Conference 7.286::digital

388.0. "Jack Shields per Wall Street Journal" by HUMAN::CONKLIN (Peter Conklin) Tue Sep 22 1987 23:30

"A 'TEKKIE' ON THE INSIDE TRACK AT DIGITAL

by William M. Bulkeley
9/1/87 WSJ

MAYNARD, Mass. - Top salesmen frequently soar to corporate success.
So do financial whizzes.  In technical companies, engineers sometimes
rise high.

Repair people - even when they're called field engineers - generally hold
dead-end jobs.  But not at Digital Equipment Corp., the No. 2 computer maker
in the U.S.

John J. Shields, who joined the computer firm in 1961, three years after
its founding, has risen through the ranks of field engineering to become one
of three senior vice presidents.  And he is considered a likely candidate to
succeed the company's founder and president, Kenneth H. Olsen.  Mr. Olsen, who
is 61, won't discuss retirement or succession.  In the past, analysts have 
criticized him for not arranging an orderly succession, but Mr. Olsen has
said it would be a mistake to name a successor.

BOOSTING SALES OPERATION

But in heading Digital's sales and marketing operations for the last six 
years Mr. Shields has turned what used to be viewed as a weak sales operation
into one that is boosting company revenue by 25% a year.  "In many areas, we're
leading" giant rival International Business Machines Corp. in marketing
techniques, says Mr. Shields, a feisty, bearded, 5-foot-6-inch marathon 
runner.

And he has maintained Digital's corporate culture, "It's still Digital style.
The salesmen don't lie to you." says Carol Muratore, an analyst with Morgan,
Stanley & Co.

Mr. Shields has had to develop unique marketing tools to bring Digital into
the corporate computer market.  For example, next week he will preside over
DECworld, a nine-day show in Boston at which some 50,000 customer executives
will see more than 500 Digital computers at work.  The cruise ship QE II, 
which the company has rented, will be docked in Boston to provide extra 
housing space.

$20 MILLION AFFAIR

Digital will spend more than $20 million on the annual event, but Mr. Shields
says he expects hundreds of millions of dollars in sales to flow out of it.

Building up Digital marketing hasn't been easy.  For one thing, Mr. Olsen 
himself has always looked askance at high-powered salesmanship, worrying that
it turns off customers who are pushed to buy products that they don't need.

The company started out selling to engineers who bought computers because 
they knew what they would do with them.  "DEC historically viewed its market
as the next engineer on the the bench," says Naomi Seligman, senior partner
at the Research Board, a New York organization that advises many large
companies on their computer purchases.

But starting about 1980, Mr. Olsen decided to centralize decision-making and
sell large computer networks to non-technical users.  Most vice presidents at
the time bristled at the changes and eventually quit to enjoy the wealth
they had accrued from Digital stock.  But Mr. Shields, who was the vice 
president of field service, helped push the reorganization.  To the surprise
of fellow executives, he was rewarded with the job of heading Digital's sales.

Digital sales people were long derided as "tekkies" with plastic pocket 
protectors and white socks.  But Mr. Shields has more than doubled the world-
wide sales force to 12,000 people in the past three years mostly by recruiting
from outside.

"Five years ago, I had difficulty locating the (Digital) sales man assigned
to my account," says Carmine Vona, senior vice president, Bankers Trust Co.
"Now they have teams dedicated to the financial industry.  They have
specialists who know as much about banking as some of my people."

UNLIKELY MARKETING STRATEGIST

Mr. Shields would seem an unlikely marketing strategist.  He never got a 
college degree, although he has taken management courses at Harvard and
Worcester Polytechnic Institute.  And he has never worked as a salesman.

He has adopted some traditional techniques.  For example, he persuaded Mr.
Olsen to permit bonuses for top salespeople because "there was averaging" 
of merit increases by supervisors, and top performers weren't being
rewarded.

Now 20% of the sales force gets bonuses.  But commissions and quotas reflect
total sales rather than specific products so salespeople won't push computers
customers don't need.  And when the executive committee propses stock options
for managers to the board of directors, "the primary measurement is customer
satisfaction," as recorded on lengthy surveys, Mr. Shields says.

But Digital also has come up with techniques of its own.  DECworld came about
because of concerns that salespeople didn't know how extensive the company's
computer line was.  When impressed salespeople suggested customers needed to
see it, the marketing idea developed rapidly.

Realizing that Digital salespeople has been unsophisticated about commercial
accounts, Mr. Shields decided to require industry specialization.  The 
company also has set up application development centers around the country
to help customers design prototypes of computer systems for their needs.  Mr.
Shields also is resuming television advertising for the first time since 
1983.

Though engineering remains the core of Digital's corporate culture, marketing
is getting more respect.  Says Don Busiek, vice president software services,
and a long-time subordinate: "Jack has had to work up as well as down.  He's
managed to make Ken (Olsen) see the usefulness of good marketing."

Staying in the autocratic Mr. Olsen's good graces is the key to Mr. Shields'
future.  Mr. Shields maintains he enjoys working as a team with the two other
senior vice presidents.  He has an office next door to John F. Smith, senior
vice president, engineering and manufacturing and the man considered his
closest rival.  "I'm sure Ken has a plan, and he's keeping it to himself,"
Mr. Shields says.