Hewlett Packard

James Olson, general manager, Video Communications Division

It looked like mission impossible back in May 1992, when Hewlett-Packard General Manager James D. Olson was told to plunge his division--then a maker of microwave test gear--into the hot market for digital video. He had 11 months to get his nerdy engineers to develop a suite of products--such as computers to send movies to homes--and get them to market.

A daunting task? Sure. But at a company that prides itself on its swift response to changing markets and counts on products that are less than two years old to generate more than 60% of its current equipment orders, it certainly isn't uncommon. In 1994 alone, Olson's Video Communications Div. has suddenly made dark horse HP a leader on the Infobahn. It has signed deals to supply video computers to Pacific Telesis Video Services, BellSouth, Southern New England Telephone, and the government of Singapore. Time Warner Cable Group's video-on-demand trial in Orlando will include a special HP printer that lets users pluck still images off video. "We've transformed ourselves from gearheads into gladiators," says Olson, 44, an electrical engineer who joined the company in 1974.

The key to the transformation: a complete revamping of product development. The unit, which used to take up to six years to develop new offerings, now takes less than nine months. How? First, Olson had his engineers consult with potential customers. That way, they knew what features to include, avoiding endless tinkering. Then, they simplified manufacturing by using common parts. Many products use the same power supplies, for example. They even decided to buy some components and software from outside sources rather than develop such gear more cheaply in-house, as long as that approach speeded development.

For example, HP initially purchased converters that adapt various video formats from Britain's Vistek Electronics Ltd. and sold them under the HP logo. At the time, such deals were almost unheard of. But in the race to come up with new products, the practice has become far more common. These days, pleasing the marketplace takes precedence over tradition.

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