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18th Annual Government Technology Conference
Sacramento Convention Center
Sacramento, California
May 12, 2004

© Copyright 2004 Hewlett-Packard Development Company, L.P
All rights reserved. Do not use without written permission from HP.

Good morning, and thanks, Steve, for that great introduction. And I must say before I begin that I'm particularly honored today to be able to have shared the stage, if you will, with the young heroes that we just recognized, and their partners, the dispatchers. I think seeing that kind of example of heroism gives all of us great confidence in the future.

And I think as well, they are a great reminder of the fact that leadership and heroism have nothing to do with age or position or power or profession. Leadership and heroism have everything to do with character and courage can come in all kinds of packages. So let's give them all one more round of applause.

It's also a great story of partnership and collaboration, and the dispatchers deserve a round as well.

I also want to take a moment to welcome some special guests today, a group of local government executives from the U.K. who are visiting GTC West on a study tour that's sponsored by HP. And this is I think a great opportunity for them to see how local governments in the U.S. are using technology, and to share some of their experiences as well, and so we're delighted to have our guests from the U.K. joining us here this morning also.

Now I come here today, in fact, wearing two hats. First, obviously as the chief executive of a California-based technology company - now a Fortune 11 company with 142,000 employees in 178 countries and roughly $75 billion in revenue - but we are a California-based company with our headquarters here in California and a significant amount of business in the public sector.

But I come here as well with a second hat on, and that is as a constituent - a proud resident of the State of California, and I represent thousands of HP employees who are also constituents in states and communities throughout the West, and who as constituents certainly have a vested interest in both government and technology. And so I guess in some ways, you could say we are here as mutual customers of one another.

I want to start today by saying thank you. There are many of our customers here in the audience today, and I want you to know how much all of us at HP appreciate your business. At HP, we know and have always known that everything we are about and everything we do starts with customers. We know that nothing happens unless a customer is willing to place their confidence and trust in us and do it again and again.

But beyond thanking you for your business, I also want to take a moment to thank you for your service. The work that you do every day to support public safety and educate our children, and promote economic growth, and protect the environment, and help those in need is tough, important and sometimes thankless work.

Public service, I'm sure, often feels like a thankless task because as Americans, we are all quick to exercise our right to criticize our government. But by making a commitment to be civil servants, you are also making a vital contribution to the health, welfare and safety of people throughout the state and this region, and as a citizen, I want to thank you for your service.

And I want to tell you as well that HP is very proud to be your partner. I don't just mean as a technology partner who works with you to improve the performance and responsiveness of government. I mean as well we are proud to be your partner in serving our communities.

Government cannot and should not meet every public need. Corporations like HP have an obligation to invest in our communities, the communities in which we live and work. And contribution to community - making a contribution, not just making a profit - has been part of HP's DNA for 60 years, and I believe will be part of our DNA forever.

We have an obligation as well as an opportunity to take on projects that are beyond the reach or the resources of state and local governments. And we take that obligation very seriously.

We believe strongly that companies can do well by doing good; that corporate citizenship and social responsibility create value for both communities and shareowners over the long run. And as an example of this, just yesterday we were very pleased to announce a $10 million grant for Technology for Teaching to schools around the country. It is yet one more example of HP people believing that we have an obligation and an opportunity to make a difference and to make a contribution.

Now when I was invited to deliver this keynote, I was quick to accept for a very simple reason. I believe, as do so many of you in this room, that technology has the ability to transform government, to make it more efficient, more responsive, to make organizations more agile and adaptive, and to improve communications and information sharing between government and the citizens it serves.

As Steve mentioned, I started out as a history major, and perhaps that is why I think about history a lot. I was attracted to technology because of what I believe technology enables. And I think, in fact, the last 25 years in technology have been the warm-up act. I think the dot-com boom and the dot-com bust represent only the end of the beginning, and now we are entering an era - a historic opportunity - where technology truly can transform governments, societies, lives. I think that is an exciting opportunity for all of us.

If you think about the challenges that we face in our society, whether those challenges are around education, or healthcare, or economic development, or environment protection or security - none of these challenges will be solved without the application of technology. Or you think about your own challenge: the changing of the guard with new governors and new CIO's and what that means for shifting priorities; budget deficits, the pressure to continually do more with less; the increased focus on infrastructure and Homeland Security; the constant flow of new legislation and mandates from Washington; the increasing demands from citizens for information and services and transparency - technology plays a role in all of these challenges.

It is one of the reasons why we recently established the public sector as one of HP's four major market segments. In addition to government services and administration, we are focusing on defense and security to improve national and citizen safety; on health and wellness to reduce costs and increase patient care - patient safety as well; and education, to enhance the learning experience for teachers and students.

HP has significant strengths in all of these areas with services and solutions that span our enterprise and small and medium business offerings. But as much as I believe in the power of technology to transform - and I'll come back to that in a moment - I also know that technology is only a tool; it is only a means to an end. And a tool is only as good as the people who wield it. I can pick up a hammer and a chisel, but that does not make me a sculptor. And all the computing power in the world will not make government more effective, or the homeland more secure, or our classrooms more effective if the use of technology is not guided by vision and leadership.

And by leadership, I do not just mean governors, or mayors or CEOs. I mean people throughout an organization who have responsibility, or perhaps who take responsibility for making decisions; people who are willing to step up and drive change.

By the way, I do not believe leadership has anything to do with position or power. I think leadership has everything to do with character and the choice to step up and make a positive difference.

One of the important lessons I've learned about leadership and success over the years is that real power comes not in title. Real power comes in the connections between all kinds of things. But most importantly of all real power comes from the connections between people.

Power comes not from those who stand alone, but from those who can work best with others and reach out to others to achieve a desired outcome. And finding those connections, and recognizing those connections, and enabling and empowering those connections is part of what leadership is all about. And it is also part of what technology can unlock and enable.

Leaders, wherever they are in an organization, can never forget that people want to do a good job fundamentally. People want to be treated with consideration and respect. People want to feel a real sense of accomplishment in their work. They want to have their ideas considered and their achievements recognized. They want to feel that they're part of something larger than themselves. They want to be part of a larger vision, direction, goals that matter - goals that a company or a state agency or a local government is working towards.

And today, leadership I think is not only about enabling and empowering that kind of connection, it's also more and more about managing change, about building organizations that can adapt to change. And this is just as true of the public sector as it is of the private sector.

We live in a world you know all too well, of accelerating change and growing demands for information and services. And both business and government now increasingly are being judged on our ability to adapt to change, to embrace change, not fear it, to use change as a lever.

Companies and states who cannot adapt will lose ground - it's not a question of maybe losing ground. Companies, states, leaders, organizations that cannot adapt will lose ground. That is why that I believe that the work Governor Schwarzenegger, his Cabinet and the entire Legislature have embarked upon is some of the most important work in the history of California. I have been proud to play a very small role in that for the past six months as a member of the Governor's transition team, and we have compiled what we call a Competitiveness Report on California which we will be delivering to the Governor shortly.

But what I see across the board now is an unwavering commitment to return California to its position of leadership in the U.S. and in the world - a position that has eroded over recent years.

The sweeping California performance review begun by the Governor and his team is an important call to action for state government. It recognizes that it takes more than incremental changes and token reforms to restore the public's trust and confidence in government. And it sets an ambitious goal of making California, in the Governor's words, "the first true 21st century government in America."

It is a bold vision, and I think change always requires bold vision. But it is also a vision that is fitting for a state that ranks, as you heard, as the 5th largest economy in the world.

Now I speak from experience when I say that the process of change of moving towards a bold vision will not be easy, and it will not be painless, but it is absolutely necessary if we are to transform government.

During the past 5 years, HP has gone through a process similar to what California is just beginning. We began also with a bold vision, to be the leading technology company in the world.

And it all began with the same conclusion that I think California has reached, that we at Hewlett-Packard would not be able to meet the rapidly evolving needs of our customers or the increasing competition that we faced without making major changes in how we were organized and how we did business, and indeed, in the very level of our aspirations.

We were a company five years ago with 83 independent product lines. All 83 of those product lines had their own everything - their own CIO, their own CFO, their own HR, their own systems - I know none of you can relate to any of this…[laughter] By the way, that was the structure that had served us well, but what works in the past doesn't always work in the future.

And in addition to that, we had uncompetitive costs and we had a way of doing business that made it virtually impossible for us to collaborate effectively on behalf of our customers. We were losing ground, and candidly, losing relevance because we were not positioned to take advantage of the changes that were redefining our industry, or to lead those changes.

So to begin with, we restructured our organization to present a unified, coherent face to our customers, as well as to renew our commitment to invention and innovation. We consolidated our product lines. We put in place something we call still to this day, Total Customer Experience, that's designed to really sharpen our focus on serving customers needs. And we put a lot of our own bonus money for all of our employees, as well as for myself at risk if we could not deliver improvements in Total Customer Experience.

But restructuring, and refocusing and redefining our aspirations for the future was not the end point for HP no more than it is the end point for state government. We were building the foundation for a company that could lead in our chosen markets, and that would have the agility and flexibility to adapt to new ways of change.

And throughout this journey, which as you know included the largest merger in the history of our industry and one that was a tad controversial at the time. Throughout that journey, we focused on three pillars that are essential, I believe, to the success of any change management or transformation effort; three pillars that are pretty fundamental: people, process and technology. It's obvious to say, but it's worth saying anyway that it doesn't matter how good a vision is or how sound a plan is, we could not succeed - no organization can succeed - without the active support of our employees.

Our employees had to understand and embrace our goals and objectives; they had to embrace the change process; they had to understand and embrace the role that they needed to play - understanding both the rich opportunity that lay in front of us, and the difficulties that lay between where we were and where we needed to go. And that, of course, requires frequent and honest communication. It meant building on our culture and values, which fundamentally when you simplify it, comes down to knowing that how we do things is as important as what we do - that our character is as fundamental to our success as our capability.

Process is also important because it provides an architecture for a change. Consolidating two large companies, for example, is a complex task and a rigorous focus on process from planning to communication, to how you make decisions, and frankly, how you make those decisions stick, how you integrate culture is essential.

I'd like to say that change management has become something of a buzzword. It may be more clear to say you manage change the way you manage any other aspect of a business or government - that is, you manage it. You have plans, you measure it, you assess your results, and then you do it over and over and over.

And at the same time, making a company or a state more flexible and more agile also means consolidating and streamlining business processes to make information more accessible and decision-making more efficient and effective.

And finally, technology has played a critical role, in fact, we know not because we are a technology company, but because of the transformation we have had to go through ourselves. We know that technology is either an enabler of change or it is an inhibitor to change - there is no in-between.

And we know as well that the ability to adapt to change and then to master change depends to a great degree on the ability of business processes, and applications, and IT infrastructure to work in a synchronized and seamless way. So, one of the keys for us was to simplify our applications and our processes - very easy to say, very tough to do because simplifying process or simplifying applications requires people to change the way they do business. It requires people to share, and it requires people to say, "You know what? I'm not that different from this other department or this other agency. We can use the same fundamental technology or process or applications."

When we merged HP and Compaq, we had 7,000 applications, and we had to make a conscious decision to reduce and simplify that portfolio, and we have in just two years reduced that portfolio by 25 percent. Our goal is to reduce it by 80 percent in the next two years, and at the same time, we've reduced our overall cost by 25 percent.

One of the keys to our technology transformation has been a detailed, what we call "Plan of Record," that describes everything that our Global IT has to do and has to deliver for HP. It establishes program priorities; it links up with the plan of record for every single HP function, division, process. And it is a plan of record that is regularly reviewed by me and my executives to see if we are doing what we said we would do, and if not, why? Where do we have to accelerate? Where do we have to modify? It is a living document that continues to evolve as our business needs and priorities evolve.

In other words, how we use technology is not off to the side. It is integral to the transformation of our business; it is a rigorous process. It requires rigor both in measuring as well as in sticking to the plan, but we know that without this rigor, we could not have been successful, and we also know based on what our customers tell us that we are setting the standard for IT integration. And in the process, we have created a guide book for other companies as well as for public sector agencies to follow and adapt to in their own circumstances.

Now, looking back on those three pillars - people, process and technology - we learned that adopting an architectural approach as an organizing concept worked. We learned that it was vital to integrate the best from the two companies. We learned that executing rapidly with a high degree of discipline was vital. We learned that establishing a common set of rules and language, and a clear set of roles and responsibilities, was vital. We also learned that creating a set of clear, obtainable milestones and deadlines and sticking to them was important. And of course, I should also add that we also learned that we needed to be prepared for anything.

Now, all of that that I just went through you understand well, being in the roles that you are in. Our world is changing at an exponential rate, but through all this change, we see three very fundamental things happening in technology, and it is why I said at the outset of my speech that I think we are now entering an era where technology truly is going to transform our world and our lives in ways that the last 25 years only hinted at.

Those three fundamental shifts are these: First, every process - every process - and all content will be transformed from physical, and analog and static, to digital, mobile, virtual and ultimately, personal - personal in the sense of the individual being in control - physical, analog, static, then digital, mobile, virtual and personal.

If you doubt that, think about photography. Photography used to be a physical, analog, static process. It has now become a digital, mobile, virtual process, and an entire industry is being transformed as a result.

Think about what's happening to music or entertainment. This transformation of every process and all content from physical, analog, static to digital, mobile, virtual is going to happen in every industry, in every process to every kind of content.

Second big shift is simplicity and manageability, because without simplicity, without manageability, technology becomes simply too complicated and people can't use it to get done what they need to get done, remembering that technology in the end is only a tool, it's only a means to an end.

By the way, that is why HP is investing so heavily in improving the simplicity, and manageability and adaptability of our products and our systems. And the fact that every process is going to digital, mobile, virtual and personal is why we have built the company we've built - with the portfolio of products and capabilities, and participation in markets that we have built.

And the third big shift which I've hinted at is that increasingly, we all used to think about our worlds in vertical terms. You know, organizations are lines and boxes on an org chart, and we organized ourselves vertically. And frequently, we created technology around those vertical organizations, whether that organization was a fire department as distinct from a police department, or whether that was the PC product line as distinct from the Imaging and Printing product line inside HP.

But whether you are the head of a state or a local agency, or you're a small or medium business trying to mobilize your work force, or you're a consumer, now it's not a vertical world any more. It is a horizontal, heterogeneous connected world.

It is all about horizontal connections now. I talked about the connection between people; it is true. The power now - the ability to transform - is all about the connections between technologies, between organizations, between divisions, and yes, between people.

And it is now about making that heterogeneous world work together and speak a common language - not just devices, but networking businesses, companies, employees, suppliers to customers, or government agencies to each other. Think about our issues around healthcare or security, and government agencies to their citizens. It is a horizontal, heterogeneous connected world now, where every physical, analog, static process will become digital and mobile and virtual.

And of course, the problem that you're facing - the problem that we face - is that we haven't been configured that way. Our companies, our organizations have been configured vertically, and we have built up IT environments to reflect that. Applications were built upon vertically integrated technology stacks - independent, monolithic silos - and these environments were built to be stable, not built to be adaptive. And as a result, we think now that organizations, whether they are companies or whether they are governments, have to literally rethink how they think about the enterprise from top to bottom.

Enterprises and technologies - whether it's public or private sector - are no longer about vertical chains of command and stand-along islands of automation. They are now about horizontal collections of processes, supported by applications, supported by technology.

And as technology moves from the fringe of people's lives to the core of people's lives, the need for technology to deliver more and get connected in a seamless, simple way becomes increasingly important, which means technology now has to deliver - and the technologists who work with technology have to deliver - more accountability, more efficiency and more adaptability, or what we call agility. In other words, vertical silos, whether they are organizations or technology, have to give way to horizontal processes and connections in information flows that support an entire organization rather than discrete pieces of that organization.

Now, what we've built is around those understandings. We've built a powerful platform for managing change which uses our own experience, our own technology, our own partners, our own services and software and tools, and we call it the Adaptive Enterprise, and it is at the heart of what we offer to both public and private sector customers.

Fundamentally, what the Adaptive Enterprise is all about is synchronizing an organization's ambitions, and goals and objectives to the technology that can permit those goals and objectives to be met, and to permit an enterprise to adapt to change.

Now, when it comes to the public sector, I can't say it any better than this quote from the website of the National Association of State CIOs, and I quote, "Adaptive Enterprise architecture effectively supports the business of government, enables information sharing across traditional barriers, enhances government's ability to deliver effective and timely citizen services and supports agencies in their efforts to improvement in government function."

I said at the outset that one of the things we learned was that simplification is really important. We think there are four things that everybody who focuses on technology has to do: simplify, standardize, modularize and integrate.

Simplify, standardize, modularize and integrate, and think about those four this way: from citizen to government and back again.

I also want to say this isn't about ripping everything out and starting over, nobody can afford to do that. This is about evolution, not revolution. Where are you? Where do you have to get to, and what is this step-by-step approach that will take you there?

Now let me just give you a couple of examples to maybe bring this to life. In Santa Ana, California, police officials found that hand-written citations from routine traffic stops were triggering chain reactions of paperwork that could gridlock even their most efficient police departments; as many as 50 percent of Santa Ana citations contained inaccuracies that required a very time-consuming and costly amendment process to remedy.

So, using HP iPAQ handheld computers loaded with electronic citation applications, police officers now enter vehicle codes and other data electronically. They collect an electronic signature from violating motorists and they print out a copy of the ticket using HP mobile printers.

And this solution also then allows for easy uploading of information, avoiding costly transcription efforts, and as a result, the accuracy rate has increased over 99 percent.

The City of Bellevue, Washington is also turning to advanced wireless technology to increase efficiency and improve services to citizens. City employees and executives are using wirelessly enabled HP iPAQ pocket PCs, Blackberries, Tablet PCs and notebooks to take notes in legislative proceedings and send reports to access city databases, to gather information in the field, and to complete and print building inspection reports at job sites across the city.

Now in each of these cases, and in many more across the country, governments are using technology to deliver real-time information to and from the field, making them more responsive to citizens. It is not a coincidence that many of these same agencies are first responders, and like all of you, since September 11th, we have all developed a great sense of urgency about Homeland Security and about providing the technology that first responders need to communicate, deliver and share information.

And just as a simple example of what I mean by horizontal connections, inside of HP we used to have people who were focused on security applications, and people who were focused on law enforcement applications, and people who were focused on intelligence applications, and people who were focused on defense applications. And we have brought all that together so that we're focused now as a common effort on security, and law enforcement, and intelligence and defense, because all of that has to work together if we are really to solve the security issues that we all spend so much time worrying about.

As an example today, 75 percent of the nation's 911 centers run on HP systems, including New York City, Chicago and right here in Sacramento. We are the leading development platform in fingerprint solutions for criminal investigations, and more than 500 computer-aided dispatch systems run on HP. And if you visit HP's booth - which I hope you will - you'll have a chance to see a solution that is particularly important here in the West where wildfires once again threaten lives and property.

Government agencies fighting the devastating San Bernardino fires last year used HP systems - from iPAQ Pocket PCs, to large format printers, to big servers and storage systems, as well as software from our partner - in this case, the Environmental Systems Research Institute - to provide almost instant communications of fire and personnel status to emergency service commanders. And the result of course, was faster and more informed decision-making and more effective coordination among all the agencies involved in fighting the fire and protecting the public.

The challenges, of course, of Homeland Security demonstrate that technology and innovation are becoming more, not less important, and the opportunity to apply information technology as I've tried to describe is fundamental now.

I should speak for a moment about our commitment to sustained investment in research and development. We spend about $4 billion a year on R&D, and one of the things that we have focused on over the last several years in particular is how to accelerate our rate of innovation. So as an example, when I first arrived at HP, actually we didn't even know how many patents we produced today. Two years ago, we produced three patents a day; one year ago, we produced five patents a day. Today, we are generating an average of 11 patents a day - the highest rate of innovation in our history. And we believe very much in what we call "focused innovation," which is to say that we focus our innovation where we can make a unique contribution and lead - which is a high bar - and we partner for the rest.

So our partners' innovation is as important a part of our success and our strategy as our own innovation. We focus our own innovation around management, mobility, security and rich digital media. And management, and security and mobility are probably quite obvious to you, so let me just give you one example before I close here and take your questions of why we think rich digital media is important.

In Sacramento, for example, police officers are able to search up to 400,000 mug shots through remote access, increasing the odds of arresting wanted suspects. An example of an application of rich digital media, in New York City, the fire department is capturing digital images of major fires and emergency incidents and using them for criminal investigations, and training, and public safety instruction. And the Florida Department of Children and Families is taking digital photos of children in foster care and storing them in a centralized database where they can be easily disseminated to law enforcement agencies and to the media in the event of an emergency.

And in each of these initiatives, again, technology is just a means to an end. It is a tool to enable a larger vision of public safety and security, child welfare and all of the other important public policy goals that you are dedicated to.

Over the last couple of years, all of us have had to take a hard look at what we do, how we do it, and how technology can help deliver new value. And I think what we've all learned is that this is about how we do business, as much as it is about the technology that enables us to do what we do.

In other words, it is about - first and foremost, before anything else - it is about managing and mastering change, embracing it, not fearing it. And of course, it is about leadership.

We have a real opportunity today in California and many other states and communities, to transform government, and to take it to a new level of responsiveness and efficiency. And technology can help. In fact, technology must help, but it will take the leadership of civil servants as well as elected officials to build a government that is agile and adaptive enough to meet the evolving needs of its citizens.

And it will require a vision, and commitment, and the willingness to take risks, as well as the right balance between a real sense of urgency and a sense of patience, born out of the realization that change is hard and takes time.

It is a worthwhile journey. You can count on HP to take the journey with you to help you prove that enlightened government and enabling technology together can make more things possible for more people than at any other time.

Thank you so much.

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