Conference 7.286::digital

827.0. "The Executive Committee & Decision Making at Digital" by DR::BLINN (He who laughs, lasts) Thu Jun 01 1989 12:32

        This article on the role of the Executive Committee in decision
        making was published in MGMT MEMO, Vol. 8 #3, April/May 1989, and
        appears here with the help of Richard Seltzer, MGMT MEMO editor,
        and the permission of Abbott Weiss, Secretary of the Executive
        Committee. 
        
        Abbott informs me that since the article was published, Marty
        Hoffmann has joined Digital as Vice President and General Counsel.
        He heads the Law Department, and is the newest member of the
        Executive Committee.  
        
        Abbott has expressed an interest in feedback on the article.  He's
        not a frequent participant in Notes, nor a regular reader of this
        conference, so I may, from time to time, MAIL to him an extract of
        replies to this topic.  
        
        Should you want to contact him by MAIL, his ALL-IN-1/MTS address
        is @CORE, or using the VMSmail Gateway, "CORE::ABBOTT WEISS". 
        
        Tom
        

THE ROLE OF THE EXECUTIVE COMMITTEE IN DECISION-MAKING AT DIGITAL 
by Abbott Weiss, Secretary, Executive Committee

[extracted from the April/May 1989 issue of MGMT MEMO, Vol. 8 #3]

The Executive Committee is the senior management committee for 
Digital.  Within the company, it is responsible for setting 
overall corporate direction and strategy.  The Committee reviews 
and approves the highest level plans for products and solutions, 
technologies and markets.  It monitors and guides issues of 
overall importance to Digital's customers, employees and 
stockholders.  The members are:  Ken Olsen, President; Win 
Hindle, Senior Vice President; Jack Smith, Senior Vice President; 
Jack Shields, Senior Vice President; Jim Osterhoff, Vice 
President, Finance; and John Sims, Vice President, Strategic 
Resources.  It normally meets four days a month.

The people who bring proposals to the Committee "own" those 
proposals.  They propose what they want to do, describe the 
issues, how to deal with them, and the likely outcomes.  If the 
proposal is approved, it's their responsibility to succeed with 
it.  

The Committee invites participation by additional people on 
specific topics, particularly matters of strategic direction.  So 
when scheduling items for the agenda, we try to identify 
interested parties to ensure that we have the various points of 
view represented.  For instance, when dealing with issues having 
international importance, Pier-Carlo Falotti, President, Digital 
Europe, or Dick Poulsen, Vice President, GIA, often participates.

Typically, the people who bring proposals to the Executive 
Committee are direct reports of Executive Committee members, or 
their direct reports.  But, in theory, anyone, at any level in 
the organization, can go to the Executive Committee with a 
proposal.  

Most of the important work of the company happens without 
day-to-day ratification from the Executive Committee.  It's just 
people doing their jobs.  There are a great many things that 
people can do within their responsibilities, without having to go 
to committees.  The Executive Committee wants employees to feel 
empowered to do what they need to do to succeed in the 
responsibilities they have.  The more empowered and effective 
they are at doing their jobs, the better the company will be.

Many people who are new to Digital ask, "How do I get a decision 
made?"  And they look up.  

Most of the time, the people who are asking already have the 
decision-making responsibility, but not the authority.  Authority 
means you can make whatever decisions you want without having to 
talk to anybody.  Responsibility means you have to worry about 
it, think it through, and talk to people.  You have to make sure 
that those who are impacted by your decision are aware of it.  In 
the end, you own responsibility for success or failure of that 
project, even though you may not have full authority to make it 
happen.  You succeed by feeling responsible and carrying it 
through in a way that will get results.  

In a company as broad and interdependent as Digital, to be 
successful, you need to gather the support, understanding, help 
and insight of a lot of different functions.  So as you go 
forward with your decision, you need to contact many people to 
have them do what they need to do to complement your work.  
Committees, like the Executive Committee, can help you to get the 
support of other groups, but you have to make your own decisions 
about your own project.

We try to encourage those who have responsibility, at any level, 
to execute that responsibility to the fullest.  That means airing 
the issues well, arguing the various sides of a question, 
advocating what you believe is right, and listening to other 
people's points of view.  It means debate and discussion among 
your peers to hone those plans so the final decisions are in the 
best interests of the company.  

Periodically, employees need to have their plans and strategies 
verified.  But it is management's job to foster ways to help 
people cut through the roadblocks and execute their 
responsibilities.  There may be no need to go to the Executive 
Committee.

There are three main reasons for having proposals come before the 
Committee.  First, this process encourages people to do their 
homework, to make sure they have thought out their plans.  
Second, getting ready to come to the committee, people tend to 
seek inputs from related functions and programs.  Third, those 
preliminary discussions, if done well, encourage debate on all 
sides of the issue, so the various perspectives are brought to 
bear.  The thinking of any one individual is broadened as a 
result, and the company tends to get better decisions. 

The Committee strives for consensus, not unanimity.  Consensus 
doesn't mean that everybody has to be happy all of the time.  But 
if there is strong disagreement on the part of any Executive 
Committee member on an issue, that generally means the problems 
haven't been worked out, and we're not ready to move.  Such 
disagreement triggers more discussion and work.  Sometimes, 
issues will be delegated to one or more members to resolve 
off-line.  On any given point, what counts is what is best for 
Digital, not who is in power or who makes what decisions.

Often, if the Committee does not accept a proposal, it says, 
"You're not quite there yet."  That is not a rejection, but 
rather a request to do some more work and come back.

In addition to the Executive Committee, Digital has two other 
major committees: the Product Marketing Strategy Committee 
(PMSC), chaired by Jack Smith; and the Marketing and Sales 
Strategy Committee (MSSC), chaired by Jack Shields.  

The PMSC deals primarily with engineering issues, determining how 
our product strategy fits together and what the marketing 
messages are.  The MSSC deals with the introduction strategy for 
new products; sales and distribution plans; prices; and 
competitive marketing strategy.  

These committees provide a forum where proposals are discussed 
and ideas are garnered.  Only some of their decisions need to be 
ratified by the Executive Committee or the Board of Directors.  

There is no formal set of layered committees in Digital.  
Proposals go to the appropriate committee where the knowledge and 
commitment exist to enhance the decision.  Corporate guidelines 
are written in the Policy and Financial manuals stipulating which 
investments require Executive Committee or Board of Directors 
approval.

Since we operate on a budget, we try not to have individual 
proposals coming up for funding all through the year.  But the 
process of hammering out the budgets involves a great deal of 
discussion of various business proposals on many dimensions in 
the company.  

Once a plan is in place, we review it on a regular cycle, 
typically quarterly.  "Did you do what you said you were going to 
do?"  By looking at how the responsible individuals are 
performing, the Executive Committee hopes to stimulate 
responsiveness to changing conditions so the overall objectives 
are met.  Products, Areas and Services are reviewed quarterly in 
terms of business performance.

The Executive Committee spends a lot of time discussing the 
long-term strategic questions of where we are going as a company, 
and how we should we get there.  Organizational questions come up 
frequently, such as "how can we segment the business in some 
meaningful way without losing the benefit of integration?"  

We're concerned that as the company gets larger, there may be too 
many committees and too many interactions to get anything done.  
We need to be able to respond quickly to changes, opportunities 
and challenges in the market and in technology.  But we also need 
to appear as a single company to our customers and provide a full 
range of products and services.  

As we adapt to changing market conditions, we strive to maintain 
the right balance between initiative and teamwork.  That means we 
often need to fine tune our organizational structure and the 
roles of our committees, to make sure that people feel empowered 
to do what they need to do to succeed in the responsibilities 
that they have.  Through all these changes, we are guided by 
Digital's core values and philosophy. 

["MGMT MEMO" is written by Corporate Employee Communication for 
the Office of the President. It is written for Digital's managers 
and supervisors to help them understand and communicate business 
information to their employees.] 

    I would only beg to differ with the comment, "There is no formal set of
    layered committees in Digital."  To have service pricing for a software
    product "blessed" at Digital, one must schedule an appearance at SSC,
    the Service Strategy Committee, followed by FSPPC, Field Service
    Pricing and Policy Committee, followed by PAC, the Pricing and
    Announcement Committee.  To avoid the serial nature of this process
    requires a waiver. 
    
    The posted "reasonable" time for this entire process is in excess of 12
    weeks.  "Last possible" schedule is 8 weeks due to required lead times
    for submission.
    
    Marge

    Re: .0 
    
>>	Most of the time, the people who are asking already have the
>>	decision-making responsibility, but not the authority.  Authority means
>>	you can make whatever decisions you want without having to talk to
>>	anybody.  Responsibility means you have to worry about it, think it
>>	through, and talk to people. 
    
    Well, that certainly explains a lot about the Digital psychosis. Most
    organizations believe that authority can be delegated but
    responsibility cannot be delegated, and that if somebody has the
    responsibility, then they also have the authority. 

    Does responsibility imply accountability?  Maybe "decision-making
    responsibility, but not the authority." confuses the issue, and
    makes it more of a semantic game.
    
    After your pitch for manpower, equipment, ..., did YOU deliver on
    what was committed?  Self-reliance is a fine concept, but Digital's
    challenge is group-reliant.
    
    Regards,
    Joe
    

    My translation is that "authority" can decide who has the
    "responsibility!"  
    
    Plus a person has the responsibility for their own actions, but 
    may not have the authority to make all the needed decisions.

    Actually, I thought it was pretty clear.  There is precious little
    "authority" doled out in DEC - that's not the way we want to get
    things done.   Instead, you are expected to "sell" your ideas or
    whatever to those who it affects.  Their buy-in is what empowers
    you to proceed.
    
    In a matrix organization authority is replaced by consensus.
    
    Al
    

    re .5
    
    Ah yes, three of the strongest words from the Digital dictionary:
    
    	buy-in
    
    	empowers
    
    	consensus
    
    These are the words (things) that make it all work smoothly and
    effectively and make it a great working environment IF
    
    	ALL ARE PULLING TOWARDS A COMMON GOAL!
    
    That was DEC.
    
    	-Barry-
       
    

    Had to drop the line due to noise.
    
    To continue re .5
    
    Consensus is NOT the only way to make a matrix organization work.
    In fact - almost every successful matrix organization in the
    program/systems/solution business makes the matrix work by giving
    the Program Manager (or some other title of RESPONSIBLE manager)
    the AUTHORITY to do their job.  It may not be as free, but it sure
    as hell is more efficient, especially FOR THE CUSTOMER!
    	-Barry-
    

    *THE* single thing I find must frustrating about Digital is this stupid
    idea of getting consensus in a matrix organization as the way to
    empower one to get the job done. You sell someone at meeting, you see
    them next month and have to re-explain and sell it all over again, and
    again the next month. And even if they think it's a good idea, they
    often have other higher priorities that drops your needs off the table,
    e.g., getting another group to help fund some project. Managers and
    project leaders often spend 70% or more of their time getting buy-in
    instead of doing something. The buy-in process takes so long that we're
    continually playing catch-up to the competition (particularly in
    software products).
    
    Consensus is important for the high level decisions, like whether to
    start a line of computers with a new architecture, or entering the
    retail market, or which projects get funded. After that, someone has
    to own it, have the necessary resources, and *AUTHORITY* to make it
    happen without having to begging all over the corporation.
    
    One needs a balance of consensus and authoritarian systems in an
    organization. We're way out of balance.
    
    -George