Conference 7.286::digital

    
    Unfortunatly there are a lot of thing going on in the company 
    now that are neither right nor profitable.  I know of one situation
    intimatly; and I know of others, but I do not have an in-depth
    understanding.
    
    The image of our company and the philosophy of Ken is one thing;
    however the manner in which the folks in corporate are "interpreting
    it" might well be another matter.
    
    I suspect that the ideals of a few core participants in this conference
    have either gone South, or are being "adjusted" in CFO."
    
    Many things are changign in this company -- and some of these changes
    are certainly for the better.  But I don't think that the working
    environment, or the way of settling problems within our environent
    is the way Ken would have wanted it to be.  We are the second largest
    computer corporation in the world and the largest employer in
    Massachusetts now, and we are living up the all the derivatives
    of that - both postive and negative.
    
    

    Well gee, in my several-year-old copy of the Digital Philosophy,
    Profit is right up there in second place, right between Honesty
    and Quality.  The "First Rule" (do what is right) is last on the
    list.  Probably we should not read too much into that placement, 
    although I have felt for a long time that many in this corporation 
    read more into those few words than was ever intended by their creator.  

    Here's what the philosophy has to say about profit:
    
    PROFIT
    We are a public Corporation.  Stockholders invested in our Corporation
    for profit.  Success is measured by profit.  With success comes
    the opportunity to grow, the ability to hire good people, and the
    satisfaction that comes with meeting your goals.  We feel that profit
    is in no way inconsistent with social goals.

    Here's the "do what's right" tenet:
    
    FIRST RULE
    When dealing with a customer, a supplier, or an employee, do what is 
    "right" to do in each situation.
    
    Al
    

    My only question is, if profitability is the reason for cutting
    all of these "standard of living" items, then why does our stock
    keep plunging?
    
    Is corporate waiting for the end of the year to show the bottom
    line to our stock holders?  Me thinks that someone has lost the
    bubble somewhere (or else is trying to profit at the expense of
    other employees...)
    
    Doug

	No, the start of FY 89 was announced last week, Q1 results.  Right on 
expectations.  No explanation for the drop, but it recovered half of it the 
next day!

    The stock price will fluctuate with Wall St. analysts' prognostications
    of quarterly/yearly performance vs. performance during the comparable
    quarter a year ago.  (Performance read earnings.)  So while Digital's
    revenues were up about 16% vs. a year ago, earnings were down 17% for
    the comparable period. 
    
    Now the Wall St. pundits gave their forecasts a couple of weeks ago and
    the stock price went down then.  What I don't understand is, that if
    the actual performance was right in line with expectations, why should
    the price drop a second time? 

    /Ed

        Discussions about Wall Street and the relationship (if any) of
        DEC's stock price to profitability, etc. might more appropriately
        be taken up in BMT::INVESTING (where this has probably already
        been discussed to death).
        
        Tom

Re .7:

	INVESTING has a rule against speculations about 'minor' fluctuations
    in DEC stock prices.  Please read the introduction.

Re .6:

	Even more interesting is the fact that the DEC stock price is just
    about back to the middle of the range it has been trading in for the last
    couple months, according to the quote I saw just a few minutes ago.

	DEC stock prices have been much more stable recently than they used to
    be.  The few blips have been fairly easy to explain and have not lasted
    for very long.  The market is not reacting wildly to rumors any more, and
    this may be a good sign.  It could mean that some good news about DEC will
    start pushing the stock price up for a change.  Maybe there is some hope 
    after all.

    Open suggestion to the moderators and participants here:
    
    I am the moderator of INVESTING and there I've prohibited discussions
    of the flucuations of the price of Digital common stock when the move
    is less than 20 points per day (read the fine print in note 1.4 there)
    
    Speculation regarding movements of the stock price have in the past
    drawn senior management unwelcome attention to both the noter and moderator.
    
    Like sex and ethnic jokes, the cruel lesson of experience has taught us
    that discussion of small flucuations in the stock price is just one of
    the things too sensitive for discussion open to 120,000 employees.
    
    I'll add something here. If your personal wealth and lifestyle are
    closely tied to Digital's stock price, I suggest that you diversify
    your financial assets to match you willingness to take on risk.

    Re: .1

    �      ...
    �      computer corporation in the world and the largest employer in
    �      Massachusetts now, and we are living up the all the derivatives
    �      ...
    
    Is this really true.  The reason I ask is that I distinctively remember
    in one of the local TV channel's news that Raytheon is the largest
    employer in Massachussetts.  I was quite surprised at that.  Almost
    every third person I see around seems to have a DIGITAL badge.

    
    Interesting observation, because that was my first reaction too!
    
    Raytheon *used* to be the largest employer in Massachusetts.  I
    don't know exactly when, but Digital did recently surpass Raytheon.
    As I understand it, today, we are number 1, Ratheon is number 2.
    
    /Dave

    re: .0
    
        � Good, affordable health plans are not PROFITABLE so they're
    	� not RIGHT
    
    	� Comfortable office space is not PROFITABLE so its not RIGHT
        � . . .
    	� Those at the top seem to be so concerned with impressing Wall
    	� (which takes a very short-sighted view of things), that they've
    	� decided that 'profitable' equates with 'right'.  Unfortunately,
    	� it appears that those of us who do the work that makes the dollars
       	� don't feel that way, and we're being ignored.
    
    I think that in your last paragraph, Dave, you've hit pretty squarely 
    on one of the dilemmas we and most companies face - short vs. long
    term profitability.  Specifically, it (at least) appears that health
    plans, quality-of-work-life "benefits", and the like don't help the
    short term profit picture.  
    
    However, if we look at things like employee loyalty, satisfaction,
    and enthusiasm, we find study after study telling us that such
    "benefits" have a great deal to do with long term profitibility.
    
    Although I've "spoken" with Ken Olsen only *very* briefly - i.e.
    his traditional Christmas walk through the Mill - I suspect that 
    he'd agree that the principal reason for treating employees as 
    "our most valuable asset" has everything to do with the "bottom 
    line":  people who are loyal, satisfied, and enthused will be
    creative and energetic in improving all phases a business and will
    be instrumental in driving the long term profitability picture.
    
    The problem them becomes one of balancing the Wall St./short term
    pressures with the need to be here and doing well in 20 years. 
    Needless to say, if I had "the solutions" (doubt that there is
    "a" solution), I wouldn't be here, participating in this discussion.
    I do, however, believe that more than a few people are actively
    working to balance those needs.
    
    Steve
    

    re: .11 Minor nit
    
    	If we passed Raytheon, then we are in fact the #2 employer in
    the state, albiet the largest private sector employer.  The state
    has the honor of being the largest employer...
    

    
 
>    that discussion of small flucuations in the stock price is just one of
>    the things too sensitive for discussion open to 120,000 employees.
 
I Hold stock in Digital and talk to my Broker every other day, Why can every
one else outside of DEC talk about it and not us?? Employees make up a large
% of DEC held stock and do take an interest in what happens to it...
   
>    I'll add something here. If your personal wealth and lifestyle are
>    closely tied to Digital's stock price, I suggest that you diversify
>    your financial assets to match you willingness to take on risk.

You just blew what you said above!!!

Monty

    I doubt the state employs more people in this state than Digital
    does.  Do you mean the total of the state and all of the cities
    and towns?
    

        Discussion is reasonable and permissible.  Writing speculation
        down in conferences (which are, after all, corporate documents)
        is probably what's not permissible.  In any case, if you have
        a problem with this, why not contact Pat Sweeney (moderator
        of BMT::INVESTING and the person who made the report) by mail
        and ask him to provide more details, either by mail or as a
        reply in this conference.  But first, check BMT::INVESTING,
        which is a more appropriate conference for this issue.
        
        Tom

    Now this is an interresting topic...this was on the tongues of a
    lot of people I talked with today.  
    
    I own stock and I like it when the price of the stock goes up.
    If we cut costs and the profitability goes up I get a bigger dividend.
    I don't get a dividend so I don't really care about gross profitability
    as much as I care about for potential for growth.
    I am an employee and cuts to benefits directly affect me and my
    personal profitability.  An increase to the PERSONAL cost of medical
    care costs me directly.  A reduction of the extent of company
    involvement in the vehicle expense directly affects me PERSONALLY.
    It did not result in an increase in the profitability of my personal
    stock holdings.  (or anybody elses)  My opinion is that the resulting
    change in employee satisfaction may have caused the recent decline
    in the value of the common stock on the NYSE.  Since I am not an
    analyist I will not attempt to support my opinion.  From what I
    have heard from analyists provides no more concrete reasons for
    the downturn, and the downturn coincides with certain mass mailings,
    I will continue to propose that cost cutting affects employee
    satisfaction which in turn causes rumors which in turn causes market
    swings.
    
    

    re: 15
    
    	I don't have actual numbers here, but think about it for a second.
    
    DEC has what is it, 45k, 47k employees in MA?  The state has -
    
    		The Government
    		Consultants
    		DPW (biggie!!)
    		State Police
		MDC (biggie!!)
		State Schools (probably 10-20k right there - how many
			       people *work* for U Mass?)
		State Hospitals
    		Those cheerful toll takers on the Pike :-)
    		etc.
    
    It adds up...
    

The last time this discussion came up in this conference I tried to find out
how many employees the Commonwealth has.

It appears that no one person knows.  For example, the state office of personnel
administration only knows how many employees are in that one department!

Please don't suggest a place to call without first calling it yourself to find
out the answer and being sure that it includes such things as the universities
and hospitals.

/john