Conference 7.286::digital

    Hmmm, sounds like product lines to me...
    
    A few thoughts:
    
    When you spin off divisions to develop their own niches, you end
    up duplicating all of the administrative and support functions you
    used to share as part of a large organization.  The end result is
    *more* bureaucracy than before (when viewed as the sum of the parts).

    Invariably you end up with competing products and services.  This
    means that substantial investments are made to bring products to
    market before survival can be ascertained.  We end up competing
    with one another in the marketplace rather than in the boardroom.
    This is not necessarily a bad thing, but it is significantly less
    profitable than bringing only a single message to our customers.
    
    One of the advantages of a large organization is it's tremendous
    reserve capacity.  As a single company, we can summon *enormous*
    amounts of resources (oh-oh, the dreaded 'R' word...) to attack
    large segments of markets.  By breaking up, we loose the ability
    to do that.
    
    Lastly, we are a technology company.  We loudly proclaim our ability
    to use this technology to bring success to entire enterprises.  *Large*
    enterprises.  If the only way we are able to solve our own problems 
    is by breaking the enterprise up (instead of the application of 
    this technology),  the veracity of our marketing message becomes
    significantly diminished.
    
    Al   

    

    Have you checked out the book 
      ``In Search of Excellence'' by
    Peter Thomas (?).   
    
    It discusses exactly what you are asking about and much more.
    I think it must be a must read for managers and for others 
    strongly recommended reading.  It revels startling and eye 
    opening facts and observations about Corporate Management.

    One interesting aspect of a service organization spin-off would be that
    the spin-off would have it's own set of books that could conform to
    government cost accounting standards and could, therefore go after true
    government cost type (cost plus, etc.) contracts.  As one corporation
    today, we are precluded from that business.  I*M had a Federal Systems
    Division (now part of Systems Integration ?) that was set up that way.
    
    If we are moving toward being a system integrator, that is a huge
    marketplace that is not available to us today.
    
    	-Barry-
    

    re: .2
    
    That's Tom Peters, not Peter Thomas, but what do these people expect
    if they refuse to have last names.
    
    My understanding of Tom's ramblings and entertaining examples is
    that it all boils down to:
    
      "Behind every successful organization is a monomaniac with a
    mission!"
    
    which may not be in the book but certainly was in his follow-on public
    appearances.                                 
    
    And, I couldn't agree more.  An organization is a reflection of
    its leader(s) or lack thereof and nothing more.  IBM was wonderful
    under the Watsons, but sucks wind managed by a bunch of yuppie MBA's
    none of whom has a loyalty past his own physical/financial
    gratification.  On the other end of the spectrum is Chrysler which
    used to be just a haven for car-buyers whose friends already had
    Fords and Chevs and they either didn't want to copy or to offend one
    friend by copying the other.  Chrysler's current monomaniac has, as 
    his mission, the burning desire to prove Ford was wrong to fire him.  
    (Amazingly enough, Tom Watson Sr's appetite was for the same sweet
    taste of revenge because NCR had fired him.)
                     
    Don
    

>For the sake of argument, let's say we spin off the PDP division (we might 
>find some other areas as well).
.....
>                                         ....Hopefully, during the process 
>we'll manage it so what remains of Digital is largely cleared of the deadwood 
>people complain about.  

I understand the premise of the argument, but considering the number of 60 - 80
hour weeks I put in, I really don't like being lumped into a category called
"DEADWOOD". In reality, the folks in the service organizations that do the
PDP-11 products are often up to their eyeballs in work because there isn't
a lot of expertise left in these areas in the company, yet hw and sw
services are still being sold on them, and they are very profitable areas for
the corporation!

So please, if you want to use charged words like "deadwood", how about making
up the name of a business like "spin off the FOOBAR business" rather than malign
something real?

Deb

    I was afraid this would happen.  What I meant was that in the process
    of some fairly major surgery, ie spinning off one or more large
    divisions, there tends to be a high rate of attrition.  During the
    process of splitting we also get to give out lots of golden handshakes.
            
    You might also remember I noted that one of the negatives to Digital 
    was that we would lose more than a few good people.  
    
    So, one big company splits to become two or more big(gish) companies.
    Are we better off?

    Whether or not we are better off becomes academic if the "spinoffs"
    serve to induce a takeover.  These takeover giants look to buy up
    profitable companies and sell off sections/divisions/spinoffs to
    finance the stock takeover.
    
    Marge

        re .0
        
        Firstly, why should the only mechanism for making digital smaller
        involve breaking off major components of the company. There is an
        underlying result to supposedly making us "smaller" - Improve the
        per capita profitablity (which will bring pressure to bear upon
        the so called deadwood to shape up or ship out.)
        
        So where do you decide what is to be split out. Let us take your
        hypothetical case of the PDP11 business. At about 10% of Digital,
        lets take 12,000 people out of Digital. Sure, a lot would resign
        because they had been "shuffled". Most of those would be the hard
        workers who had lost career paths etc. The deadwood would be happy
        to cruise in a generally unchanged job. We would have to run
        seperate field offices, for this other company, as they would have
        seperate profitability goals ( and we wouldn't want them competing
        with mainline Digital). They wouldn't be under the same strict
        corporate direction, so they would start looking at alternatives.
        What do the PDPites do for disk. Do they just buy from Colo
        SPrings with no feedback anymore into product design, or do they
        move out and buy from brand X, or do they start their own disk
        design facility. What happens with "compatibility". The other
        company is no longer privy to the DECnet developments. the PDP
        Company is now about the same size as Wang or DG, without the
        might of Big Digital behind them. As Marge points out, it makes
        the PDP company and Digital Proper both ripe for take over bids.
        To my way of thinking, it would be the fastest way of pissing $1
        billion plus out of the window.
        
        As is often the case, this would appear to be an attempt to fix a
        problem by changing the result rather than the cause. If there is
        a problem with the bureaucracy, then fix that problem. Don't try
        to find kludges around the problem...
        
        There is no "too big", Surely you, as an employee normally based
        in Australia's national capital would know that bureaucracies can
        grow to ridiculous extents before they are too big...
        
        
        q

    Spin the PDP-11 business off into a separate company? Hmmm...that now
    enables them to compete in the market place, just like everyone else...
    
    If I were in such a position, I'd develop and market a new system based
    upon Virtual Addressing, capable of Symmetric Multiprocessing, with a
    wide range of processors all running the same O/S or some flavor of Unix.
    
    And then go compete against my 'parent' company...

re Note 790.2 by HANNAH::MESSENGER:

> We are *not*
> hiring the best, at least during a hiring freeze; for the most part we only
> hire people fresh out of college.  

        This is a particularly sore spot for me, because we are not
        even allowed to hire an MIT student, graduating this June,
        who has been working for us as a temporary employee for a
        year and who has been given great recommendations from his
        supervisor.

        He has been working on an advanced development project that
        we want to make into a product.  Rule number 1 of technology
        transfer says that tech transfer is most effective when the
        people are transferred.

        Bob

    re .8
                                                              
>    Firstly, why should the only mechanism for making digital smaller
>    involve breaking off major components of the company. 
    
    It doesn't necessarily have to.  It just seemed a suitably vivid
    example of how to achieve the apparent goal of dramatically reducing
    the size of the company so we could all be marvellous and creative
    again.  If you think it can be achieved (or even should be achieved,
    a separate question) another way then fine.  It doesn't affect the
    validity of the question.  
                             
>        There is no "too big", Surely you, as an employee normally based
>        in Australia's national capital would know that bureaucracies can
>        grow to ridiculous extents before they are too big...
                             
    When I first read this I almost thought we were going to agree.
    But!  No precedent has been set.  I thought one of the reasons you
    like dumping on Canberra is that the bureaucracies HAVE grown to
    ridiculous extents (meaning they are too big)(a not unreasonable
    opinion).

	Spinning off groups from the parent as separate 'franchises'
    is a way to reduce the cost of doing business.  You don't have to
    pay benefits, retirement plan...none of the goodies wer get with
    the parent.  These spin-offs then can compete better against certain
    types of competitors, say...the PC business.
    	The DECtop strategy statement that was mailed to our homes in
    one of those regular DEC publications stated that we will be doing
    something creative to service these customers.  Perhaps this is
    it?