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Conference 7.286::digital

Title:The Digital way of working
Moderator:QUARK::LIONELON
Created:Fri Feb 14 1986
Last Modified:Fri Jun 06 1997
Last Successful Update:Fri Jun 06 1997
Number of topics:5321
Total number of notes:139771

1896.0. "Ken Olsen under pressure to produce" by SDSVAX::SWEENEY (Patrick Sweeney in New York) Wed May 13 1992 13:20

T.RTitleUserPersonal
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1896.1Not the entire WSJ articleDANGER::FORTMILLEREd Fortmiller, BXB2-2, 293-5076Wed May 13 1992 13:252
    This represents about 2/3 of the WSJ article.  The part starting from
    "RISC and Reward" is what is missing from the DowVision version.
1896.2Who is David Smith?SCAACT::AINSLEYLess than 150 kts. is TOO slowWed May 13 1992 14:176
This isn't the first time I've seen David Smith quoted in an article concerning
DEC.  I don't recognise the name.  Can someone fill me in?

Thanks,

Bob
1896.4MIMS::PARISE_MSouthern, but no comfortWed May 13 1992 14:335
    
    We're all under pressure to produce.  What we have to figure out
    is how to put the pressure under customers to buy!
    
    
1896.6We all can turn Digital aroundJARETH::TREWORGYWed May 13 1992 14:5618
    The most important point was left out of the article!
    
    "While such hugely expensive projects have gone forward, management's
    efforts to cut other costs often focused on items such as water coolers
    and magazine subscriptions. In January, a memo circulated at a Digital
    office in Acton, Mass., identifying the building as a test site for
    lower-cost toilet tissue, " a project being driven by Win Hindle,
    corporate staff senior vice president."
    
    It is about time someone has recognized the real problem with Digital -
    too much toilet paper usage. This is something we can all help with. Why
    use too sheets when one will due? Even better still wait until your
    lunch break and use the facility at a local service station. For you
    #1 performers, if you work near a competitor's office, sneak in and use
    their toilet paper.  
    
    Maybe we failed in bringing  in the papaerless office. Let us not fail
    this time, let's make Digital toilet paperless by 93.  
1896.7washes the back side with waterLUNER::ROBERTSraised on AnthraciteWed May 13 1992 14:584
    
    The Japaneese have a toilet that does just that BTW.
    
    	8-)
1896.8It may be DECpc 43 controlled..RT93::HUWed May 13 1992 15:396
    
    Ditto, the toilet in the Casio of Monte-Carlo also do that. The used
    one will flip inward and washed, then new one will flip outward.
    
    Michael..
    
1896.9I think this is the entire WSJ articleDANGER::FORTMILLEREd Fortmiller, BXB2-2, 293-5076Wed May 13 1992 15:46231
1896.10PBST::LENNARDWed May 13 1992 15:5217
    I have long maintained that DEC seriously needs "Big Company" managers.
    Maybe we'll finally start seeming some action.  BTW, those big company
    managers should replace, not supplement, many of the hangers-on.
    
    Personally, I think it is time for major changes at the highest levels,
    and I'm not talking about banging on the bird cage again, which seems
    to be the preferred way to deal with organizational issues here.
    
    The cuts being proposed (10-15K) are once again, too little, too late.
    But, most devastating of all, the next round of cuts will probably
    again target top-notch people who happen to be trapped on
    non-performing or out-of-favor organizations.  When I see the number
    30,000, coupled with a goal of reducing the Greater Maynard Gold-Old-
    Boy Chowder and Marching Society by 50%, then I'll know we are finally
    getting serious.
    
    SERP'ing out, and thankful
1896.11CREATV::QUODLINGKen, Me, and a cast of extras...Wed May 13 1992 16:386
    re .0
    So what makes us think that Sculley could help. People I know inside
    Apple, say he isn't certain of which direction to take, either...
    
    q
    
1896.12RANGER::LEFEBVREPCs 'R UsWed May 13 1992 17:009
    re. .4:
    
    I'll agree with your first statement.  
    
    Ken Olsen is not the only one under pressure to produce.  Anyone in
    this organization not feeling any pressure to produce should pay closer
    attention to our situation.
    
    Mark.
1896.13Freedow to Act!LUDWIG::LOGSDONWed May 13 1992 22:2218
    As the old saying goes, Big Men [or women] make Big mistakes. 
    If Mr Olson says he gave to much Freedow [power] to people he is more
    than right, however they used it to take Freedom away from others.
    Whenever an organization brings in new blood it is because they took
    the freedom from the people they already have and will give it to 
    the new people under what I call "Get the job done syndrome"
    They will support these "new" people with a much less conservative
    attitude that they have with present employees because they "brought
    them in" and have to back them or look bad. 
    
    I have seen it time and time again that "New Blood gets the support and
    Freedom" to get the job done that for some reason a long time employee
    has been asking for all along but no one was listening.
    
    I feel this company must have that new blood somewhere in its own ranks
    and is being held back by........................
    
      
1896.14BIGJOE::DMCLUREWhen the going gets tough...Wed May 13 1992 23:2910
re: .13,
   
>    I have seen it time and time again that "New Blood gets the support and
>    Freedom" to get the job done that for some reason a long time employee
>    has been asking for all along but no one was listening.
    
	My thoughts exactly.  Thanks for putting that note in (now
    I can get home in time for my favorite TV show).

				   -davo
1896.15FDCV14::CONNELLYglobally suboptimized in '92Thu May 14 1992 01:0419
re: .11

>    So what makes us think that Sculley could help. People I know inside
>    Apple, say he isn't certain of which direction to take, either...
    
Sounds like he made the best decision he could, under the circumstances.
Partnering with Digital would've been seen as the two biggest "proprietary"
vendors picking up their marbles and going home together.  Now if we had
had Alpha ready at the time, and if we had changed our technology licensing
practices then, and if we had had a UNIX offering just credible enough to
cause some FUD for the other players in that space, and if we had had enough
engineers not behind the development environment power curve due to lock-in
to the VMS design center...

Then MAYBE some other folks would've taken their marbles and come along to
play our game.  But not as it stood.  Good technowetdream, bad business.

								paul
1896.16Its the risk you takeMSDOA::MCCLOUDBIG fish eat little fishThu May 14 1992 01:409
    rep .13 .14
    
    	The new blood is inside each and every one of us. The reason new
    blood's have soo much success isw
    
    1. They are NOT scared to take the risk...
    
    	My manager often says to my whole group to take the risk and he
    accepts our mistakes along with our successes.
1896.17more complete version of .0SDSVAX::SWEENEYPatrick Sweeney in New YorkThu May 14 1992 01:43175
1896.18LUNER::ROBERTSraised on AnthraciteThu May 14 1992 10:003
    
    enough of the MORE complete versions when are you going to post the
    WHOLE version?		8-)
1896.19New roles give freedomIW::WARINGSimplicity sellsThu May 14 1992 11:158
As Robert Townsend says, for the first 100 days of any new job, you're
bullet proof. If you get moved within that time, the person who hired you
will look like a complete idiot. So, that's the time to really revolutionise
things.

It doesn't matter whether you come from inside the company or outside...

								- Ian W.
1896.20"If you're walking on eggs, don't hop."SA1794::CHARBONNDMediocrity _is_ achievableThu May 14 1992 13:2611
    re.16 >The new blood is inside each and every one of us.
    
    WADR, what planet do you work on? Most of the people here have seen
    _hundreds_ of co-workers TSFO'd out, new products being built over-
    seas, are worried sick about the future of the plant, are watching 
    the stock price circling the drain, and won't move for fear of being 
    perceived as candidates for the next RIF. There are hardly any
    employees under the age of 30, or with less than ten years in the
    company. After spending ten + years building up pension benefits,
    vacation time, etc. you _don't_ make waves.
    
1896.21Take the riskMSDOA::MCCLOUDBIG fish eat little fishThu May 14 1992 14:0410
    rep .20
    
    	Excectly my point the problem is if everybody is so scared to make
    changes then we all eventually will be TFSO'd. The only thing I can do
    is find what I can change and change it. So far it has been profitable
    change with some mistakes but I am only human. Lets face facts if you
    try to change something and get canned for making the wrong choice you
    would have been canned eventually without even trying to make a
    difference this is not the way I want to go. I will go out fighting if
    I get canned for it then this is not the company I want to work for.
1896.22* * * * *star stuff* * * * *PBST::ISBRECHTThu May 14 1992 14:3835
re....20

Hi there; ('didn't catch your first name)

Apropos your last line...
	    The purpose of life IS to make waves !
All impressive things that we enjoy now had their start in "labor pains"!
We're the product of star stuff that had its own birth in a super nova
explosion. And if that isn't 'making waves' then I don't know what is.
There is no such thing as job security - no security <period>.
	...BTW...too bad there isn't a Happy Face key on this here LK201
	 to impart these lines a fitting chuckle; in Amateur Radio, we
	say, hi,hi to make up for the stoic character of a code key
	transmission.

I've been following  these Notes proceedings with riveted interest, especially
since Monday of this week. In line with my ingrained engineering-type
of make-up and 'root-cause-analysis' thinking -  meaning, to step
away to take in the big picture -  I'd like to add that the majority
of entries have been afflicted by too high a morose 'fault signature'.
One reply, to the Churchill Commons Speech Note, even kicks those of
us, who might be taking a 'transfer ticket' soon, by saying, ~~~ "you've
been useless anyway so why don't you get out and let us do the rowing..."

So, to all of you who might be faced with high-impact decisions to either
stay on or 'take a hike', never get so tight up  with any relationship
(personal or business) that you can't 'crack a smile' or whistle
a tune and remember that star stuff which gave birth to us all and will 
also call us home again.


Cheers,
Karl
    

1896.23Let's get specific ...ODIXIE::GEORGEDo as I say do, not as I do do.Thu May 14 1992 14:5819
    Re: .21
    
    All this talk about "changing some_thing_" oversimplifies the issue and
    is misleading.  Digital doesn't need to "change something"so much as it
    needs to change its attitude, its approach to problems, its ability to
    communicate, its integrity.
    
    For example, 2 weeks ago, I was involved in generating a solution to a
    Fortune 50 customer.  The Account Team accused me of "nitpicking the
    program to death" because I insisted on creating an effective statement
    of work _before_ doing the pricing (and believe me, this was not a
    value-based pricing argument).  I was told that that was a delivery
    problem to be resolved by the delivery manager (_not_ involved in these
    discussions, by the way).  I was told there was "plenty of money in
    here to cover anything we forgot".
    
    Now, very slowly, tell me how to "change this" in a meaningful context.
    
    		Steve
1896.25We are DIGITALMSDOA::MCCLOUDBIG fish eat little fishThu May 14 1992 16:1419
    re .23
        
            I have no idea what the sultion to your problem is and do
        not understand why you expect me to know the answer. Changing
        our attitue is something.
        
        >Digital doesn't need to "change something"so much as it needs 
        >to change its attitude, its approach to problems, its ability
        >to communicate, its integrity
        
            This sounds like you are not a part of us or should it read
        
        Digital doesn't need to "change something"so much as WE need to 
        change OUR attitude, OUR approach to problems, OUR ability
        to communicate, OUR integrity
        
    
    	All of these things are changes we can make and the only
    	way they will get changed is by us not by management or policies.
1896.26Globe article referenced in .24SSDEVO::EGGERSAnybody can fly with an engine.Thu May 14 1992 17:01297
The Boston Globe
Monday, April 27, 1992

Digital bracing for a rocky course

Despite the doubts of some, founder tries to steer company through
tough times

By Josh Hyatt
Globe Staff

Kenneth H. Olsen is mad, very mad.  "What happens inside this organization,
nobody has  a right to know," shouted the chairman and founder of
Digital Equipment Corp. during an interview last week.  "It is not
public what we do inside."

What about stockholders and employees, Olsen was asked, shouldn't they
be told the details of the latest reshuffling?  "No," thundered Olsen.
And as for the press - well, Olsen left little doubt where he stands:
"Keep your cotton-picking hands out of things," Olsen warned.  "If I
bawl someone out, there is no reason I've got to bawl them out in
front of you."

First revealed about 10 days ago, the $14 billion company' s latest
reorganization - its second within a couple of months - left the roles
of three vice presidents up in the air.  "We change the organization
all the time," Olsen said angrily.  "I'm not going to go into the
details.  You'll get it all screwed up anyway."

Today, as the company opens the doors on DECWorld '92, its huge
exposition for 25,000 customers, there are enough questions about
Digital's prospects for returning to financial health - particularly
under Olsen - to fill Boston's World Trade Center.

The numbers tell part of the story.  For its fiscal third quarter,
which ended on March 28, Digital reported an operating loss of $294
million, its second operating loss in a row.  And the company has
indicated that it may not run of of red ink until 1993.  "I was
disappointed," Olsen conceded.  "In spite of what you read in the
Globe, we are not about to fire a bunch of people."

If Olsen has a master plan - and in some quarters, it is by no means a
given that he does - he isn't revealing it.  "I don't explain
everything," Olsen said.  "Every day we change something.  We'll tell
you results."

Those results, whatever they are, will reflect upon no one as much as
Olsen.  An Massachusetts Institute of Technology graduate who went on
to work at Lincoln Laboratory, Olsen and a partner got the idea to
launch what they then called Digital Equipment Computer Corp. in the
summer of 1957.  They changed the name because they were eager to get
venture capital and they had read an article that said nobody could
make money in computers. They got the investment money, a whooping
$70,000, and Olsen to this day  loves to quote Gen. Georges Doriot,
the pioneering venture capitalist who served on his board until he
died in 1987.

At the start, his investors were leery about Olsen's stewardship.  The
venture capitalists took 70 percent of the stock and demanded that
another 8 percent be reserved for a key person, a professional manager
who would be brought in.  That person never materialized, and Olsen
has remained an overwhelming president at Digital to this day, though
he has never owned much more than 10 percent of its stock.  Of course,
his unparalleled performance has made him of multimillionaire.  No
company founder has ever stayed on to build a company the size of
Digital,  a computer maker second only in revenues to International
Business Machines Corp.

Digital also has the distinction of being the largest company in the
United States that is still run by its own founder, who appears to
have stayed on top and in command through a combination of wonderfully
wise decisions and terribly shrewd power plays.

Indeed, it is quite possible that Olsen will emerge triumphant from
these turbulent times.  He has come roaring back before, often with a
hot idea in tow.  Around 1970, recalled one former Digital executive,
"everybody said Olsen was out of touch."  Digital reasserted its
technological leadership with the PDP-11, a 16-bit minicomputer.  In
1977, the company produced a breakthrough VAX family of computers,
which propelled Digital into IBM's orbit.  During the '80s, Olsen's
vision of networking - that is, tying computers together - set the
company soaring even higher.

Complex transition

But analysts believe that Digital began falling behind the
technological curve as far back as 1987.  Hoping to remedy that,
Digital by year-end will be shipping computers that employ its new
microprocessor, Alpha, reputed to be the fastest microchip ever.
"They've taken on the most complex product transition in the
industry," said Joseph Payne, an analyst at Alex, Brown & Sons.  It
takes a real organizational leader, and Olsen is the right guy in the
right job."

Others aren't so sure.  Some believe that Olsen has simply grown too
arrogant and too out of touch to see the scope of Digital's problems,
never mind healing them.  "Olsen is all raw nerves right now, and he's
not very happy with any of his executives," said a consultant who
works closely with the company.  "He's incredibly sensitive."

Another consultant - for obvious reason, most are unwilling to allow
their names to be used in this story - depicts the giant computer
maker as a hostage to its overly attached founder.  "I think somebody
needs to get Ken Olsen out of there," the consultant said. "He is
running the company, right now, totally from motion.  Nobody will
stand up to him."

Company insiders described an atmosphere where Olsen often issues
directly conflicting instructions.  Just last week, for instance, he
sent employees a message - some call them "KenGrams" - indicating that
Digital had adopted another company's database product as its
standard.  Within a few days, another message appeared contradicting
that one.

"There is no question that management at Digital seems more confused
and disjointed than ever before," said Thomas Willmott, vice president
of the Aberdeen Group Inc., a market research firm.

Another person who works closely with Digital describes Olsen as
increasingly impatient and unable to focus on what needs to be done.
At a recent meeting revolving around a product decision, this source
said, Olsen made it clear he didn't want to read competing business
plans or take the time to discuss such matters as pricing comparisons.
"He didn't listen," the consultant said.  "He said, `I don't have time
for this.  I've made my decision.'  And that was it."

Inside Digital, Olsen's outburst last week prompted reactions that
ranged from distressed to appalled.  Some at Digital clearly believe
that shareholders have every right to know if a three vice presidents -
William Strecker, F. Grant Saviers and Dominic LaCava, all of whom are
listed in the annual report - are changing jobs or might leave the
company. Saviers, for his part, said only that he guessed he would
stay at Digital.

"I don't know where they are," Olsen said of the vice presidents.

In the interview Wednesday afternoon, Olsen had difficulty even
admitting that the company had resorted to layoffs, which began in
January 1991.  "We're not in certain businesses anymore," Olsen said.
And while the most recent reorganization clearly eliminated the
company's hardware engineering unit, Olsen contended that "we are not
disbanding any hardware group."  On Friday, John F. Smith, Digital's
senior vice president, predicted that the company would cut at least
10,000 positions in fiscal 1993, which starts in July.

Deepening financial distress

In his 35 years at the helm, Olsen has traveled the road from hero to
goat and back again about as many times as Richard Nixon.

But Digital's distress is deeper now than ever before; until its
second fiscal quarter, which ended in December, the company had never
reported an operating loss.  And in an industry in which competition
and technology are changing at staggering speeds - and profit margins
leave little wiggle room - some believe that the 66-year-old simply
doesn't know what to do.

Even if that is true, he isn't likely to admit it.  Olsen is "one of
those people whose egos are so strong that they have managed to blind
themselves to any form of criticism," said Edward B. Roberts, a
professor of management of technology at MIT who has known Olsen
almost since he started Digital.  "He is continuing to bring the
company down, while hoping for a magic turnaround."

Digital's board or its shareholders may want a more aggressive
approach.  But by Olsen's own design, there is no apparent replacement
for him from inside the company.  "Once you pick a successor, it is
the kiss of death," Olsen said.  "It limits you.  You just have to
overwork everybody and see who survives."

Almost no on does.  "Olsen has managed, over the years, almost
systematically to kill both challengers and likely successors," said
Roberts.

Nearly two years ago, Roberts recalled, he sent Olsen a chapter of his
book about high-technology entrepreneurs that concerned Digital.
Olsen said back a nine-page commentary on Roberts' seven-page chapter.
Olsen's most revealing suggestion, Roberts said, was asking Roberts to
diminish the credit he gave to C. Gorden Bell, who is considered the
technical mastermind behind Digital's flagship line of VAX computers.
"He couldn't stand the fact that I was giving Bell credit," said
Roberts.

Indeed, successor speculation seems to chase one executive after
another out of the company.  "Ken Olsen has never said that someone
might be a successor, could be a successor or even implied that
someone might be a successor," said John J. Shields, who was widely
viewed as No. 2 when he left, without another job, in October 1989.
"When I was there, Ken always tried to keep his options open."
Shields is now president and chief executive officer of Prime Computer
Inc. in Bedford.

In the last year or so, Digital has suffered several important
defections.  Since leaving in the fall, James Osterhoff has yet to be
replaced as chief financial officer.  One reason, insiders say, is
that the board has been pressuring Olsen to hire from outside Digital,
which he is resisting."  They don't want a yes-man telling Ken how his
finances are doing," said one source.  "Very few people want to take
on that job."

Gary B. Eichhorn,  a fast-rising executive who was vice president of
general systems business at Digital, also left last year.  "Ken has a
very specific philosophy not to name a successor," said Eichhorn, now
general manager of the workstation business unit at Hewlett-Packard
Co.  in Chelmsford.  "He always told me that this is part of the way
he needs to run the business."

And Olsen seems firmly convinced that he does need to run the
business.  By his own admission, he can't even foresee the day when he
would not be in charge.  "I'm probably guilty of thinking I'll never
grow old and never leave," he said.

Not likely to be forced out

It doesn't seem that anyone is going to force him out, either.

Under typical circumstances, the board of directory would be the most
likely party to put the squeeze on Olsen."  Clearly they have to meet
over the next 30 days," said Willmott.  "They need to have an intense
discussion about the future of the company."

But few seriously think that they would consider a future without
Olsen in control.  Digital's board consists of only eight members, and
most seem to be tied closely to Olsen - one belongs to a common social
group, for example, and another goes back to Digital's early days.
"The board is very interested when we lose money," said Olsen."  We
explain it to them."

The board may not confront the issues head on, but stubborn questions
remain about whether Olsen's style of management, or even his
personality, are appropriate for the situation in which Digital now
finds itself.  Both, critics content, were better suited to a time
when the company had a virtual lock on its customers.

Olsen's personal management style has always been unconventional, to
say the least.  This is the man, employees report, who canceled an
entire product line in 1982 by issuing a parable about tractors.  "He
throws out a thought that can be taken many ways and says, `Run with
this,'" recalls one former executive.  "He is truth-seeking, which
presumes that he knows the truth."

Since the start of the company, Olsen has also been a strong believer
in matrix management, a configuration in which all decisions are
shared.  This leaves no one person with too much power. "The culture
at DEC has always been that problem solving is more important than
decision making," said Scott Flaig, who left Digital three years ago
as director of manufactured and engineering for the telecommunications
group.  "That has been a wonderful way to grow the business.  But now
it's hard to find the owner of any given decision.  What  markets will
we serve?  What kinds of products will we make?  These decisions
aren't happening."

Growth, in itself, can mask a lot of so-so decisions.  But now that
the company is shrinking, a consultant who works closely with Digital
describes it as highly politicized and almost totally paralyzed.  It's
very difficult to put your hand on what's happened in there," he said.
"A culture has emerge where everybody says they can get something
done, but nobody really was."

When Digital was growing, and the stakes weren't so high, it was
undoubtedly easier for managers to reach a consensus.  Now nobody
wants to stick his neck out.  "Because of his management style, Olsen
is just standing back," said the consultant.  "But they need a strong
leader in there.  Maybe Ken's says of morals is getting in the way of
doing what he needs to do."

It may very well be that Olsen's personality does not mesh will with
the changing computer industry, which requires him to make more
painful decisions than he did back in the days when proprietary
technology and minicomputers - two Digital specially - reigned
supreme.  "I don't know if he had the heart to do the kind of cutbacks
Digital needs," said one consultant.

Olsen is idealistic by nature, and some who know him see him as,
firmly believing that he and his 116,000 or so employees can dig their
way out of this predicament. Payne says the recent elevation of both
marketing and software executives shows Olsen "clearly has a view of
where computing is going in the 1990's."

"Most of the people who criticized Ken don't know him,  and generally
don't know what they are talking about," added Eichhorn.  "I've worked
closely with him over the past five years, and he's one of the most
brilliant people I've met.  The company is going through a transition
right now.  And they are having some short-term financial problems.
Somehow, people equate that with Ken's lack of leadership."

Today, as DECWorld opens, both Olsen and his company will try hard to
repeal any apparent erosion of customer confidence.  "Customers need
to hear a story that they and get realistically priced non-obsolete
systems from DEC today," said Willmott.

Whatever story customers hear, it will be truthful.  For as Olsen said
during the interview last week, in a loud more: "Making up stories is
lying, and lying is wrong and immoral and unethical and damaging and
destructive and wrong by anybody's sense."

-
1896.27COOKIE::WITHERSBob Withers - In search of a quiet momentThu May 14 1992 17:147
1896.28RE: .23 - Boy, can I relate to THAT situation!YUPPIE::COLELife's a beach; then you diveThu May 14 1992 18:328
	Steve, did the aforementioned Account team include the person respon-
sible for the final P/L of the account, ie, the AGM, Program Manager, etc?

	If not, then I would have copied that person on ALL memos henceforth, and
documented my concerns in those memos.

	If they were there, that Account team is in BIIIIGGGG trouble! Disengage
ASAP!!
1896.29ODIXIE::GEORGEDo as I say do, not as I do do.Thu May 14 1992 18:3319
    Re: 25 
    
    Steve, if "We are DIGITAL" why do you refer to it as "MY" problem?
    Isn't it OUR problem.  Does it not concern you that we bid and price
    programs before we understand how to deliver them?
    
    I asked for your opinion as to how to both make a constructive change
    using my example AND not get canned.  I hope I did not imply that there
    was only 1 answer and you had it.  In .21 you expressed your opinion of
    *what* to do - and I agree with you.  I'm simply asking you, in this
    situation, what would you suggest as to *how*?
    
    > All of these things are changes we can make and the only way they
    > will get changed is by us not by management or policies.
    
    Once again, *HOW*? The above statement is somewhat platitudinous: it
    is not an action plan or a statement of work.
    
    		Steve
1896.30ODIXIE::GEORGEDo as I say do, not as I do do.Thu May 14 1992 18:5423
    Re: .28 
    
    Jackson T., no, my direct conversations did not include the AGM.  It
    did include his Sales Ops manager, though.
    
    The sad part of it is that we will probably win the business, and it
    may even be profitable.  But we won't have a clue why and won't be
    able to repeat it in a competitive situation.
    
    And it's not just that Account Team.  They're actually pretty good
    folks who are trying to keep their heads above water.  Until NMS
    collects ongoing ACTUAL program cost and charges the Account Team,
    there will be a tendency for Account Teams to negotiate BUP/price
    concessions from the Lines of Business; the LOB then has to worry about
    ACTUAL margins.
    
    But if we do start charging Account Teams with actuals, LOBs would have
    no real incentive to control program costs. ARRRGGGHHHHH!
    
    Plus, I'm afraid this industry is beyond the point where the good
    intentions of honest men can correct all ills.
    
    		Steve
1896.31An order in hand is worth 2 in the bushFASDER::AHERBAl is the *first* nameFri May 15 1992 02:1820
    Steve,
    
    Winning the business is something Digital needs all it can get during
    the current lean period. It keeps manufacturing and the rest of the
    company "ticking" (even if it's at cost) so that we're ready when the
    business does pick up. No one can speak for your case except for the
    account team..that includes you.. but, with every buy in at 0 profit,
    there should be an account strategy that spells out the "get well".
    
    If this is a Fortune 50 like you said, I believe a total account
    strategy that defines the where/when you profit should be the primary
    goal with, many cases, acceptance of a perceived "loss" in the
    beginning. If this is a one time purchase by your local gas station,
    you are right on as to profit up front.
    
    I wouldn't give up on your thoughts and certainly not as a result of
    this forum. It's your account team you need to work, not the readers of
    this conference. Let us all know when the win comes in and we'll all
    congratulate you for you contribution. If you lose, well..no one ever
    made money pondering the past.
1896.32Sadly, the issue is now resolved ...ODIXIE::GEORGEDo as I say do, not as I do do.Mon Jul 13 1992 20:497
    There were actually 2 pieces of business proposed to this customer -
    one to the corporate level and one to a division.  Unfortunately, we
    have now been told that we lost both of these multi-million dollar
    opportunities.  In one of them, our price was either twice the low
    bidder or twice the next-low bidder.
    
    Steve
1896.33ALIEN::MCCULLEYRSX ProMon Jul 13 1992 21:4815
.23>    I was told there was "plenty of money in here to cover anything 
.23>    we forgot".
    
.32>                   -< Sadly, the issue is now resolved ... >-

.32>    we have now been told that we lost both of these multi-million dollar
.32>    opportunities.  In one of them, our price was either twice the low
.32>    bidder or twice the next-low bidder.
    
    looks like the thing we forgot was that bidding a competitive
    price might preclude padding sufficiently to accomodate unknowns!
    
    Wonder how many jobs that little fumble cost?  Too bad the account team
    that couldn't be bothered to sharpen their pencils will likely not be
    among them...
1896.34Background on Ken Olsen's retirementSDSVAX::SWEENEYPatrick Sweeney in New YorkWed Jan 06 1993 12:0022
    From Fortune January 11, 1993 p.41 "How to stage a coup" Alan Farnham

    Eventually the dean* may communicate the outsiders displeasure to the
    CEO to give him a chance to shape up.  If he does not, then the board
    is free to, ethically, to shoot him.  In cases where the company's
    performance is merely bad (not atrocious) evidence of the CEO's
    unfitness needs to be accumulated. His vacation may prove to be the
    ideal time to gather ammunition.

    This often happens in the political sphere, says Robert Conquest, a
    Hoover Institution Fellow, "One day Khrushchev was the big guy,
    getting greetings from cosmonauts in spaces Then he left for vacation.
    When he got back, he was out." Ditto for Ken Olsen of Digital
    Equipment.  His directors waited until he'd left for his annual
    two-week canoe trip to start grilling analysts and company
    executives.  Olsen, returning from paddling, found himself up a creek.
    ---

    *"dean" was defined earlier in the article as the former CEO of a
    Fortune 500 company serving as an outside member of the Board of
    Directors. In Digital's case it was Philip Caldwell, former CEO of
    Ford.--PS