Conference 7.286::digital

    Digital's dilemma is caused by a more or less world wide recession.

    Fix that and you fix Digital.

    Jamie.

    re .1
    
    Digital's dilemma is made visible and painful by the recession, but
    it's a home-grown dilemma and no one outside Digital can honestly claim
    responsibility for it.
    
    re .0
    
    I think your proposals would go far towards cleaning up some short-term
    problems, but the main long-term problems of, for example, lack of a
    marketing strategy, must be addressed to make Digital healthy.  When
    people are hungry, they'll eat whatever is available.  When hunger is
    less felt, people will choose quality, price and style.  It's the same
    and it's been the same in the computer business.  Digital grew
    enormously feeding the hungry, and now they're satiated.

    I'm all for the idea of a disinterested third party taking 
    a hard look at abusers, but also to take a REALLY objective
    look at entire organizations, what they really do, how they've 
    grown since about '86, why, etc. almost what a company would
    do if they bought out DEC. 
    
    - Manager to direct report ratios. 
    
    - Who's really getting layed off, and why. e.g. some of Digital's
      best and brightest getting thrown out of the company in favor of 
      people that are better connected politically, but hardly 
      possess the same skills.  If you intend to get rid of a engineer, 
      and spare someone in an obvious overhead function, you should have 
      PLENTY of explaining to do.
    
    - "Crony-ism"  e.g Jobs being created for people to save their 
      skin, just because they are correctly affiliated politically,
      even if everybody else in their organizations is going away. 
       
    
    I'll bet this is all suprisingly blatent on paper, without requiring 
    a great deal of research, but it will never get anywhere internally.
    
    
    Mark
        

    I disagree with e) and f) (I think those are the ones -- the stuff which
    I would paraphrase as "Buy Digital, Use Digital)...

    If our MIS organizations are using outside packages, we should be finding
    out why, not mandating that they change.  If we are measuring our MIS
    organizations correctly, then they are choosing the most cost-effective
    means to deliver the functionality required of them.  If Digital can't
    deliver cost-effective products for the functionality they need, it isn't
    going to help our bottom line to deny them access to alternatives.  I
    agree that Digital should be using Digital-made products, but it must
    come about because ours are better and cheaper.

    If you want MIS to be a field test site, under NMS you'll have to pay
    them to do it :-)

    I would like to see a profit sharing system but I do not believe
    it will be at all effective unless people have more control over
    their actions than they currently have. If every step you take is
    closely controlled by a manager than how can you have, let alone
    thing you have, control over the companies profit? I think that
    before a profit sharing plan could really make a difference you
    would have to greatly reduce the number of managers in the company.
    This I would like to see.
    
    It would improve morale by letting people know they were trusted and
    give them the ability (I hate the word empowerment) to do the right
    thing as they see it. And take responsibility if things went wrong and
    get credit when they went right.
    
    			Alfred

>    If our MIS organizations are using outside packages, we should be finding
>    out why, not mandating that they change.
    
    Unfortunately, this is not the way it works.  Believe me, I spent five
    years in internal Digital MIS, and the reason USE WHAT WE SELL has
    never been implemented is not due to lack of functionality/cost
    effectiveness of Digital's products.  The problem is the MIS managers 
    who reject change {i.e. "I'll have to retrain my people"} and who
    are only concerned with satisfying the needs of their immediate
    managers {"I'm not going to waste Mr. MyBoss' money converting our 
    FOCUS application to Rdb."}.
    
    It's a chicken-and-egg situation.  Unless DEC MIS uses the products,
    those products will not be improved/tested as well as they might be. 
    
    I was talking specifically about software products.  Do you believe
    that MIS folks at LOTUS use MIcrosoft EXCEL spreadsheets?  Do you
    believe IBM MIS uses CDD/PLUS to store data definitions?   
    
    The issue with MIS is they should be a SUPPORT organization to
    Digital's software development.   It's in Digital's best interest.
    At one of the last DEC MIS meetings I attended, the money DEC was 
    paying IBI FOCUS for software licenses was in excess of $1M / year.
    
    The other issue of "Buy DEC" is that of those marketing organizations
    that directly compete against Digital software products.   Is this a
    common practice in business?   Does GM have a Honda Marketing
    organization?   Does IBM have a process in place to allow IBM
    sales reps to get credit for DEC software sales?   It's lunacy.  The
    old excuse for the the existence of these organizations was that they
    helped sell hardware.   That's not where the money is now.  The money
    is in the software and services that we assist our competitors in 
    selling.
    

	"Use what we sell" is great sentiment, but there
	are many instances where we don't seem to offer a
	competitive product.... Also, don't dismiss the
	possibility that there is a certain amount of
	concern that if an MIS employee spends his time
	learning Rdb (not Oracle), VAXC (not Sabre C),
	or VMS (not System V), then when Digital lays him
	off, his skills are *not very marketable* !

	These folks are probably looking after their own
	bread and butter.  Looked in the classified ads
	lately at available programming/MIS jobs ?
	DECstuff/VMS/Rdb/DECnet et. al are a very small
	fraction of available computer industry jobs.

	Let's make sure MIS buys the best, most cost-effective,
	most valuable products.... Heck, if they need an
	IBM 3090 to fix the problems with our admin systems,
	they should get one.  That does two things:

	1) Tells our engineering groups that they haven't got
	   the products, and

	2) Gets the admin systems fixed !

	But as far as the original topic goes, DEC ain't gonna
	fix squat.  Time after time, they've decided "We're gonna
	do more of what we're doing now," rather than fix a
	bad system, eliminate a process or group, etc.

	I still maintain it's gonna take an outside buyout
	of the company or a new BOD and concomittant replacement
	of layers of upper management.  We're still living in 
	1982....

	Steve H

Re: .0

While I'll agree that downsizing overhead functions makes very good sense I
believe it has already happened very disproportional in the US. The MIS,
Finance, and Personnel departments in this geography (PA,southern NJ, DE, and 
northern Md) have been downsized over the past few years almost out of
existence. Every time the order comes through to cut the budget the axe has
fallen here. From the rumors I've heard this is not the case universally across
all locations.

I'll also vote for the pay cuts for top executives. I believe it's endemic to
US based business that the more companies lose money, and market share the
more we seem to want to pay the executives who are responsible.

-Terry

    Fix Digital?   Well for openers...
    
    1. Put more accountability onto management. Set clear achivable goals
    and can the managers whose groups don't meet them. 
    
    2. Change the prevelant attitude, which seems to be "do what ever will
    protect your job" back to "do what is right".
    
    3. Identify and eliminate management and staff types who can be
    described best as "Inhibitors".
    
    4. Reward and promote management and staff types who can be best
    described as "Enablers".
    
    5. Task the 25 Top Managers with spending at least 1 full day per week
    with "Management by walking around".
    
    6. Take two chapters from the book "Up the Organization"
    
    	First Chapter to take: The Personnel Department. Total chapter
    	Reads: "Fire the personnel Department".
    
    	Second Chapter to take: "replace it with a people dept!"
    
    7. Go back to pay for performance which seems to have been abandoned in
    many parts of the company.
    
    8. Stop the absurd practice of refusing to promote sharp hard working
    people because their grade level is to low!
    
    9. Go back to quarterly performance reviews. 
    
    10. Go back to regular skip level talks, and climate sensing efforts.

    Field data centers have also collapsed. At least 9 have been merged
    to 4.  This helped to reduce MIS headcount.
    As to the use of 3rd party products, many were used before DEC
    had anything competitive. That seems to be very common these days.
    Once the application is written, conversion to the DEC product
    is often considered, but nixed by someone above and outside of
    MIS. MIS is told to "just keep the business running", despite
    their urging conversions/rewrites. 
    The blame should not fall on MIS solely.
    
    John

    re .0
    
    Item 1
    
    And what makes you think that the stock price has anything whatsoever
    to do with the profitability of the corporation. It's up to a bunch of
    wall street weenies...
    
    re .0 Generically. This note seems to degrade to one of the biggest
    problems in Digital today. i.e. Sour Grapes. THe standard, it's all
    "that departments" fault. Those so and so's in MIS don't know how to
    use computers efficiently, those so and so's in Sales, couldn't sell
    water in the Sahara, Those so and so's in Engineering keep making poor
    quality products..., Those so and so's in Field Service are just a
    bunch of board swappers, Those so and so's in EIS either would sell
    their grandmothers or don't know zip about the products they are trying
    to sell, or those so and so's in Senior Management have lost touch with
    it all... 
    
    Given the regular appearance of these types of accusations, it is more
    than likely that most have some degree of truth to them. Laying Blame
    isn't going to fix things. If you see a problem in another part of an
    organization, and are sufficiently motivated, write up a problem
    statement, suggest a basic project plan, send it to the right people,
    and put some effort into this company rather than P*****g and M*****g
    about where it's at.
    
    q
    

   > And what makes you think that the stock price has anything whatsoever
   > to do with the profitability of the corporation. It's up to a bunch of
   > wall street weenies...
    
    So I guess the fluctuation in the stock price from 199 down to 50 over
    the past several years is just a coincidence in regards to Digital's
    poor profitability over that period?   Wall Street is far from perfect,
    but as a publicly held company isn't the primary responsibility to our
    shareholders to increase value of the stock?  And isn't that a function
    of Digital's short-term and long-term profitability? {Since no dividend
    is paid}
    
 >   re .0 Generically. This note seems to degrade to one of the biggest
 >   problems in Digital today. i.e. Sour Grapes. THe standard, it's all
 >   "that departments" fault. Those so and so's in MIS don't know how to
    
    Sorry, but my suggestions were targeted at what I have seen as specific
    areas within organizations, not a blanket accusation of every other
    group.   It's just as easy to say "well, write up a plan and do
    something about it".   That's all well and good, but is not realistic. 
    The managerial and morale problems of a $14B company will not be solved
    by individuals at the  bottom of the hierarchy.  IT IS IMPOSSIBLE.  
    Solutions to Digital's major problems must come from the top.   The
    solutions must be formulated, articulated, and carried out... and
    carried out quickly. 
    
    The moaning and griping you see is a reflection of the lack of
    communication and leadership that management is providing.   I would
    bet that Digital could be turned around in ONE QUARTER if somebody
    would just start making decisions for the company and start carrying
    them out.   
    
    I have offered plans and my time at the level where I think I can
    help... for example, field testing software and providing QAR's,
    helping out an engineering group with DECUS demonstrations, promoting
    Digital's software to customers and sales reps.  
    

>    So I guess the fluctuation in the stock price from 199 down to 50 over
>    the past several years is just a coincidence in regards to Digital's
>    poor profitability over that period?

	Have you drawn a graph comparing stock price and profitability? I 
	suspect that you would not see a close correlation.

			Alfred

    >	Have you drawn a graph comparing stock price and profitability? I 
    >	suspect that you would not see a close correlation.
    
    What would such a graph look like?   It would not be simply Quarterly
    profits versus stock price.   But if you did a trend of the company's
    profits by quarter over the past five years and laid that on top of the
    stock price, I would bet it would not be that different.   The
    differences at individual points on the graph might represent the market's
    confidence in Digital versus the industry as a whole.
    
    Is it wrong  to say that if Digital were extremely profitable that it
    would have a positive effect on the stock price?  I know its not a
    simple equation like "if DEC makes $X, the stock rises Y%" but how
    about "If DEC makes $5X the stock will be higher than if it made $X" .

    I see the problems as a matter of who works for who.
    
    By this I mean, how do we make money.
    
    
    
    Customer--Sales--Engineering--Manufacturing--Customer   
    
    >----- time to market------------------------>
           (quick to market)
    
    (usually drawn in a circle )
    
    
    Now we can put F&A in there, or personnel, or MIS, or....
    
    But they all PROVIDE (or are suppose to) a service to one or more of
    the people in this circle. They are SUPPOSE to make life easier for the
    people inside the circle. They are SUPPOSE to provide an interface to
    outside groups; SEC, Directors, IRS, Vendors, Givmt, etc. The interface
    to the people inside the circle should be as easy as possible for the
    people inside the circle and as difficult as required for the people
    outside the circle providing the SERVICE.
    
    
    Too many times here I see the service groups trying to run/steer the
    ship. People, this IS SUPPOSE to be a high tech company. The key word
    is tech, not F&A or Purchasing etc. They want/force their way into the
    quick to market circle, only to slow it down, to have control, to build
    an empire...
    
    If Ken would just ask all groups to tell him who they work for.
    Then 'educate' them... to what is correct.
    
    Steve

    RE: .11
    
    The whining that goes on IS the problem. People won't stop doing it
    until the reasons for it stop. 
    
    Digital must find new ways to consume the glut of MIPS we and others
    have created. Our future lies in new inovative ideas the consume this
    glut and the growth that is just over the horizon. 
    
    People who are spending their lives complaining nad looking over their
    shoulder are not likley to be very inovatiove. A few will. If we
    recognize and reward them others will try. At present however, there
    are large numbers of folks who have a "Don't rock the boat" mentality
    who inhibit inovation. We have to replace them with people who enable
    and encourage inovation. Hence my list in .09

Numbers taken from this year's annual report... 
    
    Notice the trend.  High profit = high stock price.  
    
    
		   1986   1987   1988   1989    1990   1991
-----------------------------------------------------------
Net Income $M       617   1137   1306   1073      74   -617
-----------------------------------------------------------
Stock HI             94    174    199    122     103     87
Stock LO             47     82     99     86      70     45
Stock MID            70    128    149    104      87     66
                                                           

    Yet another complainer about the complainers.

    If you to deny the problems that are indicated by the authors, then do
    so with your most persuasive reasoning, otherwise don't tell us that
    that discussing problems is itself a problem.

Re: .9

Deming would have emotional problems over giving people quarterly appraisals -
he's bad enough on the "disease" of giving people annual reviews!
He perceives that it's very easy to show short term gains that come back to
cripple the organisation after the culprit has moved on to better (and 
potentially far more damaging) things.

He proposed doing away with individual performance appraisals completely. In
most cases, he found that they were used solely to fix salaries in such a way 
that inconsistency ran rife, and team performance was very secondary to that 
of the individual. 

His solution was to fix the percentage of scale based on feedback from manager, 
colleagues and customers; the scales are set based on market research of 
competitive organisations. If you fell outside norms based on the ratings, you 
were either destined for higher things and recognised as such - or you were 
subject to disciplinary proceedings for poor team performance.

Anyone like to submit Digital as a candidate for a Deming award? The report
from the initial audit would be an absolute nightmare!
								- Ian W.

    RE: .17 Let's see now. For 1986 and 1991 the stock prices are
    very very close. And yet income was much much higher in 1986.
    And in 1989 the earnings were 7% lower then in 1987 but the
    high stock price was 30% lower. The low price for 1989 was
    *higher* then in 1987. Thanks for the data to support my point
    of view.
    
    		Alfred

    >       <<< Note 1708.20 by CVG::THOMPSON "Radical Centralist" >>>
    >                            -< I was right >-
    
    No, you weren't.
    
    Go back and re-read my reply.   Then go and graph the stock price on
    one graph and the profits on another.  Look at the graphs.  See, they
    are almost identical in shape.... looks sort of like this:
    
    
              +  +
            /       \
          +           \
                        \
                          \
                           \
    			
    	  86  87  88  89  90  91    
    
    You are trying to measure apples and oranges.  I was talking trends,m
    you are talking percentages. Profits reflect the net result of an
    entire year's worth of data.  Stock price reflects TODAY's market
    perception of the company.   My point was that the stock price will
    rise if profits rise.  Do you reject that?   If Digital makes money in 
    1992 would you expect the stock price to be higher or lower than if 
    Digital loses money for 1992?   
    

    
    
    
        I agree with some (most) of what's been said here, there have been
    good ideas and not so good ideas. Unfortunately the people (person) who
    could make the difference does not read this notes file.
    
        In a way DEC is suffering the same way the US economy is. The
    "snowball" started rolling a while ago, it has since picked up
    speed and is on a course of it's own. All the so called "experts"
    have different opinions and the only way to RIGHT things is for
    the leaders to take charge.
    
    
                                                       Phil...
    
    
    As a side note.
    
    I don't know about anyone else, but I'm getting real tired of all these
    "experts" on the different news broadcasts. During the Gulf War, every
    station had a military expert, not many knew what they were talking
    about. In the last few days I've been watching the business news (being
    home on vacation this week, I never realized how awful daytime TV is)
    no two "experts" have said the same thing or agreed on anything.
    One said the economy will BOOM in 92, an hour later, another one said
    it would be a slow recovery, but that is actually better in the long 
    run. And last night the guy on CNN said we were really in for "the
    closest thing to a depression since the 30s".
    Now that I know exectly what's going on, I think I'll become a network
    expert on something, anything, it won't matter, I'll know as much as
    anyone else does.

    
    1-FIND NEW BUSINESS (they are spending money, identify source)
    
    2-WHAT THE CUSTOMER NEEDS, SUPPLY IT! (they are in pain)
    
    3-DO 1 & 2 OVER AND OVER AGAIN! (profitable business)
    

re .22:

If you laid all the economists in the world end to end...





they'd all point in different directions.

    Re ..20:
    
    Actually, there is a .81 correlation between the net income and the
    "mid" stock price.
    
    
    				-- edp

    A questions about the stock prices -- Have these prices been
    "normalized", to account for the last stock split somewhere around
    1985-86?

    Investing tip: the price of a stock is not based on what the
    company did yesterday, it is based on what people think the
    company will do tomorrow (and the day after, etc.).  They often
    use past data to predict, but the stock is driven by expectations,
    not memories.
    
    There's a conference devoted to investing (SUBWAY::INVESTING).
    
    		-John Bishop

    re .0:
    >f)		Eliminate all marketing organizations whose function is to 
   > 		promote third party products that are in direct competition
   > 		with Digital's own products.  
    > 		Does everyone know that DEC sales reps actually get credit
   > 		for selling the third party products AND services? 
    
    IMO you show a remarkable lack of the Channels strategy.  Channels
    brought in about 40% of our revenue last year, with a MUCH better cost
    ratio than the rest of the company.  
    
    You seem to think that we can be all things to all people, and should 
    consider anyone who offers software, for example, that a) runs on our 
    platforms b) happens to overlap a product we sell, as the ENEMY, rather 
    than a possible method of selling a system that otherwise might never get
    sold.  
    
    I'm really GLAD that DEC reps get credit for selling 3rd party
    products!  I'm also unaware of any large-scale 3rd-party service
    providers that are rolled into this.
    
    karl

Heard a report on a company (I believe it was Ben & Jerry's, the
Vermont Ice Cream maker) the other day where the top management is
compensated AT MOST at 8X or 18X times the salary of the "lowest"
worker.  Sounded reasonable to me.  The rationale was that there
is value in all workers, regardless of level and that sky-high
compensation for top management should be proportionate.

Another way to look at it ... compensation for top management should
be tied to performance of the company.  If the company does poorly,
why should management be rewarded.  Thus the recent $18M bonuses
at GM last year might be viewed as inappropriate, since they're
losing $15M a day at the moment.

Steve

   > IMO you show a remarkable lack of the Channels strategy.  Channels
   > brought in about 40% of our revenue last year, with a MUCH better cost
   > ratio than the rest of the company.  
    
    Can you document that 40% with any figures that don't come from the
    Channels Marketing organization?   I spent five years in an MIS group 
    supporting a Marketing organization.  I know how they count the
    revenue.  I also know it's bogus.   Any sale that has anything remotely
    related to a Marketing organization's charter get counted for 100%, 
    nevermind that three other groups are counting it as 100% as well.
    
    >You seem to think that we can be all things to all people, and should 
    
    Yes, I think we can be all things to all people.   Why not?  My
    experience with third party products is mainly in the 4GL area. 
    Digital's product RALLY is equal to or superior to the other products
    like COGNOS POWERHOUSE, IBI FOCUS, or SMARTSTAR.  Yet our customers
    hear nothing about it.   On the other hand, I get a newsletter or
    something else from the other third party 4GL's nearly every week,
    and there's always a highly ranked DEC marketing manager quoted as
    to what a great product the third party's software is.  What's wrong 
    with this picture????  
    
    >consider anyone who offers software, for example, that a) runs on our 
    >platforms b) happens to overlap a product we sell, as the ENEMY, rather 
    >than a possible method of selling a system that otherwise might never get
    >sold.  
    
    They are not the enemy, but they are also not Digital.  Is it any
    wonder that many of the fastest growing software  firms are those
    companies that DEC helps out?
    
    And what's more important in the long run - selling a box to a customer
    or selling him a software platform that he develops all his
    applications on {i.e. database, 4GL, tools}?   
    
    >I'm really GLAD that DEC reps get credit for selling 3rd party
    >products!  I'm also unaware of any large-scale 3rd-party service
    >providers that are rolled into this.
    
    DEC sales reps get credit for sales of COGNOS and SMARTSTAR services.
    And what's easier for the sales rep?  He doesn't have to find any
    sales support resources internally {try and find a RALLY person 
    sometime}.   It's a good short term strategy, but will kill Digital
    in the long run as the boxes become cheaper and cheaper and the
    software and services revenue becomes more important.
    
    I guess  my point is if these third party products are so good, why 
    doesn't DEC buy them out and discountinue developing our own products?  If
    they aren't any better than DEC's products, then why not try and make
    a real effort to keep ALL of the revenue in Digital by COMPETING not
    CHANNELING {maybe Shirley McLaine can be DEC's new spokesperson? :-)}
    
    
    

    As an IS person I can tell you that we do
    
    "USE WHAT WE SELL"
    
    Remember, nowadays Digital is about selling solutions, not just
    DEC products. If the best solution for a customer is product X made by
    company Y, then sell it. Of course, if DEC has the best product, then
    that's what we give the customer, but sadly we don't always have the
    best. 
    
    One of the recent notes mentioned Rally. Rally might be wonderful now,
    but 5 years ago there were very few people who would honestly have
    suggested its use for developing an application. That's why we have all
    these third party products running around on our internal systems. Yep,
    it annoys me that we don't make the best products in all areas, but
    realistically we don't have the resources. 
    
    As an example take end user reporting tools. The DEC solution is Teamdata.
    Talk about a joke! There are products out there that have been
    addressing this market for years. There's no point in DEC trying to play
    "catch up". Just make sure that the people who have the experience with
    the third party products port them to run on our hardware. At least we
    can get some revenue!
    
    If we go back to the bad old days of
    
    "USE WHAT WE MAKE"
    
    then we're in trouble...

    RE: .29
    
    >Heard a report on a company (I believe it was Ben & Jerry's, the
    >Vermont Ice Cream maker) the other day where the top management is
    >compensated AT MOST at 8X or 18X times the salary of the "lowest" worker.  
    
    It was Ben & Jerry's and the rate was 7X the salary of the lowest
    full-time wage earner.
    

    
    Re .29, .32:
    
    From the "Parade" Magazine, Boston Sunday Globe, 29-Dec-1991 --
    
    	Best Quote by a Boss
    
    	  By chairman and CEO of Ben and Jerry's, Ben Cohen, who last year
          kept his salary to $84,000 (the company limits its top salaries
          to no more than seven times the pay of the lowest-paid full-time
          worker):
    
    	"I don't see any way you can justify somebody making $1 million or
        more a year when the low-level workers aren't making enough money
        to afford a house."
    
    
    [I clipped it out and hung it on my office wall.]
    

    	We lost our relationships with our customers.	

    
    We didn't lose our relationships with our customers! We lost the
    relationship of ourselves. One being trust.
    
    Think process not functions!
    
    

    
    re: .35,.36 - People who focus on process seem to very quickly lose
    	sight of what the end-goals were that had the process created, and
    	instead focus totally on ensuring the process works, not that the
    	problem has been solved.  Invariably, it results in disaster and
    	chaos.  While process can be a useful tool, it must be constantly
    	re-evaluated in terms of solving the problems that led to its
    	creation.  Unfortunately, this seldom happens until things get
    	all %&^$ed up!
    
    		bob

    
    re:36
    
    I believe by focusing on the existing processes and making improvements
    we will realize the results.
    
    Also, growth is not our primaty goal. Our goal is to be
    a quality organization and do a quality job which means that we will
    be proud of our product and our work for years to come.
    
    As we achieve quality, growth comes as a result.
    
    The product we are selling includes the engineering, the software, the
    manufacturing, and the services, which includes field service, software
    support, sales, order processing, training, and manuals.
    
    Yesterday we were focused by job function, today we must focus on the
    customer, we must operate as a customer driven organization. I feel
    attention to the process will lead to results.
    
    BTW: the customer is all of us not just our paying customers.
    
    You're right that results is what we're after. There's lots of teaming
    going on and there's goodness coming out of most of them. However,
    we must remember that teaming is not the goal, the goal is team based
    results.
    
    We need to look across all organizations rather than up or
    down(stovepipe) and trust each other. The politics must be driven out
    as it's interfering with the worker close to the work trying to make
    a difference (Just say "Do it").
    
    Rick

    A big potential win in the NMS system, if implemented fully, is that
    internal groups _become_ paying customers, and the dollars used to buy
    products/services internally are the same as the dollars used to buy
    them externally.  Thus we're forced to listen to other organizations
    within Digital who use our "stuff", and we're forced to compete in an
    "open" environment against service providers outside of Digital.  Or have
    I missed something?

    
    Interesting question: what to concentrate on, process or result?
    
    By training and inclination, I tend to be results-driven.  There
    are a growing number of people, it seems to me, that are instead
    concentrating on process, though.  I seem to remember reading somewhere
    that the Japanese made most of their gains over the past 30 years
    by incrementally improving the *process* by which they manufactured
    goods.  Also, I remember reading an article that quoted Lester 
    Thurow as saying that the biggest improvements in the 1990s will
    be in process improvements; that the biggest gains in products
    had already been achieved.
    
    I also think Deming tended to concentrate on improving processes, yes?
    How about Statistical Process Control (SPC)?  Wasn't that based upon
    Deming's work?
    
    I think that a lot of the TQM initiatives concentrate on 
    process (or practice) improvements as well, do they not?
    
    
    Glenn

    Doesn't the focus depend on the nature of the work, too?  If I'm going
    to perform 10,000 iterations of a process, I want it to be streamlined.
    So things like manufacturing transistor radios lend themselves to process
    tweaks.

    But if I'm going to do something just once or twice, it may be better to
    spend the time _doing_ it rather than discussing the process for getting
    it done.

    Maybe this is what marks a good business -- concentrating on the right
    emphasis for each problem which arises.

    
    Re: .41
    
    Good point....I hope you're a high level manager.  I don't know
    if the organization can stand such a drastic dose of common
    sense.
    
    As we move to flexible manufacturing (doing things in smaller
    and smaller numbers with higher and higher levels of customization)
    the focus will probably need to change again.
    
    Interesting problem, huh?  If you start manufacturing things in
    smaller numbers, do you need to think as much about the 
    flexible *process* for doing that or more about the *features*
    of the product(s)?  The again, if you're in touch with the customer, 
    maybe they're telling you *what* they need, while they leave it up
    to you to decide *how* to provide it (so you're back to process).
    
    And what about software?  Should you concentrate on improving the
    life cycle development methodologies or getting things done quickly?
    Actually, it's not even clear (at least to me) that the two are 
    mutually exclusive.
    
    Glenn

RE: .40

Most of the things that Six Sigma and other Quality programs talk about
is improving the process by analysing what went wrong.  The core idea is
to not fix the "symptom" but to look at the real reason that something
went wrong and to fix that.

RE :41

While I agree with your idea, how many times do we really do something
once?  I would quess that most everything is done many times by many
different people.  Process allows someone unfamiliar with a task to be
able to do it after reading the procedures or with training.

FWIW,
Lee G.

It seems to me that one failing we have is a tendency to design processes
and then create orgainizations to "work" them.  As a result, the process
becomes the goal.  The organization, dependent upon the process for its
existence, tends to function defensively rather than creatively.

The alternative is to give an group a clear set of goals, measure
it on the achievement of those (AND ONLY THOSE) goals and then leave
the group to devise and manage its own processes.  Resisting the temptation
to measure people on process performance rather than goal achievement is 
crucial.  It's also difficult since the former is often much more amenable
to measurement.

-dave

    
    re:.44 - very well said.  It's that tendency to put the cart before the
    horse all over again.   I agree with your alternative - set the goals,
    and fit the process to the goals. When the goals change, the process
    must change with it. Process always needs to be measured in terms of
    making the original goals.  However, far too many people feel that once
    the process is established, the effort is done.  Witness governement,
    both state and federal, and/or public education where both those
    mind-sets fail on grand scale.
    
    	bob
    

Ken Olsen makes something like $895K/year, Jack Smith $585K/year (from an article
in business week).  Now that's something like $10K/week take home for Ken.  Who
needs that kind of money?  In the same article a ratio of company performance to
CEO salary was done for the fortune 100 (I'm remembering here and am probably
wrong about the details, but the facts are accurate).  Ken Olsen was ranked as
forth WORST!  The CEO of United Airlines was the winner of this dubious award.
Meanwhile, we've killed a couple of thousand Sales and Sales Support folks.  For
each of those killed, a potential $2M/year of revenue was lost, especially if 
you do what was suggested in an earlier reply, find a customer with a problem,
solve the problem, sell the solution and repeat many times.  Now let's do some
more math.  Ken olsen takes home as much as I make every five weeks (count his
gross and he probably covers my "overhead" as well).  So every year, his salary
would feed ten of me (us), which could bring in an additional $20M/year.

So why am I rambling?  I like the idea of a 10% cut at the top, but don't think
it's enough.  How about reducing the top level to the median (or mean, take your
pick) of the company.  That is probably something like $50K for the median and
maybe a little higher for the mean.  These guys should have put something in the
bank over the past years so living on a meer $1000/week won't kill them, and this
is only until the company is squared away.  Ken and company have asked us to do
a lot to turn things around.  They have even asked many of us leave the company
we love.  It's time they take a significant step themselves.  I was at a meeting
last spring and listened to Jack Smith anguish over the decision to cut people.
This was before the first ax fell in July.  At the time, I was impressed by his
compassion, but have since wished I would have stood up and expressed to him 
that for him to lose some of his income was a hell of a lot better than me 
losing all of mine!  One can certainly extrapolate this idea to come down a
couple of levels from the top and apply the remedy.  Sure some will leave, but
then one could question their committment to the company anyway and we're 
probably better off without them!

It is time for our upper management to do the right thing.  Other than sleepless
nights, these guys haven't put much in the game.  If salaries were cut at the
top, we could probably eliminate the loss we will show in Q2 (on paper, I know
it can't be fixed now, but you get my drift).

So, Ken, the balls in your court.

Kelly Lipp
Rocky Mountain Account Group Sales Support

    
    how is cutting a few hundred k from KO's (and a few other) salaries
    going to save DEC?
    
    

... Sorry to rathole the interesting subthread above ...
    
    The following are some weekend afternoon ramblings aroused by passing
    by the former Corporate Headquarters of Prime Computer Inc., a couple
    of miles from where I live in Natick.  I worked at Prime from
    1980-1989, when I was laid off and joined DEC.
    
    I include them here because not enough of us, I believe, realize that
    "it *can* happen here."  Certainly there were very few of us at Prime
    who saw the end coming if we didn't adapt...  and no one foresaw how
    the end would come...
    
    
    Ever since I was a tad in the Metro Boston area, there were always
    radio commercials for 
    
    "Carling Black Label Beer...  brewed on the shores of Lake
    Cochichuate."
               (cue to sound-effect of Native American drums doing
    "BA-DA-BUM-BUM")
    
    And yes it was true, in those years Lake Cochichuate was a sylvan,
    rural lake in the faroff sticks, about 20 miles west of Boston, and
    there was a real brewery here in Natick.  I toured it with my wife and
    kid sometime around 1971, and it was complete with huge lagering tanks,
    and huger copper pots with many gauges and pipes where the slosh was
    brewed.  There was free beer at the end of the tour.
    
    A few years later, the brewery folded and Prime Computer Inc., riding
    the crest of the virtual-memory minicomputer marketplace, expanded
    explosively into Natick and Framingham, and built its central admin
    complex in what was renamed "Prime Park."  Also on the shores of Lake
    Cochichuate, HUM-HUM-HUMM-HUMMM.  By then, and somewhat because of
    Prime's later success, "the sticks" were changing from largely farmland
    and were becoming "Metro-West Boston."  The skins of the old brewery
    building were removed so that the huge lagering tanks could be removed. 
    The place of the huge copper pots was taken by an elaborate reception
    area carpeted with oriental rugs, with glass windows two stories high,
    that was used only on State Occasions, if then.  Times were good...
    
    But Prime guessed wrong, didn't keep up with desktop technology, made
    the wrong merger at the wrong time, and took its eye off the ball.  Now
    its cash cows are in the milking machine and will be there until blood
    runs from their teats and they die.  They are history.  Prime has
    shrunk back away from its "Corporate Jewel" in Prime Park and is now
    huddled -- Engineering, Marketing, and the whole lot -- in the old
    Engineering Complex across town.  Prime Park is now empty, though the
    brave new corporate logo is still on the old Carling Brewery tower, and
    the front lawn has a shiny Prime logo too, near the old waterfall that
    once served a purpose -- to precool the brewery's water being recycled
    back into Lake Cochichuate.  But there's also a "For Rent" sign out
    front that advertises the whole joint as "Carling Park."
    
    Sic Transit Gloria TimeSharingii.
    
    And to think that a few short months before the crash, Prime's
    Corporate Elite invited the WHOLE COMPANY to celebrate "Breaking
    Through Day" (at the Centrum, on Jan. 26, 1988 -- I still have the
    foolish banner!) because Prime's revenues, figured with the hostile
    takeover addition of the "ComputerVision Division," had just broken
    through the $1B barrier...  What no one foresaw at the time was that
    the only "breaking through" that was in our future was --
    metaphorically speaking -- through the ice of Lake Cochichuate, to be
    snarfed by the bottom-fishers of Wall Street.
    
    So that's why, when I walk into my office in the Mill overlooking the
    millpond, I reflect often on the contrasts between its original r�le as
    one of the cradles of the world's first Industrial Revolution -- and on
    how through Ken's vision and the genius & committment of thousands of
    DECcies before me, it was successfully recycled into the cradle of the
    world's premier vendor of networked minicomputers and desktop systems
    in the Computer Revolution.  
    
    I try to do everything I can to ensure that we complete our NEXT
    metamorphosis -- into the kind of vendor that we must become in order
    to survive and succeed in the current revolution, that of the
    Information Economy.  I don't want to see any more empty shells on the
    Mass. landscape, labeled "Assabet Park."  Because I've seen it happen. 
    It CAN happen.  But it needn't, because we have the talent and vision
    to succeed.  But to do so, we must realize, deep down, that failure IS
    possible if we don't continue to make the kinds of radical changes that
    are now underway.
                                    

re .47

...and a little more in touch with non-virtual reality.

It would be worth your while to read some of the Fortune magazine articles on 
the corrosive effects of high executive pay (not connected to any rational
measure of company return) on competitiveness of U.S. firms.

/Dave

    Regarding salary differentials, I heard on NPR the other day that the
    salary ratio between upper-level management and line workers at GM is
    160:1, while it is around 16:1 for Japanese auto companies.

    I don't think the only reason for reducing the ratio throughout the
    spectrum is the profit of the corporation.  I tend to believe the
    argument that "taxing the rich" will make only a small and temporary
    dent in the problem.

    The bigger reason for reducing the differential is to reduce the pressure
    to rise to our highest level of incompetence.  As an IC, I have felt a
    lot of _personal_ pressure to move toward a management career track,
    despite knowing that I deal with technology much better than I deal with
    people.  The incentives are:

        1. Money.  Pay someone to fix my house so I can play with my kids.
	   Take a vacation.  Eat out once a month without feeling guilty.
	   Hire a college student to scrape the play dough off the rug...
	2. Authority.  Right or wrong, my perception is that people at
	   Digital listen to managers more than architects, and architects
	   more than engineers.  We seem to have an ample supply of both,
	   but the management track sometimes appears more attainable and
	   less arbitrary than the upper-level engineering track.

    If the pay and authority differential were reduced, I know that I
    personally would stop doubting my pursuit of a technical track, and be
    comfortable with my position within the company.  Since I consider to
    be fairly average and generally way behind the times, I expect that a
    lot of individual contributors view the situation similarly.

    Another side effect of a ratio reduction is morale.  It's hard to struggle
    with new taxes and increasing food costs, and watch your peers leave
    to avoid bankruptcy, while the people who are most visible as leaders of
    the company don't appear to even comprehend what your are going through.
    I struggled to buy a house for over a year.  During that time, at least
    ten executives or their spouses tried to "help me out" by suggesting that
    I look at "such and so a house, which is going for only $250K".  Move over,
    Marie Antoinette!

    I don't advocate reducing executive salaries to the median -- I do believe
    that the effective executives within our company are more experienced,
    more skilled at what they do, and generally creative and visionary, and
    deserve proper compensation for their input.  But I do think that the US
    salary curve is warped at the present time, and is causing people to move
    to ineffective jobs.  An adjustment of the salary curve would go a long
    way toward balancing the topheaviness of our corporations.

    Just some disorganized thoughts...

>Ken Olsen makes something like $895K/year, Jack Smith $585K/year (from an article
>in business week).  Now that's something like $10K/week take home for Ken.  Who
>needs that kind of money?  In the same article a ratio of company performance to
>CEO salary was done for the fortune 100 (I'm remembering here and am probably
>wrong about the details, but the facts are accurate).  Ken Olsen was ranked as
>forth WORST!  


I don't believe this is his entire compensation.  The stock options have pushed
his "salary" into the millions on several occations.  I think I remember reading
a year or so ago that Ken's total compensation pushed him into the top 2 or 3
salaried executives in the world.  However, I can't quote or point to an
article.  I could be off by a few million.

How about freezing stock options until the company is back on it feet.  That
could be a moral booster.

al

    My impression is that stock options have been minimized or downplayed
    the last few years anyway. And, with the stock going lower and lower,
    the ability to even exercise existing stock options becomes moot.
    
    

    re: .47
    
    I strongly disagree with your assumption, i.e. that DEC execs make too
    much money. Given the responsibility that Ken et al have I believe he
    absolutely deserves to make the big bucks. I can't imagine the stress
    that he deals with every day. 
    
    Often senior execs have less security than us regular folks - they
    screw up, or get assigned the blame, and they're on the street. They
    have high visibility jobs, have big responsibilities, and should be
    rewarded for that.
    
    I would agree that some senior execs (like the UA guy) are grossly
    overpaid. But at <900K I don't think Ken is, not by a long shot.
    
    /Tim

    re: .51 - freezing stock options
    
    Morale booster? No &*^^$ way!
    
    I'm sure there's lots of folks like myself who are working as hard as
    they possibly can, and as long as they can, with fewer resources to get
    the job done. At the same time I don't expect much of a raise this year
    given the problems we're having. So..how does DEC reward folks who pull
    off minor miracles? In the past I've got stock options after doing good
    things, and I've appreciated it tremendously. Take them away, or take
    away the possibility that we can ever get them and morale will plummet
    even lower!
    
    /Tim

    
    My .02 on pay cuts for KO.  Nonsense, nonsense, nonsense.
    
    The man is arguably the most successful entrepreneur in history.  
    Someone name one other person in American business who started
    a company at nothing and built it to 13+ billion while staying at the
    helm the entire time.  Do you have any idea the number of decisions
    that man had to have made over a 34 year period, *any one of which*
    could have sunk this company?  Thousands of decisions, large and
    small.  His ratio of good to bad decisions must be amazingly high.
    
    Let me say that I am a big advocate of bringing CEO salaries in line
    with performance.  That guy from United Technologies (?) --Rand
    Aroskeag: he's receiving something like 11 Million/year in salary
    and stock while the company has underperformed the market for
    several years running (there was an article in Business Week awhile
    back on CEO salaries, and they name him as a biggie).  Executives
    that clearly aren't performing need to be replaced/have their
    salaries cut, but don't, for Heaven's sake, lump Ken Olson in with
    that crowd.
    
    Glenn
        

    re .53
    
    The head of a Japanese or European company, dealing with the same kind
    and level of stress, responsibility, etc., is very likely paid a great
    deal less (like an order of magnitude for the car companies).  And, as
    both Fortune and Business Week have documented rather extensively in
    past issues on U.S. executive pay, executive pay goes up when companies
    are doing well, executive pay goes up when companies are doing badly,
    and there is almost no discernable correlation between the pay top
    executives and the short OR long term performance of their companies as
    measured in return on stockholders investment.  
    
    So - what exactly are "they" paying "them" the big bucks for?
    
    /Dave

    re: .42
    
>    And what about software?  Should you concentrate on improving the
>    life cycle development methodologies or getting things done quickly?
>    Actually, it's not even clear (at least to me) that the two are 
>    mutually exclusive.
    
    They aren't.  I've worked in the situation where software development
    had to be both high quality and produced at high speed.  We all knew the
    result of not accomplishing both goals: the company would fold and our
    paychecks would disappear.  Talk about motivation...  8^)
    
    One thing that people seem to forget is that the lifecycle model
    INSISTS that the process is circular; that is, the end of the current
    cycle is actually the beginning of the next one.  Properly engineered
    software needs to accept the fact that things will need to be changed
    next time around and so, the software must be designed to facilitate
    change.
    
    Taking this "long" view does not add much time to the Vn.0 development
    time, in my experience (in fact, it can even REDUCE development time in
    many instances)  But the payback in Vn.1 ... Vn+m.z can be ENORMOUS!  Also,
    software engineered for change is much easier to fix, thus simplifying
    the task of those chartered with supporting it, while greatly improving 
    customer satisfaction when the occasional bug is found.
    
    IMO, a methodology which seeks to instill a proper long-term PERSPECTIVE
    in the the development team will go much farther than a methodology which
    deals solely with the short-term checklists.  Checklists tend to be
    easier to fulfill when you had the appropriate end product(s) in view from
    the beginning.
    
    Perhaps we should consider a software "lifespiral" instead of a
    "lifecycle".  Perhaps then people would realize that the REAL product
    isn't "done" when the circle is closed; it's just starting the next
    needed loop.
    
    -- Russ

    You're all getting away from the real issue.  
    
    10 Identify customer problem
    20 Sell solution
    30 Make a profit
    40 Find more customers
    50 GOTO 10
    
    You can write a subroutine to save money at line 25. fill in the blank.
    
    

    re .51                 
    According to Business Week (5/6/91), in 1990 Ken had a salary of
    $982,000.  In addition, he took home $10.92mil worth of stock, for
    a total compensation of just over $11.9mil.  This earned him a note
    under a table entitled "CEO's Who Give Shareholders the Least" as third
    worst.  Business Week rated all CEO's on a 1-5 performance scale,
    performance being measured as return to shareholders and corporate
    profit.  Ken scored a 5 in both.
    
    The funny part is that if Ken would have taken home $10.92 million
    dollars worth of marbles instead of DEC stock in 1990, at least
    he'd still have something that was worth $10.92 million dollars. ;-)

    re .55's "The United Technology CEO that takes home $11 mil in salary
    and stock... please don't lump Ken into that category".  You're right,
    the guy from United Technology doesn't get quite as much. ;-)

Let's see,

	If we take away Ken's stock options at $10.92Mil
	and cut his salary by even 50% to $491K

	That will save Digital $11.4 Million per year

	Dividing that by a very conservative $50k per individual
	contributor that will save 228 jobs this year. 

	Now we only have to find 88 other guys paid like Ken to save 
	the 20,000+ jobs that the analysts say we have to cut.

	

>>	Now we only have to find 88 other guys paid like Ken to save 
>>	the 20,000+ jobs that the analysts say we have to cut.
    
    Don't forget that you have to find things for those 20000 people
    to do...

    Give me the $1B+ spent on downsizing, and my choice of the Good people
    being layed off, and I'guarantee to make a good return on the
    investment...
    
    q
    

    re:  Big execs have the big stress

    No they don't, not according to several studies that have come
    out over the years.  It's been shown that the most stress is
    endured by assembly-line kind of workers with monotonous tasks
    performed at high speed under a lot of pressure and quotas, and
    so on.  Jobs where workers have little or no control over their
    work day have been shown to be the most stressful.  In contrast,
    management and most white-collar workers usually have a fair amount
    of control over their moment-to-moment activity, as well as their
    overall workstyle, and have a much lower stress level.


    re:  Big execs run a bigger risk of hitting the streets

    Indeed?  How many troops have hit the streets in the last couple
    of years, not only at this company, but at hundreds of others,
    compared to the big execs, even expressed as a ratio of their total
    number?  For example, if 5% of the troops have been laid off, have
    5% of the big execs been laid off?  And in Digital, why are there
    twenty limbo-class VP's floating around, relieved of their duties,
    having been replaced by the ten VP's in the announcement made 3-4 weeks
    ago?  Why haven't the no-op VP's been laid off?


    re:  Digital execs making thousands of decisions, any one of which
         "could have" run the company into the ground

    What do you mean, "could have"?


    The "salary gap" between upper management and troops in the U.S.,
    including Digital, is not justifiable, particularly when compared
    to the ratios of other countries, and even more particularly when
    you consider the state of the economy (that they've gotten us into,
    at least in part) and the thousands of layoffs of competent lower-level
    employees.

    If upper management would at least take a token reduction in their
    total compensation package, it would certainly more than pay for
    itself in boosted morale, which might have a ripple effect in better
    productivity and revenues.

    Chris

Ahhh Gi'day...�

    Absolutely true.   The  more  control  you have over your job, the less
    stressfull  it is.  The only time execs "lose it" is when they have all
    the  decisions  taken  out of their control, for instance by the banks.
    Many  of  the  "entrepreneurs"  of  the  80's only get sick or die from
    stress when they've borrowed over the hilt, or taken part in schemes of
    dubious legality and been caught.

    Interesting article on TV this morning.  Basically, the gist of it is
    that folks who want to invest are finding that they lose money if they
    invest them in CDs or other traditional investments.  So, they have
    been investing in droves in the stock market.  It is suggested that
    this is the main reason behind the current surge in the stock market.
    It indicates that part of the surge is not because of any kind of "good 
    news" but basically because there is all this money with no place to
    go, so it ends up in the stock market.  And, with all this money
    coming, the prices of stocks naturally rise.
    
    What is interesting is that depletion of savings to go into the stock
    market is basically a one-shot deal.  That means that, if I understand
    correctly, once the spending "spree" is over, the prices will adjust to
    they correct values since the flow of cash will eventually subside.
    The companies that are being invested in, like Digital, are not really
    expected to make a lot of money in that they are still tightening up
    and letting people go.  I think the net result is that we are about to
    see a lot of wealth destroyed on the stock market.
    
    Now, what does that mean for Digital in '92?  I really don't know, but
    I think that I will be even less prone to trust Wall Street as to our
    worth.  I'm not going to be upset by seeing the stock come down some
    toward the middle of the year, should that happen.  I plan to pretty
    much blow off Wall Street as an indicator of our viability.
    
    What I do find encouraging is that we seem to be favored for our
    investments in technology.  And, I am enjoying working on products that I
    know are leaders in the industry.  We can't sell ourselves short.  I
    believe that we really have good stuff and good opportunities for
    greater and profitable innovation.  I have a lot of hope for that.  To
    me, this seems a more appropriate measure of our success this year.
    
    Steve

    how would people feel if every one in DEC took a 20% cut in salary
    for one year only starting now.
    
    purpose: avoid possible layoffs to some, and improve Digital bottom line
    until the economy improves, and help DEC in these hard times until
    our main projects and products get out of the pipeline.
    
    the stock might actually goes up, and you'll get some of your money that 
    way too.

    I might say, I think this is a brilliant idea of minne, but Iam not sure 
    what others might think of it, and if there are some holes in it that
    I might have overlooked.
    
    /nasser

    Over the past five years Ive been taking pay cuts in that inflation is
    still in an upward trend I pay more taxes and I haven't gotten any
    worthwhile pay increases. 
    
    Everything costs more and my pay ,while its increased a teeny bit
    certainly hasn't kept up.
    
    My answer is certainly NOOOOOOOOOOOOOOOOOOOOOOOOOOO !
    
    MIKETurro
    

re .67

   Pay cuts won't help anyone.  There just isn't enough real work for
   119,000 employees.  We have a lot of business practices that should be
   stopped completely, even if it costs money to stop.  Downsizing is top
   management's "cop-out" way of forcing lower level management to do what
   it should have been doing all along, rethink how to do only the essential
   with the greatest possible efficiency.
   
   When Digital managers have enough understanding of the business (and
   intestinal fortitude) to come to me and say "Dick, you cost the company
   more than you contribute", then I will be happy to retire because our
   management will have turned the corner.
   
   But so far, our managers are mostly so immature and/or ignorant of what
   it takes to be successful within this industry, that they can't tell the
   difference between needed work and make-work _or_ (what's worse) they
   don't care.
   
   I'm not going to be the saviour of Digital, but at least I intend to be
   one of the dissenting voices to those dumb business practices I see.
   
Dick

    re .67
    
    restrict that pay cut to upper level management who can afford it,
    (say, anyone making $75,000 and up?) and maybe you've got an idea...
    me, I'd like to keep paying the mortgage on my _humble_ home...

>                      <<< Note 1708.67 by STAR::ABBASI >>>
>                             -< how about this ? >-
>
>    how would people feel if every one in DEC took a 20% cut in salary
>    for one year only starting now.
    
    For myself I would have absolutely no choice but to look for work
    outside Digital. I know lots of other people who could not afford
    to meet their current obligations on 20% less than they are making
    today. We would with out any doubt lose many if not most of our best
    people. In short what you have stated is a plan to distroy Digital in
    the shortest time possible.
    
    And don't forget that the stated reason for most of the layoffs so far
    is that those jobs are not needed. So basicily you are asking people
    whose jobs are critical to pay for those people whose jobs are either
    not needed at all or that we can make do without. This is not a good
    idea.
    
    			Alfred

I'd be in favor of supervisors and managers being asked to take a pay cut if
they want to stay in their jobs, or become individual contributors and keep
their salaries.

I came to this company in 1988, have never liked the DEC management style,
and probably never will. Yeah, it's a very humane environment, I KNOW, I KNOW!
But it's grossly unproductive, and means that the conscientious, responsible
employees carry the load for the others. 

Forcing managers to take a pay cut might get rid of managers who don't really
want to be managers. It also would free up some slots for employees who aren't
entrenched in the DEC management style to become managers. Since I'm convinced
the old-time DEC managers will not improve the company, I'm obviously in favor
of this. 

The company could also consider making it EASY for people to start working
part-time (and receiving part-time pay, of course).

But do I want to take a pay cut because the company has too many employees for
the work we do? Not on your life. I'd rather take my chances with the layoffs.

Vicki Meagher

    The right sizing activity has been focused on headcount rather than a
    reduction of expenses.  The result is that lower level employee's are
    the first to go.  Since Management is making these decisions, it's less
    painful to tell a 2 year, junior to find another company.

    What makes people think that supervisors or middle managers make
    significantly more than individual contributors.  Principal and
    consulting level engineering pay ranges are comparable to those of
    lower to middle levels of management.  
    
    Having said that, I don't believe this is a good idea.  Most of us
    cannot afford to take a 20% cut.
    
    Mark.

    
    .73  On the nose!
    
    The company metric is reducing headcount, not salary expenses.
    A few good old boy managers (now doing "project" work in groups
    that previously let others go) have salaries perhaps twice that 
    of their (now) peers.   
    
    Remember the lip service given by JS about employee reviews of their
    managers?  That would have been the vehicle to weed out ineffective
    managers.  Instead, they decide who gets canned, or who becomes a
    level 41 "project leader".
    

    salaries only make up a small fraction of the cost of a person. An
    engineer costs the company $155,000 per year. Just for the sake of
    discussion, if an engineer makes $40,000 per year, then a 20% cut in
    salary amounts to only $8000 in savings. If you lay that engineer off,
    you save 155,000.
    
    Gregg

    I cant beleive that i cost DEC 155,000 per year, no way, i go to
    the dentist once or twice a year, thats 80 bucks. i take few courses
    ok, thats 3 to 4 thousands bucks, and my cube rent is 400 bucks per
    month, and my salaray, all that will not add to more that around
    1/3 of the amount you mention !
    
    $155,000 , I cant be that valuable !
    
    /nasser
    
    

re: .76,

>    salaries only make up a small fraction of the cost of a person. An
>    engineer costs the company $155,000 per year.

    	I'd like to know approximately how much of that $155,000 goes
    to pay for office and facility operations costs for that employee.
    The reason I ask is that the bulk of this cost could be eliminated
    were the employee to work from home and the facility were eliminated
    instead.

    				  -davo

    
    You forgot, health insurance, FICA, administrative costs, workman's
    comp, etc.

     Yes, don't forget "administrative costs" as mentioned...
    The "cost per engineer" figures of ~120 to ~150K include the cost of
    "overhead", which I believe includes your management chain, plus your
    PSA, plus your PSA's management chain, plus your share of the nurse,
    plus your share of facilities, plus their management chain, plus your
    share of MIS, plus their management chain...

    Also add in taxes that Digital pays for site services and other
    overhead.  Depending on what the overhead rate is, I've seen 110K for
    Senior Engineers, 120K for Principal Engineers and $130K for Consulting
    Engineers budgeted at the *project* level.  I'm sure it's higher at the
    corporate level.
    
    Mark.

Admin costs such as:

Telephone, Lighting, heating, Office space, Equipment home and office.
I think the 155,000 number is a reasonable figure.

I am also convinced that $155,000 is a reasonable figure for the way we
work.  Now, consider the fact that engineers are expected to provide ten
times their salary in profitability or productivity increases each year.
Measure yourself (if you're an engineer) against that standard if you want
to feel warm and fuzzy.  :-)

Dick

    additionally, that $155,000 covers your share of the cost of a
    secretary.
    
     Yes. the $155,000 is your salary plus ALL the other costs digital
    incurs to have you as an employee. 
    
     You cost that much, Mr. Abassi.
    
    Gregg

    Several years ago I heard a figure that said every full time employee
    who was hired into the company was a 1 million dollar expense to the 
    corporation.
     

    
    	.76  So what's your point?  Mine was, rather than hide 
    	(reassign to "projects") ex-managers, throw them in the 
    	right-sizing pot along with the rest of us.
    

    $155,000 is incorrect. Engineering cost centers end up with each
    employee costing about $100,000. Or maybe our cost centers are more
    efficient than others.
    
    Dave

    Re: .88
    Garrod,
    
    You are perhaps correct for your group. But the group I work
    for delivers to customers. So did the last two groups I worked in and
    ALL OF THEM had a burden of $155,000 per engineer. I know that for a
    fact - I am not guessing.
    
    Re: .87
    
     My "point" is that I was responding to Mr. Abbassi's suggestion that
    everyone take a pay cut of 20% to eliminate layoffs. I was not
    responding to any concept of whether or not managers are, are not, or
    ought to be in the layoff "pot", as you describe it. 
    
    	Gregg

    Re: last bunch
    
    If someone is TFSO'ed/layed off, does their secratary get less pay??
    
    Does their facility use less electricity??
    
    Does their manager take a pay cut??
    
    All of these things are figured into these "costs" everybody quotes,
    but some of them are fixed costs and don't vary much whether there
    are 10 employees or 20 employees.
    
    

    RE: .90
    
    I dare you to go up to a secretary, and tell that person that their
    work is the same with 10 employees as it is with 20. :^)
    
    then duck........ :^)
    
    Gregg

RE: .91 and earlier

We lost our group secretary over a year ago.  Now all the things she
did have to be done by the individual engineers.  Things like travel
reservations, office supplies, copying, ad infinitum.  Now somebody
try to convince me that there was real money saved.


On the subject of the title of this note:

My answer to the issue of fixing Digital is that that is what the people
at the top get paid to do.  If they can't do the job, then get someone 
who can.  IMHO, cost reduction is a very short term fix; the real fix
is to SELL PROFITABLE GOODS AND SERVICES.  The rest is left as an 
exercise for the student.

Looking for the light at the end of the tunnel,
Lee G.

    .81 is closest to the real problem....
    
    reduce the overhead burden and the profitability per engineer
    will increase....
    
    it's like taxes, a percent of the working population supports
    the others who are rich/smaet/etc. enough to take advantage of
    tax loopholes and pay no taxes...both business and individual...
    
    

    You know, that is interesting.  If you were to eliminate half the
    engineers at a facility but keep the facility open and running, you may
    well see the cost per engineer go up.
    
    Steve

    re: .94
    then eventually with fewer engineers = fewer products = facility
    not needed as you go out of business....
    
    for how long can a few engineers "carry" the tremendous overhead
    that Digital has and still retain customers?
    
    when the economy gets bad, as it is, you need a "lean efficient(sp?)
    shop to stay competitive". The most logical reductions should be
    overhead/duplication NOT the people who SELL or DESIGN/DEVELOP or
    MANUFACTURE the necessary products that keep you in business....
    
    

	No argument that Overhead must be held in check.  But, I think 
	some of you are falling victim to the all-so-common trap that
	"overhead is bad".  I would suggest that "too much overhead" is 
	indeed bad. 

	Example:  Engineers are paid quite well "to do engineering".  
	Does it make sense that they should be spending their time doing 
	work that the PSA does?  Are they really being more productive if
	they are cleaning toilets!? [insert tongue in cheek here!]   Or, 
	an even more realistic case, is it the best use of their 
	[engineering] time for them to be doing VMS system management on 
	the groups LAVc?

	My point is that truly efficient operations must in fact have some 
	overhead if they hope to gain maximum productivity from "all" their 
	employees.

	My dollar's worth with $.98 change!

    Today's newspaper from Finland has an interesting quote. A russian
    worker says: "We in Russia have an interesting habit of giving new
    names for issues. It is a sort of a substitute for a real change."
    
    If we change the words russian and Russia to words deccie and Digital,
    would it still sound true?
    
    Would it be the best fix for Digital to make it untrue?

    re -1
    
>    6.  When traveling, try to keep your expenses down.  Many
>    	people spend more than they would were they to have to
>   	pay for it themselves.  Pretend its your own money you
>   	are spending.
    
    There's a memo floating around from Corporate which blasts a 
    lot of people for not getting the message on this. e.g....
    $1000 BAR BILLS...Dinner cruise w/two people at the same meeting 
    to the tune of $1780 and $1400 w/approvor in attendance. 
    People regularly spending double or more the guideline 
    amounts for lodging, limo to drive a secretary to work, 
    medicine, toiletries, US Open tickets, fishing charters, 
    $400 for basball caps....  Conservatively costing the company 
    $30M a year. I wish I could post it.
    
    People who show this sort of CONTEMPT for efforts like
    yours should be taken out and shot. 
    
    Mark

    
    Re: .99
    
    > I wish I could post it.
    
    Why can't you?
    
    Steve
    

Re: .98,.99

I am contacting the author of the memo seeking permission to post here.

Lee

    I recently saw in the Boston GLOBE an announcement of an auction of the
    office equipment of PR1ME Computer in Framingham, "By Order of
    ComputerVision."  I ordered the brochure.  It arrived today, and really
    gives me a turn to read it.  
    
    Surplus Assets from the Discontinued Operations of Prime Computer
    
    Liquidation of Two Huge Facilities!  
    
    Featuring Office Furnishings, Personal Computers, and Data Processing
    
    DEC VAXvector 6000-510 Standalone, DEC VAX 6000-610 Cluster
    
    A full set of Test and Analytical Lab Equipment
    
    Hundreds of Personal Computers & Peripherals -- IBM Systems, GRID
    486's, IBM ThinkPads...
    
    Steelcase Office Furnishings -- over 350 groups, including desks and
    tables, plus large quantities of chairs (pix of desks in offices like
    those I used)
    
    Cafeteria furnishings (with a pictured glimpse of the cafe where we
    would all gather for new Engineering announcements, lavish & happy
    new-rev-shipment parties, and later, the increasingly lugubrious
    meetings to discuss how the defenses against the leveraged buyout were
    going...  and the goodbye parties...)
    
    Complete conference rooms and reception settings (including pix of
    lobby furnishings, library carrels, and even the elaborate boardroom
    table around which I trained the Board of Directors on the Macintosh
    and briefed them on the nascent Prime/Apple strategic relationship, and
    struggled, almost alone and almost successfully, to convince the
    Corporation to adopt a winning personal computer strategy.  But
    Nooooo...)  
    
    What's so weird for me is that this was the workplace of HUNDREDS of
    people who were my friends and colleagues and bosses, and we blew it. 
    We blew it *all.*  We tried to buy Computervision, but they were more
    viable; we took our eye off the ball, and the bottomfishers of the '80s
    got us.  Computervision survived the takeover, regained their name, and
    are still making a go of it.  And now all the physical accoutrements
    around which we worked are going to be scattered, in good capitalist
    style, to other entities that can use them.
    
    S1c Trans1t Glor1a Mund1.
    
    A cautionary tale, if ever there was one.  Not the first, won't be the
    last.  I'm working hard to do my part such that it doesn't happen here.
                     

    Re: .48 & .102
    
    Your flair for prose is as potent as its content is foreboding.
    Like the funeral cortege, the "vehicle" is quite nice.
    
    

    re: .102
    
    Excellent note!  I'm glad you're here!
    
    Steve

    Both my girls spent many happy hours wandering the halls of Pr1me as
    they were growing up.  They played their first interactive video games
    there, on graphics workstations that were free on the weekends...  They
    were early "customers" of the "Laser Printer Toybox" that I set up
    outside my office to coerce Prime into pixel-addressable printing,
    being the first in their schools to be able to submit typeset-quality
    papers...  So figured that it would be meaningful for them to know of
    the liquidation, and even more so because both of them are now
    gainfully employed, deep into  the Silicon Valley hi-tech scene.  I've
    been advising them that they should enjoy the good times, and be
    prepared for the inevitable bad ones.  
    
    Here's part of the note I wrote them, to introduce the news.

=====
Dear Kids, 
    ...
Remember, this is a "what-have-you-done-for-me-lately" business, and
eternal vigilance, and constant learning mode, is going to be called
for, for the indefinite future!

Don't EVER decide, even by default, to play the dinosaur to anyone
else's mammal.

Love,
Dad
=====