Conference 7.286::digital

	I may be missing something. As I don't see any parallels here.
	What are the signs that Digital is going the way GM did/is?

			Alfred

    
    Ref. .1
    
    Bureaucracy and professional career bureaucrats might be the most
    common element?
    

	RE: .2 Japan has them as well. Are they heading the GM way as well?

				Alfred

    re .1
    
    Perhaps the "middle management lifers" who resist/resent any change
    from the "old way" of doing things, despite a rapidly changing economy
    and even more rapidly changing industry?
    
    Jon

    Perhaps the stifling of innovation to use '70's technology?

    To add to Dave's base note, the complete title of Ms. Keller's new
    book is:
    
    "Rude Awakening: The Rise, Fall, and Struggle for Recovery of General
     Motors."  It is published by the William Morrow Press.
    
    For those readers especially interested in General Motors and its
    struggles, I'd recommend "My Years at General Motors" by Alfred
    P. Sloan.  This is the Sloan of MIT's Sloan School and the Sloan-
    Kettering Insitute.
    
    Regards,
    Joe

    I guess I was unclear in my base note. I am not saying that Digital
    IS GM, and we're going down the tubes. Just the opposite. I think
    that what happened to GM is built into the genes of almost every
    large organization, and your continued success depends on your ability
    to recognize the tendency and to overcome it.
    
    I posted the note to trigger a discussion: are we in the same boat
    as GM, or not, and why? It just struck me as I read the reviews
    of this book that there may be lessons for every business.
    
    My two cents: I think Digital is very tied up with red tape and
    needless processes. We hear it from our customers, and certainly
    any of us who work inside see it every day. It's a source of great
    waste. But I see a very strong tendency here to fight it and to
    cut down. Particularly now, with the emergence of the business segments
    model. There's a strong movement, and urgency developing in the
    company to cut away at the layers of red tape we've built up.
    
    Certainly we're different from GM in that we don't have to contend
    with a huge union every three years.
    
    I think we're similar to GM, and many other big companies, in having
    vast armies of people who have 10-15 years to go before they retire,
    and whose jobs have gone away or become irrelevant. That's a problem,
    and I think in the long run the only way it will be solved is through
    "voluntary" severance, or layoffs. Notice how more and more, when
    you hear a corporate officer speak, they all emphasize that "no
    layoffs" is a "tradition", not a policy? I think the groundwork
    is being laid now.
    
    I think there's a strong inbred resistance to change and new technology
    here, but at the same time there's a capacity for boldness. Look
    at the way we went into the RISC systems business -- it stunned
    the industry. We bought it.
    
    We're very unlike GM in having a visionary like Ken Olsen at the
    helm. He invented the company, and directed it all along. He knows
    technology and business, and he's capable of intuitive leaps. From
    all accounts, Roger Smith is a lifetime product of the GM bureaucracy,
    with all the rough edges worn off. He was a finance guy; doesn't
    know beans about cars. Under his leadership, GM has been in steady
    decline. And you can't blame the Japanese, or the federal government
    entirely; during the same period Ford came back from the dead to
    seize technological leadership in the US industry, and to grab market
    share from GM.
    
    Somewhat like Digital in the mid-80s, I'd say. Leaping ahead and
    growing at the expence of IBM.
    
    That's some random thoughts on this. I think my base question is
    a valid point for discussion, and I hope I've clarified my reason
    for posting it.

    I think the parallels are spooky, and increasing day by day.
    Alfred, I am surprised that you saw *no* parallels between the few
    things listed in .0 and DEC in '89.   No, DEC isn't in imminent
    danger of becoming the bureaucratic, red-tape-paralyzed, un-innovative
    company which GM had become by the early '80's, but DEC certainly
    cannot be considered to be healthy in all those parallel respects
    either.
    
    The examples in the base note, and especially the observations made
    in .7, are extremely perceptive.   The line about the "frozen middle",
    while describing GM specifically, speaks volumes about much of U.S.
    industry in general, and to some extent, Digital in particular.
    
    "Can we avoid the GM syndrome?"    Absolutely, YES, we can.
    
    Will we?	Probably, but not if this company continues to move
    in the direction it has been moving since about 1983 (the one 
    tremendous year of 1987 notwithstanding).  Digital cannot continue
    to reward mediocrity, stifle innovation, and allow an ever-swelling
    population of "me-first" middle management to manage and control
    for personal and political gain at the expense of leadership, long-term
    profitability, and creativity.   I consider myself to be lucky.
     I work for some excellent management, and I am surrounded by a
    lot of excellent people.   However, I've been around long enough now to
    see that there is a large and growing population of people who cannot
    and will not adapt to changing times.  I see managers who try to
    control, rather than lead.  I see management that stifles innovation
    by avoiding all risk.  I see a lot of people who worked hard for
    many years, got this company to where it is today, but cannot see
    that "the times they are a-changin'"' or perhaps they're just too
    comfortable to take risks and try new things to keep this company
    moving forward.   And worst of all, while this class of risk-averse,
    me-first, uncreative, unimaginative people are in a lot of responsible
    positions, there are so many extremely talented people who want
    to work hard, to innovate, and to lead, but aren't given the chance
    because they're out of jobs due to the shifting of U.S. Manufacturing
    population and responsibilities.  The people who are currently in
    TMP just happened to be in the wrong place at the wrong time.  It
    had nothing to do with their abilities that they are now searching
    for work.  It was just the (bad) luck of the draw.   These people
    can contribute, they want to contribute, and in many cases are
    considerably more talented and innovative than some of the
    "comfortable" people who have work, but don't want to take risks
    to help the company.

    Digital will ultimately turn the downward trend around.  It's a
    strong company with very strong top management and a wealth of talented
    people.  But the company must reward these people, and put structure
    in place to keep innovation and company success foremost, and personal
    politics out of it.

    Things we did in the past as a leader and visionary in computing
    ----------------------------------------------------------------
    * Time-sharing systems when the whole world was running batch jobs
    * Foresight to see that one architecture and OS saves customers
      lots and lots of money in the long run
    * Pretending to be a niche player, keeping a low profile, all the
      while eating away at the IBM customer base. (This includes the
      VAX 9000 release when Ken O. claimed that the VAX mainframe is
      not a product in direct competition with IBM!)
    * Building a lot of products for VMS and a lot of applications through
      CMP's and third-party developers
    
    Things that indicate us slipping from our aggressiveness
    ---------------------------------------------------------
    * The PC fiasco
    * Late entry into workstations and good software even later than
      that
    * Reliance on outside companies for components like processor chips
      while we have huge semi-conductor outfits
    * Fumbling in our sales strategies - Mushrooming of lip-service
      approaches to solution-selling at a critical time like this -
      No one unified clear approach
    * Strategies being influenced more by Wall-Street than Ken Olseneque
      foresight and direction
    
    Things that might bode bad times if we don't keep with
    ------------------------------------------------------
    
    * Less cautious and more adventurous approaches to research -
      particularly Object-oriented systems and CASE. Once again
      APPLE, NeXT and other smaller companies may beat us to it
      if we don't respect what they do and learn from them.
    * Shedding the techie image and concentrate more on becoming
       business-like and talk to the customers in their "language"
      rather than in terms of VMS/ULTRIX/Hardware...Do it really
      seriously in stead of vague phrases like "Solutions...
      Enterprise..." etc..
    
    Nari
    
      

    GM in its arrogance ignored competitive strategy.

    Today, Digital in its arrogance does the same.  Only a handful of
    people are left who have an institutional memory of Digital when its
    was smaller than Apple is today.  So Digital thinks that because of its
    large installed base it doesn't have to compete as hard as smaller
    companies.

    One of my first notes I wrote in '83 or '84 said pretty much the same
    as the previous paragraph.

re >< Note 962.10 by SDSVAX::SWEENEY "Night of the Living Career-Dead" >
                                  -< Deja vu >-

>    GM in its arrogance ignored competitive strategy.

Worse, GM ignored its customers.  I listened to a Today Show interview of Roger
Smith.  Bryant  pointed  out to Mr.  Smith that his customers were going to the
"other guys" at lightning  speed  suggesting  that  the  Japanese have what the
consumers want.  Smith said, and I paraphrase (but not too much), "We know what
our customers want.  They do  not  need  to  tell  us.    We  know what's best.
They'll take what we sell."

Does Digital ignore its customers?  

Will  WE  be  offering cash rebates?  

Is it time to take that job running the Ft._Wilderness/Magic_Kingdom boat?

Dave

    
    Ref: .11
    
    >><  Will  WE  be  offering cash rebates?  >
    
    Don't we already do this -- i.e. "competitive allowances"
    

    The same Roger Smith caused a flap two years ago during a news
    conference.  The Boston Globe's automotive reporter got up on his
    soapbox and asked what GM could offer the American consumer for under
    $5,000 to compete with the numerous Asian models.  Smith's response was
    that the best value for under $5K was a *used* Buick!
    
    The Globe's auto writer had a field day with that one.

    Parallels? You want parallels?  OK
    
         - Middle Management Lifers up the ying-yang interested only in
           keeping their stock options watered and fertilized.
    
         - Unwillingness to accept or acknowledge (until recently) that
           the business has changed dramatically and permanently.  This
           has been characterized by an almost arrogant distain (SP)
           towards our customers, PC's, Open Systems, Work Stations, etc.
    
         - Costs and expenses out of control.
    
         - Incredibly complex internal systems and processes, barely
           limping along.
    
         - A laughable lack of good computer usage internally.  We seem
           not to know what we build.
    
         - ...and committees convening other committees to discuss the
           problems inherent in rule by committees, only to have other
           committees send the problem off to still more committees so
           that their feelings won't be hurt.  You should see the
           committees that were formed to study simplifying our
           business.
    
         - An almost total lack of true leadership at any and all ( and I
           mean ALL) levels.
    
    Other than that I don't see any parallels.  After all, the Mill
    doesn't have a 14th Floor.
    
    

    re .11
    
>consumers want.  Smith said, and I paraphrase (but not too much), "We know what
>our customers want.  They do  not  need  to  tell  us.    We  know what's best.
>They'll take what we sell."

    Was Roger Smith on the ELF V2 committee???
    
    Couldn't resist
    Jon

    For those who are comfortable with DEC's position (i.e. "Yes, GM went
    down the tubes, but we're better of than that") my only word of caution
    is that we recognize that GM makes cars ... DEC makes computers and, to
    an increasing extent, provides services.
    
    The advances in the automotive industry pale in comparison to the
    advances in computer technology in the past 'n' years. Do not be lulled
    into complacency because our situation isn't as bad as GM's was. 
    
    Because of the EXTREMELY rapid pace of change in our industy, we can
    ill afford to allow red tape, political nonsense, bureaucracy, and
    other such things to continue to exist. We've consistently missed
    windows of opportunity because of our own arrogance, and I personally
    continue to see examples of the "We're Digital and you're not"
    attitude. We've gotta get humble ... quick!
    
    /se
    

From Note 962.7:
                 
>>    Certainly we're different from GM in that we don't have to contend
>>    with a huge union every three years.
    
We don't have to renegotiate salary contracts every three years, but this
company seems to be a union company to me in that once you get hired, you're
hard to fire. And it seems to have a lot of employees who work part-time but get
paid as full-timers.

Vicki Meagher

    John DeLoran's book 'On a clear day you can see GM' also makes for
    good reading. Being 10 years old (it was written several years
    before it was published) hindsight makes it better reading today. 
    One interesting observation is the claim that GM was hooked
    on high profit margins, more than 50% of the price of a GM was
    profit to either GM or the dealer. Lee Iacocca made the same claim
    of Ford in his book. 

    At least GM and Ford had years to prepare for the changing
    marketplace, and the advantage that a $10,000 car really was
    better than a $5,000 car. Maybe not twice as good, but at least
    good enough that people would pay twice as much, at least for a
    little while.

    mike

    That quote from Roger Smith reminds me of an almost identical one from
    Ken Olsen.  (Made several years ago.  He has apparantly changed his
    mind since then.)
    
    Another non-parallel: Roger Smith probably knows how to drive a car.

    Is/was Jack Shields our Lee Iacocca?

    re: .20
    
      

    
    And if you want a visual account...the movie "Roger and Me" shows
    the effects of the GM Syndrome on the people and town of Flint
    Michigan.  Truly unbelievable...and you will not see any actors or
    props, this is what really happened.
    
    alex

    How about a plot summary?
    

    The plot is like "Monty Python and the Holy Grail", where the
    chairman of GM, Roger, is the Holy Grail.

    
    REF: Roger and Me
    
    Having seen it, I judge it to be something very new -- a movie (with a
    large audience at a matinee even) that sharply attacks with satire and
    humor, the professional bureaucracy which regards a company's employees
    with little humanity, as so many used, for example, old VT100's who are
    no longer needed, and simply cast aside rather than refurbished to new
    uses.  At the end of the movie, the audience cheered and clapped for
    Moore's showing the superficial bs given to helping the workers who
    helped build GM and who suddenly found they were no longer wanted
    because labor in Mexico at 70 cents an hour could replace the efforts
    of workers in Flint Michigan, where General Motors began.  The poignant
    point of the film was when the chairman was shown making a teamwork and
    us together type speech on Christmas eve and at the same time, in
    Flint, also on Christmas eve, several former workers were being evicted
    from their homes.
    
    I perceive word of mouth will increase audience attendance, and
    ultimately have a less than desirable impact on GM's shrinking U.S.
    market share.
    
    

    Moore doesn't need word of mouth - he's been on
    
    Letterman
    Carson
    Larry King
    Sonya Live in LA
    CityPulse (local Toronto program)
    
    and probably many others during a continent wide promotion swing.
    
    Scooter