Conference 7.286::digital

    An outstanding analysis, probably the best I've ever seen.  I strongly
    agree that what we need more than anything else is "big company"
    management.  I strongly fear that it'll never happen.

    re: .1
    
    instead of "big company management" another possible solution is to
    break into seperate divisions and allow the "DEC way..(whatever that
    is)" of management to do what it did best before the company became
    so large that it was no longer effective. Along the same lines if a
    division is mismanaged and not profitable it disappears....this way 
    the divisions that contribute to the profitability of the company can
    continue to do waht they do best instead of having to "politic" with
    every other group in the company that may or maynot be a contributor..
    

    re .2   I like your idea.  I know very specifically that we could have
    been much more successful in the Government Systems business a few
    years ago if we had been divisionalized.  Interestingly enough, Wang
    continues to win significant guvmint business through their Federal
    Systems DIVISION.  But once again, this ain't gonna happen with the
    present management we have.

    re: .3
    I cannot take credit for anything other than trying to apply the
    lessons of history to "our" problem. As best I can remember other
    very successful companies have been the route we have taken the past
    15 years and the most successful solution seemed to be breaking the
    company into divisions that were seperate enities. I'm sure there we
    some that were not successful doing this but I look at the GM's/Ford's/
    Standard Oil/IBM/Chase Manhatten(sp?) etc. and they all seem to have
    "improved their management problems" when reaching a certain threshold
    by using this technique. I can believe that DEC's Government Systems
    Group could be extremely more profitable and better able to address
    the "customers" problems with solutions if they did not have to deal
    with some of the "roadblocks" that the present structure presents.
    
    Some will say our present concept of business units is the same thing
    but it really is not the same.
    
    By the way since the breakup of AT&T by justice in 1982(?) or there
    abouts I view them as presently going throug the shake out period of a
    "divisionalization"...it will be another 10 years before it's complete
    and even though there are no "ties" by the OC's to MA Bell anymore
    the princple and evolution should be the same as in the other cases
    cited...
    

    
    Does anyone know if KO really made the statements that are attributed
    to him the the base note?
    

    Re .5 I don't think Fortune goes around making up quotes from CEOs...
    just my humble opinion.
    
    Re .2 et seq., wouldn't breaking up into divisions mean yet another
    layer of management?  I heard one analyst say a month or so ago that
    "DEC's problem is that it has a 1970s style management structure in
    which everyone reports to everyone else and nobody is ultimately
    responsible."  Would separating into divisions foster this
    accountability?  Or would it just "balkanize" DEC?  
    
    Some thoughts....

    
}    Re .2 et seq., wouldn't breaking up into divisions mean yet another
}    layer of management?  I heard one analyst say a month or so ago that
}    "DEC's problem is that it has a 1970s style management structure in
}    which everyone reports to everyone else and nobody is ultimately
}    responsible."  Would separating into divisions foster this
}    accountability?  Or would it just "balkanize" DEC?  


	These are good points but again I point to history as a guide.

	The division of GM(Ford, enter your own) that is responsible
for engines is a business that must make a profit or be gone.(I'm only
guessing this is the structure, it's what I perceive as the most
successful way to do it) The divisions management should be below the
threshold or critical mass to be efficient and profitable. If it exceeds
this the situtiation that caused divisions in the first place is repeated
and you get "balkanized" again.

	The idea is to return to a size that is manageable, profitable,
takes responsibility and is accountable for their products/actions/decisions.

	That is why the division that does engines does engines not just
for the "parent" compamy but also has to do business with others such as
the government, or other manufactures that require "their" product.

	This is just one small example but I do think this is an alternative
that may or maynot be a plus for DEC in it's present situation. Of course
it's not something that just "will happen" and the mistakes made by others
are bound to be repeated, but in the long haul it just might be a good
solution for DEC.

	We are presently "balkanized" to the point where not many in
some middle management positions are willing to take the responsibility
or be accountable because they are too busy looking after their careers
or bottom lines. This company was made in the late 60's early 70's by
managers who were willing to take risk if they had a good product or good
idea and take the responsibility and accountability that went with the
risk. This country was made great the same way, until that spirit returns
we are in for a long slow decline...

re Note 1342.6 by ICS::NELSONK:

>     Re .2 et seq., wouldn't breaking up into divisions mean yet another
>     layer of management?  I heard one analyst say a month or so ago that
>     "DEC's problem is that it has a 1970s style management structure in
>     which everyone reports to everyone else and nobody is ultimately
>     responsible."  Would separating into divisions foster this
>     accountability?  

        Communications and coordination within a division should be
        easier without the noisy "context" of the larger corporation; 
        conversely communications and coordination between divisions
        might be more distant and complex.

        Thus you need to choose your divisions carefully by grouping
        parts together that need to be a coordinated business.

        Digital, to grow or just to stay even with the competition,
        must continually explore and grow into not one but multiple
        new businesses.  Some will be big and some will start small
        (and may remain small).  Some will need to operate very
        differently from others.  A systems integration business must
        operate very differently from a high-volume low-end business. 
        Divisions that can operate with very different approaches to
        business are necessary for a growing multi-billion dollar
        company.

        (I believe that one of the reasons we failed in the PC space
        -- and never really tried again -- was that our single
        approach to sales and marketing couldn't serve that market
        space.  True, our products were wrong, but we could have
        remedied that quickly.  What really killed our attempts in
        the PC space was the realization that we would have had to
        conduct business in ways that were new and strange to us.)

        Bob

    
    
    Re: .1
    
    I totally agree.  What Digital lacks more than anything is a
    cadre of experienced big company managers.
    
    Ken's belief, at least as reported by Fortune, that we don't
    a revamping of management but must focus more on the technology
    is not going to cut it.
    
    Breaking down into divisions won't do it either because our product
    lines were at least analogous to divisions and we moved on from there
    because our management could not figure out how to keep growing
    otherwise.  I venture that there is not more than a handful, and
    Ken may not be among them, of high-level managers in Digital who
    could hold their own in most any mature, big-company environment.
    
    Many of our managers are where they are because they were in a fast
    growing company and were the most senior person around when the
    growth below them suddenly made them managers.  In other words,
    there was no ladder for them go climb.  They came in and the growth
    pushed them to the top.  I would bet that most anyone reading this
    file knows a high-level manager who would never have gotten to that
    level in an older more established company.
    
    Developing technologically complex products is one thing but managing
    a large, diverse organization is quite another.  Once a company gets
    this big there are definitely some management skills that come into
    play regardless of the business that you are in.  A Lee Iacocca type
    could probably manage Chrysler, Digital, or Procter and Gamble and 
    do well at it, because his skills are in managing a big, diverse
    organization.  Those are the skills that Fotrune is referring to as
    "big-company management" and I think Digital doesn't has very
    few people who have them.
    
    Just think of it this way.  There are lots of other companies out
    there competing in the same economy that we are and not all are
    doing poorly.  What will get us out of this mess?  A new
    technowidget?  And what do we do when that plays itself out as the
    VAX has?  If management is not our most fundamental problem,
    then why are we in the mess that we are in?  
    
    Steve
    

re Note 1342.9 by SQM::MACDONALD:

>     Breaking down into divisions won't do it either because our product
>     lines were at least analogous to divisions and we moved on from there
>     because our management could not figure out how to keep growing
>     otherwise.  

        I guess we draw different conclusions from the same "facts". 
        I regard the success of the past decade as founded upon the
        decisions made during those old product-line days.  I regard
        the malaise of the present as founded upon the "one company,
        one product, one strategy, one approach, one decision"
        philosophy of the post-product-line era.

        Bob

    To further belabor the issue of big company management, I agree
    strongly with .9 that we probably have only a handful of managers
    who could last two weeks in General Electric or Boeing, etc., and
    I'm not sure we have any.
    
    The same people who got us in this mess are trying to get us out, and
    I don't think they know how.  Our senior management is virtually
    all home grown, and to a large extent simply rode a growth wave to
    higher ground.  A lot of 'em were simply in the right place at the
    right time, and we are paying the price now.

    i agree with cookie::lennard (-1), in that most of our managers, from entry
    level to top-level, are home-grown and to a large extent were 'in the
    right place at the right time' and that the result is, in large part a
    contributor to the present problem... but, not to the exclusion of a
    lot of other contributors...
    
    i used to work for Burroughs... from 1968 'till i came to DEC in early
    '82.  i saw tht company struggle with rapid growth in the computing
    machine business, and many of it's employees became managers, with a
    sort of Burroughs Culture background not too dissimilar to DEC culture. 
    i am convinced that it is a characteristic of most growth companies,
    when they finally slow down, to acquire a new 'stability' and a new
    sort of 'culture'... and the success of that company largely depends on
    the willingness of its employees to accept change and adapt.  IBM
    adapted well, when it bet the whole she-bang on computers in the '50s 
    and acquired a new 'culture'.  that company's success today is due in
    part to its willingness to change, and to it's ability to change
    quickly.
    
    the mood i sense in DEC today is a recalcitrant one... it
    reminds me of a spoiled child not wanting to move to a new neighborhood
    or start in a new school.  i am not encouraged by this feeling, and i
    feel it more strongly here than i did in Burroughs.  there are pockets
    of business where change is anticipated and looked forward too, and
    fortunately my unit is one of them... but there seem to be lots of
    places where 'the good old days' are longed for.  
    
    i fear that unless DEC's employees learn how to change, and adapt to
    different business methods, and respond quickly to opportunities and
    challenges in a changing economy and business environment, not to
    mention changing political structures here and especially abroad, and
    learn to take chances, and accept challenges and risks, that the
    company will, within five or ten years, go the way of Burroughs, and
    other 'old school' companies.
    
    We can't return to the old way of doing business, folks.  We can lose
    ourselves in reverie, and remember the 'good old days'... but, unless
    we accept that business is NOT 'as usual', we will suffer a long fall.
    
    opportunities, beyond our wildest dreams of yesteryear are just around
    the corner.  
    
    just think of what could be done in the USSR... if we act quickly,
    decisively, and with courage.
    
    tony

re: .12

I think one thing that relates to what you're talking about with both
Burroughs and DEC is that management models and business models that work
with a certain size company may break for that same company when it grows
large enough due to scalability problems.  A lot of programs that are put
in place to realize economies of scale at a smaller size become unmanageable
due to communication breakdowns when the scale increases beyond a certain
factor (sort of like in Brooks's "Mythical Man-Month").

Often you see processes that are put in place to straighten out chaotic
smaller-scale situations take on the appearance of bureaucratic boondoggles
as the scale gets larger.  That doesn't say that being "process-oriented"
is wrong (as some Noters here seem to think)--it just says that you can't
make the old processes into an untouchable tabernacle on an altar surrounded
by robed bureaucrat-priests.  When the scale changes, the process needs to
be subject to fundamental change, so that it follows from the business need
rather than hampering it.

Reorganizations are SUPPOSED to address this, but they run afoul of the
psychological factors, especially when most of the pool of managers available
to implement the reorganization are "old-timers".  They've been rewarded (to
the extent of being promoted into management in the past) for operating in a
certain manner with certain familiar processes.  It's hard for even the best
managers (in other words, ignoring the "reorg-opportunists") to stop doing
something that they've historically been rewarded for and not only follow
but actually drive a new way of operating and new processes that put them on
unfamiliar ground.

For instance, a lot of "old-time DECies" who were good at flaunting process
to bail the company out of crises by unorthodox means turn out to be bad at
building the new, more appropriate process because having crises (or even
fomenting them on purpose) has been what's given them their opportunity to
shine in the past.  And some other managers who've gotten ahead by fighting
off the "crisis manager" types to introduce some sort of order by creating a
workable process get so heavily invested (psychologically) in "their" process
that they can't stand the thought of changing it in major ways when that
becomes necessary.  Yet the swinging pendulum of change is apt to bonk both
types over the head in time.

Clearly every now and then, when the scale factor changes enough, we have to
be able to step back from habits of working the day-to-day problems to look
at the "big picture".  What is it that we're really trying to do from a
business perspective?  Once we understand that, a lot of the old processes
and personal fiefdoms may have to be thrown out in order to get to a saner
way of doing business.  I look at top management as having the responsibility
to lead that effort and articulate it simply enough that every ordinary line
manager and individual contributor can "see the forest for the trees".  My
gut feel is that top management at DEC has gotten too involved in coming up
with psycho-babble type "visions" and advertisement-like slogans rather than
presenting simple business models from which operating processes at the lower
management levels would then seem to naturally flow.  That's got to change.

								paul

    >>>who could last two weeks in General Electric or Boeing, etc., and
    
    [this is not specifically directed at .11, rather at the concept
    that somehow KO's management is flawed. Possibly even directed at
    ME...]
    
    Bear this in mind: It is KO's style and decisions that have created
    the environment that LETS YOU post notes, using corporate resources,
    on company time, that are of an "employee interest" or "recreational"
    nature. The same environment that allows you to wear anything you like
    to work (for the most part), and allows you to work flex time, and
    allows people to "telecommute". 
    
    If you think most DEC managers would not last two weeks at a typical
    major military/aerospace plant, then maybe you'd better look in the
    mirror. Would your day to day style and work habits be tolerated in
    that rigorous, stratified, hierarchial environment? ( I know mine
    probably would not... ). 
    
    

    
    Re: .14
    
    >Face it, it's taken 9 months to reduce headcount by 6000 people - less
    >than 5% of the population!  I worked for a company that had a 30% RIF;
    >from the time of the first rumor, 'till the last one left was less than
    >2 weeks.
    
    Yes, it has taken a long time to do what seems like a small
    accomplishment, but transitioning or laying off 6000 people is not
    a small job no matter what % of the company it is.  Your figures of
    a 30% RIF don't tell us much.  How big was the company?  Laying off
    30 out of 100 or even 300 of 1000 is not comparable to the logistical
    nightmare of letting go of 6000 of 125K particularly if several
    thousand of them are concentrated in one area.
    
    Steve
    
    

    Re .15,  I hear you, but a lot of the so-called goodness factors that
    make Digital such an exciting place to work, aren't really all that
    important.  I'd gladly wear a tie if that's what's required.  Also, I
    wouldn't really mind stricter controls on conferences like this.
    
    Actually, I left Digital in 1980 to work for a defense contractor....
    (Aerojet Electrosystems).  Yeh, it was rigid and structured, and a very
    nice place to work.  I was most impressed with the quality of the
    management.  They cared a lot about people, and gave you all the tools
    you needed to get your job done, without question.  Basically, they
    had all the perceived "goodies" that Digital did, just with a more
    finely honed edge.  Bennies far exceeded DEC, BTW.
    
    I worked for IBM, Aerojet and a Community College, so I have some
    experience to balance DEC against.  If I were allowed only one word
    to describe what I think the biggest problem with DEC is.....it would
    be SLOPPY.
    

    re: .17
    
    I've seen this story alot since I've been at DEC and always have
    trouble figuring out why people who leave DEC always seem to end up
    back at DEC???? I think it says something for the way we work here
    and for the way work is "structured" in the other companies..
    

    ...I knew it!!!  But, thought it would take a little longer for
    someone to want to know why I came back.  It had absolutely nothing
    to do with DEC being a better company.  I had an urgent, personal
    need to get back East ASAP, and DEC re-hired me almost instantly.

    Can you define sloppy for us?
    
    Is it managers who are sloppy, or individual contributors who are
    sloppy?
    
    If I bring my project in on time-under budget-high quality and work 6
    (or 18) hours a day to do it, is that sloppy?
    
    Are you saying there is no accountability?
    
    Is anyone at any company able to work at peak performance all the
    time...or are people at some companies better at *looking like* they
    are on task while we at DEC are allowed to be more honest about when we
    are and when we aren't?
    
    According to organizational development metrics from some long ago
    class, the larger the organization, the more 'overhead' in
    communication and non-productive time.  I remember reading that 5-6
    hours a day on task out of 8 hours was considered excellent for workers
    in a large company like DEC compared to 7-8 hours a day on task for
    smaller companies (on the average).  
    
    Does sloppy have more to do with how one creates and follows through on
    commitments, or what one does with their time hour to hour?
    
    Holly

re: "burnout"

I think a good organization recognizes that you may have to "burn out"
the top contributors on occasion--and it rewards those contributors in
part by pulling them out of the fire for some R&R, education, "blue sky"
brainstorming, etc.  Personally i don't mind working 70-80 hours a week
in short bursts if that effort is verbally acknowledged and then allowed
to give way to "quiet time".  It's the open-ended burnout, especially (i
would guess) in service jobs, where the only reward is in more money,
that leads to very unhealthy morale situations.  People can only take so
much stress before they start to really falter (see hospital interns for
comparison).  Of course, getting NO reward (money or recognition) would
aggravate this to unbearable levels, which is truly bad management, IMO.

Straight 40 hour weeks are rare in this business, i think.  But don't
keep piling straws on the camel's back without ever lightening up the
load.  Most good performers will bust tail if they know there's some
hope of getting out from under the load for an appreciable amount of time.

								paul