Speeches

© Copyright 2001 Hewlett-Packard Development Company, L.P
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Good afternoon. Today we celebrate a 50-year success story between the United States and Japan.

On September 8, 1951, the United States and Japan drafted a friendship treaty designed to promote our common welfare and maintain international peace and security.

On that day, 98 delegates from 48 nations from around the world supported and signed this treaty. And we're here not just to pay tribute to a relationship that has simply adhered to that original agreement, but to a relationship that has in fact transcended the original spirit of the agreement, along the way forming a partnership - a partnership that has been called "the most important bilateral relationship in the world."

ON SHAPING CHANGE

And that brings me to the topic of my remarks today: The process of change and the role of partnership - in an increasingly complex world.

I think we can all draw inspiration from the Friendship Treaty, and what it teaches us about the process of change: the importance of shared values, the importance of charting aspirational goals, but also the importance of managing change through a framework that considers the needs of all of the constituents in the change process.

What is fascinating about the change made possible by this treaty is that some of it happened as planned, as a matter of course, but many other changes - some of the most meaningful ones - occurred unexpectedly as an outcome of partnership. A true case of two partners coming together, and together, being able to achieve far more than they could on their own.

REFLECTING ON CHANGE

Two distinguished guests at this celebration are former Japanese Prime Minister Kiichi Miyazawa and Mr. Robert Fearey. Both had roles in the original signing and both, I think, would have tremendous lessons to teach us about what has changed since that day in 1951.

In thinking about what I wanted to convey to all of you today, I tried to imagine for a moment what today meant for Prime Minister Miyazawa and Mr. Fearey, and then I imagined them surrounded by the delegates who signed the original treaty. And I began to think about what it must have been like to see the world through the eyes of these 98 delegates, delegates who invested their hope, their optimism, in the prospect of a new beginning. Delegates who not only believed that change was possible - these are people who together made it possible.

And looking through their eyes, we would clearly see a relationship that has brought growth and prosperity to both our nations - perhaps more growth and prosperity than could have been predicted fifty years ago.

Through their eyes we would see entirely new industries that have been formed and transformed through partnership: the auto industry, the consumer electronics industry, the computer industry, digital entertainment, and now telephony. The list, quite literally, goes on and on.

But to merely list them is to miss the greater point: It misses the lesson to be learned: Change is rarely easy work. It requires a special kind of determination, a boldness - a willingness to take risks, a willingness to, on the one hand, have the courage of one's convictions, and on the other, humility to learn, adapt and grow. My observation today, what I see in the faces of the people who have joined us today, is the importance of learning the process of change - personally, as a leader, as a company, as a culture, as a nation, as a partner.

AN APPROACH TO CHANGE

There is, of course, no magic formula for change. There is no prescribed path. But I do think this treaty teaches the value of having a framework, a way of looking at change. To harness it, and benefit from it.

In our own reinvention at HP, the process of change is a constant assessment that involves:

• looking out at the world and assessing what is worth aspiring for;
• looking in the mirror and looking at ourselves honestly, seeing the truth and acting on the truth ;
• and looking forward, toward the future, forging new paths - sometimes controversial paths that others may not see and understand.

Some 50 years ago, when our respective delegates signed the friendship treaty, the world was a very different place. With the war behind them, they looked out and they envisioned a world that would work much differently. They envisioned the return to peace. They envisioned partnerships between great nations. They envisioned growing economies. They envisioned a world where nations could be both independent and connected, completely autonomous, yet part of a much greater community.

If these same 98 delegates were here today, what would they see? They would see, I think, a world that has delivered on many of those aspirations in a profound way.

Through communications systems, and backbone technologies like the Internet, and the media we have become interconnected. Our students share ideas. Our scientists share research findings. Our industries collaborate in ways that could not have been fathomed 50 years ago.

As our delegates broaden their view, they'd see that regional economies have become members of the global economy.

They would see, in fact, not Japan on one side of the globe and America on the other but rather two nations that are part of a much richer, much larger, much more connected ecosystem.

And in this global ecosystem, organizations and institutions are operating organically, like interconnected systems as opposed to islands of isolation. They've become more permeable and interdependent rather than rigid and independent.

I think our delegates would also remark how wonderful it is that operating as part of a global ecosystem doesn't mean diluting ourselves as nations . We don't need to become the same to succeed. In fact, quite the opposite. Our differences within the global ecosystem are assets. Maintaining our cultures, our traditions, our own systems mean that we make a unique contribution and create balance within the ecosystem. Within an ecosystem, it is diversity that enables prosperity.

So, as we stand at the beginning of the 51st year of this Friendship Treaty, what is worthy of our aspirations now?

• Within our own nations-what problems and challenges are worth addressing?
• In business-in technology, and telephony, and the automotive industry, and finance-what is the bold next step? For example, with a vast infrastructure now in place, can we make business benefit more people?
• On the world stage, what people of the world are in need of our help? While we have made tremendous progress in creating a global ecosystem, not all members of that ecosystem have benefited-from economic growth, from technology, from the sweep of change.

The aspirations we dare to articulate, dare to dream about, dare to utter, are the ones that we can actually achieve.

And so, as we stand on the cusp of the 51st year of this treaty, as we look at what it means to be allies in the future, what shall we dare to dream next? Because once we have the answer to that question, I believe we can begin the work of making it so.

LOOKING IN THE MIRROR

That brings me to the second part of our framework for change: The value of "looking in the mirror"-and doing the kind of truthful introspection that results in clarity of action.

Within HP we have called this part of the process, "Preserving the best, and reinventing the rest." It's a short-hand way to describe the constant tension between old and new, history and future, established norms and nascent, and often better, ways of doing things.

PRESERVING THE BEST

What would our 98 delegates encourage us to preserve today? For one thing, core values.

Our cultures and histories may have been very different fifty years ago, but it was the common values inherent in the friendship treaty that enabled us to transcend our differences. Values such as trust, respect, and integrity.

On large and small scale, our two nations have returned to commonly held values in good times and in hard times to guide our actions.

I know, certainly, even within the halls of Hewlett Packard, these values have been at work over the past 60 years, bringing us closer to our partners in Japan. Let me tell you a few stories from the archives to illustrate what I mean. They serve as parables of the much larger pattern between our two nations.

HP began operating in Japan nearly 40 years ago. We embarked upon a joint venture with the Yokogawa Corporation in Japan. The Yokogawa Corporation had many similarities with HP - a commitment to quality, to integrity, and to the customer.

Unfortunately in the first few years of operations, performance was mediocre at best, until one day when a bright young manager named Kenzo Sasaoka felt he had a solution for achieving higher quality standards for this joint venture.

Sasaoka-san's idea? Let the local Japanese workers manage their own operations - with complete autonomy. There would be less confusion and greater efficiency. Bill Hewlett and Dave Packard trusted this idea and respected Sasaoka-san's enthusiasm.

And Sasaoka-san honored that trust and respect by turning it into a great success story. Inside of a short period of time, manufacturing quality within the Yokogawa team-which was called Y-HP - skyrocketed and became better than the best HP division at the time. The Y-HP team had exceeded quality standards far beyond what management thought was ever possible.

These practices were openly embraced and encouraged across the company. These operating values translated into another degree of success when, in 1982, the Y-HP team won Japan's coveted Deming Prize for superior quality. A fine example of shared values and mutual learning between Japanese and US companies - working together, toward a common purpose.

Another example of values building enduring relationships came in 1983, when HP formed a manufacturing partnership with Canon.

This partnership initially began with only a handful of people within the two companies. We agreed to trust each other and to share technology for the common purpose of building the world's best laser printers.

This once small operation built on mutual trust, respect and integrity has grown over the years into collectively shipping over 50 million laser printers to date, and to this day the original contract between HP and Canon sits in a small file cabinet in Boise, Idaho, virtually unaltered in 18 years. And even though scores of products have come and gone, markets have ebbed and flowed, our relationship has grown stronger and stronger with each passing year.

Proudly sitting in our Palo Alto office is a stone with a hand painted symbol of kyosei, which Canon presented to HP in 1996 celebrating the great harmony and balance between our two companies.

And we intend to continue building many more successful US/Japan business relationships together. Just to highlight a few among many: with NTT DoCoMo we're working on building next-generation mobile streaming media solutions. And with Softbank we're helping consumers get direct access to a HP products, services and solutions online.

Bringing us back to the Japan/U.S. Friendship Treaty, I add a second challenge as we embark on our 51st year.

Not only must we find the next set of aspirations we deem worthy of our pursuits, but once chosen, I believe we need to find ways to amplify our successes - small ones like I talked about at HP - but big ones as well. How do we take this 50-year track record and take our performance and our accomplishment to the next level?

REINVENTING THE REST

Which I think brings us to the "reinvent the rest" part of our framework.

At HP, we started the process of reinvention by reaching out and listening to our three core constituents: customers, employees, and shareowners.

Our customers told us that we were simply too complex, too decentralized, too hard to do business with. They said we were focused on selling products when what they need is end-to-end solutions to their tough technology problems.

Our employees told us that they wanted to work for a winner. A company defining the future of the industry. A market leading company. A company that would retain its commitment to its core values, but would update its practices and strategies for a new technology era.

Our shareowners told us they wanted a company focused equally on creating value and fueling growth.

With that feedback, when we did an honest, sober assessment of our future, the mandate for change became irrefutable. With a new level of clarity around what we aspired to achieve on behalf of core constituents, we set ourselves down a path toward transforming the company and all of the core systems that drive it, including strategy, structure and processes, culture and behavior, and the performance metrics and rewards required to measure our progress and success.

Change of this magnitude is never easy. And once you embark on the change journey, you soon begin to learn that many people don't like the discomfort that goes with systemic change. Stern resolve becomes important because standing still or going backward are no longer options.

LOOKING FORWARD

All of which brings me to the third part of my framework for change.

We've talked about looking outward toward the market, then looking in the mirror to see the truth. Now let's talk about looking forward.

Remember we talked about preserving core values moments ago. Core values are timeless. They never change. They are the basis of interaction between partners, colleagues, citizens, businesses, governments. However, strategies and practices must evolve to keep pace with the times.

In fact, leadership, whether it's at the individual, business, government or societal level, is about mastering the process of constant change. It's about anticipating, learning and adapting for the future and adjusting strategies and practices, better and faster than anyone else.

The news that HP and Compaq announced earlier this week is fundamentally about leading change and reinventing an industry. The technology industry has reached a point where consolidation among the players is inevitable. Scale, scope, breadth and depth have become prerequisites for leadership. Technology must now deliver on its full promise. It must no longer shackle businesses to their past but liberate them to create their future. It must become deeply woven into our daily lives to simplify and enhance the way we live, learn, and work. Technology must be used to create a foundation for universal access to basic social and economic opportunities.

In order for technology to deliver on these big aspirations, then one company must step forward, a company with enough market presence and a conviction to fuel the shift toward industry standards-based architectures and approaches. A company committed to putting customers first, not just the technology.

This week's announcement is about catalyzing change across an industry. Those who say it's about combining forces to salvage two PC businesses or that it's only about creating scale to cut costs are missing the point. They're looking backward in the rearview mirror, not forward toward the future.

It's important to remember that in the process of change, leadership is by its very nature lonely. Leaders look out and around, and if you're really and truly leading, there is nobody else in view.

Once you embark on the change journey, you can't look back. Prime Minister Koizumi understands this very well when he says, "There is no turning back."

You must also remember that change doesn't happen over night. It requires patience, a long-term view and a commitment to addressing the inevitable resistance with character and resolve.

Returning to our original delegates again, I'm sure they would also agree that systemic change was not accomplished by the folks in that room, but through the collective, every-day acts of many over the course of our ongoing 50-year journey together.

There have been 11 different United States Presidents and 23 different Japanese Prime Ministers since the signing of the treaty and each of them have contributed to this relationship in their own way.

We should also remember that our original 98 delegates were representing millions of individuals, who opened their hearts and minds to change, who believed that we could begin anew on a foundation of trust, respect and integrity and a commitment to stay this course of change together - one act of friendship at a time.

CONCLUSION

In experiencing this celebration through the eyes of our original delegates, I hope that it is clear that while change can be an extremely daunting and difficult process, it can also be positive catalyst for creating enduring value, enabling us to grow and adapt together, just as we have over the course of the last 50 years.

All that's required is that we are open to it and willing to embrace it. That we are thoughtful about what to preserve and what to reinvent. And that we have the courage of our convictions to stay the course, despite the critics and naysayers - once we are underway.

It is my hope that everyone of us here today feels an immense sense of pride and confidence in our relationship and our future together, and that we share a sense of personal responsibility and accountability for helping to continue to grow our relationship together, to continue on the journey of change together with a framework for mastering the process of change in mind and finally, to honor all that we've accomplished together beginning September 8th, 1951.

Thank you.

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