Conference 7.286::digital

    The answer might be found at Apple.  Even though Sculley did/does have
    a vision for Apple, his key strengths were marketing.  This clearly
    bought him some time, but Apple's current malaise suggests that it
    wasn't enough time.  The question still looms - does Apple have a
    future?  It's key executives - if one looks at their stock
    purchases/sales over the past year - have voted a resounding "No",
    selling virtually every bit of Apple stock they could get their hands on.
    
    Of course a company needs a vision.  If you don't know your
    destination, how will you know when you've arrived?  Gerstner's
    statement is analogous to starting out on a trip and saying, "I don't
    know where we are going, but I'm going to make sure this car doesn't
    leak any oil or gas along the way."  So we will arrive no where
    mechanically sound.	

    
    re: .0 and .1
    
    I think the guy was making a point.  We speak way too much about
    high falutin' concepts ("vision", "visioning", "managing chaos", blah,
    blah), and we don't focus on fundamentals.  I think he's saying, pay 
    attention to the basics.  Hit lots of singles and doubles, and don't 
    make repeated errors, and you might just get to be a pennant 
    contender again.
    
    It's not that you don't need a strategic direction (of course
    you do), but companies like IBM and Digital need to set those
    directions where they're closest to the customer (the CBUs in
    our case), the new baby blues in theirs.
    
    Glenn
         

Gerstner's statement could simply reflect a belief that he is running a
conglomerate, similar to, say, GE. The pieces need individual "vision", but for
global vision, financial metrics are more appropriate.

I suspect, in fact, that this is the right answer, for both IBM and DEC: we must
cut our businesses loose from each other, with each business measured on
profit/loss. We must let go of the notion that our hardware and software
offerings need to be "complete" and "comprehensive". We must identify our
SPECIFIC strengths and pursue them vigorously. We must shed some of the "me-too"
items that don't have any reasonable prospect of showing a profit.
 
--RS

>    selling virtually every bit of Apple stock they could get their hands on.

     I wonder if the pending tax changes were also a factor. I've
     heard many [huge] investors have been doing this mainly due to
     the new tax structure.

    This reply is long and I apologize in advance.  I'll post my conclusion
    first, followed by a form feed and the thesis that leads to the
    conclusion.
    
    What of vision at Digital?  Will (or has) Digital abandon(ed) vision 
    from the top in favor of business controls?  Will vision come from upper 
    management as it does (or should) at GE and HP?  Or, will vision become 
    the responsibility of middle-, lower- or non-managers?
    
    Steve
    
    GE was also mentioned in the article and it is true that the IBM model
    will apparently follow that of GE:
    
    	From Wall Street Journal, 29-Jul-93, p. B1:
    
    	  Mr. Gerstner offered one clue to his thinking about IBM when 
    	asked to name a company he considered a management role model.  
    	Soon after he came to IBM, he said, he spent six hours with 
    	perhaps the most successful apostle of the pure-management 
    	approach, General Electric's John Welch.  "I said, 'Jack, you've 
    	run a $60 billion company.  I'm about to.  Let's talk," Mr.
    	Gerstner recalled.
    	  But he quickly noted that the GE management model - picking 
    	a strong manager and letting him run an autonomous business - 
    	may not apply to IBM.  GE's grab bag of businesses - including 
    	jet engines, investment banking and refrigerators - don't have 
    	strategic ties with each other.  IBM's businesses - hardware, 
    	software, printers, disk drives, networks, microchips - "are
    	so intertwined," Mr. Gerstner said.
    
    If Digital adopts the "pure management" model (as it may be doing as
    near as I can tell) we may face the same hurdles as IBM.  This issue
    has sparked a great controversy both within and outside of IBM:
    
    	From Wall Street Journal, 28-Jul-93, p. A3
    
    	  He also noted an unusual recent IBM ad campaign inviting 
    	customers to trade in their mainframes for an IBM minicomputer.  
    	"I got a lot of mail from employees who said, 'What are you doing?'" 
    	he said.
        ...
    	  "He's pushing a lot of the right buttons for investors," said
    	Steven Milunovich of Morgan Stanley.  "But I'm looking for a 
    	definition of strategic direction, and I'm not hearing a lot yet on 
    	that subject."
    	  Another long-time IBM watcher, James Cassel of the market-research
    	firm Gartner Group, said, "I have a problem with how you manage a 
    	company without knowing where you take it."
    	...
    
    	From Wall Street Journal, 29-Jul-93, p. B1:
    
    	  Some management experts find Mr. Gerstner's view of IBM hopelessly 
    	limited.  "It's an accountant's answer, not a leader's," says Robert 
    	Gilbreath, head of the change management division of Philip Crosby 
    	Associates Inc., Winter Park, Fla.  "If he's trying to get his people 
    	to turn the company around and be innovative and fast, he's got to 
    	give them another reason."
    	...
    	  Microsoft's chairman, Bill Gates, widely hailed as one of the
    	computer industry's smartest long-term thinkers, struck a similar 
    	note in an interview earlier this year.  "Being a visionary is trivial," 
    	he said.  "Being a CEO is  hard.  All you have to do to be a visionary 
    	is give the old 'MIPS to the moon' speech - everything will be 
    	everywhere.  Everybody knows that.  That's different from being the 
    	CEO of a company and seeing where the profits are."
    
    If there is to be no vision at all, then I don't think innovation will 
    survive.  This is because creative people are trying to do what has never 
    been done before.  They need a vision to be able to know when they are 
    on the right track and so that they can count on getting the support 
    and commitment they need to be successful.  As many are aware, much of
    Microsoft's innovation did not originate within the company.  In fact,
    part of the key to the success of Microsoft has been in obtaining
    innovation from many outside sources.  Microsoft has made a few enemies
    as a result of its (thus far successful) approach.  But, it has also
    made many innovative companies wary of any dealings with Microsoft.
    
    If management wants guaranteed results, creative people can't work because 
    of the nature of the problem.  That is, problems requiring innovative
    solutions tend to involve doing things that haven['t been done before.
    There tends to be significant risk that we might not be able to do it either.  
    Having not been done before, all you can rely on is a vision, talent and 
    commitment from all concerned to make it happen.
    
    Now, here is where I get concerned.  If there is to be no vision or
    commitment to vision at the top of the company, then where?  Upper 
    management? Middle management?  Lower management?  Remember, the top of 
    the company is interested in doing "basic management" and not in dealing 
    with "vision."  If you are an upper manager, you are more likely to impress 
    them with your "basic management" skills than wasting their time with 
    "vision."  And, so it will go all the way down the management chain
    as each level tries to please the level above.
    
    So, "vision" will become the responsibility of the "empowered"
    non-managers.  More, since all management will be focused on basic
    management, "bottom line" issues, the non-managers will take the brunt
    of the responsibility in making the links between the "bottom line"
    and "vision."  This is fine in a commodity industry where creativity is
    not important.  But, I doubt such will work in an industry where
    innovation is critical.
    
    It has been mentioned that IBM/Digital might not be succesful at
    following the GE model.  In that model of separate businesses (which 
    HP also follows) the top level CAN work on "basic business."  Vision 
    comes from the heads of the individual business units because there is 
    a clean division of responsibilities and the individual businesses have
    control over their numbers without having to worry about coordinating
    tightly with other areas of the company.  But, it seems to me pretty 
    clear that when you have a big business approach where all units are
    dependent on each other, the responsibility for "vision" is ambiguous.
    
    The bottom line?  I feel IBM will eventually make the GE model
    successful.  They will divide the company into distinct businesses 
    with no cooperation to speak of between different units.  Any overlap 
    will be fought over with the survivors taking all.  Each unit will
    operate with its own vision as established by the top people of each
    unit.  This is much how I was told that HP works now.
    
    What of Digital?  We seem to be ahead in some aspects:
    
    	From Wall Street Journal, 29-Jul-93, p. B6:
    
    	"Digital is much farther along than IBM right now," said Shao Wang, 
    	of Smith Barney, Harris Upham & Co.  Digital, which competes with 
    	IBM for many of the same corporate buyers, is now focused on services 
    	and software, and is making a transition to advanced chip designs, he 
    	said.  IBM, meanwhile, "still seems abjectly dependent on the mainframe" 
    	and is slashing costs without radical strategic changes.
    
    My concluding comments are at the top of this note.

    Isn't it more an issue of the type of vision that is appropriate at a
    given level of the company.
    
    Certainly Welsh set down a clear mission - to be #1 or 2 in any
    business GE participates in.
    
    Product visions are appropriate for autonomous divisions that clearly
    have no obvious relationship to the large organization.
    
    In other words, within the larger corporation, each piece ought to know
    where it is going and why that is important.
    

    re: .6:
    
    >Product visions are appropriate for autonomous divisions that ...
    
    Not disagreeing, just an observation.  I noticed that 
    vision becomes the responsibility of di-visions.
    ^^^^^^                               ^^ ^^^^^^^
    
    The words "visions" and "divisions" seem to reflect the 
    traditional model of a company with a unified vision at the top
    that is broken into smaller, workable issues with organizations
    assigned to address these issues.
    
    Steve

    The remainder of this note is extracted from "BREAK - IT THINKING - 
    Unconventional Wisdom For Fast Changing Times" by Robert J. Kriegel, 
    Ph.D.:
    
    
      In the dogged pursuit of short-term goals and the bottom line we
    have developed cultural myopia.  All of our hopes and aspirations are
    related to making next quarter's numbers.  With this foreshortened
    field of vision, we live by the quarter and die by the quarter.
    
      Such tunnel vision blinds us to opportunities for innovation and
    creativity.  It prevents us from seeing other possibilities and
    options - alternative routes that may appear as a consequence of change,
    new technologies, or an unpredicted circumstance.
    
      How can companies avoid the cultural myopia the results from
    short-term goal setting?
    
      Having goals is not the problem.  What gets us into trouble is
    the importance we attach to them.  Goals have their place.  They serve
    a purpose.  They give us something specific to shoot at and provide
    feedback to tell us how we are doing.  They are a way of keeping score.
    
      We think of success as the goal, the finale, the reward, the finish
    line.  Because it is viewed as the end and not the means, there is
    a tendency to think "we've got it made" when we achieve our goals. 
    We think we know the basics, have the skills and drills "down," and
    start taking success for granted.  The result is, we get lulled into
    complacency and slack off.  We often shoot too low when we focus only
    on achieving our goal and miss opportunities.  We need to raise our
    sights and our vision.
    
      The key to sustained peak performance is finding something larger
    than a goal, something bigger to shoot for.  Something that moves you.
    A vision that inspires us and others adds passion and a sense of
    purpose.  It uplifts people's morale and efforts.  
    
      From a corporate standpoint, where does vision come into play?
    
      In 1989, Fortune magazine reported that Fortune 500 CEOs listed
    "vision" number one when asked to characterize top leadership
    traits in the decade to come.  Organizations need a vision to inspire people,
    engage the spirit, and provide direction.  Leadership by vision - LBV -
    will be to the nineties what management by objectives (MBO) was to the
    seventies.
                           

    re:-1
    Thanks for posting it.  Enjoyed the quote immensely.
    

    Kriegel was one of the guest speakers at COE last year...

    I think Digital's vision is become a full-service information systems
    vendor who puts customers first. Hence the CBU organization.
    
    Plus, be highly successful vendor of components in selected product
    areas - PCs, storage, printers, terminals.
    
    Bill Strecker now has a clear and plausible strategy. You must hear
    is "Technology to Win" presentation.
    
    Finally, by re-engineering the basic processes of the company [The
    Customer-Value Chain] we will be the kind of company that can deliver
    on the promise of putting the customer first.
    
    That's my take on Digital's vision...
    
    Jim
    
    n.b. read "his `Technology to Win' presentation"
    

The computer business is unlike other commodities. If we were building 
cars or washing machines then it becomes simple : reduce cost and build 
a quality product and we will make a  profit.

Computers need to meet more criterias to appeal to customers, such as 
adherence to standards and availability of compatible third party 
hardware and software. You need vision to influence future industry standards 
in favor of your products and/or to build future products that will compete 
and win using standards set by others.

Don't you think intel or Microsoft both have visions to rule the world ?
They surely do not use the "cut costs to make profit"  concept.  

    I'll be presumptuous and say Digital's vision in the '60s might have
    been stated as "Compute-Power To The People!"  Maybe even well into the
    '70s, I think we had a sense that we were doing something for our
    fellow human beings, not just running a business to "win."
    
    Of course, you have to make money *too* and as Adrienna Staedecker said
    when I asked at her HLO speech recently how soon we could work on re-
    creating what I called a "generous vision" for the company:  "When
    you're bleeding, you've got to stop the bleeding first" (or words to
    that effect.)  I certainly agree with that.
    
    She also promised that we will have what she called a "Strategic
    Intent" announed near the end of FYQ1 or beginning of Q2.  And I've
    heard enough of what the SLT is scheduled to be doing this month to
    believe this may happen.  So I'm optimistic.
    
    I also *love* the quotes at .8 that Steve posted.
    
    I'm a little afraid however of this "strategic intent" phrase.
    "Compute Power To The People" has generosity.  It isn't just winning,
    like teenage boys playing softball.  Winning goes with zero-sum games. 
    Playing zero-sum games is part of how the Tribe gets is teenage boys
    ready to do the tribe's killing, so the tribe can survive.  My life is
    too short (now that I'm beyond teen age...) to just play around.  I
    want to make a contribution in the lives of my fellow human beings.
    I know the company has to survive to make that possible, so sometimes
    we have to fight zero-sum games and win.  But that's the necessary
    condition, not the sufficient condition.
    
    I have a vision for some of what Digital can contribute.  I also have a
    limited view of our resources and the world we're in, so I don't know
    how complete nor how appropriate it is.  But here goes....
    
    Computing historically was done a box at a time.  Then we networked the
    boxes so the Lone Rangers using each box could share their ideas and
    their data.  Now we're making the boxes portable and ubiquitous.  But
    we're still thinking a box at a time.
    
    I believe there's a big possibility about to dawn, and I'd like to see
    us really shine with it.  Namely:  *big* displays, allowing a Posse,
    not just networked Lone Rangers.
    
    See, I lead a lot of engineering teams while they co-create complex
    ideas and plans on walls.  We use nothing but paper and Post-Its
    (3M trademark) and felt pens--pretty old fashioned technology.  But
    these groups generate upwards of 10,000,000 pixels a day on the wall. 
    And they need eye-muscle access instantly to all that they have done.
    Windowing won't work if you have a dozen or 20 people all working on
    various aspects of the thing in 2s and 3s and in subgroups of 5-7 and
    occasionally on all of it *as a whole*.  And the world is so complex
    today that a lot of work is like this:  no one genius can encompass it,
    so if you can't get a team to do it you can't do it.  Dividing it in
    pieces sometimes is as effective as dividing the spleen from the liver
    and the heart--sometimes the essence of it will get lost unless you can
    consider the *whole* of it.  (As in "concurent engineering":  using not
    only criteria for the product, but also criteria for the manufacturing
    and the servicing and the training/learning, *all at once* to arrive at
    solutions and decisions that will work *as a whole* for the customer
    and for the business.)
    
    But nobody on the face of the Earth can support this co-creation with
    computer technologies.  Networked Lone Rangers just ain't a Posse.
    
    It'll take huge wall-size displays (which I gather may not be far off)
    plus a lot of other hardware (spiders to mark and edit the wall, as
    mice mark and edit the screen) and software.
    
    Part of the vision, and a part that not many companies could match
    Digital on, would be co-creating in 24 hour teams.  Begin the work
    maybe in the Maynard area, pick it up in Singapore as night falls on
    the US East coast, migrate the work to India as Singapore's day wanes,
    continue in Europe when the sun is over there, and when you come to
    work in the Boston area 16 hours of progress has been made on those
    other giant project-walls around the world.  This is how it might
    appear inside Digital.  Our multinational and international customers
    would have different localities participate, but many of them also have
    enterprises on whom the sun never sets.
    
    But that's just one possible vision.  It's probably inappropriate. 
    However, you might want to contrast it with "winning."  Warms your
    blood a little more, wouldn't you say?
    						Russ

    A vision of big displays?
    
    Well it's a _product_ vision you're talking about in .-1 and
    unfortunately it's in an area where Digital today buys its technology
    from other vendors and it's not at all in an area where Digital has
    some expertise.
    
    IBM wants to become a GE and balance the entrepreneurship of divisions
    with a coherent corporate image and financial plan.
    
    Digital wants to become a blend of Intel, Compaq, and EDS and abandon
    the idea of being all-product/all-customer provider of information
    technology.

    re: -1
    It warms the heart a lot more.  Thanks for taking a stab at what the
    vision  might be;  it opened my eyes to some possibilities.
    
    One of the things that worried me in your note is that a statement of
    strategic intent is forthcoming.  That we need it is unquestioned; 
    that it should be done without benefit of insights like yours can
    seriously flaw the results.  If it fails to arouse a passion and an
    ownership in each one of us (okay, I'll settle for a majority), then it
    will be no more than an inept attempt to finish an item on someone's to
    do list.
    
    I also strongly agree that setting a vision that speaks only to beating
    the competition is aiming way too low.  Chick Schue's vision was to be
    larger than IBM by the year 2007, April or May.  Even though it gave me
    great joy to beat IBM, that was not the right vision.  It didn't
    address customer needs, product capabilities, or the larger vision of
    making people's lives more meaningful.
    
    Maybe you should share your engineering vision with Adrienna.  I'm sure
    others have thoughts on the matter as well that should be shared.

    Yes, you need to know what direction you want the company to go.
    If you want to call that a vision, fine.
    The problem with NOT knowing where you are going is you'll make a lot of
    wrong turns and mistakes just trying to survive.
    
    It is beyond me how anyone could cut $8.9B and not know what they want
    to do.  At home, you don't cut costs by selling the car if you need it
    to make money.  At a company, you don't cut $X and then later figure
    out if you cut the right things.  I think it was a dumb statement.

I think that IBM (and Digital) can manage way their out of their respective crises.
IBM still have about $50bn in revenue, Digital have about $12bn, I find it
just incomprehensible that you can't apply text-book business practices and
get both organizations back into profitability again. I think that's what
Gerstner and Palmer have been doing, we are ahead of IBM in this matter
but I have no doubt that Gerstner can "execute" his way out the current situation.

The problem, both organizations face, is understanding the industry trends
that brought them to their current situation. IBM have acknowledged that
the shift of Computing spends towards midrange and PC LAN's is the root
cause of their problems and that they want to get into the software business
to replace their declining markets. The reason Gerstner wants to "execute" his
way out of the current crisis is that the new markets they want to get in
to are not generating the revenues needed. So there is "vision" at IBM
and they do talk about in public forums. The big push to OS/2 is part of
this.

Mark 

    
    re: .13
    
    I really *do* hate to be cynical, but if Digital (and other
    computer/software companies) really achieve what we're all
    aiming for (our "vision", as it were), it will be to put our 
    fellow humans out of work.  (This really is the aim of the 
    business re-engineering zeitgeist, and to achieve the vaunted 
    productivity gains, you want less people to do more work; 
    further, you *must* use information technology to do it.)
    
    Now, I suppose you could consider this helping people.  After all,
    Americans, at least, are certainly overworked (according to Julia 
    Schorr anyway), and we're doing our bit to increase their leisure
    time.  All the futurist gurus of the early 1980s (most notable among
    them John Naisbitt of Megatrends fame) said that we'll all be
    enjoying *much* more leisure time by the 1990s.  I suggest he was
    right.  There's lots more Americans (and looks to be lots
    more Eurpeans and Japanese soon) that will have plenty of leisure
    time to enjoy.  The only question is, where will the money come
    from to enjoy all that time off?
    
    Man, I just can't wait to be banging on that laptop at my mountain
    cabin, with fire burning merrily and my loyal canine at my feet.
    I think Naisbitt called it the "high-tech, high-touch" society.
    
    Glenn (feeling somewhat tired and cycnical today)              
    
     
    

    re: .18
    
    I had a customer of mind last week pose a very interesting question.
    She is a fairly high level exec?
    
    Her question, can you name me one company that through re-engineering,
    business process automation, information technology, etc. grew their
    business on the revenue side (new, innovative product services),
    operating margins dramitically improved and the employee population
    grew as well?  (implying all this focus is purely cost?
    
    I could not name one and she either! PS. We both read Hammer and
    Champy's book and did not see one their either!!
    
    Tom

    
    re: 19
    
    My answer would be, you probably won't find many.  My reading
    of the focus (and reason for the increasing popularity)
    of business-process reengineering is to decrease cycle-times
    and reduce costs, *especially* by doing more with less people
    (your highest fixed cost).  This results in better profits
    during periods of slow or no revenue growth.
    
    I think part of the reason that businesses have so zealously
    embraced re-engineering is that they see a shrinking economic 
    pie, with more competitors licking their chops.  The bottom
    line is that, as Palmer says, if you don't increase your
    productivity by leaps and bounds year over year, you're history.
    He's right.  It's sort of a Malthusian view of industry and work,
    but I can't argue with it.
    
    None of which changes the premise of my .18.  You can't do
    re-engineering without a major IT component, and therefore,
    if we're an IT supplier, then we're not providing "computing
    power to the people" as much as we are figuring out ways for
    companies to produce more with less (and figuring out creative
    ways for people to work longer hours -- hence my comment about
    the laptop at my mountain "getaway").
    
    Glenn  

    Try Federal Express.
    
    They implemented an information system that allows them to tell you
    where your parcel is at any one time in the transport process.
    
    It's text book efficiency (pickup clerk uses handheld to imput details,
    constant tracking/tagging etc.) But the whole way they did business was
    re-worked for efficiency - but by being able to tell a customer at any
    one time where the parcel is, they gained competitive advantage and
    grew revenue as a result.
    
    The article was in Business Week about 2 years ago.
    
    Paul

    re .19
    
    Business Week and Fortune magazine have written up a few examples of
    business reengineering successes.  There aren't too many notable
    examples.  A recent article (in the last week or two, I think) went
    into some of the problems.  One notable point that was made that seems
    to explain the lack of big success stories is that re-engineering
    doesn't create truly significant long term gains if your basic strategy
    or business model is wrong.  You can spend millions and place your
    entire company on the rack for months or years, only to find that while
    you are now the world leader in A, all your customers really wanted B.
    
    /Butch

Another benefit of re-engineering is that you pick
up quality along the way. I don't know of a single
company that loses business because their quality
has improved.  As each process is looked at in detail
for its steps and components much extraneous "customer
unfriendly" work is disposed of.  As you become easier
to do business with, more people are willing to do
business with you.

    re: .18
    I would take a longer historical view and assert that Toyota in the
    40's and 50's re-engineered US's "mass production" method of automobile
    production to create "lean production". This is well-documented in
    "The Machine That Changed The World". The results, over time, lead to
    growth for Toyota.
    
    Jim

    
    Re; .24.
    
    Ok, I'll take a longer historical view.  The reality of
    capitalism, as practiced in America since the mid 1800s,
    has been to replace people with machines (or if not
    machines, cheaper human labor).  This is well documented
    (textiles moving south, then to Mexico and/or South East
    Asia, garment industry, manufacturing in general, ad nauseum).
    
    Let me say at the outset that I am a believer in capitalism,
    so neither this nor my .18 was intended to imply otherwise.
    I just don't think we should be kidding ourselves about what
    we're doing.  If we sell a more efficient (downsized) computer
    system to a law firm, you can bet that they are buying it to
    cut down on the clerical labor force (in fact, the proposal
    we generate to try and get the contract will, in all probability,
    discuss "labor savings" to justify it).  The wonderful, yet 
    automated, services provided by the phone company have resulted in 
    *thousands* of layoffs.
    
    This is a natural progression going back years and years and years.
    Now, I need to feed my family, so I will work diligently at whatever
    endeavor is necessary to do that.  Moreover, I am intellectually
    challenged and stimulated (and also terrified) by the pace
    of change in this industry.  So I make no apologies for helping
    to make computers and related products.  But I *am* fully
    aware that not all of the results of our labors are good for 
    our fellow humans.  I have to live with that.
    
    I am neither denigrating the effects of, nor justifying "process
    reengineering".  I am also not absolving myself of its ultimate
    results, or the part I play in it.
    
    Glenn
    
    Glenn

    Hi,
    
    Responses and replies from .18-.25 raise very valid points. Some of the
    companies mentioned in the previous replies are in fact very good ones.
    
    Then I will pose an additional question regarding a "vision" for
    Digital Consulting.  Since we seem to basically agree that MOST of the
    re-engineering efforts focus on the cost side. Why don't we (Digital
    Consulting) take .18 premise and add a tiwst to it.  
    
    The twist would be to add "Re-Humanize and Re-Profitize" to the
    re-engineering twist to try and differentiate ourselves from the
    market.
    
    Take Digital, we have definitely focused on the cost and we here how we
    have to now generate the business. IMHO, the only way we can generate
    new business is to take some of the new business methodologies and come
    up with some new ideas.
    
    Some in fact, we (Digital Consulting) can and well with IT solutons and
    Services provide you with all three: Re-engineering, Re-humanizing,
    Re-profitizing your enterprise.
    
    I still believe with brain-power this company still has remaining that
    we can be innovative and different.
    
    Sorry to be rambling, I am tired and have had a long-week. What does
    the rest of the audience think about the above idea?
    
    Tom
    
    

Hey guys, what's with the gloom about enhancing people's productivity??
When we enhance Ford's productivity, they make better cars for us for less
money. If they hadn't improved their productivity, they'd be out of business
by now.

The success of capitalism is a direct result of the continual pressure for
productivity improvement. People lose their jobs when their jobs become
obsolete. Those people find new jobs in emerging industries. Sure, there's
a good deal of pain involved in this process, but the net result is
continuing improvement in the standard of living for the average worker.

--RS

re Note 2612.25 by BOOKS::HAMILTON:

>     But I *am* fully
>     aware that not all of the results of our labors are good for 
>     our fellow humans.  I have to live with that.
  
        When you sell a product to a customer as a labor-saver, what
        you are really doing is offering to substitute the (indirect)
        application of your labor for the application of somebody
        else's labor.  You get paid if buying (the indirect
        application of) your labor is a cheaper way of getting a job
        done than buying someone else's labor.

        If you went to their employment office, and said "I need a
        job, I'll do the same job for less" you'd be doing the same
        thing to your fellow human.

        Bob

    When a customer buys new technology, it's up to them what to do with
    headcount.  They can just let people go or they can retrain their 
    people to do more profitable work.  It's their decision and reflects 
    the competence and orientation of their management.
    
    Steve

"That's not my department", says Werner Von Braun.

    re: .30
    
    Ah!  Another fan of Tom Lehrer! (sp?)  Of course, the a-bomb was the
    classic example of advanced technology used to reduce headcount, but I
    digress ...
    
    Steve

    
    re: .29.
    
    Sorry, Steve, but I can hear the red herrings flopping on the
    bottom of the boat.  The statistics are rather disheartening
    (ex steel workers working at McDs because of new smelting
    technologies and specialty mills; Fortune 500 ex professionals
    and managers working at 2/3 to 1/2 of their previous salaries;
    thousands shed from the Baby Bells and AT&T; manufacturing either
    automating or heading south for cheap labor, etc., etc.).
    
    It's true that "management" has the choice of what to do when 
    technology replaces people; but you and I both know what actually
    happens.  Management is beholden to shareholders; shareholders
    want their equity returned to them in the form of dividends or
    higher stock prices (derived from ever increasing profits).  The
    easiest, and, if history is any guide, the most well traveled path,
    is to dump the people.
    
    I realize that this is a dim picture, but the reality is that
    most of the foregoing wouldn't have happened without computers.  
    Let me say again, I've made my choice, and I'll live with
    it (actually, as someone pointed out a few notes back, you
    can't *not* compete at some level).  I'm just not going to
    rationalize it, or wish it away, and I'm not going to
    pretend that what we do, we do to "help" people.
    
    Re: some others
    
    I understand the frequent arguments about the supposed correlation 
    between rising productivity and rising standards of living.  But
    consider: I was raised in a middle class home by a father who
    had not completed high school and a mother who did not work.  We
    had two cars (albeit used) and a house (albeit modest). We took
    a camping vacation once per year for 2 weeks. 
    
    Fast forward to 1993: I have a masters degree.  I work *at least* 
    50 hours per week, every week.   My wife also works a full time job.  
    I have a modest ranch house with one bathroom in a semi-rural area, 
    two cars (one with 110K miles on it, the other with 50K miles on it).  
    We haven't taken a vacation (away) in 10 years.  We have just finished
    putting one child through college at a state school, and we do save
    *some* money for retirement.
    
    Is this picture *really* because our productivity as a society has
    languished?  Am I just a screw off, or what?  Should I believe
    what I read, or what I observe?
    
    Glenn
    
    
    
    I just can't see that
    

    I think that part of the reason that vision is being put down over
    business practice is that emphasizing sticking to business practice 
    is a lot easier and can be trained.  You can prove you followed 
    standard business practices when you mess up.  But, proving you had 
    a good vision and did what was possible to make it reality is hard 
    to do when you mess up.  
    
    Vision is something that requires a lot of work and a bit of
    inspiration.  It tends not to come to those who are uninspired or 
    don't like to work hard.  It's really difficult to have vision, take 
    chances and be a leader when your main concern is to make sure you 
    don't look stupid in front of shareholders.  But, I feel that's what
    the prospering companies of the future will have in common.
    
    
    re: .32
    
    No red herrings there at all.  Laying off steel workers reflects
    management policies and (possibly lack of) competence.  A freeze on
    technology development and proliferation is very difficult to do in 
    a free economy.  Implementing technology freeze on a worldwide basis 
    is nearly impossible without magor effort.  For example, it took a 
    worldwide effort to keep a despot from using technology to build a 
    formidable nuclear force recently.  And, a centralized economy tends
    towards failure, if the Soviet block is any indicator.
    
    I agree that management finds it easiest to dump people.  But, if
    history is any guide, dumping people is not what leads a company to 
    new prosperity.  It is a short-term fix that usually has long term
    ramifications that balance if not negate the effects of the layoffs.
    How many steel companies that laid off lots of workers are making money 
    hand over fist nowadays?  How many went out of business?  From what 
    I've seen of shareholder response, the traditional jump of the value 
    of a company that lays off lots of people seems to be a thing
    of the past.  Shareholders seem to be wising up that layoffs may
    indicate unresolved management problems.
    
    Again, this may boil down to management reaction to new technologies.  
    The technologies themselves generally create wealth, as far as I'm 
    concerned.  How that wealth is used is up to the managers of the wealth.
    
    Going on a bit of a tangent, what concerns me is "technology" that is
    introduced that destroys wealth.  Such things as new ways to run state 
    lotteries, new ways to speculate in real estate or futures, new ways to
    tax people (retroactively), new ways to frivolously sue people and so
    forth.  But, I digress ...
    
    Steve

    re .various on technological changes, '50s vs '90s, etc.
    
    50s vs. 90s
    ===========
    
    On the issue of the 50s vs. the 90s: _The_Economist_ has had a 
    series of very good articles on this issue over the last two years.
    
    Basically the good times of the '50s were a one-time event, not the
    normal case.  They were due to the co-incidence of two things: the 
    US had come out of WWII with the only surviving industrial system, 
    and we were converting our economy to run on oil rather than coal.
    As oil was far cheaper to produce and use than coal, this meant a
    huge infusion of real wealth--but oil and coal are both fixed 
    resources, so we were using up capital on income (e.g. your parents 
    [and mine] didn't "earn" that level of comfort and security so much
    as they "found" it).
    
    Now the US no longer dominates the world economy and we no longer 
    have super-cheap domestic oil.  Our post-1970 GNP growth rates of
    2% or less are right in line with pre-WWII experience: it's our 
    short memories that make the 1940..1970 period and growth rates 
    of 3% or more seem the norm.  And it may get worse, due to our 
    ageing population and a poor educational system, etc.
    
    (By the way, don't complain to me about this--read the articles
    in the 1992..93 issues and complain to _The_Economist_).
    
    
    Putting others out of work
    ==========================
    
    It's true that technology changes make labor surpluses.  While
    historically other higher-value uses for that labor show up,
    they don't always show up for the people who lost the jobs.
    Given that human desires are infinite, there's always something
    to be done--though it may not pay well.
    
    In global sense it's a win (consider the transition from 80%
    farmers to 3% farmers in the US, for example); but to the 
    individual elevator operator or whatever it's a problem.  The
    slower the change, the less impact on peoples' lives: if
    horses are replaced by cars over fifty years, existing blacksmiths
    can live out their lives as blacksmiths--everything can be
    handled by having fewer young men or women become blacksmiths.
    If the replacement takes five years, then the existing set are
    hurt.
    
    The alternative is for everyone to be a little bit poorer than
    they otherwise would be (because of the forgone productivity)
    and to keep the people employed.  In money terms:
    
    Let B = number of blacksmiths (the old technology)
    	b = their income, in units of things and services, not money
    	m = income from a McDonalds' job (taken by the unemployed blacksmiths)
    	E = number of everyone else
    	e = their income
    	e'= the increased income because the old job is now being done
    	    more efficiently (this is why income has to be counted in 
    	    goods and services, as the money income may not change while
    	    prices go down (e.g. food and steel in the 1800s)
    
    We assume b > m (the old tech job pays better than McD's or equivalent)
    and that e' > e (there is a real efficiency).  We know that E >> B
    (blacksmiths/car workers/etc. are a small fraction of the workforce).
    
    The old situation is GNP  = B*b + E*e
    The new situation is GNP' = B*m + E*e'
    
    So if E*(e'-e) > B*(b-m) it's a net win.  Cold comfort for the B's,
    though.
    
    If the E's are willing to be (e'-e) poorer, then the old situation can
    contine; if the E's are willing split the increase, then the B's can be
    subsidized a bit as a transition aid.  But if a competing country does
    the cold-hearted thing, then the "kind" country loses, as it is less
    productive and thus less competitive (i.e. e' is less than it would
    otherwise be).
    
    			-John Bishop

    reply .34
    
    
    The result is the benefits will go to the FEW at the expense of the
    MANY..Another term for FEUDALISM.
    
    The comfortable ELITE subscribe to these cold  calculations and  deny
    responsibility  for the results of their efforts which continues to
    downsize the  working  and middle class without remedies.
    
    The New World Order takes no  prisoners.
    
    

    re .34
    
    On reflection I believe that the "oil" part of my posting is
    not from _The_Economist_, but from another discussion of
    resource rents and welfare economics.
    
    re .35
    
    Feudalism is a different system entirely.
    
    The issue of "responsibility" is a moral or political one 
    rather than an economic one.  
    
    		-John Bishop

This might get a little tedious, and it is kind of long, so you
might want to hit 'next unseen'.

Re: .34

Farbeit for me to argue with a journal as august as _The_Economist_, but
hey, no guts, no glory, right?
    
>    We assume b > m (the old tech job pays better than McD's or equivalent)
>    and that e' > e (there is a real efficiency).  We know that E >> B
>    (blacksmiths/car workers/etc. are a small fraction of the workforce).
    
>    The old situation is GNP  = B*b + E*e
>    The new situation is GNP' = B*m + E*e'
    
>    So if E*(e'-e) > B*(b-m) it's a net win.  Cold comfort for the B's,
>    though.

 Ain't that the truth.  Speaking as a probable future "B". :-)
    
>    If the E's are willing to be (e'-e) poorer, then the old situation can
>    contine; if the E's are willing split the increase, then the B's can be
>    subsidized a bit as a transition aid.  
     
  But we don't subsidize them -- well, that's not completely true.  We 
  don't, in any significant way, retrain them.  The real question, though, 
  is this: is it the "Es" who are getting the benefit of (e' > e)?  Maybe 
  you could argue that CEOs and shareholders (a subset of "Es") are 
  getting the value of the efficiency.  I suppose you could say that since 
  shareholders are "regular" folks who invest in pension funds, that in turn
  invest in stocks, that we do in fact garner some benefit from the 
  efficiencies, to one degree or another.

>    But if a competing country does
>    the cold-hearted thing, then the "kind" country loses, as it is less
>    productive and thus less competitive (i.e. e' is less than it would
>    otherwise be).

I think the "kind" country loses short term.  If they retrain their
B's, though, who knows about long term?  Can the same be said for
companies?   Note: history says it won't matter.
    
I thought that neoclassical economics had the following equation
as sort of a basic law:

      GNP = C + I + G

where "C" was consumer spending; "I" was private investment, 
meaning the money (M1...Mn) saved and loaned in various forms; 
and "G" was government spending.

Further, I was under the impression that John Maynard Keynes' 
hypothesis, and the theoretical underpinnings of the New Deal, 
were that you needed to up the "C", the "I", and/or the "G" in some 
way to increase GNP.  Since GNP (during Keynes' heyday) was in a 
deflationary cycle (big time), the only way to bootstrap out of 
the depression was to increase "G" by large amounts.  The result was 
things like farm subsidies, the REA, and the WPA (not that WWII 
hurt the economy, either :-)).  And, of course, the depression 
did end.

My overall point, though, is this: consumer spending, "C", is roughly 
2/3 of the economy currently (can't quote a source, but I think
it's generally accepted).  You get enough people on subsistence
levels of income (unemployment, welfare, whatever), and they ain't
contributing much to the growth of "C".  You get a political wind 
blowing that says you can't keep up "tax and spend", and "G" ain't going 
to go up (that and the fact that we misspent the money we borrowed to 
up "G" anyway).

So that leaves "I".  Where does "I" come from?  From the folks who
gained from (e' > e), right?  So, why isn't everything hunky dory?
That is, if all "Es" gained, why isn't the economy just humming
along at, what do they call it, Pareto Optimality?  Is it due
to Capital flight (made much easier, by the way, via information
technology)?  Something must be happening to it.  

So, (with a nod to the mods) what's this have to do with Digital?

If GNP doesn't move, we won't sell computers (at least, that's what
the spokespeople say whenever a big company loses money), we'll add 
to the unemployment, and... well, you get the picture.  That's why
Ravi Batra's books sell so well, and our computers don't. 

If our economy doesn't add relatively high wage jobs, and consumer 
spending remains in the doldrums, we'll continue to muddle towards 
the cliff, it seems to me.  Hence my belief that Fortune 500s are 
digging their own graves by continuing these layoff cycles.  
Eventually, it all catches up to you.

>    Putting others out of work
>    ==========================
    
>    The slower the change, the less impact on peoples' lives: if
>    horses are replaced by cars over fifty years, existing blacksmiths
>    can live out their lives as blacksmiths--everything can be
>    handled by having fewer young men or women become blacksmiths.
>    If the replacement takes five years, then the existing set are
>    hurt.

And the immediately foregoing, of course, is the *real* stressor.
This is all happening in the space of 5-8 years (thanks, in large
measure, to information technology).  Bad news.  And, since I believe 
you were obliquely referencing a reply of mine, I'll add again that I 
know I'm playing a part in all of this.  So I guess there's poetic justice
in the knowledge that the Sword of Damocles is hanging over my own 
head as well (some might even call it Faustian in its sweep, to 
*totally* mix the metaphor :-)).  There.  That makes me feel better.

Of course, all this theory is strictly from my (fast fading) memories
of college economics courses; pre-"supply side" courses at
that. :-)  So take it all with a grain of salt.

Glenn

P.S.  For those offended by contributors to NOTES. (Known as well by 
the more pejorative terms "whiners" and "complainers".)  This reply will 
take up 6200 or so bytes (uncompressed) on a disk located somewhere on 
the HUMANE cluster.  Please note the time stamp (I am on 
the East Coast of the USA -- is it OK to whine after hours?)  
It will have some network effect, though I don't know how much, when 
it is written to the disk, since I am not on the HUMANE cluster.  
Extracting John Bishop's reply used still more network bandwidth.  
Further, for those who choose to read it, it will chew up some number 
of "attention cycles." I apologize in advance for any productivity 
loss that results.

Highlights (or lowlights) from Fortune Magazine, Sept. 20, 1993
(reprinted w/o permission)

Title: "When Will the Layoffs End?"
Subtitle: "Not soon, maybe never.  For many large companies in 
          the Nineties, the big shrink has become not a one-time
          event but a way of life."

"Every business day since the beginning of the year, an average 2,389
American workers have learned that they would be losing their jobs."

"The chiefs of America's biggest companies seem caught in the grip
of what might be called wee-ness envy -- my company's workforce is
smaller than yours.

The terms 'downsizing' and 'rightsizing', suggesting a one-time correction,
have become passe.  Executives bent on euphemism now say that their
companies are 'decruiting'."

"The new mindset among job-cutting companies is that the world economy
faces a sustained period of slow, low-inflationary expansion and
global overcapacity, and era in which they cannot easily raise prices to 
expand profit margins."

"Even industries that had been reliable job creators in the past -- computer
manufacturers and drug companies, most prominently -- are shrinking
payrolls.  Massive reductions at IBM, Digital Equipment Corp., Amdahl,
and Wang Laboratories resulted from collapsing sales of mainframes
and minicomputers."

"Companies that get into decruiting begin not by targeting workers so
much as the work itself.  Their new techniques for finding cost-cutting
efficiencies go by a variety of names -- total quality management, work
redesign, and (the favorite of late) process reengineering.   Whatever
they call it, companies willing to commit to the sustained effort that
these new approaches require find that they keep discovering opportunities
to make quantum improvements in productivity.  Almost inevitably, however,
as the work is squeezed out, employees become casualties -- permanently."

"Layoffs, the inevitable byproduct of the new drive for cost lowering 
efficiencies, may ultimately render big companies more fit to combat
tenacious global competitors.  But will they ever again create jobs in 
significant numbers?  And where are the displaced employees to find work?
No country has found a successful answer, and the question continues
to be the most vexing one confronting the global economy."

I posted this as a reply here, rather than as a separate
note, because it accurately captures many of the themes I was trying
to articulate in some of my replies to the string.  Mods, feel free
to move it to a separate note if you think it's more appropriate there.
I would also add that Fortune had a piece about a month ago that had an 
article in it claiming that small companies are slowing hiring
as well -- many in fear of what Clinton's health care plan will
cost them (early July, that one was, I think.)

Glenn