Conference 7.286::digital

    ...sobering thought on a Friday afternoon...
    jb

    
    
    They have made progress....right to the next package :-(
    
    Ken
    

No, you're not the only one who thinks that.
We have been told that the purpose of the cuts is to 
make the company more efficient and eliminate waste.

We have gone way past the point of cutting out the waste at the IC level.
We have not even begun to cut the middle-management waste.

If we do not FOCUS our efforts on ELIMINATING the bureaucratic organizations
whose prime effort seems to be aimed at preserving their existence, then
we will not make any progress.

Kevin Farlee

    Forget about "ELIMINATING the bureaucratic organizations" or any others
    within Digital - none are the source of our problems.  We need to
    increase our customer base, increase our sales and then we can worry
    about making them more profitable.  When you lay-off your sales force
    you must reduce your sales - unless you are saying that none of your
    sales force is working up to your expectations, in which case you
    should lay them all off.  I'd welcome a definitive statement about how
    we are going to increase our sales - which products, how are we going
    to entice the customers, which customers will buy, etc. - no more
    cutting costs.  Does anyone ever look to the future?

    re . .3 and .4
    
    we need to do both. cut, and cut big, into the middle of the layers of
    management. we also need to increase sales through investment and
    leadership in specific areas. i haven't seen either occur though round
    after round of cuts. until it does. i will not be buying any digital
    stock.

    The "Bird-Cage" theory of management cracks me up every time I think of
    it, it's so true. I have observed the "Creative Job Creation" scenario
    many times in fifteen years. We used to think funny. Guess it wasn't.
    
    .mike.

    RE: .0 Andy, you are an optomist if you think we've made any progress
    at all. I fear we are slipping faster. Maybe cuts were and are needed
    but the ones we've had so far don't seem to have helped any.
    
    		Alfred

    I commented once before that managers shouldn't be seen as deadwood but
    as lianes but nobody seemed to understand. A strong liane can camouflage 
    a dead tree so that it looks like alive. It makes cutting both deadwood and
    harmful lianes far more difficult. Think about tons of reports this company
    is producing, some of them necessary, but plenty is just a camouflage
    (intended or not) to cover a purposeless entity. Expensive hours
    are spent both while producing these tons and again if somebody is
    brave enough and really read them.
    
    BTW. how many of us really know what is a good employee like within next two
    years.., or 5 years? Definitely, it shouldn't be measured against last
    decade's IT environment.
    
    --Ritva

    i think we all should stop right now and look back and inspect 
    the situation from a global perspectives.

    generally speaking, i dont think we can expect , when i say we, i dont
    mean only DEC, but industry in general, maintain the same level of
    employment all the time, employment must decline, and/or shift from one
    area to another.

    as we get better, we improve the way we do things, we automate, hence
    we need less people and engineers to make the same thing, hence we
    must layoff.

    look at hardware, now with automated design tools , few hardware
    engineers can design alomost anything you want, something that many years 
    ago took a 100 or so to do, now 5 can do.

    software seems to be heading that way, although not as fast as with
    hardware, but eventually, in say 20 or so years, one can build complex
    software systems with much less programmers than today, and with much
    better quality also.

    one thing i therefore hereby henceforth suggest is that the first thing 
    that president Clinton does is to make a white paper to announce the 
    immediate start of a 4-day work week to cover all except the critical 
    areas in this country. 

    this will help balance things out, and reduce unemployments.

    thank you,
    /nasser

    re .0
    
    Gee, in one of the two or three VP visits to Sydney, in the last month
    or two, I had the opportunity to ask a question of B.J. 
    
    I asked if the "layoffs" were really having a positive effect on our
    financials at all, or should we re-think the strategy. He assured me,
    that the statistics showed that it was a success. Wrong person to tell
    that one to. I have graduate qualifications in Statistics. I know a)
    How poorly DEC tends to manipulate the numbers, and b) how easily they
    can lie.
    
    Issue 1. The "downsizing" has been extremely poorly implemented. I have
    seen sales people that can close $10M/yr+ consistently, laid off. I
    have seen talented support people given their notice, and in so many
    cases, there hasn't been the slightest effort, to de-brief that person,
    so as to pass their knowledge or current business interactions onto
    someone else. True Downsizing involves a combination of improving
    automation etc, to allow the same task to be performed by fewer people.
    It doesn't involve abondoning business, and compromising quality as we
    have done, purely to reduce headcount.
    
    Issue 2. Reducing expenses is not the only wat to improve the
    profitablity.  Take a look at PC-by-DEC, running a $1B business with a
    few dozen people. Take a look at the OEM disk business, where we are
    making an absolute killing with a high quality product, in markets that
    we had never previously considered. This is what will get us back to
    mainstream...
    
    Peter Q.
    

>
>    one thing i therefore hereby henceforth suggest is that the first thing 
>    that president Clinton does is to make a white paper to announce the 
>    immediate start of a 4-day work week to cover all except the critical 
>    areas in this country. 
>
>    this will help balance things out, and reduce unemployments.
>
>    thank you,
>    /nasser
>
Exactly. Here in Switzerland we get at least 4 weeks annual holiday and work
a 40 hour week. Some countries do even better. For  example in Germany
they get 6 weeks paid vacation and work a 37 and 1/2 hour week. Any time
I talk to friends working in the computer industry in the States they
seem to be working all hours and not taking their measly 2 weeks holiday.
When its necessary we work the evenings or weekends but its
the exception not the rule.

Nasser is right. There is less work and it needs to be divided better.
An employed person costs society far less than when unemployed.

B.t.w I recently read a report which showed that when the length of
the standard working week was cut productivity increased. Seemingly
the people involved became more focussed on their work.

/Paul.

    A recently released study of Fortune 500 firms that have
    down/right-sized, shows some pretty interesting stuff. The findings
    were summarized in Business Week, and if memory serves me correctly,
    they are...
    
    1) Employee lawsuits againsts the firm increased dramatically
    
    2) At a time when an organization needs its people to take risks,
       experiment with new ideas and act more  entrepreneurial, downsizing
       produces the opposite behaviors. As people fear for their jobs, they
       tend to become more conservative and follow established procedures.
    
    3) All organizations (repeat ALL) studied, failed to surpass the annual
       sales generated prior to the first people cuts being made. They
       essentially became more profitable, but flat in sales and market
       share.
    
    4) Each new headcount cut produced a short uptick in the price of the
       firm's stock.
    
    5) Organizations cut people prior to determining what  tasks and jobs
       were critical to the company's success. So the unnecessary work
       still continued to be performed along with the necessary work...with
       fewer people.
    
    Now for some personal thoughts on this issue of progress that was posed
    by the original note. Perhaps, Digital's expenses were too high for a
    firm doing $13 billion in sales. But, maybe, just maybe they were
    acceptable for a firm doing $20 billion. Where is the articulated,
    corporate vision and strategy for making this happen? When will we
    learn that there is no shame in recognizing that we have to sell and
    sell more to exist? I'm sorry to say that during the past few years
    we have been guided by individuals who, to quote Charles Dickens, "know
    the price of everything and the value of nothing".

    From my perspective at HLO, things seem to be getting a little
    better in the past month or 2. We've actually got a capacity
    crunch right now because people are pulling in their demands
    for NVAX and Alpha chips. I hope this is the first ripple of 
    things turning around.

 Some progress is being made, but you can't change a company this
 size and this large overnight. But consider what already has been
 done.

    1) Through serp,tsfo, etc about a 10% employee reduction and
       more planned.

    2) Large reduction in manufacturing sites.

    3) Consolidation of lots of small engineering sites.

    4) Alpha & WNT -  a real product vision in place.

    5) The PC division - an excellent example of how successful
       we can be.

    6) A new CEO, with a rep for moving fast.

    7) A new CEO, who charged ahead with closing of manufacturing
       plants.

    8) A new CEO, who is already putting his stamp on the company.

 Sure everyone agrees all this started about 2-3 years too late. But
 better now, then the Wang solution.

 IMO

 While everyone is bemoaning the unfairness of the cuts. So far I've
 seen two major kinds.

 Functional and percentage.

 Functional - an entire group is cut, everyone in the group of
 course feels they do a critical function, or are working on a
 project critical to Digital. But afterward things continue just fine
 Digital is very overloaded with groups that spend a lot of time
 justifying how important they are to DEC. They are now fewer of
 these and will be even fewer.

 Percentage - This hits all of us the most. Whatever the method, it
 seems unfair. Also from past management experience, I've learned
 that peers tend to be poor judges of an individuals performance.
 I can't say all the cuts have targeted the weakest performers, but
 of the ones I have first hand knowledge of this has been the case.
 This is from engineering, I have no experience of what's happening
 in the field.

 What I think is a remaining big problem? As mention before, many keep
 saying middle management, without giving reasons. Well I agree Digital's
 middle management leaves something to be desired.

 Digital's rapid expansion through the late 70's and early 80's
 created many of today's managers, many got their jobs just by being
 in the right place at the right time. No required training and no
 real measurement of success or failure.  Think about it, what does it
 take for a manager to fail badly enough to be removed from his job?
 For an IC the metrics are much more straightforward. Digital is
 currently filled with so-so managers who are very good at protecting
 their jobs. These people have no place to go, to make room for likely
 better successors.

    The current solution to this is reorg's. The real purpose of
    many reorg's is just to get a so-so manager out of the loop.
    ("ah woops Harry there doesn't seem to be a place for you on
      the org chart")


    Suggestions - job rotations and term limits in a job for middle
                  management.


 Of course this alone is not a solution, but many of the right things
 we need to do,  Palmer is already on record as wanting to do, reduce
 the # of products,  clearer lines of responsibility and become sales
 focused.

 But the implementors of this are middle management, as .12 mentioned,
 downsizing causes even greater tree hugging.

 good luck bob.

    Re: Note 2206.14 by DELNI::MOONEY
    
>   1) Through serp,tsfo, etc about a 10% employee reduction and
>      more planned.

    I read somewhere that our high watermark for number of employees was
    ~136K in 1989. Now we have ~108K employees. That works out to a ~21%
    net reduction in number of employees, if I have my math right. 

    If we reach the stated goal of ~85K employees, that will be a net total
    reduction of ~38% of the employees.

>Nasser is right. There is less work and it needs to be divided better.
>An employed person costs society far less than when unemployed.

Ok.

>B.t.w I recently read a report which showed that when the length of
>the standard working week was cut productivity increased. Seemingly
>the people involved became more focussed on their work.

But if productivity increases when the work week is cut, and we want to pay
more people to do less work (see above), then shouldn't we be *increasing*
the work week on the theory that productivity will *decrease* and it will
take more people to do the work?

-steve-

    ref .16

    time for little symbols. 

    let work = W
    let size of Employment = E
    let length of week = L

    currently we have         W = E * L            ----------(1)

    BUT since we got more efficient, this means the amount of work W will
    be less than before, (process is shorter, more automations etc..) hence 

    (1) can be written as

                           W-dW = E * L           ------(2)

    now, you have a choice, you can play with E or L to keep the equation
    balanced. (since left hand side cahnged, we must change right hand
    side)

    what happens now is this
                          W-dW  = (E-dE) * (L)  -----(3)
    while we should try to do this
                          W-dW  = E * (L-dL)    -----(4)

    ie  in (3) we reduces people to balance things out, while what we
    should do is (4), i.e. reduce length of work week instead.

    /nasser
    

It was Oscar Wilde who said that, not Charles Dickens.

    
    	RE .0-.18>
    
    			I dont know, lets just get it over with...
    

    Sorry, getting it over with just won't happen. When asked, the UK CEO
    said that layoffs would be 'perpetual'. Whilst this was not a wise
    choice of words, what I think he meant is that they'll be ongoing until
    we make a profit.
    
    Palmer says that his job is on the line if DEC isn't in the black by
    Q3FY94.
    
    /a

 Re: .20

 Sorry Andy, didn't quite understand did you mean that Palmer said his
 own job is on the line or the UK CEO's jobis on the line.

 (Though I guess it's academic, if we aren't in the black by then, there
  won't be ANY jobs!!)

 Cathy

    Palmer said that his job was on the line.
    
    Of course Shingles' job is too....

    Andy, you're an optimist. The ant's only got 1 leg.
    
    Incidentally, someone earlier said DEC stock wasn't a buy. I reckon it
    is because I predict that unless something changes radically, DEC will
    be subject to an aggressive takeover bid, by either Bill Gates'
    Microsoft, or a large Japanese conglomerate. Best if you US employees
    hope for the former, because if the latter, the US business (which is
    dragging Europe and GIA down) will be reduced to a services and sales
    function, with all manufacture being done in GIA (inc Japan of course),
    UK, and Ireland.
    
    Laurie$Crystal_Ball.

    William Gates or Microsoft has no rational interest for acquiring
    Digital.

    The frequently mentioned acquiring companies of Digital are Mitsubishi
    and Matsushita, but there is now no reason to believe that they are
    actually interested in acquiring Digital.

    Digital could also be acquired by an American firm in the expectation
    that its breakup value would exceed its going concern value after
    selling assets and forming smaller independent companies from the
    remaining assets and employees.

    You forgot AT+T. If DS thought it was a viable route, he might have
    gone there in order to be able to head up AT+T's DIGITAL division.
    
    Andy

    The names in .23 were "for examples" and not specific. I believe DEC is
    ripe for asset stripping.
    
    Laurie.

    re:  What ifs ...
    
    I wouldn't be surprised if we were bought by a Japanese concern
    expressly *for* our manufacturing capacity.  Many Japanese firms
    are actually moving manufacturing operations *to* the US, as the
    labor and plant costs in Japan have skyrocketed.  Buy a Sony TV 
    or a Nissan sedan, and there is a significant chance that it was 
    made in the good ole' USofA.
    
    AT&T has NCR to play with now, and new markets to pioneer (such
    as the Information Utility and competing with Cable TV) so I doubt
    very much that they would be interested in Digital any more.
    
    All in all, I think the current company setup would make it difficult
    for a hostile takeover to succeed.  The more likely scenario is that
    top management would actively seek prospective buyers at some point,
    possibly making a nice bit of change in the process.  After all, it's
    happened before ...