and opportunities for personal growth and
development. In return, HP people are expected to meet certain standards
of performance on the job, to adjust to changes in assignments, schedules
and the work environment when necessary, and to be willing to learn new
skills and to apply them where most critically needed. This flexibility is
particularly important in our industry where rapid technological change
and intensifying worldwide competition compel us all to continually seek
better ways to do our jobs.
Another objective of HP's personnel policies is to enable HP people to
share in the company's success. This is reflected in a total compensation
package, including pay and benefits, that places us among the leaders in
our industry.
HP also places a high value on creating an inclusive environment that
benefits from diversity at all levels, values individual differences and
enables all HP people to develop and contribute to their full potential.
HP actively supports or creates outreach programs that enrich the pool of
diverse candidates available for hiring and promotion. By tapping the
talents and ideas in such a diverse work force, the company can expand its
base of knowledge, skills and understanding, become more responsive to
customers' needs and strengthen our global competitiveness.
Advancement from within is based solely upon individual initiative,
ability and demonstrated accomplishment. Since we promote from within
whenever possible, managers at all levels must concern themselves with the
proper development of their people. HP managers should anticipate customer
and business trends, consider the impact on knowledge and skills needed in
the future, and communicate these requirements to their employees in a
timely way. They also should give them ample opportunity-through
challenging work assignments and continuing programs of training and
education-to broaden their capabilities and prepare themselves for more
responsible jobs.
The physical well-being of our people has been another important concern
of HP's since the company's founding. We believe all occupational injuries
and illnesses are preventable and our ultimate goal is to eliminate them.
We want people to enjoy their work at HP and to be proud of their
accomplishments. This means we must make sure that each person receives
the recognition he or she needs and deserves. In the final analysis,
people at all levels determine the character and strength of our company.
Management
----------
To foster initiative and creativity by allowing the individual great
freedom of action in attaining well-defined objectives.
In discussing HP operating policies, we often refer to the concept of
"management by objective." By this we mean that, insofar as possible, each
individual at each level in the organization should make his or her own
plans to achieve company objectives and goals. After receiving managerial
approval, each individual should be given a wide degree of freedom to work
within the limitations imposed by these plans, and by our general
corporate policies. Finally, each person's performance should be judged on
the basis of how well these individually established goals have been
achieved.
The successful practice of "management by objective" is a two-way street.
Management must be sure that each individual understands the immediate
objectives, as well as corporate goals and policies, and has the necessary
training and tools to be successful. Thus a primary HP management
responsibility is communication, coaching, constructive feedback and
mutual understanding. For their part, employees must take sufficient
interest in their work to want to plan it, to propose new solutions to old
problems, to take reasonable risks and exercise sound judgment in the
performance of their jobs. "Management by objective," as opposed to
management by directive, offers opportunity for individual freedom and
contribution; it also imposes an obligation for everyone to exercise
initiative and enthusiasm.
In this atmosphere it is important to recognize that cooperation between
individuals and coordinated efforts among operating units often are
essential to our growth and success. Individual businesses must
continuously seek the appropriate balance between focusing on their own
needs and objectives and contributing to or drawing from the strength,
size and reputation of the company as a whole. Our businesses are
independent in many respects, but they're also part of a single company
whose strength is derived from mutually helpful relationships among units
that are closely linked through common technologies, customers, values,
goals and objectives.
The dynamic nature of our business places an important responsibility on
managers to create an environment that embraces change and helps employees
manage the increasing demands of work with their other life activities.
This requires a high degree of flexibility and a willingness to consider
nontraditional approaches to getting the job done. At the same time, it is
important for everyone to recognize there are some policies which must be
established and maintained on a companywide basis. We welcome
recommendations on these companywide policies from all levels, but we
expect adherence to them at all times.
Citizenship
-----------
To honor our obligations to society by being an economic, intellectual
and social asset to each nation and each community in which we operate.
All of us should strive to improve the world in which we live. As a
corporation operating in many different communities throughout the world,
we must make sure that each of these communities is better for our
presence. This means identifying our interests with those of the
community; it means applying the highest standards of honesty and
integrity to all our relationships with individuals and groups; it means
creating desirable jobs and generating exports and tax revenues; it means
building attractive plants and offices of which the community can be
proud; it means designing and providing products and services that are
safe to use and can be manufactured, operated and disposed of in an
environmentally responsible manner; it means contributing talent, time and
financial support to worthwhile community projects.
Each community has its particular set of social problems. As citizens of
the community, HP people can and should do whatever they reasonably can to
improve it-either working as individuals or through such groups as
charitable, educational, civic or religious institutions. In a broader
sense, HP's "community" also includes a number of business and
professional organizations whose interests are closely identified with
those of the company and its individual employees. These, too, are
deserving of our support and participation. In all cases, managers should
encourage HP people to fulfill their personal goals and aspirations in the
community as well as attain their individual objectives within HP.
At a national and international level, it is essential that the company be
a good corporate citizen of each country in which it operates. This means
looking for creative ways to apply technology to societal problems and
contributing HP products and support to philanthropic programs that
address immediate or long-term societal needs. Moreover, our employees, as
individuals, should be encouraged to help find solutions to national or
international problems by contributing their knowledge and talents. The
betterment of our society is not a job to be left to a few; it is a
responsibility to be shared by all.
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