| T.R | Title | User | Personal
Name | Date | Lines |
|---|
| 1845.1 | | CVG::THOMPSON | DCU Board of Directors Candidate | Sun Apr 12 1992 02:24 | 38 |
| > A $290M loss is about equal to $2,900 per employee. The company must be
Interesting way to look at it. This makes it really sink in. I wonder
how much per VP it is though. :-)
> the BOD why they won't. This company has been pissing around since late
> 1987 on restructuring and has quite frankly achieved sod all. We've had
> voluntary 'rightsizing', we've had TFSO, we've had the appointment of VPs
> of everything except a VP of cleaning toilets, we've had SERP, we've had a
> $1 billion restructuring charge, we've had NMS. BUT STILL we manage to
> report a loss of about $3 per share IN ONE QUARTER. In addition expenses
> are UP and revenues are DOWN, fat load of good all that 'rightsizing' did.
Sure looks like getting rid of people isn't the big answer to expenses
that we've been told. Obviously someone somewhere is finding ways to
spend more money without it going into payroll. I think this is a sign
that it's time to forget the so called easy way, layoffs, and start
looking at selling more.
> This is insane. At least if we called in an external company to examine
> Digital they could be somewhat independent in determining whose empires
> are worthless and where the excess baggage is.
But what if the external company says that we're top heavy in
management and that our internal processes are too costly and get in
the way of efficient selling, development, and service to customers?
Those problems can't be solved by laying off low level people.
Something obviously has to be done differently around here. I wish I
had some answers but it appears obvious to me that "right sizing" isn't
it. At least not the way it's been done so far. It's clearly not
individual contributors and first level managers who are responsible
to significant parts of this loss. It's the system that's screwed up.
The system is keeping the company from making money and last I heard
it was upper management who was responsible for designing the system.
Alfred
|
| 1845.2 | It's time to prune | SMAUG::GARROD | An Englishman's mind works best when it is almost too late | Sun Apr 12 1992 23:21 | 44 |
|
Interesting. I've already received two positive mail messages basically
agreeing with my base note. In addition earlier today there was another
.2 which I thought really summed the situation up. Well I guess the
author must have had second thoughts about posting it here because
it is no longer here.
Because I feel that the contents of that reply hit the nail on the head
I'm reentering it under my own name and take full responsibility for
its contents.
Dave
================================================================================
Note 1845.2 My reaction to the earnings report 2 of 2
XXXXXX::YYYYYY 28 lines 12-APR-1992 00:04
-< Its time to Prune >-
--------------------------------------------------------------------------------
I see digital as a large tree. With roots, the ones who
do their job in the dark with no direction from above. They are the
ones supplying the nutrients to the top. At this time though,
the roots are in a drought and food is scarce. But, alas the leaves
seeing the sun shining as usual think there is nothin wrong.
However, the roots are not sending the nutrients that they used
to. The solution, the leaves decide is that the roots are not
doing the job they are supposed to. Well if the leaves get rid of
the roots not doing their job then all will be well. Get rid of
the excess and all will be fine.
After killing off a bunch of roots strangely even less nutrients
flow. The leaves c't understand this and decide more must go.
These roots just aren't contributing to the well being of the Tree.
It is time for a gardener to step in. The tree can no longer heal
itself. It will die if the top is not pruned. Once, the top is
pruned the roots can supply the nutrients to make the tree once
again grow.
If the tree is not pruned it will eventually topple over because
there are no roots left to give it stability.
(I am sad for the company I Love... when green leaves are more important
than whole being of the tree)
|
| 1845.3 | | WLDBIL::KILGORE | DCU -- I'm making REAL CHOICES | Mon Apr 13 1992 12:19 | 8 |
|
I like the idea of the management consultant firm. $1M, eh? Might be a
tad steep for our coffers right now, what with our recent expenses for
boat rides, secretarial limos and letters to credit union members. But
if the company can't afford it, I'd be willing to kick in. I wonder if
$20 from each concerned individual contributor would do it? Heck, I'd
even throw in another $20 as a concerned stockholder!
|
| 1845.4 | NO WAY.. | GSMOKE::GCHARBONNEAU | | Mon Apr 13 1992 12:42 | 4 |
| After you collect all the cash and they don`t want it,sent it my way..
At $20. per..126,000 I could have a good time on this..Sorry as uncle
Jack Smith reported..106,000...
Make that 105,999 as I won`t kick in on this..
|
| 1845.5 | tried already on a smaller scale... | CSOADM::ROTH | | Mon Apr 13 1992 12:47 | 30 |
| Re: Outside consultant to help Digital streamline
Supposedly, this very thing occured at a Digital field office years ago.
The story goes thusly:
The office managers wanted in a big way to have 'consultant x'
review the office structure and workflow so that they could form a
'winning team approach'. 'Consultant X' performed their
observations for a period and came back later with their
recommendations. The primary suggestion (i.e. the biggest benefit
producer) was made that the entire office should have a single
manager/leader for business operations instead of each organization
vertically reporting to their own organizations outside the office.
Immediately after this was presented all of the functional managers
began a heated argument with each other. The manager responsible
for paying the consultant took the 'consultant x' aside and
apologized for the fray and indicated that Digital was a unique
company and that their recommendations were impossible to implement
at DEC. The manager began to write out the check to cover the fee
but 'consultant x' said "Keep it- you need it more than we do."
I am suggesting that even if we pay $1M for a consultant there is no
clear evidence that DEC would commit to any suggestion(s) put forth.
Lee
|
| 1845.6 | call it evolution in action | PULPO::BELDIN_R | Pull us together, not apart | Mon Apr 13 1992 13:25 | 20 |
| re: how to get real change
This discussion reminds me of one in a course I took on
Population Growth back a good many years ago. The point the
professor made was that nobody has to do anything about
population control, nature will do that. When the population
grows beyond the resources needed to support it, the death
rate rises, whether by war, disease, or famine. The same is
true of companies. When a company fails to change in
accordance with the environment it competes in, it will die.
Ultimately, the management of Digital can proactively sponsor
the kind of change that will allow the company to survive the
ninety's, or the company will not survive. Sad, perhaps, but
true. Nature, whether biological or economical, cannot be
deceived.
fwiw,
Dick
|
| 1845.7 | The Osterhoff plan... | LDPMAX::gabriel | NBA Action, it's FANtastic !! | Mon Apr 13 1992 13:44 | 10 |
| Re: Outside consultant to help streamline Digital..
Isn't this exactly what former CFO Jim Osterhoff did ? I thought he
had told KO the only way to make the company profitable was to do some
serious cost cutting (including 30,000 or more layoffs) and when KO
refused Osterhoff decided to leave the company because he saw where it
was headed without those changes.
|
| 1845.8 | | BAGELS::CARROLL | | Mon Apr 13 1992 14:04 | 17 |
| Without serious changes, the company will continue to decline. I agree
that some pruning towards the top is necessary. We also need a change
in corporate philosophy. We need to emphasize selling/marketing since
that is who customers buy from and give checks to. Most of all, we
need to get back to the most basic premise of any business, customer
service and satisfaction. Satisfied customers will spend their money
with us while the unsatisfied ones will spend their money with our
competitors. We must think of the customer in everything we do here,
in every job from the Office of the President to the Field Serive
person who gets called out at 3:00am. Saying we are the best does
not make it so. Customers judge us by our actions not our words.
I see instances every day where people come to work and put their own
interests above those of the company or the customers. This is not
in the best interests of the company and is the real cause of our
decline.
|
| 1845.9 | Now That you Asked....... | PBST::LENNARD | | Mon Apr 13 1992 17:10 | 19 |
| Beautiful, .0 ..... except I don't agree about the consultant. What
this company needs more than anything else is "Big Company" management
who:
1 - Know what to do.
2 - Are willing to do it.
Also agree about the lay-off figure of 30,000 as what is needed right
now, but it must include top management, and an absolute reign of
terror at middle/upper management levels. It won't happen.....we are
on absolutely the same track as DG and Wang, and don't have a clue
what to do about it.
Also, we have probably one last chance to finally start delivering to
our customers what they want.....and not what we think they should
have.
Will it happen? I give a less than 10% chance.
|
| 1845.10 | Too much of one - Not enough of the other | STAR::DIPIRRO | | Mon Apr 13 1992 17:20 | 21 |
| What we need are two things. First, we *do* need to cut costs. There's
still some serious fat around this company and it's not evenly
distributed. In one corner, you can't even get a calendar refill, and
then you hear about some group taking a cruise. Obviously, something
isn't right.
What worries me more is that I don't see much from the other side of
the coin: what are we doing to increase revenue...what businesses will
we be in 2 years or 5 years from now? What is our expected revenue
growth, in what areas, and what are we doing NOW to get there? If the
company was highly focused on a few key areas of business, pumping
resources only into those areas while trimming away from the others,
then I'd feel a lot better about the company's future. However, that's
not what I see at all. I see across-the-board cuts, and I see no focus.
The result of this is that it will just be harder and harder to try to
produce anything, leading to a snowball effect.
I think the time has come from someone at the top to say THESE are the
businesses we're going to be in and this is our expected revenue
growth, and with our rightsizing efforts, this is what our expected
profits will be. Then start hacking away at everything else.
|
| 1845.11 | Would it be possible...?
| SQPUFF::HASKELL | | Mon Apr 13 1992 17:25 | 11 |
| In a note a little way back, somebody presented an organizational chart of
the company. In it was listed 103 VP and only God knows how many senior
managers.
Why can't we get by with only 24 or 30 VP and reduce the senior managers
in the same manner. To hell with protected turf, exec's perks, and highly
inflated pay.
I changes must be made, then lets start at the top.
Paul
|
| 1845.12 | > $100 million in currency trans?????? | CTOAVX::BUCKLEY | ski fast,take chances,die young | Mon Apr 13 1992 21:24 | 5 |
| One on the comments by upper DEC management said that more then $100 million
of this loss was due to currency transactions. How is this possible when the
dollar is weak and DEC reports in $? (The same number of DM would = more $)
Did someone decide to go way out on a limb in the futures market?
|
| 1845.13 | Alpharays... | PBST::ISBRECHT | | Mon Apr 13 1992 21:30 | 38 |
|
To All:
On base note .0 and .2 --- RIGHT ON SIR ! WELL PUT !
Right after I saw an ALPHA presentation the stock started slipping.
The next morning, while pondering the state of the world over
McDonald coffee, I came up with the following piece.
'just to add a chuckle to an otherwise gloomy outlook;
ALPHA /\/\/\/\/\/\/\Rays
With the powers you possess
save us from financial stress.
Instead of moderate gains,
Mr. Stock has been visiting those plains.
And, get moving in a hurry
so our future won't turn blurry.
You might ask help from GAMMA
or we all must live with Mamma.
--------------Ki______________920402
cheers,
Karl
|
| 1845.14 | Alpha isn't a panacea... | COPCLU::GEOFFREY | RUMMEL - The Forgotten American | Tue Apr 14 1992 12:32 | 27 |
|
Now I know one reason why Digital is losing so much money...
I ordered a workstation in the beginning of January. In my
innocence I expected delivery in a few weeks at most. After all,
a workstation is not much bigger than a PC - a commodity ware if
you believe the press. Well, I finally got it yesterday. It took
only three months to arrive. Ah, and it was also delivered with
the wrong sized monitor. Imagine getting a car delivered with
the wrong motor - or paying for a 19" TV and getting a 16" TV
instead.
In the mean time I have gotten a job outside DEC and will leave
the company on 30 April. How could I - as a potential future
customer - ever trust Digital to deliver me the goods swiftly
and correctly when DEC couldn't even handle an in-house order
for one simple product? Alpha isn't going to solve all of DEC's
problems...
- Geoff -
P.S. To all you Deccies out there - good luck and God bless! And
remember: drink lots of Coca Cola...
|
| 1845.15 | Uh huh! | STAR::DIPIRRO | | Tue Apr 14 1992 12:41 | 5 |
| I can't remember where, but I saw or read an interview with Jack Smith
somewhere where he was asked if the company was betting its entire
future future on Alpha. To paraphrase, he said that it would be kind of
silly for a $12 billion company to bet its entire future on one
product.
|
| 1845.16 | | CREATV::QUODLING | Ken, Me, and a cast of extras... | Tue Apr 14 1992 14:42 | 18 |
| Why not, we have done it before. Remember the one product, one strategy
marketing approach of a few years back. This from exactly the same
Marketing folks that insist on labelling our, "works on our hardware
only" O/S as "OpenVMS".
We aren't betting the company on Alpha. We have a world beating
technology, the outselling of it, has been mediocre to say the least,
and we are doing zip to capitalize on it, in terms of software. By
that, I mean while we are porting this that and the other thing, We
have reached a new quantum of available computing resources, which
should usher in a totally new and innovative set of world beating
applications, but no, we seem to working towards the lowest common
denominator in the functionality of our software...
sigh..
q
|
| 1845.17 | Lets buy DEC | MSDSWS::RCANTRELL | | Tue Apr 14 1992 15:39 | 25 |
| Hello,
Just a thought but first I want to say good luck to noter .14 . If
I could find something outside of DEC that could equal the pay and so
called benefits I would consider it too. Kind of like jumping on the
raft before the ship sinks.
Now for the thought. It would be nice if we employees could take
the day to day operations of this company away from the top level
managers. But DEC has a buyout policy built into its by-laws that
prevents it. I personally feel that we roots know how to fix the
problems because we see them every day and also see the solutions every
day. If we could collectively buy DEC stock until we owned the company
than maybe things could change. (This has been done at other companies
before so this is nothing new.
There is way to many levels of management for this company and
problems we see never get to the top. There should only be 3 levels of
management from the top to the bottom. Imagine how much salary expense
this would save alone.
Anyway, only my two cents worth.
Rick
|
| 1845.18 | We've tried External Consultants. | LARVAE::NOBLE | | Tue Apr 14 1992 16:58 | 15 |
|
Re.0
We tried External Consultancy already, and this was two years ago
before we started reporting a loss.
Extract from other Note File follows.
....
As an example, consider the consultancy Digital got from Coopers
and Lybrand. Did they supply bodies to us free? Not on your life. They
charged us the going rate and laughed all the way to the bank as we
paid them $5 million.
...
|
| 1845.19 | Re-org?) | MR4DEC::RICH | | Tue Apr 14 1992 17:00 | 26 |
| re. .11 and the number of vice presidents.
In management science (I know this may be an oximoron ;-) ) There is a
concept called span of controll which proposes that a manager can
successfully and properly manage somewhere between 5-9 subordinates.
Let's take 7. We can build the following binary tree by 7's.
1, 7, 49 , 343, 2401, 16807, 117649
That is if each "manager" had a span of controll of 7 we would need
only seven layers of management to manage a company our size.
Now we could use this chart tree in several ways:
Org1: Pres(1), Exec VP (7), Sr. Vp (49) ... VP, Asst Vp, Assoc.
VP(117,649) everyone's a VP!
Org2: Pres(1), SR VP (7), VP &Grp Mgrs (49), Mgr I-IV(343), Supervisers
(2401), Task leaders (16,0000), Individual Contrib (100,000).
I suspect we are closer to the former than the latter.
-Neil
|
| 1845.20 | "IBM apparently benefited from...control" | A1VAX::DISMUKE | Say you saw it in NOTES... | Tue Apr 14 1992 17:17 | 68 |
| 1845.21 | Understand what Graicunas really said | CHEFS::HEELAN | Cordoba, lejana y sola | Tue Apr 14 1992 21:20 | 13 |
| re .19 <span of control.>
If you go into the background of the "span of control" theory, you
might find that the oft-quoted 5-9 subordinate maximum is _only_ if
each one's work interracts with each of his/her colleagues. "Span of
control" is based on the number of interractions that a manager can
track at any one time.
If all the people are doing tasks that do not interract with each other
than the span of control can be far higher. Anybody old enough to
remember rooms of 100+ punch-girls controlled by a single supervisor ?
John
|
| 1845.22 | Fix the culture first | PECAN::LITTLE | Todd Little, TNSG/SDT/Reuse Technologies Group | Tue Apr 14 1992 22:48 | 77 |
| It is very disappointing to see the "blame it on management" drum being
beaten again. While I'm not one to standup and say that I think our
management is doing everything right, it is absurdly over simplistic to
blame our current problems solely on them. Our problems run much
deeper and as such will be much more difficult to fix. I personally
believe that our problems are primarily "Digital Culture" in nature and
we have only our collective selves to blame.
I think the single biggest cultural change that has to occur at Digital
is one of anticipating, understanding, utilizing, and capitalizing on
change. Here are some indicators:
o We think significant change means getting a new manager or being
part of a new organization. I suggest that if the same people are
still doing the same job with the same processes, who they report
to is simply an accounting and power game. Nothing actually changes;
except the personal relations and trust that has been built up is
discarded.
o Our processes for developing products are antiquated and quickly
killing us. In the software area, I suspect we're one of the worst
examples in the industry of software engineering practices and in
utilizing CASE tools. We've stuck our head in the sand and refuse
to change. We're so terrified of change that many organizations
refuse to even acknowledge that there are better ways and that they
need to assess where they are in order to plot a course of action
that leads to real change.
o We used to be technology leaders and our customers would come to us
to solve their problems. We "knew" the right technology for them.
That may have been true at one time, but it certainly isn't true
today. Yet I'm astounded how many engineers still think that way.
"We know what's best for our customers if they'd only realize how to
utilize our products, we'd be successful." is still the underlying
meaning to what they're saying. And yet we don't even use most of
our own products. How can we know what's best for our customers?
Talk about arrogant.
o Related to the previous item. We still think technology sells. Ha!
The fastest growing segment of the computer industry is the PC and
some pretty low tech PC software. We refuse to give up our old
beliefs that customers will buy the "best" solution. MS-DOS was
developed years after RT-11, VMS, and many other Digital operating
systems and was much lower tech. The Intel CPU's were lower tech
than the existing PDP-11's and the Motorola 68000, yet they outsell
everything else on the market by nearly 10 to 1. MS Windows is
lower tech than DECwindows but it sells 30,000 licenses a day! Visual
Basic uses BASIC, talk about low tech, yet its revenues last year
exceeded all of SDT's revenues.
There are numerous other examples of our unwillingness to change. At
best we ignore it, at worst we actively fight it. The above examples
are primarily changes that need to occur throughout the company and are
only indirectly related to management.
Perhaps our second biggest cultural failing is what we believe in. We
believe in individual products. People and organizations live and die
by their products.
o If you want to become a consulting engineer you better lead the
development of a product.
o If you want to become a VP, have your group develop some successful
products.
o If you want to have a group pay attention to your input you'd better
be building a product.
o Groups are "chartered" to build products.
I don't think we believe in customers, architecture, cooperative work,
process, reuse, profitability, integration, accountability, etc. Those
things typically don't show up on goal sheets, and I don't believe they
are valued by the people in the company. Believing primarily in
products is short sighted and self defeating.
-tl
|
| 1845.23 | More than management have this problem. | A1VAX::GUNN | I couldn't possibly comment | Tue Apr 14 1992 23:34 | 30 |
| re .22
I agree. Put more concisely Digital still believes 100% in TECHNOLOGY
PUSH. All the management, measurement, planning and reward systems in
the company assume the world operates this way. Everything starts with
developing a product. The only way to solve a problem is with
technology, build a new product or modify an old one. The only valid
reason in the Digital culture for losing a sale is that we didn't have
the right product. "Roll on Alpha" is an expression made several times
in this Notesfile demonstrates this belief is alive and well amongst
the Digital Noting community. This belief served Digital well while it
was a reflection of the market conditions.
Unfortunately most of the computer market has shifted over to MARKET
PULL. The market has matured. Many suppliers are pushing commodity
products. No one supplier has a lock on a particular technology for any
length of time. Studies show that there has been very inconsistent
return on massive investments in Information Technology. The latest
techno-widget won't sell unless it solves a problem that a potential
customer recognizes that they have. Engineers and Engineering can't be
the driving force that will succeed in this kind of market. All the
corporate systems need to be reversed so they start with what potential
customers consider important.
If we had a supremely effective management implementing our old
technoid beliefs by making massive investments in irrelevant
technology we would probably be going out of business a lot
faster than we are now!
:-)
|
| 1845.24 | Anybody spot any trends? | OZROCK::FARAGO | alphalpha: n. lucerne, best fodder. | Wed Apr 15 1992 01:27 | 7 |
| The following reply will contain our results for the last ~6 years by quarters.
The percentages next to each field show the changes from the corresponding
quarter of the previous year.
Notice any trends?
FWIW
|
| 1845.25 | results from last 6 years (print wide) spot the trends.... | OZROCK::FARAGO | alphalpha: n. lucerne, best fodder. | Wed Apr 15 1992 01:30 | 105 |
|
Q1FY92 Q2FY92 Q3FY92
Product sales 1,863 0% 1,939 -3% 1,750 -17%
Service & other revenue 1,430 16% 1,540 13% 1,502 6%
Total operating revenue 3,293 6% 3,479 4% 3,253 -8%
Cost of product sales 908 3% 1,093 18% 1,020 3%
Service expense 888 14% 939 14% 956 11%
Total cost of sales 1,796 8% 2,031 16% 1,976 7%
Gross Margin 45% -2% 42% -13% 39% -17%
Research & engineering 409 2% 420 4% 429 8%
Selling, General & Admin 1,052 3% 1,176 10% 1,133 3%
Total operating expenses 3,256 6% 3,627 13% 3,538 6%
Operating Margin 1% 240% -4% -205% -9% -280%
Interest expense (21) -17% (12) -43% (12) 49%
Income before taxes 57 64% (136) -187% (274) -253%
Income taxes 29 228% 3 -94% 20 -68%
Net income 29 9% (138) -224% (294) -352%
Q1FY91 Q2FY91 Q3FY91 Q4FY91 Fiscal91
Product sales 1,866 -6% 1,989 -1% 2,100 1% 2,343 13% 8,299 2%
Service & other revenue 1,228 8% 1,363 16% 1,420 20% 1,602 23% 5,612 17%
Total operating revenue 3,093 -1% 3,352 5% 3,520 8% 3,945 17% 13,911 7%
Cost of product sales 878 0% 924 -1% 989 2% 1,114 8% 3,905 2%
Service expense 780 7% 823 14% 860 18% 910 16% 3,373 14%
Total cost of sales 1,658 3% 1,747 5% 1,850 9% 2,024 11% 7,278 7%
Gross Margin 46% -4% 48% 0% 47% -1% 49% 6% 48% 0%
Research & engineering 402 -1% 404 3% 398 -2% 446 8% 1,649 2%
Selling, General & Admin 1,024 9% 1,066 11% 1,101 9% 1,281 21% 4,472 13%
Restructuring charge 0 0 0 1,100 1,100
Total operating expenses 3,083 4% 3,217 7% 3,349 2% 4,851 31% 14,499 12%
Operating Margin 0% -94% 4% -25% 5% -1416% -23% 139% -4% -4439%
Interest expense (25) 11% (21) -7% (8) -79% (16) -47% (69) -38%
Income before taxes 35 -82% 156 -19% 179 619% (890) 203% (519) -519%
Income taxes 9 -82% 45 15% 63 ERR (18) -50% 98 97%
Net income 26 -83% 112 -28% 117 368% (871) 239% (617) -929%
Q1FY90 Q2FY90 Q3FY90 Q4FY90 Fiscal90
Product sales 1,994 5% 2,007 -2% 2,080 4% 2,065 -8% 8,145 -1%
Service & other revenue 1,137 9% 1,178 4% 1,182 4% 1,301 5% 4,797 5%
Total operating revenue 3,131 6% 3,185 0% 3,261 4% 3,365 -4% 12,943 2%
Cost of product sales 882 10% 935 8% 974 16% 1,035 8% 3,826 10%
Service expense 730 12% 724 5% 730 7% 784 4% 2,969 7%
Total cost of sales 1,612 11% 1,659 7% 1,704 12% 1,819 6% 6,794 9%
Gross Margin 49% -4% 48% -6% 48% -7% 46% -10% 48% -7%
Research & engineering 404 11% 392 4% 405 6% 413 3% 1,614 6%
Selling, General & Admin 939 11% 961 8% 1,014 13% 1,057 6% 3,971 9%
Restructuring charge 0 0 150 400 550
Total operating expenses 2,955 11% 3,013 7% 3,273 17% 3,689 18% 12,930 13%
Operating Margin 6% -41% 5% -52% 0% -104% -10% -189% 0% -99%
Interest expense (22) -14% (22) 24% (37) 91% (30) 39% (111) 32%
Income before taxes 198 -35% 194 -48% 25 -93% (293) -173% 124 -91%
Income taxes 48 -42% 39 -59% 0 -100% (37) -142% 50 -86%
Net income 151 -32% 155 -44% 25 -90% (257) -182% 74 -93%
Q1FY89 Q2FY89 Q3FY89 Q4FY89 Fiscal89
Product sales 1,896 12% 2,045 12% 1,994 9% 2,255 3% 8,190 9%
Service & other revenue 1,045 24% 1,134 19% 1,132 14% 1,240 8% 4,552 16%
Total operating revenue 2,942 16% 3,180 14% 3,126 11% 3,495 5% 12,742 11%
Cost of product sales 800 19% 869 19% 840 10% 959 9% 3,468 14%
Service expense 650 24% 687 16% 680 13% 757 7% 2,774 14%
Total cost of sales 1,449 21% 1,556 18% 1,520 12% 1,716 8% 6,242 14%
Gross Margin 51% -4% 51% -3% 51% -1% 51% -3% 51% -3%
Research & engineering 364 22% 376 25% 384 19% 401 4% 1,525 17%
Selling, General & Admin 848 23% 891 18% 901 19% 998 16% 3,639 19%
Total operating expenses 2,662 22% 2,824 19% 2,805 15% 3,116 10% 11,406 16%
Operating Margin 10% -30% 11% -22% 10% -24% 11% -29% 10% -26%
Interest expense (26) 8% (18) -37% (19) -27% (22) -21% (85) -20%
Income before taxes 306 -17% 374 -13% 340 -17% 401 -25% 1,420 -18%
Income taxes 83 -17% 94 -6% 83 -18% 88 -34% 348 -20%
Net income 223 -17% 280 -15% 256 -16% 313 -22% 1,072 -18%
Q1FY88 Q2FY88 Q3FY88 Q4FY88 Fiscal88
Product sales 1,686 25% 1,826 22% 1,833 12% 2,196 24% 7,541 21%
Service & other revenue 844 23% 956 23% 991 27% 1,143 28% 3,934 25%
Total operating revenue 2,530 24% 2,782 22% 2,824 17% 3,339 25% 11,475 22%
Cost of product sales 671 16% 729 19% 762 20% 881 25% 3,042 20%
Service expense 525 17% 595 24% 600 17% 707 31% 2,426 22%
Total cost of sales 1,196 16% 1,323 21% 1,361 18% 1,588 28% 5,468 21%
Gross Margin 53% 6% 52% 1% 52% -1% 52% -2% 52% 1%
Research & engineering 298 25% 301 29% 323 26% 384 35% 1,307 29%
Selling, General & Admin 690 38% 757 40% 759 34% 860 32% 3,066 36%
Total operating expenses 2,184 24% 2,381 27% 2,444 24% 2,832 30% 9,840 27%
Operating Margin 14% 1% 14% -19% 13% -26% 15% -18% 14% -17%
Interest expense (24) 29% (28) 43% (26) 24% (28) 58% (106) 38%
Income before taxes 370 26% 430 1% 407 -12% 535 5% 1,741 3%
Income taxes 100 -11% 100 -35% 102 -33% 134 0% 435 -21%
Net income 270 48% 330 22% 305 -1% 401 6% 1,306 15%
Q1FY87 Q2FY87 Q3FY87 Q4FY87 Fiscal87
Product sales 1,353 1,494 1,631 1,776 6,254
Service & other revenue 686 777 779 893 3,135
Total operating revenue 2,038 2,272 2,410 2,669 9,389
Cost of product sales 578 615 636 703 2,532
Service expense 448 481 513 540 1,982
Total cost of sales 1,027 1,095 1,150 1,242 4,514
Gross Margin 50% 52% 52% 53% 52%
Research & engineering 238 233 255 284 1,010
Selling, General & Admin 498 539 566 650 2,253
Total operating expenses 1,762 1,868 1,971 2,176 7,777
Operating Margin 14% 18% 18% 18% 17%
Interest expense (18) (20) (21) (17) (77)
Income before taxes 295 424 460 510 1,689
Income taxes 112 154 153 133 552
Net income 183 270 308 377 1,137
|
| 1845.26 | :-) | DCC::HAGARTY | Essen, Trinken und Shaggen... | Wed Apr 15 1992 07:36 | 5 |
| 1845.27 | | AKOCOA::JMORAN | When Money Speaks The Truth is? | Wed Apr 15 1992 13:18 | 6 |
| Re: .18 Noble
The return on the investment from the C&L UK consultant engagement was
significant. Quite frankly, you do not know what you're talking about.
John
|
| 1845.28 | I agree, but I disagree :^) | A1VAX::BARTH | DEC's fallen and can't get up? | Wed Apr 15 1992 13:25 | 66 |
| RE: .22 (and similarly .23)
While I agree that "our problems run much deeper and will be more difficult
to fix" I strongly disagree that blaming it on management is off-track.
We, the individual contributors, NO MATTER HOW WILLING TO CHANGE, MAKE
SUGGESTIONS OR ATTEMPT TO IMPROVE THE COMPANY cannot do it without buy-in
from management at several levels. And unless management, at several levels,
has decided to get very radical, no such change is going to happen.
We need LEADERSHIP by the people in charge. Sorry if this is just a
semantic difference, but I believe that it's called GOOD MANAGEMENT. And
I don't see it.
Some questions to ask back to those who think management isn't the root
of the problem:
> o We think significant change means getting a new manager or being
> part of a new organization. I suggest that if the same people are
> still doing the same job with the same processes, who they report
> to is simply an accounting and power game.
Right. Who hires the managers? I sure don't. Who establishes, nay,
insists, on the processes we use. Management.
> o Our processes for developing products are antiquated and quickly
> killing us. In the software area, I suspect we're one of the worst
> examples in the industry of software engineering practices and in
> utilizing CASE tools.
Who has the power to make this get better? Maybe some consulting engineers.
Definitely engineering management.
> o We used to be technology leaders and our customers would come to us
> to solve their problems. We "knew" the right technology for them.
> That may have been true at one time, but it certainly isn't true
> today. Yet I'm astounded how many engineers still think that way.
> "We know what's best for our customers if they'd only realize how to
> utilize our products, we'd be successful." is still the underlying
> meaning to what they're saying.
Let me correct that impression: I believe what you state is largely true
for engineering MANAGEMENT (and in my organization it's been traditionally
true of marketing MANAGEMENT). Most engineers who do the coding are
very willing to build what the marketplace wants. It requires the support
and approval of MANAGEMENT to go out and see what the marketplace has
("We don't have time for that." "The schedule is too aggressive (ie,
unrealistic)" etc) and then it takes good product MANAGEMENT to keep the
project focused on customer-oriented features. Sorry, but we grunts can't just
do all those things without support.
[Side note in the CYA category: my current manager is very good about this
stuff - that's not always been true of previous bosses I've had.]
This is long enough. You get the idea. If we get the kind of change-oriented
leadership we need, this company will do fine. But all those mind-set
problems you see with DEC exist primarily in management, IMHO. Remember,
some brave souls have even stepped up and asked top-level management to do
serious re-arranging of their thinking. And what's happened? $300M losses.
If the Jack Smith's of the company aren't going to listen to the Paul
Kinzelman's of the company, then it doesn't matter whether you call it
cultural or ingrained thinking or whatever.
We need leadership.
Karl B.
|
| 1845.29 | | SQM::MACDONALD | | Wed Apr 15 1992 13:31 | 13 |
|
A fundamental principle for consultants is to get a very clear
response from whomever is hiring you as to whether or not they
are willing to hear bad news. If they aren't, then you're wasting
your time. An external consultant will do us no good if we aren't
willing to listen.
Whomever said that our culture and willingness to listen is the
real problem hit the nail on the head. That problem isn't created
just by managment.
Steve
|
| 1845.30 | Please provide a little more meat ? | COMICS::BELL | Hear the softly spoken magic spell | Wed Apr 15 1992 13:43 | 19 |
|
Re .27 (John)
> The return on the investment from the C&L UK consultant engagement was
> significant. Quite frankly, you do not know what you're talking about.
For the benefit of those UK employees who share .18's view (which, I
suspect, may include most people below the level of Corporate Business
Manager), can you please enlighten us rather than just stating that
[you believe] the RoI was significant and that anyone questioning it
doesn't know what they are talking about ?
Quite frankly, there was precious little feedback to the "worker bees"
and what little did occur was lost amongst the general content-free
change-for-change-sake messages that were flying around at that time.
Thanks,
Frank
|
| 1845.31 | Leadership is only part of the solution | PECAN::LITTLE | Todd Little, TNSG/SDT/Reuse Technologies Group | Wed Apr 15 1992 14:40 | 61 |
| re: .28
As I said, management carries some of the blame as they are ultimately
responsible for the actions of the company. Yet the attitudes and
beliefs that I was refering to were primarily espoused by individual
contributors. Management takes the blame for not having the guts to
force the change, and instead bemoaning that their people can't change.
>We, the individual contributors, NO MATTER HOW WILLING TO CHANGE, MAKE
>SUGGESTIONS OR ATTEMPT TO IMPROVE THE COMPANY cannot do it without buy-in
>from management at several levels. And unless management, at several levels,
>has decided to get very radical, no such change is going to happen.
This is a self fulfilling prophecy. If you don't feel empowered to
make changes, you won't. What level of management do you feel its
necessary to have supporting you? I suspect that if you can make a
good enough case for your changes, that David Stone would be willing to
listen. He as much has said that we should not let antiquated
processes stand in our way.
>> o Our processes for developing products are antiquated and quickly
>> killing us. In the software area, I suspect we're one of the worst
>> examples in the industry of software engineering practices and in
>> utilizing CASE tools.
>
>Who has the power to make this get better? Maybe some consulting engineers.
>Definitely engineering management.
Who needs "power" to make this better. Just do it. This seems like a
no brainer.
>true of marketing MANAGEMENT). Most engineers who do the coding are
>very willing to build what the marketplace wants. It requires the support
>and approval of MANAGEMENT to go out and see what the marketplace has
>("We don't have time for that." "The schedule is too aggressive (ie,
>unrealistic)" etc) and then it takes good product MANAGEMENT to keep the
>project focused on customer-oriented features. Sorry, but we grunts can't just
>do all those things without support.
That is a cop out. Within TNSG, management believes enough in getting
to the customer to mandate QFD. It's about the only mandated process in
all of TNSG at the moment. That should tell you something of
managements willingness to go out the door with something that meets
the customer's needs.
Using schedule as an excuse cuts both ways. Who provides the tasks,
estimates, and dependencies? Notice that the emphasis by Stone is time
to profit, not time to market.
I agree we need leadership, and good leadership is always better than
no leadership. But we need it both at a management level and at the
individual contributor level. Many managers in this company feel
powerless about getting their organization to change.
I believe its the beliefs that I mention at the end of my reply that
fall primarily on the shoulders of individual contributors. And I
believe those have to change before we'll see an improvement in the
bottom line. You can be led to those changes or change them yourself.
The latter is certainly much quicker.
-tl
|
| 1845.32 | Maybe we're really agreeing, but... | A1VAX::BARTH | DEC's fallen and can't get up? | Wed Apr 15 1992 15:39 | 86 |
| *>We, the individual contributors, NO MATTER HOW WILLING TO CHANGE, MAKE
*>SUGGESTIONS OR ATTEMPT TO IMPROVE THE COMPANY cannot do it without buy-in
*>from management at several levels. And unless management, at several levels,
*>has decided to get very radical, no such change is going to happen.
*
* This is a self fulfilling prophecy. If you don't feel empowered to
* make changes, you won't. What level of management do you feel its
* necessary to have supporting you? I suspect that if you can make a
* good enough case for your changes, that David Stone would be willing to
* listen. He as much has said that we should not let antiquated
* processes stand in our way.
Yeah, and I won't have a job the next day...give me a break. Sorry to sound
so strident, but many of us have been down this road. If the changes we need
including cutting projects (mine, yours, whoever's) and a manager in my
food chain isn't interested in having it cut, I am the one who will suffer if
I waltz into Stone's office and say "My project will never be profitable."
If it involves changing the focus of a project, eg, and one of the managers
doesn't agree, you have to play the "salary continuation" game. The real
reason some of us don't feel empowered is because we're not. I'd love to
walk in and tell Stone what I really think. I think he'd decide I'm nuts
or, if, God forbid, he believed my view had validity, I'd have my head
handed to me by someone above me in the food chain.
RE: practices
I don't have much problem with this. The only time I've seen it be a problem
is when management tries to mandate the way things get done. Maybe you're
right - maybe it is a no-brainer.
*>true of marketing MANAGEMENT). Most engineers who do the coding are
*>very willing to build what the marketplace wants. It requires the support
*>and approval of MANAGEMENT to go out and see what the marketplace has
*>("We don't have time for that." "The schedule is too aggressive (ie,
*>unrealistic)" etc) and then it takes good product MANAGEMENT to keep the
*>project focused on customer-oriented features. Sorry, but we grunts can't just
*>do all those things without support.
*
* That is a cop out. Within TNSG, management believes enough in getting
* to the customer to mandate QFD. It's about the only mandated process in
* all of TNSG at the moment. That should tell you something of
* managements willingness to go out the door with something that meets
* the customer's needs.
Pretty broad brush, there - all of TNSG. I disagree. Mandated or not, I
can point you to projects that started this FY where those quotes are used
as the cop out to dodge QFD, and any other TLA's you want to roll out. We
aren't talking legacy, we're talking current projects.
* Using schedule as an excuse cuts both ways. Who provides the tasks,
* estimates, and dependencies? Notice that the emphasis by Stone is time
* to profit, not time to market.
Sometimes management requires or makes a commitment before tasks, estimates,
and dependencies are known. And management ALWAYS makes the deals with outside
suppliers, vendors, contractors. Just because Stone wants time to profit
doesn't mean it's being implemented well by the managers in his organization.
Set mode/lower_pulse
Listen, I know that one person can make a difference. Honest. I do know that.
But after so many "messages" and so much "resource manipulation" and months
and months of reorg's, at some point you get tired of trying to find
a way to dodge the powerful people who, if they could see you, would squash
you like a bug.
It's not so much a cop out as it is giving up. Let us HIRE our managers.
Let us FIRE our managers. Really empower me. Then see what we can do.
Or give us some indication that there are no repercussions about visiting
Dave Stone - or that he even wants to see us. But, frankly, I've had enough
of the current game. I don't wanna play.
Let me clarify - the project team I'm on and the manager I directly report to
are sufficiently good that I can (God willing) contribute and am contributing
to the company's profitability and to customer satisfaction. My project is
really not a problem here.
The context of my complaint is more when I look around some of the rest of
the organization and (most assuredly) the rest of the company. I talk to
plenty of people who tell me exactly what I've put here - "we are mismanaged"
And having worked for both field and corporate organizations, I can safely
say, "I believe it." For my money, it is the root of the problem.
K.
|
| 1845.33 | | FIGS::BANKS | Still waiting for the 'Scooby-Doo' ending | Wed Apr 15 1992 18:18 | 6 |
| .32:
Very well said.
What the h*ll is the point of having a spirit, when it's only going to get
crushed?
|
| 1845.34 | Manglement vs. Individual Contriputors | TINCUP::BITTROLFF | | Wed Apr 15 1992 22:38 | 23 |
| Regarding the argument around who can make a difference.
I see it as mostly a matter of scope.
1 good manager can energize an entire organization, it usually takes a determined
core group of IC's to achieve the same level of results without support.
The converse is also true, one bad manger can drag an entire organization down,
often to the point where no matter how determined the IC's can't make up the
difference.
A dynamic IC or team can do just fine as long as the manager doesn't actually
get in the way.
Finally, the effect is multiplied as you move up the chain to a point. After you
reach some level (I don't know where, maybe 30,000 feet? :^) ), a sort of a
disconnect occurs and the people doing the real work aren't really affected no
matter what goes on. The real power of a good manager at this level is knowing
how to hire and manage the managers under them, not to guide the troops.
Just another 2 cents worth.
Steve
|
| 1845.35 | bahh! | DCC::HAGARTY | Essen, Trinken und Shaggen... | Thu Apr 16 1992 08:38 | 26 |
| 1845.37 | Advice | SDSVAX::SWEENEY | Patrick Sweeney in New York | Thu Apr 16 1992 12:29 | 5 |
| Don't confuse your rights as a shareholder and the obligation that
your employer believes you have not to embarrass the company.
Any inquiry that you have should be pursued through the open door
policy.
|
| 1845.38 | | SSDEVO::EGGERS | Anybody can fly with an engine. | Thu Apr 16 1992 20:05 | 7 |
| As the one infamous person who once asked a question in an annual
meeting, my advice is, "Don't do it."
If you want to get get something on the ballot, or get a question
asked, go through some third party who will insulate you. Your stock
broker, perhaps. And remember not to base the question on inside
information.
|
| 1845.39 | bungie jumping | STAR::PRAETORIUS | what you fear, you empower | Sun Apr 26 1992 16:36 | 46 |
| I agree a little with (Pecan::)Little, but I think .32 was the most
eloquent reply to this note. We can argue that its the worker's fault,
the hierarchy's fault, everybody's fault or nobody's fault. The one thing
that biases me in this discussion is Deming's repeated observation that workers
can't improve things without management that's sold on change and cooperation.
I've been thinking a lot about fear recently. I went bungie jumping a
few weeks ago. I was hoping that it would be difficult, that I'd really have
to push myself emotionally to step offa something with the ground so far away
beneath me. That I could could use that moment as a dividing line and push
off into the future from it.
It was nothing. Well, not nothing, but very little, fearwise. A second
or two of hesitation, taking a deep breath, a little rush of adrenalin, the
wonderful (but brief) sensation of free fall, the little snap at the end of
the cord. I'm glad I did it, all the same, but,
It was nothing.
Why?
I work at DEC.
Look at all the fear expressed in the replies to note 1845. The whole
U.S. computer industry quivers at the sight of the recession (except for Bill
Gates, who, by genetic accident, was born without the capacity for fear or
ethics). Everyone at DEC quakes with the knowledge that most parts of the
company have structures and processes that are seriously out of step with our
customers' needs. Our customers are afraid that any money thrown at DEC is
thrown away.
The managers are rattled because their personnel purging and belt
tightening have hit the bottom line with all the impact of a DEC advertisement.
The employees are horrified that, with rare exceptions, the management gives
no hint that they see the big picture. Grunts and bosses alike sense that
their jobs may be in jeopardy, that we're sliding into an abyss. Underlings
are afraid that their overlords, desperate to cover their own asses, have no
desire for intelligent and open discussion of things as they are.
Fear, fear, fear, fear, fear.
I don't know what it means. I don't know what the answer is.
It's just an observation.
RP
|
| 1845.40 | | FIGS::BANKS | VMSMAIL: Its as good as it gets! | Sun Apr 26 1992 18:36 | 24 |
| Having been in companies (other than Digital) that share these problems, it
has been my observation that people (grunts and management alike) never
really "get it" until a few days or weeks after filing Chapter 11.
I'm assuming it'll work that way here. For my efforts, I've totally broken
my pick (and spirit) trying to change things from where I sit.
As I've said before: What's the point of having a spirit, if it'll only be
broken?
I've tried my best to try to "fix" things. I may have had the wrong ideas,
and I may have gone about it in all the wrong ways, but I'd still give
myself 10 out of 10 for trying and 0 out of 10 for results. I have finally
discovered that I am in an organization that has problems, and despite all
my best (or arguably worst) efforts, I can't change it. Therefore I have
three choices:
1. Learn to live with it.
2. Sit around and complain about it.
3. Find another set of problems to be a part of.
I've spent far too much time doing #2 (as this reply is a prime example).
I've been trying to do #1. Trouble is that I don't share any accidents of
genetics with Mr. Gates (as alluded to in .39)
|
| 1845.41 | When the going gets tough... | BIGJOE::DMCLURE | Just say Notification Services | Tue Apr 28 1992 22:40 | 25 |
| ...the tough get pissed off? NOT! Or at least not exactly...
Of course, the correct answer is: the tough "GET GOING" (to
where I'm not quite certain - to another company perhaps?). :-(
There are many truths stated in this note string and others.
There are extremes being voiced here too - both negative and positve.
I personally think that's a good sign. Some would rather see only a
middle ground. I diasgree. I think a heated debate on these issues
in an open forum such as this is looooong overdue in this company.
To wish for a muddle ground on these issues is only a wish for more
conflict avoidance. A politically corrected state of affairs -
sanitized for tender ears. That's the sort of vanilla coating
that got us to this point in the first place.
According to Ken Olsen, it's immoral to lie. Actually, yesterday's
Boston Globe quoted him as saying that it's immoral to "tell stories"
because that's like lying and lying is immoral. Hmmm....
So go ahead and raise some hell. Tell it like it is! Be honest.
-davo
p.s. Just remember to update your life insurance policy first ;^)
|