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mgmt memo


Vol. 10 No. 9__________________________________________________________________ December 1991


"MGMT MEMO" was written by Richard Seltzer in Corporate Employee Communication for the Office of the Presi­dent. It was written for Digital’s managers and supervisors to help them understand and communicate business information to their employees. You can reach Richard at


This issue of MGMT MEMO deals mainly with the New Management System and future directions of Digital’s business.




Reaffirming the New Management System (Ken Olsen)

To avoid the temptation to view the New Management System as a justification to do things the way we used to, we must continuously repeat what it is and what it isn’t.


The Enterprise Information Utility — a Concept for Digital’s Future (Jack Smith)

We are leaving the era of traditional data processing and computation and moving to a new era of information creation, analysis and work sharing that is in support of new, more competitive, distributed business processes. Profitable markets for the future will come from what we now call "The Enterprise Information Utility."


The Significance of October 30 — Taking the Computer Industry to a New Playing Field (Bill Demmer and Howard Woolf)          

The significance of October 30 lay not so much in the individual products announced as in the framework for the future of which they are a part. We established a new playing field on which we and the rest of the industry will be competing for years to come.


The Role of the ’Coach’ in the New Management System (John Sims)

The word "coach" is our way of emphasizing a style of management that many in this company have used before and that is very important to our future success. This style is applic­able not just for senior managers, but throughout the company.


The Market Shift from Functional to Enterprise Excellence (Paul Kampas)

Key events beginning in 1987 heralded the end of one era and the beginning of another for the Information Technology industry. This change has pervasive implications for vendors and customers alike.

Drug Testing vs. Managing Performance - Different Approaches to Deal with a Common Concern (Bruce Davidson, Sue Andrews, Ron Glover)

An increasing number of companies, including some of Digital’s largest customers, have initiated broad drug testing programs for all or many of their employees. What are these customers driving for?

ISV Group Adds VMS Develops to Charter


New Manufacturing IBUs Announced                                                                                                


Ten New Vice Presidents Appointed in U.S. Area                                                                              


Reaffirming The New Management System by Ken Olsen, President


There is always the temptation to view the New Management System as a justification to do things the way we used to do them, and a tool for controlling people. It is very impor­tant to continuously repeat what the New Management System is and what it isn’t.


The New Management System is not:


o a measurement system,


o a means for allocating rewards, or


o a means for top down, hierarchical control of operating units.


Some people perceive the New Management System as a vehicle for a manager, who usually has no responsibility, to pass orders, directions and strategies to the people who have to carry them out. The New Management System is just the opposite.


The New Management System is based on trust in the managers and teams who have to do the job and know more about the job, the problems, the needs and the solutions than anyone because they are closer to it and are involved in it daily. It is also based on entre­preneurial creativity. The unusual spirit of responsibility that motivates an entrepre­neur comes only when the leader and the team feel they are responsible and that they have set the goals and the plans.


The New Management System is a system for laying out plans, strategies and goals for each individual group in the corporation, and an accounting system designed to give them the information they need to run their operation in the optimum way. It is not a vehicle for imposing plans done by the boss, for measuring the team doing the work, or for punishing or rewarding the team for results.


Sometimes a plan could be for long-term investment with a promise of great returns in the future. Sometimes a plan could be for phasing out a business because that is the wisest thing to do. Sometimes it could be for steady profitable growth equal to the company goals.


The New Management System is a means to help wise management of a group. The measurement system on which rewards are based is separate, and is not part of the New Management System. The reward system is based on the sum of growth and profit. Those who invest now to pay off in the future receive their reward in the future. Those who make great profit and growth today receive the rewards today.


Job of a coach/manager


If this is true, why then do we need coach/managers? It is clear that a coach/manager does not set the goals for the group and is not measured by the sum of resources spent and of profits gained. Their measurement system is not based on the sum of the results of those under them. They do not adjust the budgets of the people under them to make the sum of all of their groups meet certain goals.


Their job is to make sure everyone in the group learns, is trained and developed to be a great manager. They are measured by the quality of the managers they develop.


This is very hard for traditional managers who commonly believe that the manager’s job is to tell others what to do, and to punish and reward them depending on how well they did. Of course, that theory doesn’t work because the manager, in effect, does not take respon­sibility and neither do the people who are told exactly what to do, and the plans that result are not wise.


Having a boss order better results clearly does not solve the problem. Wisdom and moti­vation come from the people who understand the problem and who are going to take respon­sibility for laying out plans to deal with it, and from having a supervisor who trains, coaches and helps, and adds wisdom.


In August and again in October, a group of 50 managers, including Executive Committee members and business unit managers, met in the woods at Heald Pond in Maine. While we were there, we spent hours discussing the meaning of the coach/teacher/trainer as boss. We have to reiterate these principles because of tendencies in modem management that destroy the entrepreneurial spirit.


The New Management System assumes that every project and job will be budgeted and the controllers will maintain those budgets. Any changes to the budgets have to be made formally, and control in the New Management System means people propose a budget, it is approved, and they are held to that budget both in its expenditures and return.


The New Management System also assumes that top management and the Board of Directors will show wisdom in which plans and proposals they approve. Clearly, every group cannot spend now for future gains or the company will immediately disappear. Most plans must pay off immediately. It is also clear we cannot insist on everyone spending all their effort on immediate gains with no investments for the future.


Under the New Management System all groups are encouraged to propose projects in which they believe. The management of the company chooses between those projects based on how they fit into the corporate strategy and the corporate assets, and the likelihood of return. They also have to balance the short term return and the long term return.


It is clear the business units will be measured by the results they produce, and their managers will be measured by the quality of the development, education and the values developed within the business units under their charge.


Outline of New Management System




The goal is to separate the product generation, the marketing and the selling parts of the company so each group can look at themselves as if they were a separate company that adds value and makes profit on the value they add. They will have the necessary accounting to see the cost of the value added and understand if their model and their operation generate profit. They must make short-term adjustments to assure constant profit.




The accounting system is not a measurement system or a reward system, but it is clearly set up to give the business unit manager the information necessary to manage the business unit wisely, and readily see the income, cost and profit.




Business units are measured by profit and growth, and the sum of profit and growth. Plans and budgets are proposed with optimum business judgment and wisdom which sometimes means investments for big gains in the future. The Executive Committee must balance short-term and long-term needs in choosing between business plans. If investments are made for a big payoff In the future, the measurement system of profit and growth will indicate big re­wards in the future.




All budgets will be updated each quarter and a quarter added to the budget so there is always twelve months of budget in the plan. Someday, we will add two more quarters so there will always be six quarters in the budget.


As part of this quarterly review, every coach/manager will review the products and acti­vities of the business units. How do they compare with the competition? What products, services, or activities are missing that others do? How do our costs compare? How is our marketing? What opportunities do we exploit to get our messages across? What are our weaknesses that will be improved in the next quarter? How is our time to market?


Besides the budget update, the business plan will be updated and presented. The business plans should have all the data pertinent for a good business plan for the business which that group is pursuing.




The job of the coach/manager is to coach, help, train, discipline, encourage, lead and, in general, make sure plans are wise and good business. The coach/manager is also responsk ble to make sure conflicts between parts of the company are resolved efficiently.


Each quarter, every coach/manager of business units and every coach/manager of coach/- managers will write a summary of all the units for which they are responsible.


A chart will be presented showing the morale, enthusiasm, efficiency, cost, time to mar­ket, competitiveness, ease of doing business, and, in general, the quality and wisdom of the business. Also, they will carefully outline the competitive position as it is, and a prediction for the future.


The coach/manager does not make individual decisions of staffing, budgeting, products, marketing, but they are responsible for ensuring that morale is good, that people are competent and have a plan that works not only for the present quarter but also for the future.


The Enterprise Information Utility - A Concept For Digital’s Future by Jack Smith, Senior Vice President, Corporate Operations


Our future is guided by the principles of the New Management System: clear delegation and accountability at all levels of the value-added chain. Without compromise, we must chal­lenge all Business Units to lead us to world-class corporate performance and into the fastest growing and most profitable market segments of the 1990s.


But we cannot institutionalize these principles without also articulating a clear industry concept of growing profitable markets for the future. This concept is essential to our future success.


Distributed computing, our concept of the early 1970s, led us to create leadership busi­ness practices, as well as technology: o leadership networking,


o a single compatible family of computer systems,


o a scalable operating systems environment,


o a single application development environment,


o the creation of the OEM Distribution Channels and a change in focus of our direct sales effort, and


o a service approach based on remote diagnosis.


Implementing that concept provided us with a distinct marketplace dvantage for the last decade and a half and remains the source of our strength as we look ahead.


Today we are working to capitalize on this creative legacy in defining a new concept — one that will, once again, provide us with clear leadership in products, distribution, and service, resulting in a distinct marketplace advantage for the next 15 to 20 years.


We need such a concept to guide our investment decisions, identify and clarify our criti­cal core strengths and skills on which we must expand. We also need such a concept to paint a picture of our position in the marketplace for our customers, our sales force, and all our employees.


It must take into account the realities of today and the dream of what can be better tomorrow. The global competitive forces at work — which have been disrupting all indust­ries through the 1980s — will only increase in the 1990s. This means that all industrial organizations, governments and non-profit organizations must become dramatically more competitive in order to survive.


We are leaving the era of traditional data processing and computation and moving to a new era of information creation, analysis and work sharing that is in support of new, more competitive, distributed business processes.


Over the last several years, thanks to the creative contributions of many, we have been moving toward a concept we now call the "Enterprise Information Utility." It is driven by emerging technology, much of which has been described by Butler Lampson and Bill Strecker in papers on "The New Era of Distributed Computing." The basic market structure of this concept was outlined in the "meta-frame" work done by David Stone while in Europe and further refined by work done by Hans Gyllstrom and a small team aimed at defining our competitive advantage for the future.


The word "utility" is difficult to translate in some parts of the world, and we may want to find a better way to express this metaphor in those market contexts. We are thinking in terms of vast and pervasive resources such as electric power and telecommunications, which we now take for granted, as common necessities of daily life. We foresee the coming of an "Enterprise Information Utility," fueled by the continuing evolution and adoption of standards across the Information Technology industry.


We already have a leadership position in the standards environment and a strong legacy in distributed computing, networking and database management. Now we must mobilize the company to understand the direction and structure of this concept and bring forward the commitment to make it happen.


In simple terms, Digital should focus on building "The Information Utility" for and across enterprises, which will provide users with information in their preferred form (text, image, voice, multi-media) from any source at any time, in a quick and secure manner. This would give users the ability to achieve maximum competitive advantage for their enterpri­ses.


By analogy, let’s look at how the electric power utility evolved over the years. In the past, enterprises were responsible for their own local power generation — much as it is today with information generation. For instance, the Mill, here in Maynard, Massachu­setts, had a water wheel - producing a local version of AC power - completely incompat­ible with what was being generated elsewhere. That was fine for local needs but relative­ly expensive, not very reliable, and certainly unable to share the economies of scale and reduced costs of a larger network. Over time, the desire for reduced cost created the emergence of standards and economies of scale of transmission and production. This enabled the electric power industry, over this century, to become a true utility - a necessity of daily business and human activity.


Today, many of the information resources within individual enterprises are adequate for the local needs - but utterly incompatible with other information sources. We expect that, as in the case of electric power, standards and economies of scale will make vast information resources widely available and a common feature of everyday life.


We should not expect that within the foreseeable future there will be the equivalent of a government-regulated utility supplying all the information needs of all individual com­panies, metered on a daily or hourly basis. On the other hand, there are hundreds of independent companies that already supply all the utility elements — whether it’s trans­mission, appliances, support, maintenance, generation or storage. When these elements are brought together effectively through standards, they can provide individual enterprises with an Enternrise Information Utilitv far more powerful than what is currently available.


We understand the technology required and are, in fact, working on many of the elements necessary to deliver this utility.


Already in most large enterprises today, there are many different plugs on the walls for the information appliances in the office or factory. Beyond the wall, there are many elements, both equipment and services, which are essential to keep that information flow­ing smoothly. But those elements have a different level of complexity and have not yet evolved to the level of standardization that exists today in an electric power grid.


For instance, much important information resides within very diverse "old" information systems which can’t yet be easily accessed from new systems. But despite these limita­tions, the trend for information systems is clearly moving in the direction of standardi­zation of all the critical interfaces.


Starting in the 1970s, spanning the 1980s and on into the 1990s, much of the focus in our industry has been on the "appliances" portion of the system. Only recently has there been much discussion, exciting progress and growth in the networking of "appliances." But this level of information appliance integration only represents a rudimentary information utility without the scale and robustness of what will eventually be possible.


Imagine the future when you plug your information appliance of choice into the outlet in your office or factory - and have immediate access to all important information, no matter where it’s located, on a system within your enterprise, another enterprise, or in a public database.


Today’s reality is that each enterprise has its own management philosophies, business practices and definition of competitive advantage. Therefore, to move toward this concept of the future, we will have to add a level of custom value for each customer to realize the potential of the utility and yet meet their unique needs. While it will be the end of the decade before we see the full impact of this Enterprise Information Utility, we must start now by identifying the investments that are strategic, critical and vital to the framework of this concept.


We expect that competitive pressure to reduce our levels of product investment will in­crease during this decade. We will have to spend relatively fewer engineering dollars while, at the same time, doing a much higher quality job on every project we undertake. This can happen only if we focus intensely on a few technologies.


Overall, we must have a simpler product set, with fewer offerings of superior products. This will require making some hard choices and sticking with them. Some examples of these choices follow:


Subsystems — chips, disks, and tapes — are expected to grow about 5 percent per year over the next 10 years and are being pursued by many very large companies able to make the enormous capital investments to stay up with the pack. Our component-level products must stand on their own as profitable world-class businesses (which requires significant unit volume). We cannot afford to be a small, uncompetitive player.


Base computer systems — PCs, workstations, multi-user systems are expected to grow in the range of 3 - 5 percent per year for the next decade. Product prices will be driven down and will increase the need for delivery of products, service and support through indirect channels.


We must strongly support and smoothly transition our VAX line to ALPHA. We must become a much more effective supplier of Intel- and MIPS-based "appliances," which are essential to hold our place in the hearts and minds of decision makers. Our investments must be ex­tremely focused and, in many cases, shared by partners - there is little room for error.


Standards-based, enterprise-wide communications networks based on local area networks will become a significant driving force behind the growth of the Enterprise Information Utility of the 1990s. The total local area network (LAN) market is estimated at about $4.7 bil­lion, growing at 21 percent per year, with client/server LANs leading the pack. We must focus on becoming number one in this market. We must focus our hardware and software development on products designed to optimize the performance of these networks and on providing a wide array of new functions and services that the networks can deliver to end users.


Enabling software (data bases, frameworks, windowing systems, etc.) is expected to grow at 20 percent per year for the next decade. Investment in software for distributed, multi­vendor systems (Network Application Support or NAS) must be greatly expanded. This in­cludes networking, application interoperability, data bases (traditional, object-oriented, multi-media), systems management, security and administration for Digital and, very impor­tantly, non-Digital platforms.


Applications software is expected to grow 20 percent per year for the 1990s. Our invest­ment in "solutions" must be significantly increased. Examples include "DECtrade" trading system and the "customized" ALL-IN-1 system for a department. We must learn how to guar­antee solution systems that always will work.


We must expand our focus on information sources and on developing, and promoting the standards and products necessary to assure easy access to them.


Perhaps the most significant investment required to achieve the Enterprise Information Utility is the strategic services area, which is expected to grow in excess of 30 percent per year. These services are very sophisticated products that enable the information systems users to dramatically change their business practices/operations and become much more competitive. They include information systems strategies and architectures, formu­lation of business strategy, human systems strategy - all the components that exist in what we today call a systems integration project. We must become the most cost-effective systems integrator in the industry, with particular focus on predictable, profitable implementation of very complex projects and off-the-shelf solutions of simpler, repetitive projects.


Substantial investment must be made in:


o tools for planning, project management, multivendor integration, fault tolerant/diag- nosis, capacity planning/management, etc.;


o human resources expansion, training, development;


o development of consulting, change management methodologies/technologies;


o conducting pilots with customers on creating "utility-like" systems, and learning how to implement them profitably;


o creating targeted programs to leverage our own internal knowledge and skills in Manu­facturing, Engineering, and Distribution on customer projects; and


o expanding all the new service offerings, making existing ones more productive and establishing new ones.


Our distribution (Sales, Marketing, Services) strategies, investments, structures, and resources also must be changed, significantly. Distribution channels must be much more tailored to better match the specific products or service being sold and delivered. Non-traditional channels with much lower costs must be developed, many in partnership with other companies. Use of our distribution systems to deliver complementary products and services from other vendors must be greatly expanded.


Much of the investment redirection described above will be difficult to accomplish. It will require a significant break with the past, extraordinary persistence and leadership. Only by creating, communicating and embracing an enhanced concept for the future will we be able to meet the challenge.


The Significance Of October 30 - Taking The Computer Industry To A New Playing Field


by Bill Demmer, vice president, VAX VMS Systems and Servers, and Howard Woolf, manager, NAS and Electronic Publishing Systems


On October 30 we told the world we were making one of the most significant announcements in our history and setting the agenda for the industry.


That day we:


o announced a set of Network Application Support (NAS) products for VMS and ULTRIX en­vironments;


o stated our intent to provide the same NAS products for other computer system environ­ments such as those from IBM and Hewlett-Packard;


o announced new VAX VMS systems that bring that product family back to a leadership position in the industry in both performance and price/performance; and


o introduced an innovative user-based approach to software licensing and a set of com­prehensive services.


We are proud of the engineering breakthrough in CMOS technology in Hudson that allowed us to triple the raw performance of our VAX processors across the whole line. We are imple­menting that technology now in our VAX 4000 and 6000 systems, and we announced our intent to make it available next summer in our VAX 9000 family. Over time, it will also become available in VAX workstations. We expect further dramatic improvements in performance when we move to the ALPHA hardware that is now being developed and tested.


But the significance of October 30 lay not so much in the individual pieces as in the framework for the future of which they are a part. Yes, we told people about products they can buy today and that can generate added revenue that the company needs right now. But we also established a new playing field on which we and the rest of the industry will be competing for years to come. That is the arena in which future products, such as ALPHA, ACE hardware and ever-improving NAS capabilities, will be introduced and the con­text in which they will be understood.


Customers have heard repeatedly that they have to go to "open" systems and implement standards. But that’s been a very difficult path for them. There’s a bewildering number of standards. In just the last two years, over 1800 industry "standards" were introduced. It’s a Herculean task just to figure out which standards matter and how to implement them. These standards come in many forms — in a book, a specification, a product that imple­ments the standard, or an application product that has the standard buried in it. At Digital, we spend about $50 million a year just to keep pace with the changes, to under­stand which standards are the right ones to support, and decide how to support them.


Typically, customers already have a wide mix of equipment and software from many different vendors, and not every vendor supports the same standards, so they can’t make all the products work together. This is analogous to owning two videocassette recorders (VCRs) that use two different formats (VHS and Beta). You can’t run the movies from one on the other, but you might need to do that to do your job. That’s the frustration customers feel. And the problem gets even worse because different vendors implement the standards differently. That’s like recording a movie on your VHS machine and finding out it won't play on your friend’s VHS machine because the vendors implemented VHS differently.


This announcement helps customers out of the maze of standards and lets them easily imple­ment truly open systems. We provide the right software products based on open standards, in a consistent way so that an application can run the same on one system as it does on one from another vendor.


We told customers that this would be our path — that NAS would allow various platforms to interoperate with one another, and allow software applications written against one plat­form to be easily ported to another platform. These new NAS products fulfill that pro­mise. They give a consistent, open systems platform to our customers that they can’t get from any other vendor, and was never available in the industry before.


We are making it easy for people to buy, install, maintain and operate systems software based on open standards. These NAS products pick the right standards and apply them consistently.


Today, NAS software works on nine popular computer systems that act as "clients" — the desktop devices, such as PCs and workstations, that users deal with directly. Now the server software — the NAS software that enables various clients to work smoothly together over a network - runs on both VMS and ULTRIX operating systems. In the near future, it will run on platforms from Microsoft, the Open Software Foundation, SUN, IBM and others.


This means a customer could run NAS software totally independent of other Digital prod­ucts. They could run it on other vendors’ computer systems, without a Digital computer being involved at all.


On the one hand, that’s a major change. On the other hand, we’re just delivering on what we said earlier when we stated that Digital is a software company and will build software for all popular computer platforms.


We’re making an integrated product set that has all the software the customer needs to address key computing environments and markets. We’re selling this, first, on the VMS and ULTRIX operating systems. And over the next eighteen months we’ll roll it out on other vendors’ platforms as well.


With this integrated capability, a single application could bridge multiple platforms through the use of standardized interfaces. In other words, pieces of the same networked and distributed application might run on VAX hardware while other pieces run simultaneous­ly on totally different hardware and operating systems from SUN or IBM. And the user needn’t know or care what hardware or operating system is involved, because all these pieces could interact and interoperate automatically and smoothly.


We can do that in a limited way today across VMS and ULTRIX platforms. And we will be adding those new platforms to this capability for truly integrated distributed applica­tions.


For over ten years, vendors and customers have been caught up in debates over operating systems - VMS or UNIX? proprietary or open? Now the whole level of discourse changes.


Yes, different operating systems have different functionality. We believe that VMS is the worldwide leader in functionality. And we have worked hard to bring openness to the VMS environment, by layering open standards on top of leadership VAX/VMS performance. We talk about "no compromise computing," a phrase that emphasizes that we provide the customer with openness, the best functionality in the industry and also (with our newly introduced hardware) the best price/performance. The customer doesn’t have to make tradeoffs. With our VMS family, we provide the best in all three dimensions.


The VMS system is not just one of the platforms that runs NAS; it is also the most robust platform, with capabilities that no one else has yet implemented on other platforms. So in terms of the old points of discussion with customers, we are in a much better position than ever before.


But the nature of the dialogue is changing. NAS capabilities and the integrated applica­tions they make possible are moving the entire industry to a different playing field, where users are less interested in the underlying hardware and operating system and more interested in the distributed applications they need to run their business; where "open­ness" in its broadest sense (embracing UNIX, VMS and other operating systems) is taken for granted and points are scored with new, higher-level software capabilities.


By analogy, previously, different companies were selling different kinds of trains or planes or buses or cars, and customers had to worry about horsepower and grades of fuel and spare parts. Now customers can focus their attention on their destination. One ticket will get them where they want to go, no matter how they choose to get there; and they can change their mind and go another way next time - whatever’s best for them.


If a customer decides later to adopt new hardware or software technology, we let them do that without throwing away what they’ve done before. In fact, we support more systems from other vendors today than any other vendor in the industry; and we’re heading further in that direction.


This is a whole new way to look at computer systems. It will revolutionize the way people build computer systems and the way they implement them.


At the same time, this is the next natural step forward from where we were before. We started by building point products that could be custom-integrated into a multivendor set of systems. Now we’ve come up with the right sets of those products that make sense to work together and have put them into one integrated product setting. We pick the right standards for the customer and help the customer implement them consistently on the vari­ety of systems with which they want to work. We make it practical for customers to use open systems to solve real business problems. No one else has done that with open systems before.


Over time, we made a number of relatively small but important additions. Those quantita­tive changes have become a qualitative change, making possible truly integrated, multi­vendor solutions. Now we’re packaging these capabilities to make it easier to buy, in­stall and use them.


And we’re going to do more of the same. Over time, we’ll be introducing additional NAS functionality for our platforms and other computer platforms. NAS will be the primary vehicle we use to sell our newest software technology.


The target audience for these product messages includes MIS managers, application devel­opers and end users, who are getting much more involved in purchase decisions. Typically, there has been conflict between individual users who want particular applications and hardware that can run them, and the IS manager who wants to have all the pieces of the company’s computing environment talk to one another and work well together. With NAS, that argument goes away. NAS gives MIS departments a good tool to manage their entire computing environment. It also gives them a consistent way to have their computing en­vironment support the applications that their users require. NAS is the framework for the global integration technology of the future.


Today, with the vast improvements we just announced in VAX/VMS price/performance, we are equal to or better than most of the RISC-based systems in the industry. But the world doesn’t stay still. Our competitors will keep introducing faster and better systems, and we’ll have to work hard not only in developing new technology, but also in reducing our overall cost structure so we can maintain our leadership position in price/performance. That’s what sells product today; so that’s how we have to win.


But for the long-term, we’ll be on the new playing field created by these capabilities we’ve just announced. There Digital is primarily an integrator of both products and services, with capabilities far ahead of the competition, and lots of running room.


The Role Of The Coach In The New Management System by John Sims, vice president, Strategic Resources


In describing the role of senior managers under the New Management System, we often use the word "coach." This is not a new or additional responsibility for senior managers. Rather it’s our way of emphasizing a style of management that many in this company have used before and that is very important to our future success. This style is applicable not just for senior managers, but throughout the company.


For me, a good manager is by definition an excellent coach, and differs considerably from a traditional "boss." The word "boss" conjures up images of an authority figure who gives orders and works down a pyramid. The word "coach," on the other hand, evokes comparisons from the world of sports.


For example, the best football coaches have the ability to maximize the performance of their individual players - improving the individual skills that are needed and doing so in such a way that all players feel accountable for their own behavior. A coach is ulti­mately responsible and technically can act as a "boss." But the difference in attitude is essential to success.


In the coaching model at Digital, the "players" are entrepreneurs who work for a larger team. The coach should make sure they think and act like entrepreneurs, running their own businesses. The coach makes sure they have the tools and equipment they need and the field to play on. But primarily the coach empowers the individual players to make their own decisions, to do what they know must be done and to do it well.


If the player needs help, the coach is available to give advice. If things aren’t going well, the coach may put an arm around the player and deliver some hard messages. If a player isn’t performing, the coach will tell that person; and, occasionally, the coach has to remove a player from the game.


Coaches have the full spectrum of management responsibilities. But the good ones also have the ability to inspire the people that the company has asked them to be responsible for and to help them to maximize their own potential. The less dependent the players are on the coach the better the team tends to function.


Basically, when we talk about the role of the "coach", we’re emphasizing the importance of good management. To be a good coach, you have standards and measures, and you reward good performance, but you don’t want to act as a policeman. You want the individuals to know what the boundaries are, but you don’t put up any more boundaries than you need to play the game. You empower the entrepreneurs to get what they need to get the job done.


In an integrated environment such as ours, the entrepreneurs have several possible sources of guidance and assistance, not just the manager to whom they report. Similarly, on a football team, in addition to a head coach, there are many assistant coaches, some of whom


have particular specialties. But the head coach creates the environment that fosters the independent decision-making the team needs.


Good management does not mean vigorous top-down management. There are exceptions, of course. Maybe once in five to ten years an emergency arises, and the head coach has to say — "Today I’m going to be boss, and this is what everybody’s going to do." But com­panies that are run top-down do not develop entrepreneurs, and we need entrepreneurs to succeed in our diverse and rapidly changing markets.


The management model gets clumsy when it includes people who just give advice or have the authority to say "no" but aren’t responsible for results. A coach is responsible and does not let extraneous resources get in the way of running the team or interfere with inspir­ing the players and creating an entrepreneurial environment.


When we talk about the need for "coaching" we’re just signaling that we all need to be good managers and not revert to a top-down authoritarian approach. We need to remember that even the military, which is often seen a top-down authoritarian organization, needs to foster individual achievement. The best armies are made up of people who in the heat of battle have the ability to create, to be entrepreneurial, and take advantage of the situation. Armies that wait for one boss to tell them precisely what to do tend to lose the war.


If you are fortunate enough to have such good people that they rarely need coaching, there are other ways you can add value to the team. For instance, you can improve the quality of the resources available to your people and take care of other matters that might other­wise distract them and prevent them from concentrating on winning.


This emphasis on coaching says to every employee in the company that Digital is yours. You’ve got to do whatever is necessary to protect it and make it successful. The same principles apply if you are the manager of a business unit or a secretary who decides to save money by not ordering unnecessary supplies and making sure that travel is done in the most efficient, cost-sensitive way. You can take entrepreneurial responsibilities no matter what your job and no matter where you sit. You can help run the business and make a contribution to it.


The coach creates an environment that enables entrepreneurial behavior at all levels of the company. We don’t want people to limit themselves by a restricted notion of who they are and what they should do. No matter where you sit, you can and should manage well whatever the company has asked you to be responsible for.


The Market Shift From Functional To Enterprise Excellence by Paul Kampas, program manager, Strategic Industry Analysis, Corporate Marketing


Key events beginning in 1987 heralded the end of one era and beginning of another for the Information Technology (IT) industry. These events included the creation of the Open Software Foundation (OSF), Digital’s introduction of Network Application Support (NAS) and IBM’s introduction of Systems Application Architecture (SAA).


From the introduction of mass produced computers in the early 1950s to that benchmark year of 1987, customer emphasis was primarily on employing information technology for the creation of vertical functional excellence. In other words, applications were centered on tasks within vertical functional domains, including research, engineering, manufacturing, finance, sales, personnel, etc. Digital’s departmental computing strategy was clearly aligned with the market’s demand for vertical functional excellence in this era.


Having made large investments in mainframes, minicomputers, and personal computers, by 1987 business management became alarmed that substantial increases in spending for infor­mation technology were not providing equivalent increases in overall business performance. In fact, researchers could find no significant overall correlation between IT spending and business performance in large corporations. On the other hand, Japanese corporations were becoming increasingly successful in the global market with significantly lower investments in IT.


What was the problem? One key element, it appeared, was that functional excellence was often achieved at the expense of end-to-end enterprise excellence. As a result, business management has begun to shift its emphasis from vertical functional excellence to hori­zontal enterprise excellence. Here, the applications emphasis is on end-to-end processes such as Requirement-to-Product, Lead-to-Order, Order-to-Delivery, Problem-to-Repair, and Inquiry-to-Answer. As implied by their names, these end-to-end processes each span multiple functions. Interestingly, horizontal processes are generally quite similar across industries and geographies.


It is important to note here that vertical functional excellence is still important, but it must be accomplished within the overarching context of end-to-end enterprise excel­lence. One example is the end-to-end process of Requirement-to-Product. Engineering might have the world’s best CAD tools, but if they build products that don’t meet customer requirements, no customer value is created. Another example is Inquiry-to-Answer. An account manager may have the world’s best training, but if a customer asks a unique ques­tion and there is no supporting end-to-end knowledge network, no value is delivered to the customer.


This change in market emphasis has pervasive implications for IT vendors and customers alike. A summary of some of the requisite changes to Digital’s business is shown below:

                                    Era Ending 1987                     Era Beginnin in 1987


Focus of Digital the Comapny:

Internal                       Workgroup Independence      Workgroup Interdependence

External Alliances       Corporate Independence        Corporate Interdependence

Strategy                      Functional Solutions               End-to-End Solutions Driven

R&D                           Single-Vendor Product           Multivendor Product

                                    Innovation                               Integration


focus of Digital's Interface to Customers:

Applications                Functional TAsk                     End-to-End Business Process

Products                      Systems                                   IT Infrastructure (NAS)

Service                        Product Support                      Systems and Software Integration

Sales Contact              Middle Management               Top Management


Today, Digital is working hard to shift its focus from the left-hand column to the right­hand column to respond to the shift in customer needs. Examples of such efforts include the following:


o We are increasing our focus on internal end-to-end business processes to both improve
our business performance and also to gain insight that we can share with our customers,
o We are beginning to realize and communicate that open systems are essential for creating horizontal enterprise excellence. The real win for customers is when they have end-to-end business process applications that run on and exploit the benefits of open systems.

o We are beginning to shift our applications investments to horizontal enterprise excel­lence. Included here is providing leadership applications (directly or in partnership) for horizontal processes such as Computer Aided Logistics and Computer Supported Col­laborative Work.


In summary, as Digital evolves within this major global market shift, many of our existing talents and competencies still apply to the emerging context, though many of our priori­ties and perspectives do not. In some ways, everything in our world is still there, but it has been turned upside down. Customer emphasis is shifting to horizontal enterprise excellence from vertical functional excellence. Market pull is becoming stronger than product push. Software is selected before hardware. Interdependence is becoming more important than independence. When the dust settles, Digital, other information technology vendors, and customers will emerge as more effective and more efficient businesses. But we will all be quite different from what we were in 1987.


Drug Testing Vs. Managing Performance - Different Approaches To Deal With A Common Concern


by Bruce Davidson, manager, Employee Assistance Program; Sue Andrews, program manager, U.S. Drug Testing; and Ron Glover, manager, Corporate Personnel Policies and Procedures


Digital’s drug testing program - started in January 1990 in response to government re­quirements and obligations — has only affected a small number of employees in the U.S. But an increasing number of companies, including some of Digital’s largest customers, have initiated broad drug testing programs for all or many of their employees. What are these customers seeking?


Some companies, particularly in oil and chemical industries, have safety critical jobs, where lives could be lost or catastrophic damage could result if a job isn’t done pro­perly. They view drug testing as part of their overall safety program and as a risk- management expense. They can’t afford a major oil spill, or a refinery explosion, or a major chemical leak. Drug testing is one part of a range of initiative intended to reduce the risk of catastrophe. They view it as "preventive maintenance," and regularly test their equipment and their people.


Other companies connect drug testing with their total quality management programs. For instance, Motorola, winner of the Baldridge quality award, is convinced that drug testing is part of the base by which you arrive at quality of work and service.


All these companies are concerned not just with illegal drugs, but the use of prescription or legal drugs that have a negative impact on an employee’s ability to function at the work site. In many instances this includes the use of alcohol, whichs when used during work hours, or in excess, or when the individual becomes dependent on it, can leave some­one impaired and unable to do their job successfully and safely.


Many companies look not only at their own employees but also at contractors and suppliers as important contributors to their ability to deliver safe and high quality products and services. They think of their supplier base as like an extended part of the enterprise and expect their suppliers to comply with their drug testing requirements.


In terms of commitment to a safe, high-quality, drug-free work environment, Digital’s concerns do not differ from those of these customers. In attempting to reach this goal Digital has attempted to establish programs that fit the company’s culture and values.


Digital focuses on "managing for excellence.". We believe that anyone who is using drugs or is dependent on alcohol and other substances will find it very difficult to maintain high standards of work performance. Therefore, focusing on employees’ performance on the job and managing for excellence are critical components in maintaining a drug-free work­place.


Managers are in key positions to work with their people to help them achieve their goals and set realistic norms around excellence. Very often, they are the first to see indica­tions of problems or changes in the work performance of their people. More critically, they can also set norms that say it is okay to get help if you need it. Managers need to recognize that and coach and nudge and push, if necessary, to help those people get where they need to be.


In today’s high-pressure environment it is sometimes difficult to tell if non-productive behavior is the result of substance abuse, or work-related stress, personal problems or family difficulties. We don’t want the manager to diagnose. We have programs like Emp­loyee Assistance in the U.S. to help work with employees to find out what may be contri­buting to their problems.


Over 80% of the people who utilize programs like Employee Assistance are self-referrals. These people come well before somebody else has identified a serious performance problem. They realize that they are not doing as well as they should, and they want to do something about it.


Fortunately, people feel safe coming to Employee Assistance for confidential help and counseling before problems have reached a point where they’re seriously disrupting their performance and productivity — before the manager has to intervene formally.


In some cases of substance abuse and dependence, people get into a "condition of denial," where they minimize or fail to see how their use of various substances impacts their lives. They’re clouded by the chemicals that they use and may be the last ones to realize they’re in trouble. Friends sometimes can hold a mirror to us and say, "Something seems wrong. You aren’t doing as well as you were six months ago." Managers become part of that support feedback system.


Research in the U.S. has shown that the workplace increasingly is where most people per­ceive their social supports — rather than church, home or neighborhood. People look to and identify with their boss, their secretary and their fellow employees as the primary support systems. The traditional ways that people dealt with stresses and strains 15-20 years ago simply aren’t there.


Managers who are managing for excellence will recognize when a new factor is influencing behavior. They will identify people with performance problems that might be due to drugs or alcohol much earlier than a program based solely on the evidence of a drug testing program. But this approach puts a lot of weight on managers who must deal with indivi­duals one-on-one, without a guide book to tell them precisely what to do.


Meanwhile, major customers of ours who face the risk of catastrophic disasters are pushing the technology of drug testing. They are testing the limits of the law to see what they can and can’t do, and they are pushing their suppliers to abide by the same rules as their employees. When someone comes onto their site to service computer systems in safety- sensitive locations these customers insist on the same kind of assurance that a person is drug and alcohol-free as they require of their own employees. If their approach works well for them, we believe their competitors will almost certainly follow suit. Their drug testing programs will serve as examples for other businesses and other industries, and drug testing will spread, with, or without government compulsion.


As we work with these customers, we continue to increase our understanding of the appro­priate use of drug and alcohol testing as a part of an overall program of managing for excellence. We believe that in some cases testing may be a helpful component in a com­prehensive initiative that includes clear policies, employee education, training for managers and real opportunities for employees to volunteer for confidential counseling before deterioration in work performance requires their managers to take action.


We want to minimize the need to use periodic, intrusive measures to find out whether or not somebody is doing something illegal. Our approach is to manage performance and strive for excellence. In this approach, the manager’s role is essential for success.


We have made investments in people and want to help them to reach and maintain their full potential, contributing to the company, their families and the community.


ISV Group Adds VMS Developers To Charter


Mike Mancuso, group manager, Independent Software Vendor (ISV) Group, now reports to Bill Demmer, vice president, VAX Systems & Software (VSS), in addition to reporting directly to Dorn LaCava, vice president, UNIX-based Systems and Software (USS). This dual reporting relationship highlights the increased role his group will play in applications marketing.


Since its inception in 1988, the ISV Group has focused its recruitment, development and merchandising activities on both VAX/VMS and RISC/UNIX applications. They handle these activities directly and in conjunction with other Digital organizations: the Field for recruitment, Engineering groups for development support, and Integration Business Units (IBUs) and Channels Marketing for merchandising programs. As a result of these efforts, more than 2,400 UNIX-based applications are now in Digital’s worldwide portfolio.


According to Mike, "We see very strong VMS development activity with application pro­viders. More than 1,300 VMS solutions, of which 50% are brand-new to Digital, have been added to Digital’s portfolio in the last couple years.


"The continuous customer interest in existing and emerging VMS-based applications is our strongest line of defense against those who question Digital’s commitment to its VMS business partners and users," he added. "VAX/VMS systems continue to be a major source of revenue for Digital and its development and distribution communities."


The connection between the VSS and 1SVG organizations is designed to enhance VMS applica­tions recruitment, support and merchandising activities. "Ours is the primary program for access into Digital for application developers: the program is open to everyone and is easy to use," explains Mike. "Often we act as a program manager, indirectly, working with and driving existing organizations to get the job done. If no structure exists or if the job is particularly important to the business, we will work it ourselves."


The group’s responsibilities within the VAX world are similar to those for the RISC world. First, the ISV Group will bolster its broadbase recruitment activities, identifying appli­cation developers interested in developing their solutions for the VAX platform. All developers brought into the program are eligible to take advantage of a variety of busi­ness and support tools, including ISVNet; development systems at reduced prices for pur­chase or lease; access to Development Technology Centers for hands-on experience and dedicated technical support; a listing in SOFTbase, Digital’s online worldwide reference database, which is also the basis for catalogs; and use of the Digital "Authorized Solu­tion Provider" logo.


Second, the ISV Group will strive for a fresh, objective look at applications key to driving VAX/VMS business in the high-end, mid-range and desktop markets. "We have to challenge our current applications thinking to ensure the right mix of solutions for these systems," says Mike. "If solution leaders or emerging leaders are not currently running on Digital’s VAX/VMS environment, we will recruit, support and design merchandising acti­vities to increase market and license share. If they are currently available on Digital’s platform, we will work with the IBUs to use ISVG’s integrated broadbase and targeted services as needed."


New Manufacturing IBUS Announced


Manufacturing Industry Marketing, a cluster of business units reporting to Dave Copeland, vice president, has been restructured to align more closely with customers’ industries and the Account Business Unit structure. Nine new Integration Business Units (IBUs) replace four former ones.


The Manufacturing Cluster had been horizontally focused and sales people often had to go to more than one marketing group for account support. Sales will now have IBU contacts specifically identified for Account groups. With a closer relationship between the IBUs and sales, marketing programs and strategies will match Account requirements and customer needs.


The four old IBUs were: Engineering Systems Group (ESG), Computer-Integrated Manufacturing Marketing and Product Development (CMPD), Research and Development Systems (R&D), and Sales and Distribution Systems (SDS).


The nine new IBUs and their managers are as follows:

Aerospace, Diane Albano

Automotive and other Discrete chemical, Gelnn Armbruster

Consumer Electronics , Open

Consumer Packaged Goods, Eli Lipcon

Electronics, Don Jenkins

Forest, Mining, Metals, Glass and other Prcess Mfg., Rufus Sanders

Oil and Gas, Randy Levine (acting)

Pharmaceutical, Nancy Strecker


One of the new IBUs — Consumer Electronics — will be based in Japan close to the hub of the business supported.


Diane Albano, Don Jenkins, Rufus Sanders and Nancy Strecker are new IBU managers. Eli Lipcon and Glenn Armbruster held similar positions in the past.


Diane joined Digital in 1981 and has been in sales since 1983. Most recently, she was the Account Group manager for Raytheon where she was a five-time DECathlon winner.


Don joined Digital in 1976 as a Technical Sales Support specialist, and has held several positions in Product Management and Base Product Marketing. Don played an instrumental management role in setting Digital’s factory floor strategy and executing it, which has resulted in Digital having the lead in this key segment.


Rufus joined Digital in 1980 after spending 11 years at TRW in MIS. Prior to TRW, Rufus was a Sales Representative for IBM. While at Digital, Rufus has been a Group IS Manager, the Maynard Plant manager and most recently Manufacturing manager, Disk and Subsystems Product Creation Unit.


Nancy joined Digital in 1979. For the past five years Nancy has held the position as the Grumman Corporate Account Manager. She won four DEC 100, Baton and DECathlon awards, and the Grumman team won the first Circle of Excellence Account Team Award for the Aerospace Industry.


Ten New Vice Presidents Appointed In U.S. Area


The U.S. Team has announced that, in recognition of the importance of their positions and their close contact with customers, ten senior managers in the U.S. Area have been named vice president. Their responsibilities remain as before. The new titles are as follows:


Frank Branca, Northeast Region vice president, U.S. Digital Services;


Lynn Busing, Services Industry vice president, U.S. Digital Services;


Tom Colatosti, Eastern States Sales vice president;


Ruth Gaines, Telecommunications and Networks vice president, U.S. Digital Services;


Bob Hult, Western Region vice president, U.S. Digital Services;


Michael Jackson, North Central Region vice president, U.S. Digital Services;


Ed Kamins, Distribution vice president, U.S. Sales;


Tony Morris, U.S. Government Sales vice president;


John O’Keefe, Complementary Solutions Organization vice president, U.S. Sales; and "Mel Ray, Education and Consulting Services vice president, U.S. Digital Services.

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