Conference 7.286::digital

    IMHO, there were none.                                            
    

I watched the show at MRO1. I thought it was fairly entertaining (I've never
watched one of these before). Most people seemed to leave the MRO1 cafeteria
smiling.

To me, there were three memorable moments:

1. There will be another buyout package announced next Tuesday, to be offered
to people whose jobs the company doesn't think it will need anytime soon if
ever. The package will not be as generous as the earlier ones, and people will
have only four weeks to decide on whether or not to take it. It will be
voluntary.

2. In response to a question about poor performers, Jack Smith said that the
subject of poor performers was one of his "hot buttons," and that no employee
in the company should have to put up with having to work with poor performers.
He said he'd like to know about poor performers (or words to that effect).
(Before answering the question, he joked to John Sims, "I thought you told me
we got rid of all those."

3. Someone asked a question about Digital's unimpressive revenue per employee
ratio. Ken Olsen was defensive about the question, and said it was a
meaningless statistic. He said we're in the service business, and you can't
compare our revenue per employee to other companies' revenue per employee. He
totally ignored the issue of IBM's revenue per employee, which the person who
asked the question had mentioned as being better than ours. (I think Digital
and IBM are comparable companies, and IBM is even more of a "service" company
than we are.)

I went to the telecast hoping to hear about the new buyout package. I planned
to leave and come back to work if I got demoralized or annoyed. Ended up
staying for the whole show.

Vicki Meagher

	Yep, for me the highlight was Jack Smith's comment
	about poor performers.  The context was a query from
	a field employee who asked something like:

	"Well, we've had one buyout, and there's another one
	coming along...  Shouldn't we be looking at poor performers
	FIRST.... THEN look at buyouts ?"

	The first to field this one was John Sims, who really remained
	non-committal.  He was almost interrupted by Jack Smith,
	who made the statement about poor performers being his
	"hot button."

	First time I've ever heard a Digital manager ever make a
	definitive statement about this one....   Maybe we'll see
	some change.

	Steve H, who's currently working in a group that's about 16% fat.

re .2:

Didn't Ken say that we're not comparable to other companies with the
possible exception of IBM?  I don't think he's ignoring our costs vs.
IBM's costs.  I think he was just attacking the notion that revenue
per employee is a valid measure of productivity.

    So besides answering questions, weren't they supposed to inform us all
    on how they plan to turn the company around and become profitable
    again? I didn't see it but thought this was the main thrust of the DVN
    broadcast. Instead, it sounded like a Ronald Reagan press conference. I
    was really hoping for more than "Don't worry - Be happy." This just
    sounds like more of the same. I guess I was right when I said it will
    take a few more kicks in the head before we see real action...(I was
    hoping I was wrong...)

	I didn't last until the end.  I was disappointed by Ken's
	comments indicating that he feels we can't do a capable
	and competitive job of delivering Unix because there's no
	one definition of what it is.  The Open Systems Group, our
	engineering department responsible for delivering various
	Unix implementations, is apparently being directed to undertake
	their third or fourth change of strategic direction since the
	beginning of this year.  Employees accepting the need for change 
	is one thing, management accepting the need to stay the course 
	once a decision is taken seems to be something else entirely.

	What made me leave the room, however, was his response to a 
	question from a caller in MKO.  The caller asked about how to deal, 
	as a first-line manager, with employee demoralization resulting from 
	an upper-level manager flying 20 miles in a helicopter to a meeting 
	that other lower level employees had to drive to.  While Ken failed to 
	convey any sense of appreciation for the damage done to the manager's 
	ability to provide leadership and motivation to his employees in 
	cutting costs, his gratuitous comment about employees who needed 
	some extra money going out and driving around was intolerable.  If 
	there is a serious enough amount of unnecessary cost being created 
	by dishonest employees collecting unjustified mileage reimbursements
	or by any other means for Ken Olsen to be concerned about it, we have 
	a motivational and leadership problem that can't be corrected by 
	simple elimination of unnecessary jobs or other proposed cost 
	reduction efforts.  Effective leadership does not seem to be an 
	issue of concern to most of the top management at DEC today.

								john

    What reeally bothered me was when a caller asked if this company had
    a real vision for the future.
    
    Ken basically hesitated for quite some time and then in many words
    basically said "No". At least that was my interpretation.
    
    Dave

Re: 1175.5 by STAR::DIPIRRO

>>> weren't they supposed to inform us all on how they plan to turn the 
>>> company around and become profitable again? 

	yes, i also thought that was the topic of justification for the
	broadcast.  they did open with some discussion of broad strategy
	for accomplishing that.  reduce costs and increase revenues was
	the starting point.  they mentioned reducing costs by eliminating
	redundancy and increasing centralization of some support functions
	such as Information Services (IS), Financial Services and Purchasing.

	they talked about eliminating forms of bundled or free support for
	our products and customers.  they want to sell our products at prices
	competitive with the other vendors in the market and to provide the
	additional service and support only to those willing to pay for them.

	they also talked about three broad segments of the company each 
	contributing to its profitability:

		1.) product development departments 
			(i think this means Engineering)

		2.) applications integration departments
			(i think this means EIS and Software Services)

		3.) sales and delivery

	their objective is to encourage entrepreneurial initiative, 
	responsibility and rewards within each of these areas for their
	ability to produce profits = revenue - costs.

	that's the grand strategy.  they didn't offer any detail in terms 
	of organizational or tactical approaches, but this is supposed to 
	be a report on the ideas coming out of a woods meeting held only 
	weeks ago.  obviously lots of hard work is still to be done just 
	developing specifics and choosing among available alternatives.
	how and where this work is being done was not even suggested.
	they seemed big on 'write up your ideas in a proposal' describing 
	how to produce more profit and send it to Ken or Jack.

    re: .2 -  on the part where Ken said the statistic of revenue per
    employee was meaningless...he also said TWICE that one should not
    pay attention to what 'some young reporter at business week writes'..
    
    since i have friends at business week it made me smile..i'm not sure
    if it angers him that they're the press, that they're not always 'pro-
    digital', or that they're "YOUNG"... 
    
    any way..certainly Business Week has been wrong before and will be
    wrong again..but it made me smile.  I do agree with previous notes
    that he didn't fully explain how it's a meaningless statistic when
    comparing two service oriented companies.  he did make clear that
    the statistic was unreliable when comparing apples and oranges..a
    service oriented company like DEC and a product oriented company
    like Apple.
    
    

    Re: -.1
    
    	I, too was bothered by the nebulous nature of Ken's reply on
    this... I would have thought that with the sweeping changes in
    the (formerly) Iron Curtain nations and the radical alterations
    planned for Europe, some solid strategies would be formed for 
    capitalizing on these new markets. As I recall, the caller specifically
    mentioned "global vision". Ken's reply seemed to be basically
    "go with the flow", and in times when we're lucky enough to be given 
    advance notice about events like EC '92, I don't believe we can 
    afford to be without a planned, truly global vision for DEC.
    strategy.

    My impression of the whole DVN is that it probably cost the company
    a lot of money to have employees sitting around watching (expectantly)
    for a message that never materialized.  Like others, I expected to
    hear something visionary about the direction of the company.  Instead,
    I heard thought-provoking questions from employees who really care
    about Digital and want to make a difference.  The answers to these
    questions, however, were the carefully crafted work of practiced
    politicians.  
    
    I, too, was very disheartened to hear Ken's reply to the manager
    who was trying to set a good example to her employees.  "Maybe we
    should get another plane" just doesn't seem to be the message that
    will inspire us to tighten our belts for the sake of the corporate
    wallet.
    
    The caller who asked about looking to other very successful companies
    as role models (i.e., these companies never have more than 5 layers
    of management, etc.) never did receive an answer to his question.
    
    Far from instilling any confidence that things are going to change for
    the better, we all walked out of the room with our heads down.  The
    most important thing that we wanted to hear was how the company was
    going to fire up our most important asset:  the employee.  And IMHO,
    the message never came.

    Not too impressed...was glad to see them having so much fun!!  Was
    glad to hear about Tuesday, but why couldn't they give us the details
    then?  Could we possibly need some severance packages at very high
    levels?  (There, I said it).

    All this talk about increasing employee productivity, and they go ahead
    and waste x number of attendees and viewers, times 1 1/2 hours, for
    what amounted to almost nothing but a big letdown.  My guess is that
    a huge percentage of those employees were mainly interested in the new
    buyout program.  What a marvelous opportunity that was to have revealed
    the details directly to the employees yesterday;  instead we were told
    that would happen next Tuesday---By what vehicle???  The Boston Globe?
    TV?  radio? livewire? your manager? your wife when you get home that
    evening?  They had a perfect opportunity to communicate directly to
    the employees, and they muffed it.  Ken made it a point to not put too
    much credence in the media; so if we see something in print next week,
    should we believe those details?  Disgusting!!!
    

    I watched about 30mins of it, and was not impressed. No wonder were in 
    trouble. I see know clear vision or strategy for getting us out of this 
    messy situtation we have created.
    
    -Harv

    IMHO the broadcast conveyed about 10 minutes' worth of real solid
    information in the hour and a half, and that only in response to
    called-in questions.  I wasn't expecting a concrete answer to an
    amorphous question on a subject like "visioning", so I dismissed the
    answer as CEO-speak, nothing I could get my teeth into.  The two salient
    points were 1) that some kind of a new, less generous, transition package
    will be announced next Tuesday and that affected people will have one
    month instead of one quarter to decide what to do about that, and 2) that
    the next DVN announcement will be about "health care".  (That scares me
    some as a probable announcement of yet another way to extract more
    moeny from my too-thin-already wallet; maybe they won't implement
    whatever transfer-more-cost-to-the-employee scheme that turns out to be
    until after I finally get another pay raise, if that ever happens again
    in this mad place.  Sigh.)   So, if you didn't attend, you saved
    yourself about an hour and twenty minutes of time - hope you used it
    wisely...
    
    /Charlotte

    I have said it before and will say it again.  The problem with this
    company is management.  And it starts at the top and goes all the way
    down.  Ken Olsen should do DEC a favor and retire.  He may have been 
    good in the 50's-60's and 70's but this is the 90's and he is not
    in touch with the realities of the industry, the marketplace or 
    even his own company.                                             
    
    This company will not get turned around with the present management
    staff and philosophy.  Lay off the managers and hire some leaders.
    
    (I will probably catch a lot of sh*t for saying this but I graduated
    from the Jerry Williams School of Diplomacy).
    

The people complaining about lack of content must never have been to one
of these events before.  This one had much more substance than the last
one I went to.

I think they can't tell us specifics about the new transition plan 
before they make it public because of SEC rules regarding insider trading.

    I didn't care for the categorical dismissal of the revenue per employee
    question.  Fine we don't make widgets, but we are in exactly the same
    business as IBM, exactly, and their earnings-per-body are 50% greater
    than ours.  You can sit-step, hem and haw all you want, but the facts
    remain.

    	- I was not motivated
    	- KO's comment on the people driving to the meeting (referred to
    	  in another note) to get the 22 1/2 cents wasn't funny to me
    	- If our senior managers think cutting out "Wall Street 
    	  Journals and Bottled Water" is a attacking the real problem,
    	  they're more out of touch than I thought
    	- I liked the idea of putting expense control squarely on
    	  the shoulders of the employees ("Do what's right") but most
    	  employees don't have a ROI model to work with that tells
    	  them if they're within the money they should be spending or not
    	- I didn't get the feeling that we're "on top of the problem"
    	  and that we're about to turn things around
    	- I was greatly disturbed by the lack of understanding around
    	  DELIVERY. All they talked about were our great products. They
    	  don't seem to understand the importance of getting those products
    	  delivered to a customer to the customer's satisfaction. Lots of
    	  talk about inventing new services, but not on how to deliver what
    	  we have. Not understanding this allows competition to strip away
    	  the added value of our superior products. ("DEC makes a better
    	  widget, but I'm going to buy from [company] because they provide
    	  the best service").
    	- All in all, not the most inspiring meeting I ever went to.
    
    /se

    
     Re. 1175.2
    
    Does anyone have any information on the buyout package that was
    supposed to be announced today ?????
    

See 598.211

I didn't see the broadcast last week as I had too many other things going on.
I wish I hadn't missed it. It sounds like enough stuff got flubbed that the
video tapes will probably never show up in the DLN. I certainly wouldn't
want to risk any of that getting into the media's hands if I were Ken or Jack.

Re: comments on Poland Springs and WSJ's - All things being equal, the claim is
(from what I read) that this exclusion can save in excess if six figures. I
think that probably _IS_ worthwhile, though maybe not of the _MOST_ pressing
importance. The school of management I subscribe to says ya gotta look at
all the issues, though.

-Jack

re .20:

>              Fine we don't make widgets, but we are in exactly the same
>   business as IBM, exactly, and their earnings-per-body are 50% greater
>   than ours.

We make PCs that are sold at your local computer store?

    come on .25, gimme a break.  I know we don't make PC's.  I would also
    hazard a guess that IBM's PC business is very low margin, and probably
    a drag on their earnings per employee.  I stick with my observation.

    re .26
    
    IBM's PC business may be a drag on their earnings per employee but not
    on their revenue per employee--which is what the discussion is about.

    Uh, this may no longer be the case, but at least through much of IBM's
    domination of the PC industry, didn't they merely put together parts
    purchased from other manufacturers?  I mean, they didn't MANUFACTURE
    PC's, but just put together (OEM'ed?) parts from INTEL, etc.  Similar
    to the Tandymate, in a way.
    
    No,we don't make typewriters either, nor do we make photocopiers or
    cash registers, but I still think that if we're going to call ourselves
    the number two computer company, and incessantly compare ourselves to
    IBM whenever it's convenient, then we should at least be consistent.
    Either we're in the same business or we're not.  What'll it be?
    
    

    
    	We cannot call ourselves #2 Computer Company, as we are back at #3
    	again, and on current performance will never get back to #2.
    
    	Regarding DVN's being "content free", this applies to probably 90%
    	of those I have seen.

    Does anyone have a list of all of the questions that were asked ?
    
    Obviously mine around why each package gets to be less that the
    prior one wasn't addressed ? My thinking of course is that if
    someone was not offered the 1st package he/she was probably more
    valuable to the company (not necessarily true though) than those
    who were offered the 1st package ..... repeat for package 3 and 4.
    
    Effectively if I am not offered 1 or 2 but will be offered 3 which
    is less than 2 which was less than 1 is that anyway to treat your
    more important employees ???????
    
    Lloyd

    
    
    
      Perhapse it's the reverse - I.e.  The "Scrap value" of 
    the effected employees has declined?  :^)
    
    
    						-al

re:         <<< Note 1175.30 by OK4ME::OSTIGUY "Secure it or SHARE it" >>>

This is being discussed in topic 598. You may find some answers (or at
least opinions) there.

re: .29

OK - I confess ignorance, not having read a trade rag or the WSJ in years.
Who _has_ supplanted us as number 2 at the present time?

-Jack

    For a quick response.....I think it's Fujitsu....fer sure it's a
    Japanese company.  There are also 3 or 4 other Japanese companies in
    the wings and coming up fast.  We will probably be #4 or 5 on a
    couple years.  Apparently, there is no stopping them.

    If I may be allowed a follow-on comment.....I also found the
    artificiality of the whole broadcast very disturbing.  The
    announcer was just too damned slick for my taste.  I also
    thought the "audience" was laughable.  They were all Bedford
    employees, including at least one very senior manager whom I
    recognized.....but not a word out of them.  They all sat there
    like lumps on a log, and I just could not help but be reminded
    of some sort of staged press conference out of North Vietnam
    a few years back.  Also, a lot (far too many) of the calls were
    from Bedford employees.  I don't suppose that it's conceivable
    that there could have been some sort of set-up.
    
    All-in-all, Goebels would'a loved it.

    
    	Current Order is:
    
    	IBM
    	Fujitsu
    	Digital
    	Hitachi
    	NEC
    
    	The LARGEST Company which makes Computers is C.ITOH which is about
    	10 Times IBM Size.
    
    	The whole thing about the 3 Japanese Companies in the list is that
    	unlike IBM and Digital, they are not just in Computers.
    
    	So, when the Computer Market is low, they work on the TV/Microwave
    	Rice Cookers/etc

    A simple point that I could make:
    
     If the transition plan offers successively less incentives to the employees
    who stay, how about broadening the base of such management perks as stock 
    options.
    
    I am not talking about the stock purchase plan. 
    
    It seems to me that if raises are stretched out in time and their value
    reduced, this simple gesture is (IMHO) necessary for fairness to
    valued employees who are not management .
    
    I thought this would be mentioned during DVN, particularly because the
    stock is cheap for DEC to repurchase now.
    
    Steve
    

re .36:

One of the callers *did* mention stock options.  Unfortunately, his suggestion
(DEC use its cash to buy stock and give it to employees) was not reality-
oriented.

re Fujitsu:

Fujitsu is buying out ICL.  That's how they're becoming #2.

    re: 20,25 etc...
    
    Sorry guys....can't help replying to these...check the facts...if
    the rest of DEC had revenues per employee even approaching
    what we have in the PC business, this company would not be in 
    the current state of affairs.  We build them outside because our
    overhead internally is so high that we can not build them competitively
    internal to DEC.  I can pay external companys far less money to do the 
    same job and they are still turning profits.  We, inside DEC, tend to 
    add a lot of cost for options/features/etc that our customers do not
    require and are not willing to pay for....
    
    sue white
    engineering manager
    pc business unit
    

    re.38
    Although I agree that:
    1- Buying PC's and reselling them is costeffective under present
       circumstances and due to DEC's PC history
    and
    2- Too much overhead is obviously bad for DEC
    
    I do not see these two things related in any way.
    There might be as much overhead in the PC business as in any others.
    There might be as less overhead in any DEC engineered product.
    
    Numbers might look good for a product managers if he/she sells
    lots of them with a good margin.
    They might look very bad for the same product if look into
    Customers Service's numbers who install/support them.
    
    It should be the overall profitability that counts. To the
    best of my knowledge with today's chinese walls between the
    "functions" I doubt that there is any way to measure it, and
    even if there where, who would really care.
    
    Is a product manager/engineering manager measured on how many
    SPR's CLD's his/her product(s) is gratified with ?
    
    Is a C.S manager measured on how much customers are satisfied
    with a particular product (making them buy more).
    
    The answer is NO, as far as I know.
    
    Fred Breichner
    C.S Support manager
      
    
    

    Regarding the discussion a few replies back, I think there's an
    underlying point to be made here. Many of you seem to buying the
    high-level rhetoric of "we have the best people" and "revenue per
    employee is meaningless" when the actions of higher-ups display the
    contrary. There is no evidence to substantiate that higher-ups believe
    we have some of the best people that we should hold on to. As someone
    pointed out, there's no new creative incentives (like stock options)
    for people we want to keep. Voluntary severance packages do nothing to
    improve the company's position. As I've mentioned before, they cost a
    fortune, you lose many good people to the competition, and you're still
    left with the deadwood. However, general downsizing does improve the
    "revenue per employee" numbers, now doesn't it? There is also some
    evidence that I've heard lately that our salaries (at least in
    engineering) are once again not competitive with our competitors. We're
    still occasionally hiring external people and having to pay them
    considerably more than internal ones for the same jobs (this might be
    that the salary freeze put us just that much behind). We've seen
    employee benefit cutbacks, typical of belt-tightening situations. But
    the main point is that DEC isn't making the hard decisions required to
    turn us around. We're continuing the way we always do...And there's no
    effort being made to explicitly hold onto key people. I think the
    situation is being regarded at a very high level and that higher-ups
    don't really yet feel the seriousness of the situation. I have some
    friends who think we're going to do the exact same thing as Wang. I'm
    not quite that pessimistic, but I'm still having to really squint to
    see any reason for optimism.

    re .40
    
    I agree.  To paraphrase Ted Kopple, Digital management just doesn't get
    it.  Voluntary layoffs are a farce.  Who would volunteer to leave? 
    Only those that know they can get just as good a job somewhere else.
    The people we need to get rid of, the deadwood, know they can't do
    better somewhere else so will stay on as long as possible.
    
    Any manager who is also a good leader will tell you the most
    challenging task of a manager is to hang on to the good people as they
    are always in demand everywhere.  Deadwood doesn't move unless the
    tide moves it.  We need a reeeeeal layoff.  We also need to get rid of
    the the senior management staff who think they know what they are
    doing and get in some real business leaders who have the guts to make
    the tough, maybe unpopular decisions.  Only then will this company
    get turned around.  
    
    BTW, the recent memo from K.O. on his idea to return the company to
    profitability was also a farce.  I say again, Ken should leave.

    I think that this is directly any of K.O.'s fault, but he was
    disappointing on Aug. 30.  The constant talk of cutting on bottled
    water, WSJ's, etc. is missing the point.  All of that is peanuts
    compared with the bloated management layer we have in this company. 
    People should be asked what they are doing/managing and measure that
    against the value add (or don't) to the company.  The amount of
    overhead that is being sucked up personnel-wise could send us
    travelling around the world 20 gezillion times.
    
    --David 
                                                                         

    I don't agree that K.O. is that blameless.  His constant hammering
    of UNIX and PC's over the years didn't do us any good.  I do agree
    strongly that our overhead (of which I am a member), particularly
    at higher management levels is outrageous.  You can bet that no matter
    what happens, they will survive.  I always have this mental image
    everytime I go to Stow or Westboro of offices full of Customer Services
    "Management" literally disappearing into the distance, with armies
    of secretaries planted in front of them.  I have this strange feeling
    that if they were all sent home for 90 days, no one, I mean NOBODY,
    would know the difference.....and that's only a sample.  BTW, I am
    strongly supported in this perception by more than a few occupants
    of those facilities.
    
    

RE: last few

A simple observation:

    	I'm a first-line supervisor, and I recently counted the number of 
management layers between the folks who work for me, all individual 
contributors, and KO.  In my organization I got 9 levels of management.  
If each level of management manages 10 people (I picked 10 because it seemed 
like a reasonable number and it made the arithmetic easier), that many levels 
of management can manage 100,000,000 (that's right, 100 million) people.  
What does that say about where the real deadwood is?

Now, I confess that I get a little fuzzy around level 6, so I'm willing to 
concede that I might be off a level or two.  What *really* scares me is that 
I'm afraid I missed a level and didn't count all of them!

    Let's give Ken the benefit of the doubt - he is sufficiently consumed
    with (well, whatever it is he's consumed with - annoying Wall St. & the
    press for instance), that he should only have 3 direct reports (as he
    does now, then beyond him a simple progression (with *suggested*
    functional titles) would be:
    
    1		Ken
    3		Senior VP's
    30		Functional VP's (Sales, Software, MFG, Europe, Asia, &so on).
    300		Business / Country / Regional directors (product lines,
    		USA, Germany) 
    3000	District managers (or functional equivalents) (Southern
    		California Field everything, VAX  xxxx product, EDCS)
    30000	Unit Managers (direct people managers)
    300000	worker-bees (thee and me, buckos me hearties)
    
    	(I'm the first to confess I have massively over-simplified here.
         Wouldn't that be a nice change?)
    
    At the moment, my personal pyramid is more like
    
    Ken
    Sr. VP 
    VP SWS Corp
    VP SWS USA
    VP DCC West
    MGR DCC's 
    DCC Mgr
    Unit Mgr
    ME
    
    So we have at least two layers more than the idealized model above, and
    those two layers ain't in the cheap seats come payday, friends. 
    
    But we've had this discussion before, haven't we?
    

re .45 (mine) and .46

>>>    But we've had this discussion before, haven't we?
    
Sorry, I'm relatively new to Digital and was astonished by the numbers of 
levels and the implied numbers of worker bees that could be managed.  My 
naivete shows, I fear. :-}

Maggie

    All I can say is the worst is yet to come. Just a feeling, based upon
    how things are being "ignored", I mean handled. Too many loafers, too
    many overpaid "jet setters", too many "shake-and-bake" managers.
    
    Too many people, not enough sales = layoffs.
    
    DM
    

    Is a written transcription of the broadcast available?  If so, would
    someone please post instructions on how to obtain one?  Thanks.  mg

    Re .-1
    
    You must be joking. Don't you think our stock is low enough as it is?
    
    Dave