Richard Seltzer's
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Articles
about DEC
mgmt memo
.
Volume
8, #8
November, 1989
Update
On
Digital Europe by Pier Carlo Falotti, President, Digital
Europe
Enterprise-Wide
Information
Management At Digital by Mike Kalagher,
manager, U.S. Administration
Reflections
On
Teamwork And ‘The Dream’ by Pier Carlo
Falotti, President, Digital Europe
Industry
Marketing
And Product Marketing Merge
New
Program
Makes Internal Applications Available To Customers
Worldwide Idle Asset Listing Helps Reduce Business
Expenditures
Chuck
Thacker
And Rich Hollingsworth Named Corporate Consulting
Engineers
Because we keep growing, we have to look
periodically at our organizational structure to make sure it is
appropriate for the company now and in the future.
Since 1983. when the company was about a third
of its present size, we have managed DigiÂtal essentially as a
single business with a single point of integration at the top. For
the past year and a half, we’ve been reviewing this organizational
structure to see if it could carry us into the 1990s. We concluded
that it would not give us the insight we need into what is going
on throughout the company. More importantly, it would not give us
the opportunity to understand where we should invest and where we
should get our returns, as we move to the next plateau of growth.
Basically, we needed to identify pieces of the
company so we could look at them from the top to the bottom. This
was very difficult because so much of what we do is
interdepenÂdent. Should we segment by applications, by industries,
by style of computing, by product price-band or by some
combination of criteria?
Finally, we decided on three major product
segments and two service segments. This change entails virtually
no reorganization. Rather, the change is effected through a
redefiniÂtion of responsibilities.
From the point of view of style of computing,
the product segments are desktop, departÂmental and high. From the
point view of price band, we refer to them as low, medium and
high. The price ranges, for now, are approximately $1000-$
130,000; $130,000 to $700,000; $700,000 and up. These segments are
managed by Dom LaCava. Bill Demmer and Bob Glorioso, respectively,
and cover the same products as the Low-End, Mid-Range and High
Performance engineering organizations. These organizations will
remain the same, but their responsiÂbilities will be expanded.
The two major service businesses — Customer
Services and Professional Services, run by Don Zereski and Don
Busiek — were already looked at as separate businesses; thus they
are essentially unchanged, except that we expect greater
coordination between the products and services parts of the
business, where they intersect.
Segment managers will be responsible for
developing the plans that will determine the resource requirements
across the company. Based on the segment plans, Manufacturing,
Engineering, and the Field will formulate their implementation
plans.
Before, we took all the insights from all the
functions and brought them together at a single point of
integration and then decide where to go from there. In that model,
it was not clear who was doing analysis from the point of view of
overall investment and return and who was directing what. It was a
committee or consensus process, and no individual was responsible.
Now business managers are going to be held
responsible for developing the plans of the company. And when we
add up all their plans, they will total 100% of the company.
Although segment managers are not expected to
manage the functional resources on a day- to-day basis, they are
expected to feel accountable that those resources are being put
into place, are adequately trained and are delivering a reasonable
return on that investÂment.
If I’m a segment manager and Manufacturing
doesn’t deliver, I’m held accountable for that failure as is the
manufacturing person. You have to be good enough to be able to
manage situations like that. It’s unacceptable for a segment
manager to walk in and say, "I didn’t deliver my return on
investment because Manufacturing didn’t do something" or "the
product was late" or "we didn’t have the right number of sales
people or support people in place." You had the plan, and the
functions agreed to implement it. If for some reason, they were
not able to implement it, they failed; but you also failed. The
segment manaÂgers are being held responsible for every facet of
delivering that plan.
Segment managers’ responsibilities extend
throughout the life cycle of products — from the investment phase
through the return phase. Because our product segment managers
also double as engineering managers, this change should
significantly increase Engineering's interest in our selling and
servicing functions. For their business segment to be sucÂcessful,
the products must be complete, their advantages clearly described,
the sales force adequately educated and trained, and specific
sales opportunities fully supported.
The driving force behind this change has been
our need to understand and manage the comÂpany in a way that helps
us make better decisions and to allocate and use resources more
effectively in support of our customers.
This approach follows the product line concept
that was so important in the early days at Digital. It is based on
two main principles:
o you, as manager, will be held accountable
although you cannot control the resources; and
o each product line will stand on its own and
be accountable on its own for its indiÂvidual business.
The old product lines ran into trouble because
they started to violate both of those principles. They started to
become much too involved in the day-to-day operations of the
functions at the expense of developing good strategies that helped
our selling resources return the planned revenue. They built up
overhead and bureaucracy.
At the same time, they started to consolidate.
At one time there were as many as 38 product lines that we looked
at as 38 individual pieces. Unfortunately, we started
conÂsolidating those pieces; so we ended up with five instead of
38, and lost accountability and built up bureaucracy.
We learned from that. Those two principles will
not be violated this time.
The main operating units are the businesses
that report to Don LaCava, Bill Demmer, Bob Glorioso, Don Zereski
and Don Busiek. We used to refer to them as Product Business Units
or PBUs.
For example, Dom has five separate businesses.
He’s fully responsible for them. But, when it comes to
understanding the businesses, it’s the five people who report to
him who make the decisions on where we should invest and where we
will get our return. Dom doesn’t talk about his group as a
homogeneous whole. Rather, he reports on each of his five business
segments separately.
That's the principle. We’d like to have as many
of these business segments as makes sense. We’re not worried about
span of control. If we end up with 56 business segments, and they
make sense and can stand on their own and can be managed from the
standpoint of investment and return, that will be fine. If we end
up with 12, that will be fine too.
We began using this concept with the FY90
budget, before the details were all worked out. The main idea is
that the segment managers are now leading the company.
This way of looking at the business is
complementary to the Field efforts in planning by account. The
Sales unit/account manager is Digital's primary contact with the
customer. The segment focus will provide the resources — from
products to training and other proÂgrams — to ensure these Sales
managers are successful in meeting customer needs with Digital
solutions.
The business segments, by principle, have to
market their products to the Field. For any customer solution,
there are usually two or three different approaches. So it is the
responsibility of the segment managers to package their products
in such a way that it is attractive for particular industries. So
there’s a dialogue with the Field to make sure that the product
strategies and business plans from the segments line up with what
the Field plans to sell.
In large part, the Operations Committee was
created to give the segment managers a forum so they can identify
and resolve issues quickly and efficiently. Everyone whom they
need to work with is on that committee. Together they openly
discuss opportunities and probÂlems.
In our rapidly changing business environment,
as soon as the ink dries on a plan, it is going to start to
change. So, we need to be able to deal with those changes
immediately, in real time. The business segment focus and the
Operations Committee should enable us to do that.
I am often asked to contrast the US and Europe,
in terms of Digital’s markets and organÂization. Inevitably this
results in a discussion about the external environment, which so
heavily influences how we are organized and do business in Europe.
There is in fact no single business entity
called "Europe." Instead, it’s a grouping of 18 different
countries, each with its own language and culture, and having
different legal and fiscal structures, overlaid by an increasingly
complex matrix of European community laws and processes.
These national differences represent a natural
framework of communities, and in each country Digital has strong
national and regional management teams who integrate our busiÂness
cullture with the local environment. The role of the European
Management Team is to create overall business goals and the
umbrella framework of organizaÂtion and processes to support
achievement of these goals by the countries and functions.
Our diversity is also a strength in business,
since we are effectively trading in 18 different markets. Market
conditions vary considerably from one country to the next, and at
present we see no "saturation" of the computer market in the
countries of Europe. On the contrary, the activities preparing for
the economic unification of Europe in 1992 are really pushing our
customers to innovate to survive and to be more competitive. There
are tremendous mergers and consolidations being planned which will
allow European companies to acquire the critical size to compete
worldwide with American and Japanese companies.
Of course, today there is a tendency to be
careful when interest rates are going up. But I believe that with
our products and with the quality of the organization that we have
in each of our countries, we should continue to grow much faster
than any of our competitors. That's what we’ve been doing for a
while now. The only limitation I see for us is how many good
people can we attract so that we can sell more and cover more.
Afterall, our marketshare is still very small. So we have plenty
of opportunity.
Fifteen years ago, Digital had a variety of
different computer families — PDP-11, DECÂSYSTEM 10/20 and VAX
systems. At first that looked like a disadvantage. But the
experÂience we gained as we developed the networking technology to
link those different systems together has turned out to be an
important advantage as we now help customers who face similar
problems.
Likewise, managing 18 different subsidiaries in
Europe has been a difficult task. But what we have learned now
gives us an important advantage as our customers try to do
simÂilarly in preparation for 1992. We have a fantastic advantage
because we have been operÂating in this way for many years. So
customers are looking at how we operate internally and what we
have learned in terms of organization and management, as well as
the use of computer systems.
After all, information systems are a just tool
to help them in the way they want to orgaÂnize. Systems certainly
are a critical success factor in business today, but they should
not come first. First you should fix the organizational structures
and your business integration and business practices. Then you
should determine the system.
In Digital Europe, we have gone through many
organizational changes in the last six or seven years. Some have
been successful and some less so. You could say that the fact that
we have 18 countries is an advantage this means we have 18
different laboratories in which to try different programs and
approaches.
When an experiment works, we can make it more
standard. If it doesn't work, we learn from the experience.
For instance, we had an international account
problem inside Europe, and were forced to find a way to deal with
it organizationally. We tried several different solutions. Now the
geography manager where the customer’s headquarters is located is
responsible for that account worldwide.
Now, for example, Joerg Rieder is responsible
for making sure Siemens is happy worldwide. The account plan now
comes from the account manager and the rest of the company
cooperates to execute that plan. If we disagree, we tell him or
her later. First we execute, then we argue (instead of arguing
first and never executing, just leaving the customer waitÂing.) So
we are trying to instill the approach that first you think
internationally and then you think nationally. We are working very
hard on that. We have to succeed in making this cultural switch.
It is fundamental to our future.
(The following article is based on the keynote
address that Roger delivered on Sept. 27 at the Dataquest
Distributed Computing Conference held in Santa Clara, California.)
There are strong business reasons that
guarantee customers will make huge financial inÂvestments in
distributed systems. But the long-range viability of those
investments is in genuine doubt unless users of this technology
are willing to face the serious social and organizational
challenges raised by distributed systems.
In fact, we may look back in ten years and
conclude that distributed systems was the "Al of the ’90s" -
oversold as the solution to all problems. Just like artificial
intelliÂgence in the 1970s, we’ll conclude that the technology was
ahead of the customer’s ability to utilize it.
For end users, having a truly distributed
system means that all users in an organization can get all the
information they need, wherever they need it, from whatever kind
of sysÂtem, whenever they need it, without having to ask anyone’s
permission. This is simple to define, but not so easy to
implement; hence the excitement and anticipation of users, and the
challenge and difficulty for vendors.
Not only is distributed computing
cost-effective, and capable of optimizing the system for end
users, it reduces the stress on overburdened Information System
(IS) departments, and empowers far-flung managers and users with a
greater sense of responsibility as they take more ownership for
information, data, and communications. We are beyond the point
where centralized computing can equal the advantages of an
integrated, distributed system. It
is no wonder that so many companies are rushing
forward into distributed computing.
But what are they getting themselves into? Will
cost savings, by themselves, be enough to take advantage of the
possibilities distributed systems create? How much longer can we
expect organizations to keep purchasing ultra-powerful,
ultra-sophisticated technology when they are still having trouble
trying to figure out how to get people to effectively use
electronic mail?
The greatest challenge to the successful
implementation of distributed systems is not technical — it is
social. The technical barriers to distributed systems will be
broken. But my worry is that we will be sitting here ten years
from now trying to figure out why our huge investment in
distributed systems didn't pay off — in productivity gains, faster
time-to-market, a more flexible organization and greater
competitive advantage. The answer to that question will not be
technical. It will lie in the way that we have organÂized
ourselves to absorb and take advantage of the technology. It will
lie in a thick tangle of issues surrounding the relationship
between the way people and organizations work and the impact of
technology.
It is my hope that in raising some of these
issues, we can better appreciate the profound social challenges
inherent in distributed computing and forge ahead with open eyes.
I won’t be offering any easy answers to this challenge, but it is
important that we not forget that it will be people, not the
technology itself, that determine its ultimate success.
Technology changes the functions, roles, and
power of those who use it — quite often with unanticipated
consequences. Imagine what the impact of distributed computing can
be — a form of technology that has the potential to unleash the
flow of information within an organization.
It is this impact, which is social in nature,
that has to be successfully managed for distributed systems to
result in the kind of gains we are imagining for it. But that is
not being done. A whole series of extremely important issues is
being ignored.
For example, it is a common assumption that
open access to information for individuals in line positions will
empower them. More information will give them a better picture of
what’s going on, allow them greater input, provide opportunity for
the exercise of creatÂivity and innovation. We might call this one
of the social benefits of distributed comÂputing.
But can it be realized? If we give our people
access to reams of information, will they know what to do with it?
Will they be able to analyze it or use it for making decisions?
Will they even be able know what information on the computer is
significant enough to pull off for further study?
The truth is. most business people are not
trained in the art of managing with informaÂtion. Even those who
go to business school are trained only in the very limited school
of managing with financial data - looking at elements such as
current ratios, quick ratios and debt/equity ratios.
But distributed computing opens the possibility
of analyzing sales and marketing data, for example, that have
never quite been fractionated before. How many vice presidents of
sales have sales analysis systems that allow them to fully
understand where the sales effort is being spent, by activity, by
type of customer, by sales person, by product? And of the few who
might have that information, how many have the control processes
in place to surgically insert the proper tool and change the
process?
Such systems require skills and modes of
thinking that most business people simply haven’t been adequately
trained to handle.
One could even suggest that the short-term
financial orientation of so much of American industry is simply a
result of the fact that we don't teach business students how to
manage with anything but financial data.
Even if we properly trained our people to fully
maximize the information that distributed computing could deliver
to them, would their jobs, as presently constituted, allow them to
take advantage of it? Most of the jobs existing today were defined
independent of the kind and amount of data that distributed
computing can make available.
There’s a real danger here. If information and
technology allow people to do new, excitÂing and unanticipated
things, and their job description and the requirements of their
managers restrict them from doing it, you substantially undermine
the benefits of empowerÂing them in the first place. And you
create the possibility of what one organizational analyst calls
"corrosive frustration" — a swell of resentment from below that
undermines the unanimity and purpose of the whole organization.
Distributed computing not only raises the issue
of whether individuals can do their job better with information,
and whether their job should be restructured because of
informaÂtion, but whether whole departments, as they now exist,
need to change, perhaps combining into new functions. Research,
engineering and manufacturing have been moving closer together
over the years, and now there is a push to move these functions
closer to sales and marketing. At some point, the overlap may be
so great that internal functions will have to wind up being
completely reconfigured. Certainly distributed computing creates
an enabling technology that will allow that to happen.
Implementors of distributed computing are going
to have to face three major social issues. First, we are going to
have to train people to maximize their use of information. Second,
we are going to have to support them as jobs are redefined so they
take advantage of all this information. And third, we will have to
help each other across the organization in the redefinition of
departmental boundaries.
Whether we have the courage and commitment to
face honestly the implications of this new technology, and to try
to make the changes necessary to maximize our investment in both
people and technology, is the great social challenge raised by
integrated distributed systems.
It is a social, not technical, challenge, and a
very serious one at that. Just trying to get people to allow
information to flow in the first place can be a trial. Distributed
computing by itself doesn’t make information flow freely. In many
organizations, inforÂmation is power and the control of
information has always been one way that managers can maintain a
high currency.
It is no wonder managers are so ambivalent
about fully implementing distributed computing. Managers will be
reluctant to give up information if they see the control of it as
their power base — making one’s name by being the only source.
Only when a company values and rewards the sharing of information,
not its control, will the capabilities of distributed computing
come to true fruition.
We often worry about the impact of technology
and so rarely are prepared to deal with it. We can change
technology a lot faster than we can change human behavior.
Even Digital, renowned for its matrix
organization, its worldwide computer network, its commitment to
innovation and creativity, and its distributed computing, is not
immune. It is not uncommon in Digital for teams on distributed
networks to be so far out ahead of the organizational structure,
that we find ourselves trying to catch up. We are used to
organizational change, and we move very fast - but that doesn’t
make that change any less wrenching.
To summarize, first, there are strong pushes to
distribute computing away from centralized systems. But, second,
to do this without facing the social challenge of absorbing that
technology raises doubts about its ultimate viability. This is the
greatest challenge to distributed systems in the 1990s.
But the potential is great for empowering
people where they work, for opening avenues of innovation and
creativity, for creating an organization that plays like a
symphony orchesÂtra, for really building upon the power of this
special technology.
At times, we operate in what could best be
described as an "information bucket brigade." Many people gather
data at various steps all the way through the business, and other
people in technical jobs assemble that information for users. We
need to shorten the distance from the people who have the
information to the people who need it.
Our vision is an environment where information
flows freely and creates excitement. People are energized by
having the real information in timely fashion that has quality. We
want managers up and down the organization to know the real
product demand, so they can make adjustments in real time. We want
plants to see the actual demand as it comes in from customers.
Anyone who uses computers to make business
decisions will be touched by the implementation of an
enterprise-wide information management architecture within
Digital. The objective of this architecture is to make high
quality information easily available in a transparent network of
data warehouses. The person needing information will no longer
need to know where the information is physically located, only
what he or she needs. The architecture will establish a secure
environment that enables the free flow of information for Digital,
its trading partners and others who have an authorized need for
Digital’s information.
In the past, information strategies were driven
separately by each individual function. A year and half ago, the
Systems Steering Committee (SSCom), which acts as a
cross-funcÂtional advisory board to Digital Information Systems
(DIS), decided to create an enterÂprise-wide focus for information
management at Digital. They asked U.S. Administration to lead the
development of a strategy that would support the entire
enterprise. We appointed Tim Woisin to pull together the
Information Management Forum. This Forum consists of senior
business and technical representatives across the company. With
their guidance, we began developing this architecture.
Digital has a variety of business entities —
business segments, functions and geographies — each of which had
been pursuing an information architecture of its own. Similarly,
we had to identify the few basic principles and standards that
everybody should abide by to make sure that the overall system
works like an integrated network. For instance, one of our basic
principles is that information created within Digital belongs to
Digital and not to any one functional unit. Hence, there should
never be a cross-charge for information. In addition, we had to
set some rules for the connections between these
sub-architectures. At the same time, we didn’t want to dictate
matters that aren't necessary to make the whole system work
together smoothly. We are also balancing ease of access to
information with the need to encourage and monitor proper usage of
the system.
There is an enormous demand for computerized
information that isn’t being met today beÂcause we can’t get it
together in a timely enough fashion. For instance, information
that would be valuable if I could have it at 9 o'clock tomorrow
morning is worthless to me if 1 can't have it on time. Thousands
of sucli requests go unanswered today.
The difference between what we have today and
what we want tomorrow is the difference between "just-in-case" and
"just-in-time."
Today, not knowing what the business is going
to ask for and knowing we have long lead times to fetch
information, we build data bases closer and closer to us, just in
case somebody should ask for this information. That drives a huge
cost structure. We want a just-in-time network, where the end user
pulls the information through when it’s needed.
Of course, there will always be some kinds of
information that many people will want on a regular basis. In
those cases, there is a push to make the databases available so
everyÂbody who needs the information can have access to it.
We need to make the overall system simple
enough so business people with a need can take care of 60-70% of
their requests themselves, without the help of an expert.
When we say "enterprise," we mean more than
just Digital. We also include its trading partners — both vendors
and customers.
The feature of this architecture that will
allow links with other companies is the ability of the custodian
of the information to control who gets access to what portion of
it. That’s one of the technical changes we’re working on now.
Business and organizational changes, such as
the new "business segment" emphasis and the shift to an account
focus, are making it all the more important that we deal promptly
with these information management issues.
With the new business segment structure,
segment managers will be anxious to get business information they
need. They know that this information has already been
computerized somewhere in the company, and they don’t want to hear
about how complicated it is to access it. This new architecture
provides a framework for implementing a solution to this
requirement, in a high quality, timely and cost-effective manner.
At the same time, the U.S. Field is being
restructured to an account focus. Data bases that were set up with
the old organizational model have to be changed so we can do
profit and loss statements for accounts, and provide data in new
forms. For example, how do you give a district, which now has
responsibility for an account that is country-wide, all the
information they need? The implications to our existing data bases
are enormous.
Right now, we have people busily implementing a
solution to those Field-related questions for a January deadline.
We’re taking this opportunity to implement some elements of this
new architecture. For instance, when we restructure the data for
the Field, we can take the organizational connotation out of the
data and keep that as a separate reference file, so that future
organizational changes won’t require major data restructuring
efforts.
Moving forward with implementation of this
architecture will require teamwork and trust throughout the
company.
Information is powerful, and, to some, it means
power. One of the toughest cultural obstacles we have to deal with
is the fact that some people who have information today fell
compelled to guard it. People need to say "This information
belongs to Digital. I'm a caretaker, and have responsibilities to
the company."
Our customers are very interested in learning
what we do to solve these problems, which they are also facing.
This architecture is not only a way to deal with pressing internal
Digital needs, it also can become an important marketing tool. As
our global customers try to deal with the issues of information
management across their enterprises, with our experience, we’ll be
in a better position to help and guide them. This way, we can
demonÂstrate the outstanding capability of our products, services
and people, showing customers how we run our business.
(A document describing the "Enterprise
Information Delivery Environment Architecture" or "E-IDEA" has
just been published.
For a copy, contact the Information Management
Program Office at DTN 272-7303 or Karyn Primeau @CHM).
In August, Digital signed an agreement with
Rockwell International for the exchange of manufacturing
technology. As a result, Rockwell will send engineers to learn
surface mount technology at Digital’s Augusta, Maine, and Salem,
New Hampshire, plants, and DigiÂtal will send engineers to
Rockwell’s Dallas, Texas, plant to learn a technique for
preÂdicting the yield of printed circuit board assembly operations
at in-circuit test.
Today, Rockwell does surface mount with circuit
lines 50 mils (thousandths of an inch) apart, which is typically
the current state of the art. But Digital, using the same
proÂduction equipment, routinely does surface mount with circuit
lines twice as dense as that — 25 mils and less.
In exchange for that technology, Rockwell will
provide Digital with a mathematical model and a set of procedures
that allow them to predict the yield of new circuit board designs.
This methodology helps pinpoint problems so
they can redesign new products to improve the manufacturing yield
before introducing new products on the manufacturing line.
With this technique, it is possible to get an
estimate of manufacturing yield based on the bill of materials and
data on previous experience with the manufacturing process. As the
design gets into layout and the components become firmer in the
list of materials, the estimates become better refined — typically
coming within 5-10% of the actual results of in-circuit testing.
This exchange of manufacturing technology is an
example of the mutual benefit that can come from building a close
relationship with a major customer. This came about as part of
Digital’s Manufacturing Corporate Account Program, which was
started about three and a half years ago by Don Hunt.
At that time, Digital Manufacturing had
recently made significant gains. Customers were interested in
learning from us, and Digital Manufacturing realized that, to
maintain its momentum of success, it would need to learn from
other major manufacturers. At the same time, the importance of
building close working relationships with customers was becoming
clearer^ Ultimately;, the trust built from such relationships can
lead to major sales and improved marketshare.
This program resembles corporate account
programs in Sales, Software Services and Field Service. But in
this case, the primary focus is not sales, but rather a balanced
and mutually beneficial relationship between two manufacturing
organizations.
Building such a relationship is slow because it
is so unique. It takes constant interÂaction with the customer in
a variety of situations to establish credibility. RepresentaÂtives
from the manufacturing functions at Rockwell and Digital visited
one another's plants on a number of occasions, learned about
operations and capabilities, and got to know and trust one
another. In particular, Bill Hanson, vice president, Manufacturing
Operations, participated in a high-level internal production
operations conference at Rockwell. Bill has recently agreed to
assume the role of executive partner for that account.
The technology that Digital is receiving under
this agreement is important because it can help us establish
two-way communication between engineering and manufacturing
people, focusing on solving common problems before new products go
into production. It can also help design engineers make decisions
relating to both time to market and manufacturing cost.
We face the risk that as Digital grows larger,
distance grows between management and the people who actually know
what is going on. We could lose touch with the fundamental reasons
why we like to work together.
People enjoy being part of the same team. A
team is a group held together by a passion for a common objective.
They understand what they want to do and will make an extra effort
to make sure that their objective gets fulfilled. Also, every team
has a coach to guide them. This coach is one of them, a member of
the team, rather than on top of them.
When I joined Digital 20 years ago, the people
who interviewed me gave me the impression that they were really
anxious to work together. They inspired in me a desire to join
that team.
Do we still inspire that same desire to join
when somebody comes in the door?
Clearly, there are plenty of people who want to
join us. We have become a presence in the national and economic
infrastructure of the countries where we operate. But unless you
keep asking this question, you run the risk of not adapting to
change.
I believe that we can’t be a team of 7,000
people in the U.K. or 5,000 in Germany or 30,000 in Europe. That’s
simply too large.
But I believe it is possible to have many teams
of a "human dimension." In football or basketball, the number of a
team is fixed. But there is no fixed definition of a team in a
company. The team can be as large as it feels it can afford.
When is a team too large to function as a team?
I have two benchmarks in Europe. When the boss doesn't know his
team players by name, it’s time to split the team. And, when the
boss doesn’t know the person who gets in the elevator with him or
her, it’s also time to split. Basically, I don’t want any building
to be more than 400 people because 1 believe when buildings are
larger, it becomes very difficult to make everybody feel a part of
the team.
So first, the team should be of a human
dimension. Second, the team must have a common passion or a common
dream.
I was concerned that we had lost that dream and
were running the risk of becoming a "norÂmal" company. So we sat
down as a European Management Team and put down into words our
dream about the company we want to be. Then we published and
distributed this dream to every Digital employee in Europe.
A dream is not reality. It’s something we wish
were true. It is so perfect that we can never reach it fully, but
it is like a compass that helps us steer our decisions and our
behavior in the right direction. This dream is very ambitious.
Managers can play a leadership role to make the dream real, but
managers cannot do this alone: everyone is needed to discover ways
and opportunities in our everyday work to help us get a little
closer.
Our dream is a company:
o that attracts the best people— bright,
energetic people who are bom team players, who thrive on freedom
and challenges, and who are passionate about the quality of their
work.
o where managers coach their people to learn
from their experiences and actively encourÂage them to develop
their skills and knowledge fully.
o where managers urge their people to take
ownership of their work and reward them for their creativity,
competence and productivity.
o where the direction and the priorities are
clear to everyone and where responsibility and authority is
delegated to those closest to the customer.
o whose customers feel part of the family
because of our concern for their success, our willingness to serve
them and always do that little bit more, and, and our ability to
deliver.
o that uses a flexible, dynamic approach to
ensure an optimal match between its structure and the evolving
needs of its customers.
o that is known as its own best reference site
because it uses its superior technology and knowledge effectively
in its own organization.
o of global size where people work
enthusiastically in small groups that are networked together to
take full advantage of the benefits of its large size, and which
allows seamless coordination of large scale activities to their
own and their customers’ benefit.
o where everyone can make a difference, because
people can trust each other and managers empower their people.
o that people are proud of and where they act
as if it were their own company.
At the same time, we decentralized business
responsibilities from the country in such a way that the team not
only has a common passion but also has a common objective.
In addition, we developed a plan to coordinate
the efforts of the teams. Our skills have to be integrated and
coordinated when we present ourselves in front of the customer or
we execute a system or a service or sales in front of the
customer. So we created what we call "One Integrated Plan", a set
of procedures whereby a team, in any location, defines its
objectives as a group and measures its performance.
Of course, each individual has his or her own
responsibility. But they also have a reÂsponsibility to fulfill
common objectives. And they will be measured on both their
indiÂvidual and their team goals.
When we sell a network, for example, there is
no one function that can meet all of the customer’s needs. You
need a project manager, and you have to put all the various
reÂsources together. You have to be integrated as an organization
to be successful in proÂviding systems integration.
This organizational integration is everyone’s
responsibility. We want people to feel part of the process and not
an execution arm of what management decides. In a complex
environÂment like ours, the people are the experts.
So we wanted to restate that we are very
serious about having employees participate. In Geneva we call our
program "I want to contribute." Some countries use this title,
others have different names for their employee involvement
programs. What matters is that we are signaling to employees that
they are the company.
The role of managers should be to facilitate
the performance of the individuals, not to dictate their
performance. We represent this viewpoint with an inverted
triangle. At the top is the customer and the people who deal
directly with the customer. At the bottom is myself. We say that
the account manager, the service engineers, the software people,
and others who deal with the customer drive the organization, and
managers are there to help them.
We use this symbolism to encourage a cultural
change — to convert everyone toward helping the account manager to
make the customer more satisfied with us and more loyal. We want
customers to understand that Digital is the best company for them
to buy from.
Employee participation is one way to help
maintain and implement our dream. Employees understand the need
for integration much better than management because they have to
deal with those problems every day. The "one integrated plan" is
intended to bring together the various functional
responsibilities.
The integrated plan is not temporary. It is
intended to last forever. We are going to move it down and improve
it and get more integrated where we feel there is a need. So we
move now from the country below the country. And next year we will
move it further so that eventually, when the organization is
ready, which I hope is soon, we will have one integrated plan per
account. Then everyone feels part of the same team and has some
common objective to win.
We have to help people understand that all the
functions and geographies of the company are interdependent in a
way that is fundamental to the success of everybody. Given that we
work as a team, the priority is that the team has to win. and then
everybody wins. It’s much better to be part of a winning team than
to be the only one winning on a losing team.
To position marketing resources to link
customer needs more closely with Digital’s rich product offerings.
Digital is combining the Field Marketing Group, currently
reporting to Bob Hughes, and Product Marketing, which reports to
Peter Smith. The following groups now report to Peter Smith:
o Consultant & Information Systems
Marketing
o Electronics Industry Marketing
o Financial Services Industry Marketing
o General Services Industry Marketing
o Manufacturing Industry Marketing
o Media Industry Marketing
o Process Industry Marketing
o Public Sector Industry Marketing
o Telecommunications Industry Marketing
o U.S. MARCOM
"Combining these organizations provides the
opportunity to optimize marketing resources across the company,"
explain Pete Smith and Bob Hughes. "It also enables Digital to
further integrate customer and market information in the
development of solutions and products to meet the changing needs
of the marketplace. In addition, the marketing groups will
continue to work closely with the sales organization to develop
new market opportunÂities across industries. We look forward to
the opportunities that joining our marketing organizations will
offer."
To manage its business, Digital has developed
sophisticated systems and networks and has invested hundreds of
millions of dollars in applications developed for internal use.
Applications in such areas as Order Processing, Manufacturing,
Engineering, Finance and Administration have enabled us to support
the challenging demands and requirements of the business.
Customers have similar business needs and could
benefit from some of these internal appliÂcations, technologies
and services. Turning these applications into products and
bringing them to market would not only help customers, but also
generate immediate revenue.
The U.S. Management Committee has established
New Venture Sales to help internal groups sell to customers
applications that they developed for internal use. This
organization will work with the source group and field groups to
build a focused plan to bring appliÂcations. and the necessary
related tools and services to customers. "Our goals are
increÂmental revenue, above average profitability, and customer
satisfaction." explains Dick Heaton, New Venture Sales Program
manager.
The range of potential internal applications
and services that could be sold externally includes consulting
services, software applications, tools, hardware products,
technology and expertise to meet business needs.
"In many instances, customers visiting Digital
have seen these applications at work for us and have expressed
interest in purchasing them. I very much support the idea of
selling the best of these applications, with appropriate support
to selected customers," notes Pete Smith, vice president, Product
Marketing.
"As with any other product we offer, we must
make sure that the customer’s expectations are met and that we
maintain our emphasis on customer satisfaction," adds Win Hindle,
senior vice president, Corporate Operations.
The selling of Digital’s internal products
represents an opportunity for any group in the corporation to make
an additional impact on revenue and receive funding for
investments. All groups — including Manufacturing, Field Service,
Engineering, Personnel, Finance, Administration and Communications
— are potential sources for these products.
The booklet "Guide to Selling Internal
Products", developed by New Venture Sales explains how to start a
new venture. It begins by discussing the difference between a mass
market product and a focused sales product. It provides help in
distinguishing the potential roles of Assets Library, Software
Service New Ventures, U.S. Software Services?, the Phase Review
Process, Computer Special Systems and Customer Services in
bringing an idea to market. New Venture Sales can help in working
with these existing groups or provide alternative arrangements
appropriate to specific opportunities.
(If you want to make an internal application
available to customers, or if you know a customer who would
benefit from an internal application, tool or service, contact
George Roth at DTN 296-4336, ALL-IN-1 @UPO, or VAXMAIL at
JAWS::ROTH).
An on-line database known as D.I.A.L.
(Digital's Idle Asset Listing) helps groups with unwanted
equipment find new users for it, and enables those who need
equipment to obtain it at reasonable cost. This system can now be
accessed from anywhere in the world.
A real-time, user-frienclly system, D.I.A.L.
reduces corporate equipment and inventory expense by redirecting
currently owned assets. Based in Andover, Mass., and Nijmegen.
Holland, the system features on-line inquiry, updating and
reporting capabilities. Users are responsible for their
advertisements in accordance with company and group policies and
procedures. Users must maintain accurate data and insure that
assets meet proper quality standards. All material is physically
stored by the advertising plant, and the transfer of material,
financially and physically, is also the responsibility of the
user.
From FY80 through FY89, the total assets
redistributed through D.I.A.L. amounted to $416 million.
Retrospectively, this can be looked at as $832 million of savings:
the $416 million that wasn’t spent and the $416 million of reserve
avoidance. Asset redistribution for FY89 alone was $42 million.
D.I.A.L. is about to enter Phase II of a
worldwide database endeavor. By the end of Q2, users will be
seeing new screens with all functionality intact (inquiry, update
and reÂporting), Also, with the installation of a client server at
local sites, the speed of remote access to the D.I.A.L. system can
be greatly enhanced.
D.I.A.L. is a corporate-wide system and reports
under Customer Service Logistics and Corporate Manufacturing
Operations. The cost of the system is funded by both groups; there
is no charge to users. To request a D.I.A.L. account, contact
D.I.A.L. AdministraÂtion at DTN 240-6330. An account will be set
up within one working day.
Chuck Thacker of the Systems Research Center,
Corporate Research, and Rich Hollingsworth of the Semiconductor
and Interconnect Technology (SCIT) organization, have been named
Corporate Consulting Engineers in recognition for their
contributions to the company and to their respective technical
arenas.
Chuck’s contributions range from processor
design to the "snoopy" cache protocol to local area networks
(LANs). He designed a multi-processor workstation, which was the
prototype for the Firefox; and he recently designed a high
performance, multi-processor "snoopy" cache bus.
Prior to joining Digital in 1983, Chuck's
contributions to the field of computer science included the
co-invention of the Ethernet LAN and Alto, the first workstation,
for which he invented the bit-mapped display. He shared the 1984
ACM Software Systems Award for the latter work.
Rich Hollingsworth has worked in SCIT since
1979, following eight years at the David Sarnoff Research Center
of RCA. He is recognized as the organization’s premier
semiconÂductor process architect.
Seventy-five percent of Digital’s hardware
revenue comes from products supported by CMOS-1 and CMOS-2—both
results of Rich’s technical leadership. CMOS-3, now in prototype,
is expected to repeat this feat of world class performance and
manufacturability.
Rich is currently working on processes with
features below 1 micron, and managing a colÂlaboration with
industrial partners in Europe and the U.S., as well as involvement
with a number of universities.
The Desktop Systems Group has been renamed the
Video, Image and Printer Systems Group. This name will more
adequately portray the product areas and activities that are
repreÂsented by the group. It will also bring in the expanded
activities and interest in imagÂing products by our customer base.
The group will remain in the Westford
Technology Park, Westford, Mass., at sites DSG1 and DSG2.
Kerry Bensman has been named U.S.
Imaging Sales Programs manager, reporting to Dick HeaÂton, U.S.
Sales Programs manager. Kerry will be responsible for working with
the Imaging Systems Group, Software Services, Industry,
Government, Volume, CSS and Engineering groups to implement sales
plans for image processing products. He has been with Digital for
20 years, including 13 years in Software Services.
Lyn Benton has been appointed Assistant
Corporate Controller.reporting to Bruce Ryan, vice president and
Corporate Controller. She has been Low End Systems Controller,
reporting to Dorn LaCava, since 1987. She joined Digital in 1979.
holding positions as Corporate ManuÂfacturing Business Analysis
and Reporting manager. Westminster Plant Controller, and Small
Systems Manufacturing Group Controller.
Dan Burkus has been appointed manager of
the International Accounts Management office, reporting to Jack
MacKeen, vice president, Telecom Industry Marketing and
International Programs Office. In this role, Dan will drive plans,
programs and strategies designed to meet the needs of 16
international accounts. Dan joined Digital in 1976 as a Sales
repreÂsentative. In 1981, he became the National Account manager
for DuPont. In 1986, he became the cluster manager for the
Discrete Manufacturing Industries of Automotive, Electronics and
Aerospace.
Hans Dirkmann has been named vice
president, Customer Services - Europe, effective January 1, 1990.
He continues to report to Pier Carlo Falotti, president, Digital
Europe, and will report to Don Zereski, vice president, Customer
Services. He joined Digital in Sales in Germany, then became
manager of European International Accounts and, later, Country
manager of Switzerland. Since last year, Hans has been Country
Group manager for SwitzerÂland. Holland. Belgium and Austria. He
will continue in his role as Country Group vice president for
Belgium and Holland, which will provide continuity of management
of these two countries.
Ben Fordham has been appointed Program
Manager for the new Digital Management Consulting Program,
reporting to John O'Donnell, manager, U.S. Enterprise Integration
Services. This program will define and establish Digital’s
worldwide management, business, organization and technology
consulting capabilities for customers. Ben joined Digital in 1977
as Organization Development consultant to the product lines. He
later formed the Corporate Organization Consulting Group, which he
has managed since its inception in 1983.
Rose Ann Giordano has been named vice
president, Eastern States Sales Region, reporting to Dave
Grainger, vice president, U.S. Sales and Services. In this
position, Rose Ann will be responsible for the end user sales
districts in that territory. She also will retain her
responsibility as the corporate officer for DECUS. Rose Ann joined
Digital in January 1979 as Group Marketing manager for the
Technical Group. In 1984, she was appointed a corporate officer
and named vice president of Large Systems Marketing. She went on
to manage the Information Systems Business Group and the
Consultant and Information Systems Marketing organization.
Recently, as an added responsibility, she managed the Public
Sector, Education and Health Care Industry Marketing groups.
Hope Greenfield has been appointed
Product Marketing Group Personnel manager, reporting to Peter
Smith, vice president, Product Marketing, and Dick Farrahar, vice
president, MEM Personnel. Hope joined Digital in 1979 in the
Personnel Group in LSI Manufacturing. Most recently, she has been
the Manufacturing Group Personnel manager for the Storage and
Information Management Group.
Dick Heaton has been named U.S. Sales
Program manager, reporting to Jerry Paxton, vice president, U.S.
Sales Operations. In his new position, Dick is responsible for New
VenÂtures in the U.S. He has been with Digital since 1968. In
Manufacturing he was on the start up team for several new plants.
In Sales, he started up the Authorized Distribution Channel. And
in Marketing, he expanded Digital’s use of Indirect Channels.
Henry Keller has been named Country
manager Switzerland, reporting to Joerg Rieder. CounÂtry Group
vice president, Germany, Austria and Switzerland (D.A.CH.). Henry
will start his new assignment Jan. 1, 1990. Henry, of Swiss
nationality, started with Digital in 1984 as Country manager
Belgium and built up that subsidiary’s business to its present
size, as the number two computer company in Belgium.
Bob McCauley has been named manager of
OSI Migration for the Strategic Technologies Group (STG),
reporting to Peter Brown, manager, Strategic Technologies. In his
new role, he will be responsible for managing the migration of
EASYnet, Digital’s own enterprise-wide network, to the DECnet
Phase V products. This will provide an opportunity to test the new
products in a large production environment as well as engender
knowledge which can be shared with our customers as the plan to
migrate their own networks to OSI. Bob has been with Digital for
12 years. Prior to being appointed manager of Digital
TelecommunicaÂtions, he managed Digital’s corporate data network,
EASYnet.
Bob Mulkey has been named Corporate
Compensation and Benefits manager, reporting to Dick Walsh, vice
president, Field/Corporate Personnel. Bob joined Digital in 1985
as CompenÂsation and Benefits manager in the Low End Systems and
Technologies organization. Most recently he was Manufacturing,
Engineering and Product Marketing Compensation and Benefits
manager.
Ron Payne has assumed a new role as
Chair of Strategic Resources, reporting to John Sims. vice
president. Personnel/Strategic Resources. In addition to his
overali responsibiliÂties as Purchasing vice president, Ron will
integrate the work of Strategic Resources, insuring strategies
provide leverage across major organizations, segments, and areas.
Joerg Rieder has been named Country
Group vice president for Austria, Germany and SwitzerÂland,
effective Jan. 1. 1990, reporting to Pier Carlo Falotti,
president. Digital Europe. Joerg, who is Austrian born, first
joined Digital in Germany in 1972. He later served in Geneva as
European Field Service vice president, before returning to Germany
as Systems Business manager and now as Country manager, a role
which he will retain.
Rae Strathdee has been named Canadian
Regional Personnel manager, reporting to Ken CopeÂland, President,
Digital Canada, and Jerry LoPorto, GIA Personnel manager. Rae
began his Digital career in 1969 and served as Canadian Field
Service manager from 1974 to 1977. He then relocated to Geneva,
Switzerland, where he managed the General European Field Service
Organization and later managed the European Peripheral and
Supplies Group. In 1985, he assumed responsibility for managing
the Canadian Long Range Planning Process and Market Research
activities. Most recently, Rae was the Software Products Business
manager for Canada.
Paul Van Per Spiegel has been appointed
Country manager Belgium and Luxembourg, reporting to Hans
Dirkmann, Country Group vice president Belgium and Holland. Paul
will start his new assignment Jan. 1, 1990. He joined Digital a
year ago as the Country Sales manager Belgium and Luxembourg.
Previously, he worked for many years for IBM, where he held
various management positions in Systems Engineering, Sales,
Customer Operations and InterÂnational Marketing.