The Self-Organizing Transformation of Hewlett-Packard Laboratories©
by Kristin Cobble
and Barbara Waugh
©1997, Kristin Cobble and Barbara Waugh
Related Documents and Websites
This is a story about the ongoing transformation of Hewlett-Packard Laboratories (HPL).
In less than four years, the organization moved:
All while significantly improving employee satisfaction and the CEO's assessment of the annual review. These changes were accomplished by the management and employees at very low cost, with minimum disruption to the ongoing work of the labs, and with little outside help.
In this chapter, Kristin Cobble, an organizational consultant, "listens" Barbara Waugh, the internal change manager, into her story of the HPL transformation and then both Kristin and Barbara reflect upon it. Our reflections are in italics, and resonate with the thinking of Margaret Wheatley on self-organizing systems, David Bohm on dialogue, and Peter Block on stewardship. We focus on the first year and a half, since it took more effort to nurture the transformation process in the beginning than to keep it going. A future on-line book will contain additional first-person stories of what happened; and will deepen our reflections about the context.
Several principles emerge from the story:
The central research lab for the Hewlett Packard Company (HP), HPL finds, invents and transfers technologies that keep HP's businesses competitive. HPL's 1200 employees consist of 300 support people, and 900 engineers, over half with advanced degrees, the majority of these with a Ph.D. HPL is geographically dispersed. The Palo Alto center consists of 2 center directors, each with several labs; the Bristol center of a center director with 2 labs; and the Japan center of 1 center director and 1 small lab.
During this period, HPL is doing well: developing and transferring a record number of high impact technologies. We are getting 12-15% funding increases every year while other central R&D organizations are downsizing or shutting down. Fortune magazine features us as the Mecca where other labs come to learn how we maintain our relatively high transfer rate. We have no burning platform; no obvious reason to change.
But as technology centers, technology labs and even as individuals, we function as silos, with little synergy between parts and a lid on top of each! As personnel manager I ask, "What could make a difference?" I don't know. I do know that operating in this mode we will never achieve the HPL director's vision of MC2 - a future for the company where Measurement, Communication and Computation combine to open up markets not possible for a company without all three competencies.
I share my frustrations with my manager, Joel Birnbaum, the director of HPL and the Senior VP of R&D for HP; he responds with a question he's had for fifteen years, "Why does no one out there consider HPL the best industrial research lab in the world?" He suggests I check into consulting firms to see if we can get some help.
I interview firms. I am frustrated with the template solutions they offer and horrified at the costs, both financially, and in terms of disruptions to our ongoing work: 300K for a needs assessment, a million a year for at least 3 years, and up to 10 consultants at a time living with us! Am I missing something here?
Shortly after I ask myself the question, the Wall Street Journal runs an article on big consulting firms and notes, "the increasingly complex and technology-driven marketplace doesn't make things easier for generalist advisors." According to one dissatisfied customer, "Their work is canned, their formats are canned, their thinking is canned, and they give black box solutions to everything, where every situation is unique."
I share my findings with Joel who responds, "Why don't you lead the effort? Replace yourself and do this full time." I break into a cold sweat and confess, "Joel, I know what won't work for us - this doesn't mean I know what will." He says, "Think about it and get back to me."
I remember why I came to HP over a decade ago: after years working to change the world through politics, education, government and the church, I believed I could have more impact through the corporate sector, because more than any other, it would determine the future of the world. I've made some difference at and through HP, and now I dream of HP raising the bar for global companies, redefining corporate citizenship, to include not just the 20 mile radius around our factories, but the world as our neighborhood. What if this is a way to get going? Feeling terrified, because I have no idea how even to begin, I tell Joel, "Yes!"
Vision Inquiry Begins Organizational Dialogue
I ask Joel if he'd share his question about "world's best" in his upcoming employee coffee talks around the world. He hesitates. "How can I do that? I don't even know what I mean by 'best'! Number of Nobel laureates or IEEE fellows or technology transfers? A clearly focused research agenda? Ability to recognize the most critical projects and consistently focus resources on them? Ability to stop work that doesn't matter? Or does it even matter if we're 'best'?"
I persist. "Just share the questions and invite everyone to respond with their own questions and answers. We have to do the employee survey in a few weeks, why not make it work for this? We'll add our own questions, asking what they think 'world's best' is and what we need to get there. Save ourselves $300K. Why not?"
This is the man who correctly convinced a very skeptical company to bet our future on RISC technology. He is where he is because he knows the answers. It's not clear how it will go down for the leader to talk about not knowing what he's talking about. On the other hand, he's married to a Metropolitan opera singer, and quotes Shelly and Goethe to explain his points. A man not afraid of passion or ambiguity. Somehow this seems promising.
Joel says yes, and over the next five months, shares his vision questions around the world, asking each employee, "What do you think?" and requesting their response in the employee survey. He announces he's asked me to work full time on the "World's Best Industrial Research Labs" (WBIRL) project and given me a $250K budget.
By using the employee survey for the needs assessment rather than developing and using a new tool, we set the stage for a practice throughout the coming years that we named "lite touch." Several years later in the Executive Excellence Program (EEP), Ed Gurowitz of the Generative Leadership Group clarified the idea for us as "minimalism" (Ed's first law of transformation for complex systems):
Using inductive analysis on the 800 single-spaced pages of feedback from the survey, I see three areas of concern:
But this isn't it! Eight hundred pages of frustration, dreams, insights reduced to bullets and pie charts we call issues that senior management is supposed to fix! And the embedded paradigm of helpless employees and omniscient managers is absurd! Is there a way to bring the employees' voices into the room where I will present the report? And suggest a collective "we" go to work instead of "us" fixing "them?"
I dread the idea that is dawning for me: to use a technique I learned in political street theater and in the women's movement: Readers' Theater. But can I really bring the "streets" and these "radical" techniques into the corporate world?
I select quotes that represent the major points, and the passion and character of our folks, and weave them into a "play" about HPL. Then I recruit managers to read engineers' and secretaries' lines, and the latter to read managers' lines.
At the end of the "play" the 30 senior managers are very quiet. Then they start clapping. Then, long silence. We take a break. Then the excitement, "I really got it." "I really see what is going on in HPL now."
While senior managers usually delegate the response to the employee survey to the local managers closer to the issues, this year, in response to the play, they also develop the first ever HPL-level plan reflecting their own commitments to address the issues of strategic priority setting, people management, and the work environment. Dubbed "hoshin-lite," theirs is the only senior management plan in the company that doesn't cascade down through the organization. It starts and ends with their own commitments to change. They share it in their own employee coffee talks, and invite employees to work on whatever they think will make a difference from their own perspectives.
Looking back, making the whole of the system visible to the parts becomes an ongoing intervention at individual and organizational levels. In the presence of the whole, people seem to understand themselves as the "missing piece", seeing what they need to do and the difference they can make. In this case, through Reader's Theater the entire organization showed up in the room and became the context for senior managers to create their first-ever joint plan, and with unprecedented focus and urgency.
Joel talks of a five year plan, with a focus on the research agenda. Unless we are working on the right things, it won't matter how well do them. How can we insure we work on the right things?
After Joel's announcement of my new role, I spend my time meeting with people. Several senior managers candidly state, "We don't need this program, we shouldn't be wasting one head count and $250K on it." At first, I am threatened. I really want this job. I then ask myself, "What if this 'push back' is right? What's the truth here?" and learn that they believe quality programs focused on the support functions might be helpful, but in no way should WBIRL interfere with the research agenda. They've experienced consultants coming in and slowing down the work.
I argue that WBIRL will never occur, if we can't get better at our research processes. But they are adamant, "If it ain't broke, don't fix it." Ironically, senior management itself begins in this very first year to use the WBIRL framework and budget to focus the research agenda. But in deference to their initial objections, I take the opening they've given me for a quality program and frame all projects in year one as our new quality effort focused on support activities.
Besides these senior managers, others call me to with their ideas. Almost always they wonder if they are wasting my time. They come from all levels, job functions and geographies, sharing their insights, frustrations and dreams.
Although uneasy about it, I believe it is not my job to judge, but to reward their courage and passion with whatever help I can offer. My first response is always "Great idea!" We then explore the connections between their ideas and others' similar or complementary ideas. Then we imagine the biggest impact their efforts can make. Sometimes they need money, mostly they just need validation.
At the end of the first year, I prepare a progress report for WBIRL. I inventory work groups discovering some I didn't even know about. In one year, thirty-six work groups have sprung up involving over 1/3 of HPL from all levels of the organization! The lid is off and all questions are fair game!
In keeping with "world's best, " the team wants an inspiring speaker. I ask Joel - I believe others will reject the idea out of hand - "What if, instead of a great speaker, we had a great listener who could "hear them into speech" about their visions for HP's future driven by the integration of HPL's technologies?
Like me, Joel doubts the listener idea will be well received, but agrees to preview a great listener with his immediate staff. Now I have to find one!
The generative power of listening is an insight of feminist theologian Nelle Morton, from a lifetime ago when I worked with the church. Readers' Theater, feminist theology and now a listener as our keynote speaker? What is it about creating "wholes" that calls for all the parts of me? On the other hand, what if senior management's skepticism is right?
My partner in the most "out of the box" schemes with Joel's staff is our strategic planning manager. Through this project I'm learning he is a man who deeply understands HPL's technologies and the future they could enable, dreams of world peace, daily works on his own ego, and spends a month every year directing Gandhi peace camps for kids. He is totally with me on my latest cockamamie idea. We spend eight hours preparing our Listener-candidate for a 1/2 hour presentation to the staff. A graphic artist and technical consultant, he has them on the edge of their seats in 15 minutes, is invited to the offsite, and "listens" them into five MC2 visions for HP's future.
Surrounded by these graphic visions, senior management sees connections they've never seen before, and core technologies that span alternative futures and must be invested in no matter which future the company pursues. The research agenda is getting clearer.
The year concludes with Annual Review. Lab and Center Directors prepare the standard reports for the CEO and his staff, on what happened last year and will happen next year. The strategic planning manager and I ask Joel, "Why not present our top three MC2 visions? Our CEO once said, 'HPL is Disneyland for executives,' - why not play that one out? Involve the whole person/executive in thinking? Hook the kid inside each of them and pull that energy and perspective into strategic discussions?" Joel is skeptical but keeps listening, and agrees to a compromise. We'll do both; in the morning, an abbreviated traditional approach; in the afternoon, Disneyland. Previewing the Disney scenes the night before, Joel asks, "Are you sure this will work? It's not too late to cancel..." We try to reassure him it's going to be great, and then stay up three more hours obsessing before we surrender to the possibility that this may be a disaster - but at least we will have modeled risk-taking!
The next day I shadow the CEO as he walks into "HP the medical company," the fantasy of a future driven by our potential with medical technologies. He looks around at the skeleton hanging in the back of the room, at the two lab directors in lab coats and stethoscopes, takes a seat, removes his jacket, loosens his tie, stretches his legs, and in 15 minutes is in heated argument about HP's future as a medical company. Not traditional annual review behavior! He later tells Joel that this is the best review he's ever attended, and that HPL is giving him the information he and his staff need to really do their jobs - figure out what kind of company HP should be in five years. He and his staff take slides from the presentations and debate the futures for the next six months. All three visions turn into major MC2 businesses for HP within the next three years and drive collaborative work across centers and labs as high as 40%.
Being "in charge" of the WBIRL project I am very excited by our thirty-six work groups, and tell their stories at a dozen coffee talks as my year-end report on WBIRL. A few people are excited at what they hear, but the majority listen with blank stares. Probing, I learn they're bored, cynical, and a few think I'm ripping these groups off somehow claiming their work as my own. I hear, " We already are the best and just need a marketing department," and "if we were serious about becoming 'world's best' would we put Personnel in charge of it? We don't need cheerleaders!"
In spite of many wonderful results, I go in and out of deep doubts about what I'm doing. Employee comments hurt. Senior management push back hurts. Sometimes I feel like a fraud. I'm often introduced as being "in charge," yet I'm not classically in charge of anything. Others are doing all the work. My role seems to be to create mirrors to show the whole what the parts are doing - through coffee talks, small meetings, by networking people with similar or complementary ideas. And provide small grants out of my budget. So maybe I am ripping others off? Should I be doing something that feels more like "work?" I go home exhausted after 10 hours or more, and can't think of one tangible thing I've done.
And can it really be O.K. that I don't have a high-level plan? That I haven't persuaded top management to drive something from the top?
In this case, Barbara and Joel began with not knowing - what WBIRL might be or how HPL might get there or even if it should. This created a huge empty field on which others were invited to play at any level they chose. Joel and his staff did only the plan they would personally be responsible for. By example they invited others to do the same. Barb did only listening, mirroring, making the whole visible to the parts.
Things that keep me going when I'm doubting everything:
The next employee survey shows significant improvement in all major categories - and the previous survey was the best we'd ever had!
I formalize the de facto WBIRL Grants Program that up to now I've been using my budget for, asking for matching funds from applicants where possible. Why? Three reasons: my budget will go further, line management co-owns the effort; and my "match" becomes a benign incentive for the organization to redirect funds from old priorities to new. In addition to ongoing groups, new work groups spring up from all levels.
When the annual review is canceled in favor of our new customer-focused program reviews, an employee group, one of the few ever commissioned by Joel or any senior manager, continue to plan a day of celebration and fun. We refer now and then to WBIRL, but can't seem to make the concept relate. I talk to my EEP coach who says, "Becoming WBIRL isn't big enough to require all the individual visions to accomplish it. You'll never evoke peoples' best efforts with that vision." With a sinking feeling, I know she's right.
So what should be our vision? I ask the committee, individually and collectively, worrying the question around. One engineer, my best sidekick says, "Best industrial research lab IN the world doesn't do it for me. I'd get up in the morning to be best FOR the world." The excitement is electric, and the committee works far beyond our original intentions and commitments. A senior engineer creates a picture of what "For the world" means to him: a - to HP employees - famous picture of Bill Hewlett and Dave Packard, gazing into the garage where it all started, now suddenly has the beautiful blue earth, taken from the Apollo spacecraft, inside the garage. This image becomes our poster for the event.
Eight hundred Palo Alto employees pour into a tent we've built in the parking lot - we've never been under one roof before; and are live-linked, under a virtual roof, to our 300 colleagues in Bristol who are just ending their day. Delegates from the Japan labs have flown in. We kick off with a Readers' Theater compressing the eight month meeting into a half hour sharing our evolution and excitement from "in the world" to "for the world." A town meeting follows, where employees catch the excitement from their fellows on stage and share what this "for the world" means for them; and explore what it could mean for HP.
The excitement spreads. Our poster for the event will be purchased by 50,000 employees in the next year on T-shirts, mugs and mousepads; and appear for tens of thousands of others - in the Canadian Wall Street Journal, on the CEO's gifts to his colleagues at other companies, at all of HP's recruiting events, on holiday cards, and even on the credit union's credit card! "HP for the World" becomes the banner uniting all our businesses, and uniting the legacy of Bill and Dave to our present efforts.
Year two concludes with a sense of large-scale transformation. As a former director of HPL said from his stand in the bleachers under the tent, "HPL has never been so good!"
We notice that energy and creativity surge when the context for peoples' work scales up. In two years we see this pattern:
Is the nature of change in a self-organizing transformation like the dynamics of exponential growth? Initially the changes are hard to see, and small in size and in number. But over time, through doubling every phase period, they result in system transformation.
Year three continues the momentum of 20 new projects, and the follow-on to the Creativity Day. As result of the town meeting, discussion begins on a sensor net for worldwide environmental monitoring, work accelerates on remote medical care for the third and first worlds and new investigations begin on breakthrough technologies for education. Work also begins on what is now a bi-annual event: next year's "HP for the World" town meeting. Employees are planning mile long walk through time, "From Start Dust to Us", as the context for exploring personal and business questions.
I share with Joel and the staff my growing realization that the most important result of all the projects is the cultural change we've inspired. Growing the atmosphere of trust and openness, we will have the flexibility to do what we need to do organizationally to create and execute the research agenda for the future HP, and we can succeed whether or not we ever get the organizational structure right.
The principles of Dialogue have been widely explored at the interpersonal and small group contexts. We believe the changes resulting from the WBIRL project so far have created sustainable mechanisms for dialogue at the organizational level. With the employee survey WBIRL questions, the senior managers' annual WBIRL plan, and the biannual Celebration of Creativity Town Meetings the organization asks itself, "What should we be doing as an organization?" With the WBIRL Grants Program, the Grass Roots Research Grants Program, the organization asks, "What do you personally want to do and what do you need to do it? And how can the organization help?" The Chalk Talks, the Mentoring Program, the Secretaries' Forum, and the Community Forum create space for new conversations, and the last two create a voice for those not typically included in the an on-going decision-making as these groups make recommendations and are consulted about changes. All these questions have now been institutionalized in ongoing programs that continue the inquiry.
Through minimalism, expanding contexts, being the change they want to see, and listening rather than broadcasting, people at HPL are transforming themselves and HPL, with no disruption but only improvement in what they want to do. As the contexts expand from work cube to organization, to company to the world, so do the people expand into their rich magnificence. Their being becomes the ground for ever greater doing in the years ahead.
We ask ourselves, Is HPL now the World's Best Industrial Research Lab, or the Best Lab for the World? And acknowledge that the goal to be best in and for the world is a receding horizon: the more we do and learn, the more we know there is to do and learn.. We affirm the vision as inquiry: "What is best in and for the world today?" And for each today, one day at a time.
We believe that the story will get richer, and the theory emerging from the experience more comprehensive as others tell their stories. We plan to help others write their stories so that collectively we launch from an even greater context of experience and insight.
Epilogue: Listening Another Into Speech
We began this chapter by describing Kristin as "listening Barb into her story." We have not explicitly described what this means. Part of the challenge of describing this concept is the absence in our culture of language and values for listening and context. In many ways, Kristin's process of writing this article has mirrored the Barb's process of listening HPL into a new future. And Kristin's doubts echo Barb's about her own role.
Barb told the story to a group. Kristin's contribution began with her listening. She heard the potential of Barb's story and suggested that she write it down. She asked questions that sharpened the focus. After content questions to Barb such as "What happened?" she asked context questions such as, "Why? What allowed that to happen? What were you thinking? and they? What was your vision, your concerns? and theirs? What kept you going?"
In the course of discussion, Kristin and Barb refined the emergent theory and Kristin found a publisher. But because the experience is Barb's, it can seem that Kristin didn't "do" anything. Barb is clear that Kristin has been the difference between something and nothing. Without Kristin, no further thinking about her own story , no chapter, no book-to-be. She thinks about the dedications of books by men who acknowledge their wives with 'sine qua non." At the time she's wondered, "Then why isn't the wife a co-author and why do we never hear her voice?"
And here we find ourselves, trying to make Kristin's role more explicit, trying to avoid the trap endemic to our culture: the trap of obliterating the context, the listener, the enabler of what happens. For this reason, we write this epilogue and position Kristin as the primary author.
Barb remembers the bomb Nelle Morton dropped into the theological world over two decades ago. To the theologians who, with the Bible assert, "In the beginning was the Word," she says, "In the beginning was the Listening..."
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