Conference 7.286::digital

>>    Should we shrink this company to be more effective in our industry or
>>    should we be in more industries?  Ie...GE.

	We should and shall shrink this company.

	Jim

    We can't handle what we've got and you suggest expansion?
    
    Dick

We are currently not efficient in the areas which we are trying to cover.
We need first to become efficient at doint what we are currently doing,
i.e. The most return for the least expenditure.


Then we can take over the world ;-)
Kevin

My understanding of the GE approach to being in multiple industries is:
"Be first, be second, or be out."  They will sell or shut down any
business unit that isn't first or second.

   Gary

    GE will not invest in any venture that does not bring in revenues of
    $100 million or more. John Welch's strategies did get him a nick name
    as "Neutron Jack", because of his decisiveness in canning the
    businesses/closing builidings.  He came out successfully after 2 years
    as the President with growing revenues, profits, and STOCK PRICE..
    
    Kandha

    For the past few (five?) years, Digital has been a hot-air balloon with
    a hole in the top - slowly sinking despite ever increasing volumes of
    executive propellant and, of late, jettisoning of ballast.  IBM, on the 
    other hand, is as the Hindenburg - sailing pompously along, unaware of 
    the reason everyone else has switched technologies.
    
    Well, the Digital balloon has touched down and someone noticed the
    sky showing through.  Whether or not the hole will be repaired or more
    'ballast' be thrown out remains to be seen, but...
    
    The sparks have hit the Hindenburg and she's abaze.  It is unlikely the
    fire will be contained by separating the component parts.  The
    opportunity to sieze IBM's position of dominance is now.  The window is
    unlikely to remain open long.
    
    Digital has a proud tradition of stepping up to opportunity, looking,
    touching, and thinking to itself: "I can do this."  Then, when the
    customers come by to see what we're doing, Digital says: "Just looking, 
    thanks."
    
    Will Digital finally belly up to the bar and seize the day?  As the
    song says:  "I look to find a reason to believe..."
    
    
    Don
    

      Re .6
      HUH???
        According to an article in Newsweek or Time (got both...don't
    remember which..) this week, IBM just announced another 40,000
    employees will go in the very near future.. Now HP is announcing a big
    "TFSO" similar to the ones DEC has had... Dozens of other companies are
    doing the same or similar things.
    
        What's REAL surprising is that it seems that none of the people who
    make the decisions in these companies has done any HISTORY reading. An
    article in U.S. News a few months back entitled "Amputating Assets"
    very CLEARLY outlined the basic fact that "downsizing to profitibility"
    does NOT work.. The article enumerated a fair number of examples, and
    not ONE of the companies came out higher in the black AFTER the
    downsizing than they were before. The article also listed the numerous
    negatives: Loss of morale, fear, lack of motiviation, lack of
    incentive, sickness, good workers being dumped while deadbeat political
    people remain protected... 
    
       When Digital began over 3 years ago to "downsize", what was the
    stock selling at??
    
       Now, 3 years later, what is the stock selling at??
    
    
       

    I keep hearing about this kind of statement, but I have to be
    suspicious of anything that is so easily influenced by self-serving
    selection of cases.  All the enumeration of unsuccessful cases (which
    make news and thus sell magazines) might be just a fraction of the
    total cases of downsizing.  Maybe the successful ones never are
    discussed in public?  Its certainly not in line with the American
    common prejudice - more jobs in the USA is better.
    
    If a company has on person doing unneccessary and/or unprofitable work,
    it is better rid of that person.  That is a fact of life.  Now, if you
    extrapolate that to a situation where the number of people is large,
    then the benefit from reducing headcount seems clear.  In order to
    believe the "Amputating Assets" theory, I would need to know what other
    kinds of bad decisions the companies were making.
    
    Dick

    Re .8
    
    Elimination of positions/people/functions will, quite often and quite
    naturally lead to short term bottom line improvement.  Typically,
    because in a manufacturing business, the process is:
    
       develop ---> build  ---> market/sell ---> get paid --->
      ^                                                        |
      |                                                        v
       <---   <---   <---   <---   <---   <---   <---   <---
    
    Obviously the first three steps cost money - hence investment and
    start-up capital, etc.  Once a company has been running for a while,
    there are often several of these cycles in various stages going on at
    once.  It follows that, by deleting one of the first three, the fourth
    will still happen and at the end of the accounting period, the bottom
    line will improve.  Temporarily.
    
    The unprofitable company must investigate eaaaccchh of the cycles to
    see 1) is the cycle/product profiable and, if not, 2) why not.  If the
    product has outlived its useful life - e.g. buggy whips, the company
    must stop the cycle.  The choice of what to do with the
    people/equipment is either build something else or get rid of them.
    
    This form of downsizing/correcting is unquestionably valid.
    
    What downsizing failures do is 1) cut people randomly (for example 10%
    across-the-board) and 2) chop functions/products without analysis. 
    Generally this is done because it's easy.  Management is, after all,
    made up of people.  Like the rest of us, they have different goals and
    will take the road which most quickly fulfills those goals.  
    
    The starter of a company is often a builder and his goal is
    expansion/creation.  In many cases, a person who manages a company has
    more personal (i.e. not company related) goals and sees the company as
    a means to that end.  His decisions are more likely to be shorter term.
    
    Company investors/owners fall into three categories - the believers who
    want to be a part of the creation/building; the futurists who see some
    long-term gain; and the speculators who are investing not for security
    but for a salary.  The third category needs a monthly payback and very
    much supports short-term management.  And they support the rapid
    dissolution of a company.
    
    I guess as an employee one must determine what type of people are in
    charge and make your decisions based thereon.  Although that does
    contrast with what appear to be North American ideals of loyalty.  They
    also clash with man's innate need for immortality through work.
    
    Don