Eugenie Prime, the manager of corporate libraries for HP, had her own simple question: "How can we find the people we need to talk to within HP?" With WBIRL money, she created a Web-enabled database, called CONNEX, that helps thousands of HPers worldwide to swap ideas. For years, she struggled to get backing for her project; now it's a knowledge-sharing model that's been studied by both Bankers Trust and the U.S. Air Force.

That story is vintage Waugh. "You've got to partner with what's out there -- or you're going to be irrelevant," she argues. "You've got to integrate change into line management and into where the real priorities of an organization are set -- into the places where performance evaluations get written and projects get funded. It's better to do something small and conventional that can actually make a difference than to do something big and far-out that isn't going to go anywhere."

And over time, Waugh believes, small initiatives can lead to far-out results. A case in point: the creation of a new rallying cry for the entire Hewlett-Packard organization. Three years ago, during a meeting to plan a celebration of creativity at HP Labs, Laurie Mittelstadt, 42, a materials engineer whom Waugh calls "my best sidekick," revisited WBIRL's mission and posed a simple yet powerful question: "Why aspire to be the best industrial lab in the world? Why not be the best lab for the world? In fact, why not say, 'HP for the World?' "

The subtle shift of language tapped into a new reserve of energy. A senior engineer at HP Labs created a picture of what "For the World" meant to him. He took a famous photo of Bill Hewlett and David Packard, in which both of them are staring into the garage where HP began, and superimposed a photo of the Earth taken from an Apollo spacecraft. Waugh's group turned that picture into a poster for an HP Labs Town Meeting. People from the rest of the company became so enthusiastic about the image that about 50,000 of them bought the poster. The image now appears on HP mugs, T-shirts, and holiday cards.

"I grew up thinking that change was cataclysmic," Waugh says, "and probably accompanied by music. The way we've done it here is to start slow and work small. At some point, it begins to multiply, and you get transformation -- almost before you realize it."

What's Fast

Barbara Waugh has been working for 14 years to change Hewlett-Packard -- and working for almost 40 years to change the world. In a white paper titled "The Self-Organizing Transformation of Hewlett-Packard Laboratories," Waugh and coauthor Kristin Cobble, an organizational consultant, captured some of the lessons that they have taken away from both their successes and their setbacks. Here are some excerpts.

1. Think small. "Help happen what wants to happen. Assume resistance is a valid response and don't try to change it. Over a short time, small scale short-term efforts, fueled by the passion of the people leading them, result in large-scale long-range transformation."

2. Focus on the task at hand. "As human beings, when we're gathered together to do something and we don't know what it is, we don't know how to tell if we're doing it or not, and we are going to go crazy. Set your charter to do things that can actually be accomplished with the people you have, with the resources at hand. That doesn't mean you have to dream small. But dreams are the context for your task, not the task itself."

3. Place whatever you're working on in its next largest context. "Look at each part in the context of the whole, that whole in the context of the next larger whole."

4. Be the change you wish to see. "If we want to see more risk-taking, we must ourselves take more risks. If we want people to dream bigger dreams, we must ourselves dream bigger dreams. If we want the whole person to come to work, we must bring all of ourselves to work."

5. Don't just talk -- listen and question. "Not knowing what should happen can be more important than knowing, it can give others the room to create and generate new ideas."

6. Think ahead. "Track what a project allows for and then what that allows for and so on: The bottom line impact of many projects based on people's dreams doesn't show up until the 2nd, 3rd, or 4th derivatives of the projects."

Katharine Mieszkowski (katharinem@fastcompany.com) is a Fast Company senior writer based in San Francisco. Contact Barbara Waugh by email (barbara_waugh@hp.com).