Friday, September 23, 2011


I’ve been reading the stories about the continuing saga at Hewlett-Packard with a great deal of sadness. That this once-proud Company has been reduced to a joke is nothing to cheer about, even if you’re a competitor, because the moral is that if it can happen to H-P, it can happen to anyone.

Back in the 50s, I worked for General Radio, once the world leader in electronic test and measurement and then engaged in a vigorous competition with a fast-moving upstart in Palo Alto. In a broader sense, the competition was between Route 128 and Silicon Valley, between MIT and Stanford, between private offices and cubicles. General Radio had a vast catalog of instruments, much larger than its size could justify, and HP would pick off one product line after another, first frequency meters, then impedance bridges, then microwave instruments. And they were usually very successful.

“Hewlett-Packard has just passed us in sales," I remember saying to one of our officers in the 50s.

“They’ll pass us again on the way down,” he answered.

But of course they never did, and eventually they became a test and measurement juggernaut. But Dave Packard, in reflecting on his career, gave full credit to General Radio, founded in 1915, for having blazed the trail. I am sure that Dave Packard and Bill Hewlett had a twinge of regret when GR foundered, just as I do today as I read about the debacle at Hewlett-Packard.

What is the lesson to be learned from H-P’s collapse? It is this: Being bigger is not the same as being better. The technology graveyard is filled with companies whose undoing was wrong-headed acquisitions. Owning the test and measurement market was not enough for H-P, so the Company jettisoned its heritage and became, via acquisition, a computer company, a leader in a business it has now decided to exit.

It is hard to resist the siren song of acquisitions. If you are the CEO of a large company, you are constantly serenaded by the M&A specialists from Wall Street, singing the anthem of synergism. By eliminating redundancy you will increase profits. Your company will move up in the Fortune 500 list. We are all taught that size equals power, and the larger your company is, the more powerful it is.

The old Hewlett-Packard and the old General Radio were all for growth, but it had to be organic, not the result of buying other companies. Both companies eventually succumbed to the siren song, only to find out it was a dirge.


For an account of the early days of the test-equipment industry, read The General Radio Story, available from

Friday, September 09, 2011

Seven Days in ?

Do you remember the movie Seven Days in May? If you saw it, either on its release in 1964 or on TV since, you probably have not forgotten the story. Four-star General James Matoon Scott (Burt Lancaster) attempts a coup d’etat, believing that the President (Frederic March) has been mortally wounded by his advocacy of a treaty with the Soviets. It is a good, suspenseful film, but most of us thought the plot was just this side of science fiction.

Well, maybe not. JFK believed that the plot described in Seven Days in May was plausible, and he encouraged Hollywood to produce the film. (The Pentagon is reported to have been opposed.)

I have long thought that, especially in the YouTube/Facebook era, presidents are weaker than the press makes them out to be. Let us suppose that Barack Obama decided to pull every last troop out of Afghanistan. And, for good measure, out of Iraq. Clean break, saving billions if not trillions of dollars and untold lives.

The scene: The Oval Office. General Blackstone enters, salutes his Commander-in-Chief. The President motions for him to be seated, but the General remains standing.

Blackstone: I understand you have decided to cut and run from Afghanistan and Iraq.

Obama: That’s correct, General.

Blackstone: It’s my duty to advise you that that would be a grave error.

Obama: I’ve discussed it with my team, and my mind is made up, General. As the head of our armed forces in that area, you would be expected to support my decision.

Blackstone. I will not, Mr. President. And I must remind you that, if it comes to a confrontation, the American people will not support you. Your poll numbers are terrible, while I have the overwhelming support of the United States Congress and, I believe, of the American public.

Now, I hasten to say that, as far as I know, all our top generals are staunch defenders of the constitution and would have none of such dialogue. But self-styled patriots are legion in Congress and the Pentagon. They were in power before 2008, and they are poised for a comeback. And they know from experience that what matters is not who sits in the Oval Office, but who has his ear. They have found out that most presidents are not like Frederic March, who in the final climactic scene faced down Burt Lancaster.

It doesn’t have to come down to a shoot-out, as it did in Seven Days in May. The pressure is exerted more subtly: Do you know, Mr. President, that if you close Guantanamo, three retired Generals will condemn your action on Fox News tomorrow? Or: Mr. President, the CIA has information that suggests that Pakistan’s nuclear weapons are not secure. Talks with the Pakistani government have been unproductive, and they recommend a quick invasion. The Joint Chiefs concur, and the CIA says it’s a slam dunk. What’s your decision, Mr. President?

It’s a setup. The whole conversation will eventually be revealed in a Bob Woodward book or in Wikileaks, and the safest course for the President is to go with the flow.

Once in a great while, the President decides to hang tough, as Truman did in his historic confrontation with General MacArthur in 1951. MacArthur was ousted by Truman, and MacArthur chose not to raise the stakes, although he was a bonafide hero and adored by the public. That was then. Now, with access to an ocean of digital media and cable TV, the General might have weighed other options.

Thursday, September 01, 2011

The Hour

I remember the so-called Suez Crisis as Dwight Eisenhower’s finest hour. I am sure that England, France, and especially Israel didn’t see it that way, but that’s how I saw it, as world affairs began to intrude on my young consciousness. The parallels to the Libya situation are obvious. Qadaffi is not Nasser, but in 1956 the flow of oil through the Suez Canal was to many Europeans a casus belli and today, for all the talk about human rights, Libyan oil is more than a trivial consideration. In the Suez affair, England and France expected the U.S. to join their anti-Egyptian outrage, but Ike was not buying.

What brings this to mind is the BBC’s six-part drama called "The Hour," now running on BBC-America. If you can tolerate the channel’s commercial breaks (hard to do), this is a good miniseries, revolving around Freddy Lyons, a young BBC firebrand who wants the Beeb to spend less time on celebrity gossip and more on the storm brewing in Egypt. The drama’s title is also the name of a new current affairs program, with an anchorman who has looks and connections but not much substance (sort of like the William Hurt character in Broadcast News).

Freddy Lyons is played convincingly by Ben Whishaw, and the equally credible anchor is Dominic West. The obligatory romantic triangle is rounded out by Romola Garai, as the producer of The Hour

I have seen only three of the six episodes, so my comments are subject to revision, but here they are: There is real irony here: In the play, Freddy Lyons is understandably frustrated by the BBC’s preference for the trivial over the consequential. Check. Then why on earth does The Hour spend so much time on the weakest story line, the aforementioned triangle, and so little on the main thread? Probably because the writers were afraid that the audience would not grasp the gravity of the Suez crisis. So they turned instead to the old “will she or won’t she?” formula.

Still, there’s more than enough grist to keep one interested, and the acting is topnotch, as it usually is in BBC productions. You can pick it up Wednesday nights at 10 on BBC-America, but at this point you will be hopelessly confused if you try to catch up, and you would be better off waiting for the DVD.

Besides, the DVD will spare you all those terrible commercials.