Conference 7.286::digital

I'd be careful about getting rid of all contractors - I know of at least one
product that would probably have to be cancelled. (I'm not working on it, just
in case anyone is trying to guess.)

If they could find qualified people internally, just getting everyone up to
speed would take a couple of months, and, as usual, it is behind schedule. 
This might be tolerable, if they found people who had worked on a similar
project before. But, if they have to train people from scratch, it could take
6 months, which would delay the product beyond its window.

Judicious use of contractors can keep the company from having to lay off.

(No, I'm not a contractor.)


As for your other ideas:

>Freeze all pay raises. 

I have a problem with that, after the health insurance pay cut of last year.
If there is another one this year, that will mean a pay cut. I don't think I'm
the only one who can't afford that.


>Move Corporate HQ to Europe
Or replace some of our VP's with European ones. Pier-Carlo Falotti (Did I get
his name right?) makes more sense than all the others I've heard recently,
combined.


Some of my own:

Institute a program that when something fails (to use an old example, PC's),
find out why and correct it, instead of dropping the line and buying them
elsewhere. (And, it seems, keeping the managers that screwed up.)

If we keep on this path, we'll have to downsize even more. I don't see how we
can stay #2 and be a reseller. If we corrected our problems we wouldn't have
to downsize as much.

I don't have the complete solution here, but executive pay should be tied to
long-term performance, not short-term stock prices. I want the company to
be here for a lot longer. Concentrating on the short term isn't the way for
this to happen.


I'll end this with a mention of Memorex: about 10 years ago, there was another
recession. Memorex brought in bean counters who cut expenses to get good
results during the recession. In particular, they cut R&D. After the recession,
all their competitors had thin-film drives and they didn't. The company
got split up and sold; Burroughs bought the computer products division, and
Tandy bought the consumer division.

I don't want to see this happen here.

    If it were really that easy, you would be making a bundle as a
    consultant to IBM, DEC, WANG, PRIME, ....
    
    But is is not easy and I suspect you really know that ...
    
    And boy am I glad you aren't takine over on Monday !
    

re Note 1507             The "New Digital" One Man's Ideas               

I'll echo .1.

The biggest single contribution you can make on Monday, Dick, is to set 
forth a policy of holding an autopsy for every product, marketing, or service 
failure.  Get every manager to analyze his/her mistakes, and every manager 
of managers to review those and make recommendations for preventive action.

Sample them and publicise the ones that look like shoddy workmanship.  
Fire the managers all up and down the line when any cover-up occurs.
Make brutal honesty your motto when dealing with your managers.

Dick

    
        - Freeze all pay raises for at least all of FY92.

Based upon this suggestion, I assume you like the idea of freezing pay raises
which has been tried several times in the past five years. Like many other short
sighted ideas, the only thing this does is hurt a large portion of the employee
population, reduce morale, and lessen the incentive to go above and beyond the
call of duty in performing one's job... which is the only way DIGITAL is going
to get moving again. Do you think it would be fair to the people who are due
for a merit increase in July 1991, who's last raise was in Jan 1990, to tell
them that they have to wait another year(and at the same time some of the people
sitting next to them got their raise in June because they waited their 18+/-
months.)

/art

    BTW .1, we ain't #2, and have not been for quite some time.  We're
    something like 5th, unless you choose not to count Japanese firms.
    
    I also agree on Pier-Carlo.  I've been impressed with him for years....
    and I think he could make a big difference as our new president.  I
    think I sense leadership in P.C.F., something I wouldn't even begin
    to know where to find in U.S. senior management.
    
    re .3 (I think)...our new management system is supposed to perform
    that filtering function.  My fear is that it will be corrupted.  We
    simply do not have the data to make hard P&L analyses on a per-product-
    basis, so the allocation machine takes over...and pretty soon
    everything is roses again.
    
    One more idea.....people who are excess I would send home on half pay
    and full bennies until we could figure out how to reassign and/or
    train them.  It's cruel to keep them within the system trying to find
    a job the way we do it now.

    re .4 ......I don't think fairness is the issue here......SURVIVAL is.
    
    I didn't want to mention it in my first missive, but I would think
    about a total ban on all raises (and executive stock options) until
    se returned to some reasonable level of profitability on a consistent
    basis, even if it took five years!  And then when I turned the money
    machine on again, I would also turn on the profit-sharing machine as
    well....but I'd need most of Tuesday to figure that out.
    

    While layoffs are are awful and should be avoided if at all possible,
    the simplistic approach doesn't hack it.
    
    Contractors are necessary when we need particular skills for a short
    time.  If we don't have the skillset in house (and we often don't! we
    are as a whole terribly parochial), then either we hire somebody or we
    use a contractor.  The latter makes a lot of sense.
    
    External hiring makes sense too for the same reason:  Would you not
    object to a good new VP to handle marketing in areas where we've
    failed?  Probably not, but why not external people if there's nobody
    in-house with the skills?  You can't train somebody to do something
    when there's not even anybody to tran them, and senior level skills
    require experience.  We need expertise, not just warm bodies.
    
    Our current rules in those areas are thus rational:  We can have an
    external hire if we can justify it, which isn't easy.  And we can have
    external hires for new geographies:  How else can we staff up our (eg.)
    new Czech and Slovak offices?  Transferred American asemblers?  Yeah,
    right.  Absolutes don't make sense.
    
    The main thing we should do is dump managers who fail, rather than
    promote them.  Right now, we have some real cutup failure group
    managers who have been punished by promotions.  We need accountability
    at high levels.  Our problem is not too many grunts, it's too little
    being delivered, because we have missed too many market opportunities
    while chasing aroaund managers'-ego projects.  With failure so common,
    the good ones get punished for not being "team players" and failing too!
    
    Once we get that straight, we can rationalize the rest of the labor
    pool accordingly.  Otherwise we're the next Wang.

	As long as we're talking Alice-In-Wonderland here:

	1) Destroy the monolithic organization that stands between
	   support folks and engineering like a great Berlin Wall.

	2) Set up billing of  product groups for every remedial 
	   action taken by support groups for their product.

	3) Insist product leaders/project managers of buggy, 
	   expensive to support products be called on the carpet
	   ( at VP level ) for performance reviews.

	4) Set it up so that a salesman working on a "biggie", could
	   mobilize resources at the wave of a hand:  marketing,
	   reference site visits, technical folks, benchmarks, etc.

	5) Make it EASY for internal software groups to write
	   and market software for:  Apples, Macs, PCs, Suns,
	   IBM mainframe OSs, SCO Unix ....independent of any pressures
	   to make it "work with VMS" (or networks, or whatever
	   other horrible bags could be tacked on ).

	6) Farm our Field Service program out to 3rd party vendors, or
	   do it right.  The squeeze is so tight in most field 
	   organizations that service reps do the "Sorry, No Parts"
	   tapdance daily.

	

    Although pay and incentive freezes sound good and are emotionally
    satisfyng to contemplate, they are about the worst possible idea. 
    Morale goes all to hell.  People become as parsimonious of their time
    and effort as the company is of its money.  Moreover, your best people
    siomply pick up and leave.  They're the ones who can most easily find
    employment elsewhere.
    
    Let's get real.  Digital is now "just another company".  This is just
    another job, not a lifetime family membership. 
    
    -dave

    Whoah on the canning of hardware support!   Sun has started to do this
    in some offices, and they are giving up a lot of after-the-sale
    business.  Would be a SERIOUS mistake to farm out Customer
    Services....sometimes what makes the difference in our increasingly
    commodity-driven markets.  
    
    Service makes the difference!  
    
    (BTW, I'm not in C.S., just know its value)
    
    Gil
    

    re .10
    
    I'll second that opinion.  I was visiting relatives in Oklahoma last 
    week, and wound up talking with a cousin who spoke about the big
    mistake IBM had made a few years back by cutting down on services for
    small customers in his area.  Many of them (including his firm) went 
    to third parties.  IBM is now trying to get them back, but it's an 
    uphill fight.  Reason IBM is worried is that the third parties don't
    have any brand loyalty - so they are slowly weaning their users of
    proprietary equipment...
    
    /Dave

	Whoa ! Whoa, you guys.  I merely suggested that we do it right,
	or not at all.

	Pinching pennies on spare parts for large systems/ customers
	has generated a great deal of ill will.

	If I were a customer of DEC's, knowing what I know about
	our Field Service organization, I'd go 3rd party in a heartbeat.

	All the fancy, high-buck, high-tech Vaxsims and SPEARs mean
	zip if the guy who shows up to fix your down system has to
	order the part to get you going....

	I could tell you stories....

	Steve H

    Agree that selling off services in any way, shape or form would be a
    major mistake.
    
    The service groups (HPS,SPS, etc.) have been the only consistent money-
    makers in this corporation for several years....in fact, I would bet
    that for FY90 and 91, they may have been the only profitable entities
    period!
    
    F'rinstance, Software Product Services (SPS) passed the 1 Billion buck
    NOR point on May 15th, and was running at a 50% contribution rate. 
    That's incredibly good business.
    
    Too bad that all that profit has to go down the chute to support losing
    hardware product business (and most software too).

    
    
    	Someone told me once that sales people don't get enough
    	credit selling services to make their budget thus they
    	spend a much larger portion going after big ticket make
    	or break type items like hardware...
    
    	Is this still true and if so why ?
    
    						Mike
    						----	

    A dollar in CERTs has the same value, whatever the source.  The problem
    is, the effort involved in selling  services versus the an equivalent
    amount in hardware is potentially a good bit greater.  
    
    A large customer can decide to buy $100,000 worth of disks in a day, if
    you hustle.  To sell something like a 6 month technical residency will
    probably take a couple of weeks.  A large system integration sale can
    take a year or more.  This, in an environment where the sales lanning
    horizon has typically been measured in weeks.
    
    -dave

>    F'rinstance, Software Product Services (SPS) passed the 1 Billion buck
>    NOR point on May 15th, and was running at a 50% contribution rate. 
>    That's incredibly good business.
>    
>    Too bad that all that profit has to go down the chute to support losing
>    hardware product business (and most software too).


What may I ask are all these support folks supporting?????

Team Xerox?  IBM Mainframes?  SPARC clones?  COMPU-add PC knock-offs?

Just curious...  And please take this question seriously...  I really do not 
understand all the implications of these arguments.  It seems sort of silly
to imply that we can milk services while abandoning our roots (HW/SW).

/mike

	I keep forgetting, the new 'Field Service' includes a lot
	of stuff.

	I am talking about the hardware 'iron' repair business.

	And, YES, we should be supporting MS DOS stuff, Suns, 
	HPs , IBM whatever. IF it can be done profitably.  This
	company's got a lot of expert folks working for it.

	We should be writing software for any platform that 
	is appropriate ( meaning, there's a market, and we
	can sell into it properly ).

	You've heard, I trust, of 'System Integration.' ?

	Steve H

    
    	re .12
    
    >Pinching pennies on spare parts for large systems/ customers
    >has generated a great deal of ill will.
    
    >If I were a customer of DEC's, knowing what I know about
    >our Field Service organization, I'd go 3rd party in a heartbeat.
    
    First of all, from what I gather, you are implying that the local
    Digital Services office has not always had every part needed to
    fix every problem on every machine that has ever broken, on this
    particular site that you are familiar with. If my assumption is
    incorrect, please correct it.
    
    If my analysis of your statement is correct, let me tell you that
    this is not an uncommon occurrence, and certainly not particular
    to Digital. Let me ask you this: can you go to *any* auto service
    center and get *any* part that you need for the cars that they 
    service? You know that you cannot. 
    
    Logistics organizations are subject to budgets also, and are driven
    by "recommended spares lists" for various machines. They cannot
    possibly be expected to afford to stock an entire 8700 or 9000 in
    their stockrooms...too costly.
    
    There are mechanisms in place (priority ordering schemes from 24x7
    stockrooms) to ensure that unstocked parts reach the customer in
    a timely manner.
    
    If the problem that you suggest really exists, then I suggest that
    it may have its' roots in a local management decision to stock at
    a certain level, and not in any corporate policy.  This is only 
    speculation, however; I don't know all the details. Nor am I 
    interested in any "horror stories" you may have.
    
    I have had *many* experiences with Digital's field service troops
    and I rate them very highly. And no, I don't work for Field Service
    (Digital Services). They are a very highly dedicated group of 
    individuals with very demanding jobs, and they perform quite well
    under a variety of circumstances, in my experience and opinion.      
    
    Your note tells me that you have a very superficial knowledge of
    our Field Service troops, logistics, today's technology (try to
    buy an MCU from a 3rd party organization), AI techniques and
    challenges, and Digital Services in general. 
    
    >If I were a customer of DEC's, knowing what I know about.......
    
    I certainly hope that you do not have any opportunity to interface
    with any of our customers, with an attitude like that. If you see
    a problem, it is your responsibility to take steps to correct it, not
    to walk around bad-mouthing an entire organization that contributes
    a *large* chunk of cash to our bottom line.
    
    John Sobecky

	re: .18

	Actually, I spent 3-1/2 years carrying a toolkit for
	Field Service.  I feel like I've got a pretty good handle
	on it.

	You disagree with my assertions, yet don't want to hear
	any "horror stories" that would back them up ?  Don't
	confuse me with the facts ?

	I think that the typical DEC Field Service person is
	earnest, honest, hard-working, underpaid and undertrained,
	and the problems I mentioned are not his fault.

	The logistics penny-pinching I described goes on, and
	it has a definite effect on customer satisfaction.  This
	is down in black and white on the survey scores I used to
	see.

	Sorry, but when DEC corporate says "You will respond in 
	two hours to any system X call", then the office should
	stock parts for system X.

	When 8600s were the hottest thing we had, we were committed
	to 2 hour response time on 8600s.  Yet, the command decision
	was made not to stock ANY parts.

	The question is:		Is this RIGHT ?

	Regards,

	Steve H

    
    	re .19
    
    	No, I don't want to hear any horror stories. I spent my first
    	9 1/2 years with DEC carrying a toolbag. I have spent the last
    	4 years teaching Customer Service Engineers. I have been a
    	"customer" of Digital Services..they maintain our lab equipment.
    	I doubt very much if your horror stories would impress me.
    
    	Once again, I disagree with your basic premise that our logistics
    	policy is unsound. Once again, I say that if the problem you seem
    	to think exists, it is part of a local policy only and not part
    	of corporate policy. And your statement in your .12 response...
    
    	>If I were a customer of DEC's, knowing what I know about
    	>our Field Service organization, I'd go 3rd part in a heartbeat.
    
    	unjustly broad-brushes an entire organization. Doesn't really
    	give them a vote of confidence, or promote teamwork, does it?
    
    	If you see a problem, do something constructive to fix it. 
    
    	Of course, this discussion has nothing to do with the base note...
    
    	John S.
               

    RE: Pier-Carlo.
    
    P-C Falotti is currently president of digital Europe. Perhaps the
    company should be split by area and results announced by quarter
    by area. Areas could be U.S./Europe/G.I.A.
    
    Revenue over employee by area may show up some interesting
    comparisons.
    
    Don H.
    

>                                               <<< Note 1507.21 by AYOV28::DHUNTER >>>
>
>    RE: Pier-Carlo.
    
>    P-C Falotti is currently president of digital Europe. Perhaps the
>    company should be split by area and results announced by quarter
>    by area. Areas could be U.S./Europe/G.I.A.
 
    This will certainly tell you when Europe has a recession while
    the USA is in a boom. May not tell you much about how the 
    company is performing under its relevent regional conditions.
    
       
    >Revenue over employee by area may show up some interesting
    >comparisons.
    
    Revenue per employee only means something if the two organisations
    have the same structure, or differences in structure are factored in.
    It is a broad indicator used by Wall Street because they dont have much
    more information than that to go on. Deciding the fate of the company
    on Macro indicators when you can do the work and get proper data is
    a stupid thing to do. In this case witholding true indicative performance 
    information from the marketplace may be our worst mistake.
    
    I am getting very concerned that we are misusing the data we are
    getting and using data that does not show us where our real problems
    lie. The fact that people dont pay attention to the information they
    are presented with is sad. The fact that people may lose their jobs
    without fixing the real problems is even sadder.
    
    
>    Don H.
 
    regards,
    John
    EIC/Engineering, Sydney   

    

    re: .22
    
    John,
         I agree mostly with your points. One of P_C_F's quotes a couple
    of years back was that digital has too much data and not enough
    information.
    
         Stats/data/information are only valid if interpreted correctly
    and acted upon.
    
         Last year British Telecom dispensed with two layers of management.
    Approximately 5,000 managers were fired. At the same time B.T.'s
    service levels to Joe Public improved and continue to do so. They are
    also extremely profitable. What's interesting is that B.T. are private
    monopoly.
    
         My point is this, if a British monopoly can get rid of two layers
    of management structure, why does a global corporation in a highly
    competitive market maintain it's management structure intact (even
    invents a new one - NMS) whilst laying off thousands off indians ?
    
    Don H.
    

Another quote from PCF:

    COMPUTING DIARY PIECES

    A MICROVAX has been discovered in a recycled form as the ceiling to a
    McDonald's in Chicago; the president of Digital Europe is quoted as
    answering the question why are there no women on Digital's board with
    "Because we all have one at home"

    Computing, London. Friday, 5 July 1991

From UK_LIVEWIRE 5-Jul-91.

>    I am getting very concerned that we are misusing the data we are
>    getting and using data that does not show us where our real problems
>    lie. The fact that people dont pay attention to the information they
>    are presented with is sad. The fact that people may lose their jobs
>    without fixing the real problems is even sadder.
    
	Wall Street should be called Bean Street.  Simple minds
	need simple numbers.  Harold Geneen in the 50s and 60s went
	from company to company making the standard ratios look good
	by gutting the companies.  Stock went up, and he sold and
	left for the next eagerly awaiting victim.  I was at Raytheon
	when he was screwing around with it, and that's exactly
	what he did.

    RE: 24
    
    As I do not read your source, I did not get the context
    between recycled micro's and mens need for homesupport - if any
    context?
    
    britt
    
    btw: too much recycling of men may not be succesful, as intelligence is 
    evenly spread among sex... or... could it be that somebody has not
    discovered this yet.... or ... that somebody really has discovered it,
    but do not want.... well, this is outside the context