| T.R | Title | User | Personal
Name | Date | Lines |
|---|
| 1896.1 | Not the entire WSJ article | DANGER::FORTMILLER | Ed Fortmiller, BXB2-2, 293-5076 | Wed May 13 1992 10:25 | 2 |
| This represents about 2/3 of the WSJ article. The part starting from
"RISC and Reward" is what is missing from the DowVision version.
|
| 1896.2 | Who is David Smith? | SCAACT::AINSLEY | Less than 150 kts. is TOO slow | Wed May 13 1992 11:17 | 6 |
| This isn't the first time I've seen David Smith quoted in an article concerning
DEC. I don't recognise the name. Can someone fill me in?
Thanks,
Bob
|
| 1896.4 | | MIMS::PARISE_M | Southern, but no comfort | Wed May 13 1992 11:33 | 5 |
|
We're all under pressure to produce. What we have to figure out
is how to put the pressure under customers to buy!
|
| 1896.6 | We all can turn Digital around | JARETH::TREWORGY | | Wed May 13 1992 11:56 | 18 |
| The most important point was left out of the article!
"While such hugely expensive projects have gone forward, management's
efforts to cut other costs often focused on items such as water coolers
and magazine subscriptions. In January, a memo circulated at a Digital
office in Acton, Mass., identifying the building as a test site for
lower-cost toilet tissue, " a project being driven by Win Hindle,
corporate staff senior vice president."
It is about time someone has recognized the real problem with Digital -
too much toilet paper usage. This is something we can all help with. Why
use too sheets when one will due? Even better still wait until your
lunch break and use the facility at a local service station. For you
#1 performers, if you work near a competitor's office, sneak in and use
their toilet paper.
Maybe we failed in bringing in the papaerless office. Let us not fail
this time, let's make Digital toilet paperless by 93.
|
| 1896.7 | washes the back side with water | LUNER::ROBERTS | raised on Anthracite | Wed May 13 1992 11:58 | 4 |
|
The Japaneese have a toilet that does just that BTW.
8-)
|
| 1896.8 | It may be DECpc 43 controlled.. | RT93::HU | | Wed May 13 1992 12:39 | 6 |
|
Ditto, the toilet in the Casio of Monte-Carlo also do that. The used
one will flip inward and washed, then new one will flip outward.
Michael..
|
| 1896.9 | I think this is the entire WSJ article | DANGER::FORTMILLER | Ed Fortmiller, BXB2-2, 293-5076 | Wed May 13 1992 12:46 | 231 |
| [I think this is the entire article]
<<< SICVAX::SYS$SYSDEVICE:[NOTES$LIBRARY]DOWVISION_TEST.NOTE;1 >>>
-< DowVision Test >-
================================================================================
Note 28.19 Computers 19 of 23
SDSVAX::SWEENEY 66 lines 13-MAY-1992 08:47
-< At Digital Equipment, Olsen Is Under Pressure to Produce >-
--------------------------------------------------------------------------------
Copyright � Dow Jones & Co. 1992
Source: Wall Street Journal
Headline: At Digital Equipment, Olsen Is Under Pressure to Produce
Time: May 13 1992 0844
Story:
By John R. Wilke
Two of the computer industry's most powerful figures, Apple Computer Inc.
chairman John Sculley and Digital Equipment Corp. president Kenneth H. Olsen,
met in secret last spring, at Sculley's request. His question: Would an
alliance make sense?
Apple needed a partner for a new generation of chip designs. And Digital
needed a bigger presence in the surging business of personal computers. But
the talks, which were never disclosed, went nowhere. Instead, Apple stunned
the industry with a sweeping technology-sharing agreement with International
Business Machines.
Thus was another opportunity apparently lost to Digital and Olsen, whose
longstanding skepticism about the PC -- he used to call it a "toy" -- hobbled
the nation's second largest computer maker as PCs reshaped the market. Olsen
also long resisted two other major industry trends of the last decade: the
moves to so-called "open" systems that use standard operating software, and to
a new generation of simpler, more potent chips.
This legacy now haunts Digital and its founder as they face the danger of
being left behind by the industry they did so much to create, The Wall Street
Journal reported. The $14 billion company that has been Olsen's singular
passion for 35 years is mired in huge losses on declining sales. Despite vast
resources spent on research and engineering, its latest products have largely
failed to ignite growth. Repeated restructurings have sapped morale. Key
employees and executives have departed following run-ins with Olsen. The
company's shares now trade at one-fourth their 1987 peak, closing at $45.25 on
the Big Board yesterday.
And it isn't clear Olsen knows what to do next. Even though DEC has made
some deft moves recently, such as an alliance with software powerhouse
Microsoft Corp., there is no quick relief in sight. The depth of the latest
loss ($294.1 million in the quarter ended March 28) "caught us by surprise,"
Olsen says. "When we laid out our restructuring last summer, we thought we'd
have more time." One of Olsen's first moves after the loss was to disband much
of the organizational structure he had created only weeks earlier, sidelining
a key executive and leaving an impression of management in disarray.
The troubles inevitably raise anew the difficult question of succession at
Digital, which has been dominated by Olsen's towering presence for so long
that few leaders have emerged and remained. "He's at a defining moment in his
extraordinary career, where he can be remembered as a titan who built this
great company, or the founder who couldn't let go," says Jeffrey Sonnenfeld,
author of "The Hero's Farewell," a study of corporate succession.
But as Digital's difficulties have deepened, so too has Olsen's
determination to solve them. "No way am I going to leave now," he says. "I
only want the job as long as I'm the best. But there's a clear mission to
accomplish now. I'm not a quitter."
For now, Digital's directors are behind him; no one expects a General
Motors-style board revolt. But in a secret, seven-hour meeting recently, the
long-compliant board pressed Olsen as never before. Directors insisted that
restructuring efforts be stepped up and that strong outsiders be brought into
senior executive ranks, beginning with the chief financial officer's post,
which has been empty since James M. Osterhoff resigned last year.
The board's new aggressiveness is being led by former Ford Motor Co.
president Philip Caldwell, insiders say. He has the support of Thomas L.
Phillips, retired chairman of Raytheon Co., who has long been viewed as an
Olsen ally. Also supporting Caldwell were Robert Everett, former president of
Mitre Corp., and Colby Chandler, Eastman Kodak Co.'s former chairman, say
Digital insiders. None of the directors would comment for this article.
categoryIndustry I/CPR
categorySubject N/ANL N/PRO
categoryMarketSector M/TEC
categoryGeographic R/MA R/NME R/US
categoryCompany DEC
<<< SICVAX::SYS$SYSDEVICE:[NOTES$LIBRARY]DOWVISION_TEST.NOTE;1 >>>
-< DowVision Test >-
================================================================================
Note 28.20 Computers 20 of 23
SDSVAX::SWEENEY 65 lines 13-MAY-1992 08:50
-< Digital Equipment -2-: Olsen Shows No Signs Of Retiring >-
--------------------------------------------------------------------------------
Copyright � Dow Jones & Co. 1992
Source: Wall Street Journal
Headline: Digital Equipment -2-: Olsen Shows No Signs Of Retiring
Time: May 13 1992 0848
Story:
Olsen, the only Digital executive on the nine-member board, won't discuss
the reaction of directors either. But he says the unexpectedly steep loss
"certainly got their attention," and the board "wants a clear plan" for faster
restructuring.
Olsen says he supports reaching outside for new talent: "Over the years, we
haven't brought enough new blood and new ideas into the company."
A new urgency was apparent the day after the board meeting. On April 24
senior vice president John F. Smith said Digital will record a charge that may
reach $1 billion and will cut more jobs -- perhaps 10,000 to 15,000 -- in the
year beginning July 1. That's on top of $1.65 billion in charges already taken
and 10,000 previous dismissals (employees currently number about 116,000). And
Smith did nothing to dispel expectations of at least three more losing
quarters, nor did he predict when revenue would pick up. In the latest
quarter, sales fell 7.6% to $3.25 billion.
Some former managers say Olsen must take the blame. Digital "has everything
it needs to turn around -- good people, good products and great service -- but
it won't happen while he's still in charge," argues John Rose, who resigned
last month as manager of the company's PC unit.
Olsen rejects criticism of his leadership. "The real question is whether I
have allowed too much freedom," he says. And he has, indeed, rescued Digital
from hard times in the past and managed each time to ignite new growth.
Moreover, the company still has a strong balance sheet, with no debt. And,
though long overdue, it has a powerful new computer design that could fuel a
comeback in 1993. Based on RISC chip technology (reduced-instruction-set
computing), its new Alpha computers aren't limited to Digital's proprietary
operating software but can also use Unix and Microsoft's Windows NT.
"They're doing a lot of the right things, playing off their technological
strengths with foresight about the way the industry is headed," says John
Levinson, a Goldman, Sachs & Co. analyst. "The problem is, they still have a
ridiculous amount of baggage left over from the successes of the past."
Most people can't imagine Digital without Olsen. "No matter what changes,
there's one constant, and that's Ken," says David Smith, a former Digital
software analyst. "He's a living legend."
But many Digital executives contend that the 66-year-old Olsen, who shows no
signs of retiring, has become increasingly isolated and irascible.
A recurring criticism of Olsen's stewardship is that his dominance of
decision making tends to drive out good people. The most recent casualty is
William Strecker, Digital's chief engineer, whose product-development group
was abruptly disbanded by Olsen three weeks ago. The group had been created
only weeks earlier, and Strecker had been promoted to oversee all development.
Strecker remains at Digital, which said he wasn't available for comment.
Another key talent was lost when Olsen pulled the plug in 1989 on Prism, a
RISC computer design headed by David Cutler, a highly regarded software
engineer. Instead, Digital bought a stake in MIPS Computer Systems Inc. and
designed a line of workstations around its RISC chips. Cutler resigned and
went to Microsoft. Strecker also opposed the Prism cancellation and the
alliance with MIPS.
When it began to appear that Digital's MIPS-based machines weren't going to
be a big hit, Digital recharged its internal RISC project. Ironically, Cutler
became the designer of Microsoft's Windows NT software, which Digital now
hopes will boost future Alpha sales.
And just when Digital most needs an experienced hand overseeing finances,
the chief financial officer's job remains unfilled, nearly a year after
Osterhoff quit following a disagreement with Olsen.
categoryIndustry I/CPR
categorySubject N/ANL N/PRO
categoryMarketSector M/TEC
categoryGeographic R/MA R/NME R/US
categoryCompany DEC
<<< SICVAX::SYS$SYSDEVICE:[NOTES$LIBRARY]DOWVISION_TEST.NOTE;1 >>>
-< DowVision Test >-
================================================================================
Note 28.21 Computers 21 of 23
SDSVAX::SWEENEY 58 lines 13-MAY-1992 08:55
-< Digital Equipment -3-: Signs Of Stress Within Management >-
--------------------------------------------------------------------------------
Copyright � Dow Jones & Co. 1992
Source: Wall Street Journal
Headline: Digital Equipment -3-: Signs Of Stress Within Management
Time: May 13 1992 0852
Story:
"He went to the mat" against Olsen, opposing acquisition of two European
companies without more research, an associate says. Osterhoff's concern was
well placed: Digital last year paid a total of $390 million for the computer
units of Philips Electronics N.V. and Mannesmann AG, but so far their weak
performance hasn't helped results, while adding 10,000 people to the payroll.
Osterhoff won't discuss his departure.
There are signs, too, of stress within Olsen's core management group. Smith,
his second-in-command, appears to have lost some authority in the latest
reorganization. Colleagues say Smith, fiercely loyal to Digital, seems
increasingly exasperated. Smith says he continues to have a close working
relationship with Olsen, adding: "It shouldn't come as a surprise that the
level of frustration inside the company right now is sky high."
The management problems are worrisome, critics say, because Olsen's vision
of the computer industry has proved to be lacking of late. From PCs to
standard software, the choices he has made have left the company at a
disadvantage in a fast-changing market.
As a result, his critics say, he didn't grasp the significance of a possible
alliance with Apple, in which Apple might have used Digital's Alpha RISC chip.
That could have established Alpha instantly in a market segment where Digital
was weak. The apparent lost opportunity still leaves some current and former
Digital executives bitter.
Within the small circle of Digital's senior staff aware of the Olsen-Sculley
meeting a year ago, Olsen gets the blame for its going nowhere. Digital
executives and Apple's Roger Heinen, senior vice president, confirm that the
meeting took place. Heinen asserts that Olsen's "lack of interest and
understanding of the role of the personal computer industry" was indeed an
obstacle. Heinen, himself a former Digital executive, says the companies
"continue to have a close relationship."
Olsen dismisses the talks with Apple. "It just never came to fruition. It
wasn't that important to me." He notes that Apple talked to other companies,
too, before settling on an alliance with IBM, and that such alliances are
decided on a whole range of factors.
But at Olsen's direction, Digital has tried to make up for lost time in PCs.
In the past six months, it has brought out a line of aggressively priced
IBM-compatible PCs sold by mail order, which are going strong. Though the late
start makes it unlikely Digital will be a major player anytime soon, PC
hardware sales should hit $500 million this year.
One of Olsen's most costly decisions has been backing the ill-fated VAX 9000
mainframe computer, which cost $1 billion to bring to market but attracted few
buyers. "It wasn't a mistake, because we needed a high-end machine," says
Dorothy Terrell, a former Digital manager now at Sun Microsystems Inc. "But it
was late, too complicated and costly to build, and the sales force wasn't
selling it effectively." Olsen repeatedly resurrected its funding after others
tried to kill it, she adds.
Olsen concedes that the project "took longer and cost us more than it should
have." But, he says, "we belong in that business." Before long, Digital is
expected to introduce a redesigned mainframe based on simpler technology.
categoryIndustry I/CPR
categorySubject N/ANL N/PRO
categoryMarketSector M/TEC
categoryGeographic R/MA R/NME R/US
categoryCompany DEC
[The remaining part of the WSJ not yet in DowVision]
While such hugely expensive projects have gone forward, management's efforts
to cuts other costs often have focused on items such as water coolers
and magazine subscriptions. In January, a memo circulated at a
Digital office in Acton, Mass., identifying the building as a test
site for lower-cost toilet tissue, "a project being driven by Win
Hindle, corporate staff senion vice president."
Mr. Hindle, who has been acting chief financial officier since Mr.
Osterhoff's departure says, "I can see how that might look silly. But
if a new national paper-supply contract can save something like
$300,000 a year, well, every little bit helps."
|
| 1896.10 | | PBST::LENNARD | | Wed May 13 1992 12:52 | 17 |
| I have long maintained that DEC seriously needs "Big Company" managers.
Maybe we'll finally start seeming some action. BTW, those big company
managers should replace, not supplement, many of the hangers-on.
Personally, I think it is time for major changes at the highest levels,
and I'm not talking about banging on the bird cage again, which seems
to be the preferred way to deal with organizational issues here.
The cuts being proposed (10-15K) are once again, too little, too late.
But, most devastating of all, the next round of cuts will probably
again target top-notch people who happen to be trapped on
non-performing or out-of-favor organizations. When I see the number
30,000, coupled with a goal of reducing the Greater Maynard Gold-Old-
Boy Chowder and Marching Society by 50%, then I'll know we are finally
getting serious.
SERP'ing out, and thankful
|
| 1896.11 | | CREATV::QUODLING | Ken, Me, and a cast of extras... | Wed May 13 1992 13:38 | 6 |
| re .0
So what makes us think that Sculley could help. People I know inside
Apple, say he isn't certain of which direction to take, either...
q
|
| 1896.12 | | RANGER::LEFEBVRE | PCs 'R Us | Wed May 13 1992 14:00 | 9 |
| re. .4:
I'll agree with your first statement.
Ken Olsen is not the only one under pressure to produce. Anyone in
this organization not feeling any pressure to produce should pay closer
attention to our situation.
Mark.
|
| 1896.13 | Freedow to Act! | LUDWIG::LOGSDON | | Wed May 13 1992 19:22 | 18 |
| As the old saying goes, Big Men [or women] make Big mistakes.
If Mr Olson says he gave to much Freedow [power] to people he is more
than right, however they used it to take Freedom away from others.
Whenever an organization brings in new blood it is because they took
the freedom from the people they already have and will give it to
the new people under what I call "Get the job done syndrome"
They will support these "new" people with a much less conservative
attitude that they have with present employees because they "brought
them in" and have to back them or look bad.
I have seen it time and time again that "New Blood gets the support and
Freedom" to get the job done that for some reason a long time employee
has been asking for all along but no one was listening.
I feel this company must have that new blood somewhere in its own ranks
and is being held back by........................
|
| 1896.14 | | BIGJOE::DMCLURE | When the going gets tough... | Wed May 13 1992 20:29 | 10 |
| re: .13,
> I have seen it time and time again that "New Blood gets the support and
> Freedom" to get the job done that for some reason a long time employee
> has been asking for all along but no one was listening.
My thoughts exactly. Thanks for putting that note in (now
I can get home in time for my favorite TV show).
-davo
|
| 1896.15 | | FDCV14::CONNELLY | globally suboptimized in '92 | Wed May 13 1992 22:04 | 19 |
|
re: .11
> So what makes us think that Sculley could help. People I know inside
> Apple, say he isn't certain of which direction to take, either...
Sounds like he made the best decision he could, under the circumstances.
Partnering with Digital would've been seen as the two biggest "proprietary"
vendors picking up their marbles and going home together. Now if we had
had Alpha ready at the time, and if we had changed our technology licensing
practices then, and if we had had a UNIX offering just credible enough to
cause some FUD for the other players in that space, and if we had had enough
engineers not behind the development environment power curve due to lock-in
to the VMS design center...
Then MAYBE some other folks would've taken their marbles and come along to
play our game. But not as it stood. Good technowetdream, bad business.
paul
|
| 1896.16 | Its the risk you take | MSDOA::MCCLOUD | BIG fish eat little fish | Wed May 13 1992 22:40 | 9 |
| rep .13 .14
The new blood is inside each and every one of us. The reason new
blood's have soo much success isw
1. They are NOT scared to take the risk...
My manager often says to my whole group to take the risk and he
accepts our mistakes along with our successes.
|
| 1896.17 | more complete version of .0 | SDSVAX::SWEENEY | Patrick Sweeney in New York | Wed May 13 1992 22:43 | 175 |
| This is a more complete version of a partial posting of the Wall Street Journal
article. In forwardings, please include the copyright and byline information.
Copyright � Dow Jones & Co. 1992
Source: Wall Street Journal
Headline: At Digital Equipment, Olsen Is Under Pressure to Produce
Time: May 13 1992 0844
Story:
By John R. Wilke
Two of the computer industry's most powerful figures, Apple Computer Inc.
chairman John Sculley and Digital Equipment Corp. president Kenneth H. Olsen,
met in secret last spring, at Sculley's request. His question: Would an
alliance make sense?
Apple needed a partner for a new generation of chip designs. And Digital
needed a bigger presence in the surging business of personal computers. But
the talks, which were never disclosed, went nowhere. Instead, Apple stunned
the industry with a sweeping technology-sharing agreement with International
Business Machines.
Thus was another opportunity apparently lost to Digital and Olsen, whose
longstanding skepticism about the PC -- he used to call it a "toy" -- hobbled
the nation's second largest computer maker as PCs reshaped the market. Olsen
also long resisted two other major industry trends of the last decade: the
moves to so-called "open" systems that use standard operating software, and to
a new generation of simpler, more potent chips.
This legacy now haunts Digital and its founder as they face the danger of
being left behind by the industry they did so much to create, The Wall Street
Journal reported. The $14 billion company that has been Olsen's singular
passion for 35 years is mired in huge losses on declining sales. Despite vast
resources spent on research and engineering, its latest products have largely
failed to ignite growth. Repeated restructurings have sapped morale. Key
employees and executives have departed following run-ins with Olsen. The
company's shares now trade at one-fourth their 1987 peak, closing at $45.25 on
the Big Board yesterday.
And it isn't clear Olsen knows what to do next. Even though DEC has made
some deft moves recently, such as an alliance with software powerhouse
Microsoft Corp., there is no quick relief in sight. The depth of the latest
loss ($294.1 million in the quarter ended March 28) "caught us by surprise,"
Olsen says. "When we laid out our restructuring last summer, we thought we'd
have more time." One of Olsen's first moves after the loss was to disband much
of the organizational structure he had created only weeks earlier, sidelining
a key executive and leaving an impression of management in disarray.
The troubles inevitably raise anew the difficult question of succession at
Digital, which has been dominated by Olsen's towering presence for so long
that few leaders have emerged and remained. "He's at a defining moment in his
extraordinary career, where he can be remembered as a titan who built this
great company, or the founder who couldn't let go," says Jeffrey Sonnenfeld,
author of "The Hero's Farewell," a study of corporate succession.
But as Digital's difficulties have deepened, so too has Olsen's
determination to solve them. "No way am I going to leave now," he says. "I
only want the job as long as I'm the best. But there's a clear mission to
accomplish now. I'm not a quitter."
For now, Digital's directors are behind him; no one expects a General
Motors-style board revolt. But in a secret, seven-hour meeting recently, the
long-compliant board pressed Olsen as never before. Directors insisted that
restructuring efforts be stepped up and that strong outsiders be brought into
senior executive ranks, beginning with the chief financial officer's post,
which has been empty since James M. Osterhoff resigned last year.
The board's new aggressiveness is being led by former Ford Motor Co.
president Philip Caldwell, insiders say. He has the support of Thomas L.
Phillips, retired chairman of Raytheon Co., who has long been viewed as an
Olsen ally. Also supporting Caldwell were Robert Everett, former president of
Mitre Corp., and Colby Chandler, Eastman Kodak Co.'s former chairman, say
Digital insiders. None of the directors would comment for this article.
Olsen, the only Digital executive on the nine-member board, won't discuss
the reaction of directors either. But he says the unexpectedly steep loss
"certainly got their attention," and the board "wants a clear plan" for faster
restructuring.
Olsen says he supports reaching outside for new talent: "Over the years, we
haven't brought enough new blood and new ideas into the company."
A new urgency was apparent the day after the board meeting. On April 24
senior vice president John F. Smith said Digital will record a charge that may
reach $1 billion and will cut more jobs -- perhaps 10,000 to 15,000 -- in the
year beginning July 1. That's on top of $1.65 billion in charges already taken
and 10,000 previous dismissals (employees currently number about 116,000). And
Smith did nothing to dispel expectations of at least three more losing
quarters, nor did he predict when revenue would pick up. In the latest
quarter, sales fell 7.6% to $3.25 billion.
Some former managers say Olsen must take the blame. Digital "has everything
it needs to turn around -- good people, good products and great service -- but
it won't happen while he's still in charge," argues John Rose, who resigned
last month as manager of the company's PC unit.
Olsen rejects criticism of his leadership. "The real question is whether I
have allowed too much freedom," he says. And he has, indeed, rescued Digital
from hard times in the past and managed each time to ignite new growth.
Moreover, the company still has a strong balance sheet, with no debt. And,
though long overdue, it has a powerful new computer design that could fuel a
comeback in 1993. Based on RISC chip technology (reduced-instruction-set
computing), its new Alpha computers aren't limited to Digital's proprietary
operating software but can also use Unix and Microsoft's Windows NT.
"They're doing a lot of the right things, playing off their technological
strengths with foresight about the way the industry is headed," says John
Levinson, a Goldman, Sachs & Co. analyst. "The problem is, they still have a
ridiculous amount of baggage left over from the successes of the past."
Most people can't imagine Digital without Olsen. "No matter what changes,
there's one constant, and that's Ken," says David Smith, a former Digital
software analyst. "He's a living legend."
But many Digital executives contend that the 66-year-old Olsen, who shows no
signs of retiring, has become increasingly isolated and irascible.
A recurring criticism of Olsen's stewardship is that his dominance of
decision making tends to drive out good people. The most recent casualty is
William Strecker, Digital's chief engineer, whose product-development group
was abruptly disbanded by Olsen three weeks ago. The group had been created
only weeks earlier, and Strecker had been promoted to oversee all development.
Strecker remains at Digital, which said he wasn't available for comment.
Another key talent was lost when Olsen pulled the plug in 1989 on Prism, a
RISC computer design headed by David Cutler, a highly regarded software
engineer. Instead, Digital bought a stake in MIPS Computer Systems Inc. and
designed a line of workstations around its RISC chips. Cutler resigned and
went to Microsoft. Strecker also opposed the Prism cancellation and the
alliance with MIPS.
When it began to appear that Digital's MIPS-based machines weren't going to
be a big hit, Digital recharged its internal RISC project. Ironically, Cutler
became the designer of Microsoft's Windows NT software, which Digital now
hopes will boost future Alpha sales.
And just when Digital most needs an experienced hand overseeing finances,
the chief financial officer's job remains unfilled, nearly a year after
Osterhoff quit following a disagreement with Olsen.
"He went to the mat" against Olsen, opposing acquisition of two European
companies without more research, an associate says. Osterhoff's concern was
well placed: Digital last year paid a total of $390 million for the computer
units of Philips Electronics N.V. and Mannesmann AG, but so far their weak
performance hasn't helped results, while adding 10,000 people to the payroll.
Osterhoff won't discuss his departure.
There are signs, too, of stress within Olsen's core management group. Smith,
his second-in-command, appears to have lost some authority in the latest
reorganization. Colleagues say Smith, fiercely loyal to Digital, seems
increasingly exasperated. Smith says he continues to have a close working
relationship with Olsen, adding: "It shouldn't come as a surprise that the
level of frustration inside the company right now is sky high."
The management problems are worrisome, critics say, because Olsen's vision
of the computer industry has proved to be lacking of late. From PCs to
standard software, the choices he has made have left the company at a
disadvantage in a fast-changing market.
As a result, his critics say, he didn't grasp the significance of a possible
alliance with Apple, in which Apple might have used Digital's Alpha RISC chip.
That could have established Alpha instantly in a market segment where Digital
was weak. The apparent lost opportunity still leaves some current and former
Digital executives bitter.
Within the small circle of Digital's senior staff aware of the Olsen-Sculley
meeting a year ago, Olsen gets the blame for its going nowhere. Digital
executives and Apple's Roger Heinen, senior vice president, confirm that the
meeting took place. Heinen asserts that Olsen's "lack of interest and
understanding of the role of the personal computer industry" was indeed an
obstacle. Heinen, himself a former Digital executive, says the companies
"continue to have a close relationship."
Olsen dismisses the talks with Apple. "It just never came to fruition. It
wasn't that important to me." He notes that Apple talked to other companies,
too, before settling on an alliance with IBM, and that such alliances are
decided on a whole range of factors.
But at Olsen's direction, Digital has tried to make up for lost time in PCs.
In the past six months, it has brought out a line of aggressively priced
IBM-compatible PCs sold by mail order, which are going strong. Though the late
start makes it unlikely Digital will be a major player anytime soon, PC
hardware sales should hit $500 million this year.
One of Olsen's most costly decisions has been backing the ill-fated VAX 9000
mainframe computer, which cost $1 billion to bring to market but attracted few
buyers. "It wasn't a mistake, because we needed a high-end machine," says
Dorothy Terrell, a former Digital manager now at Sun Microsystems Inc. "But it
was late, too complicated and costly to build, and the sales force wasn't
selling it effectively." Olsen repeatedly resurrected its funding after others
tried to kill it, she adds.
Olsen concedes that the project "took longer and cost us more than it should
have." But, he says, "we belong in that business." Before long, Digital is
expected to introduce a redesigned mainframe based on simpler technology.
While such hugely expensive projects have gone forward, management's efforts
to cut other costs often have focused on items such as water coolers and
magazine subscriptions. In January, a memo circulated at the Digital office in
Acton, Mass., identifying the building as a test site for lower-cost toilet
tissue, "a project being driven by Win Hindle, corporate staff vice president."
Mr. Hindle, who has been acting chief financial officer since Mr. Osterhoff's
departure, says, "I can see how that might look silly. But if a new national
paper supply contract can save something like $300,000 a year, well, every
little bit helps."
|
| 1896.18 | | LUNER::ROBERTS | raised on Anthracite | Thu May 14 1992 07:00 | 3 |
|
enough of the MORE complete versions when are you going to post the
WHOLE version? 8-)
|
| 1896.19 | New roles give freedom | IW::WARING | Simplicity sells | Thu May 14 1992 08:15 | 8 |
| As Robert Townsend says, for the first 100 days of any new job, you're
bullet proof. If you get moved within that time, the person who hired you
will look like a complete idiot. So, that's the time to really revolutionise
things.
It doesn't matter whether you come from inside the company or outside...
- Ian W.
|
| 1896.20 | "If you're walking on eggs, don't hop." | SA1794::CHARBONND | Mediocrity _is_ achievable | Thu May 14 1992 10:26 | 11 |
| re.16 >The new blood is inside each and every one of us.
WADR, what planet do you work on? Most of the people here have seen
_hundreds_ of co-workers TSFO'd out, new products being built over-
seas, are worried sick about the future of the plant, are watching
the stock price circling the drain, and won't move for fear of being
perceived as candidates for the next RIF. There are hardly any
employees under the age of 30, or with less than ten years in the
company. After spending ten + years building up pension benefits,
vacation time, etc. you _don't_ make waves.
|
| 1896.21 | Take the risk | MSDOA::MCCLOUD | BIG fish eat little fish | Thu May 14 1992 11:04 | 10 |
| rep .20
Excectly my point the problem is if everybody is so scared to make
changes then we all eventually will be TFSO'd. The only thing I can do
is find what I can change and change it. So far it has been profitable
change with some mistakes but I am only human. Lets face facts if you
try to change something and get canned for making the wrong choice you
would have been canned eventually without even trying to make a
difference this is not the way I want to go. I will go out fighting if
I get canned for it then this is not the company I want to work for.
|
| 1896.22 | * * * * *star stuff* * * * * | PBST::ISBRECHT | | Thu May 14 1992 11:38 | 35 |
| re....20
Hi there; ('didn't catch your first name)
Apropos your last line...
The purpose of life IS to make waves !
All impressive things that we enjoy now had their start in "labor pains"!
We're the product of star stuff that had its own birth in a super nova
explosion. And if that isn't 'making waves' then I don't know what is.
There is no such thing as job security - no security <period>.
...BTW...too bad there isn't a Happy Face key on this here LK201
to impart these lines a fitting chuckle; in Amateur Radio, we
say, hi,hi to make up for the stoic character of a code key
transmission.
I've been following these Notes proceedings with riveted interest, especially
since Monday of this week. In line with my ingrained engineering-type
of make-up and 'root-cause-analysis' thinking - meaning, to step
away to take in the big picture - I'd like to add that the majority
of entries have been afflicted by too high a morose 'fault signature'.
One reply, to the Churchill Commons Speech Note, even kicks those of
us, who might be taking a 'transfer ticket' soon, by saying, ~~~ "you've
been useless anyway so why don't you get out and let us do the rowing..."
So, to all of you who might be faced with high-impact decisions to either
stay on or 'take a hike', never get so tight up with any relationship
(personal or business) that you can't 'crack a smile' or whistle
a tune and remember that star stuff which gave birth to us all and will
also call us home again.
Cheers,
Karl
|
| 1896.23 | Let's get specific ... | ODIXIE::GEORGE | Do as I say do, not as I do do. | Thu May 14 1992 11:58 | 19 |
| Re: .21
All this talk about "changing some_thing_" oversimplifies the issue and
is misleading. Digital doesn't need to "change something"so much as it
needs to change its attitude, its approach to problems, its ability to
communicate, its integrity.
For example, 2 weeks ago, I was involved in generating a solution to a
Fortune 50 customer. The Account Team accused me of "nitpicking the
program to death" because I insisted on creating an effective statement
of work _before_ doing the pricing (and believe me, this was not a
value-based pricing argument). I was told that that was a delivery
problem to be resolved by the delivery manager (_not_ involved in these
discussions, by the way). I was told there was "plenty of money in
here to cover anything we forgot".
Now, very slowly, tell me how to "change this" in a meaningful context.
Steve
|
| 1896.25 | We are DIGITAL | MSDOA::MCCLOUD | BIG fish eat little fish | Thu May 14 1992 13:14 | 19 |
| re .23
I have no idea what the sultion to your problem is and do
not understand why you expect me to know the answer. Changing
our attitue is something.
>Digital doesn't need to "change something"so much as it needs
>to change its attitude, its approach to problems, its ability
>to communicate, its integrity
This sounds like you are not a part of us or should it read
Digital doesn't need to "change something"so much as WE need to
change OUR attitude, OUR approach to problems, OUR ability
to communicate, OUR integrity
All of these things are changes we can make and the only
way they will get changed is by us not by management or policies.
|
| 1896.26 | Globe article referenced in .24 | SSDEVO::EGGERS | Anybody can fly with an engine. | Thu May 14 1992 14:01 | 297 |
| The Boston Globe
Monday, April 27, 1992
Digital bracing for a rocky course
Despite the doubts of some, founder tries to steer company through
tough times
By Josh Hyatt
Globe Staff
Kenneth H. Olsen is mad, very mad. "What happens inside this organization,
nobody has a right to know," shouted the chairman and founder of
Digital Equipment Corp. during an interview last week. "It is not
public what we do inside."
What about stockholders and employees, Olsen was asked, shouldn't they
be told the details of the latest reshuffling? "No," thundered Olsen.
And as for the press - well, Olsen left little doubt where he stands:
"Keep your cotton-picking hands out of things," Olsen warned. "If I
bawl someone out, there is no reason I've got to bawl them out in
front of you."
First revealed about 10 days ago, the $14 billion company' s latest
reorganization - its second within a couple of months - left the roles
of three vice presidents up in the air. "We change the organization
all the time," Olsen said angrily. "I'm not going to go into the
details. You'll get it all screwed up anyway."
Today, as the company opens the doors on DECWorld '92, its huge
exposition for 25,000 customers, there are enough questions about
Digital's prospects for returning to financial health - particularly
under Olsen - to fill Boston's World Trade Center.
The numbers tell part of the story. For its fiscal third quarter,
which ended on March 28, Digital reported an operating loss of $294
million, its second operating loss in a row. And the company has
indicated that it may not run of of red ink until 1993. "I was
disappointed," Olsen conceded. "In spite of what you read in the
Globe, we are not about to fire a bunch of people."
If Olsen has a master plan - and in some quarters, it is by no means a
given that he does - he isn't revealing it. "I don't explain
everything," Olsen said. "Every day we change something. We'll tell
you results."
Those results, whatever they are, will reflect upon no one as much as
Olsen. An Massachusetts Institute of Technology graduate who went on
to work at Lincoln Laboratory, Olsen and a partner got the idea to
launch what they then called Digital Equipment Computer Corp. in the
summer of 1957. They changed the name because they were eager to get
venture capital and they had read an article that said nobody could
make money in computers. They got the investment money, a whooping
$70,000, and Olsen to this day loves to quote Gen. Georges Doriot,
the pioneering venture capitalist who served on his board until he
died in 1987.
At the start, his investors were leery about Olsen's stewardship. The
venture capitalists took 70 percent of the stock and demanded that
another 8 percent be reserved for a key person, a professional manager
who would be brought in. That person never materialized, and Olsen
has remained an overwhelming president at Digital to this day, though
he has never owned much more than 10 percent of its stock. Of course,
his unparalleled performance has made him of multimillionaire. No
company founder has ever stayed on to build a company the size of
Digital, a computer maker second only in revenues to International
Business Machines Corp.
Digital also has the distinction of being the largest company in the
United States that is still run by its own founder, who appears to
have stayed on top and in command through a combination of wonderfully
wise decisions and terribly shrewd power plays.
Indeed, it is quite possible that Olsen will emerge triumphant from
these turbulent times. He has come roaring back before, often with a
hot idea in tow. Around 1970, recalled one former Digital executive,
"everybody said Olsen was out of touch." Digital reasserted its
technological leadership with the PDP-11, a 16-bit minicomputer. In
1977, the company produced a breakthrough VAX family of computers,
which propelled Digital into IBM's orbit. During the '80s, Olsen's
vision of networking - that is, tying computers together - set the
company soaring even higher.
Complex transition
But analysts believe that Digital began falling behind the
technological curve as far back as 1987. Hoping to remedy that,
Digital by year-end will be shipping computers that employ its new
microprocessor, Alpha, reputed to be the fastest microchip ever.
"They've taken on the most complex product transition in the
industry," said Joseph Payne, an analyst at Alex, Brown & Sons. It
takes a real organizational leader, and Olsen is the right guy in the
right job."
Others aren't so sure. Some believe that Olsen has simply grown too
arrogant and too out of touch to see the scope of Digital's problems,
never mind healing them. "Olsen is all raw nerves right now, and he's
not very happy with any of his executives," said a consultant who
works closely with the company. "He's incredibly sensitive."
Another consultant - for obvious reason, most are unwilling to allow
their names to be used in this story - depicts the giant computer
maker as a hostage to its overly attached founder. "I think somebody
needs to get Ken Olsen out of there," the consultant said. "He is
running the company, right now, totally from motion. Nobody will
stand up to him."
Company insiders described an atmosphere where Olsen often issues
directly conflicting instructions. Just last week, for instance, he
sent employees a message - some call them "KenGrams" - indicating that
Digital had adopted another company's database product as its
standard. Within a few days, another message appeared contradicting
that one.
"There is no question that management at Digital seems more confused
and disjointed than ever before," said Thomas Willmott, vice president
of the Aberdeen Group Inc., a market research firm.
Another person who works closely with Digital describes Olsen as
increasingly impatient and unable to focus on what needs to be done.
At a recent meeting revolving around a product decision, this source
said, Olsen made it clear he didn't want to read competing business
plans or take the time to discuss such matters as pricing comparisons.
"He didn't listen," the consultant said. "He said, `I don't have time
for this. I've made my decision.' And that was it."
Inside Digital, Olsen's outburst last week prompted reactions that
ranged from distressed to appalled. Some at Digital clearly believe
that shareholders have every right to know if a three vice presidents -
William Strecker, F. Grant Saviers and Dominic LaCava, all of whom are
listed in the annual report - are changing jobs or might leave the
company. Saviers, for his part, said only that he guessed he would
stay at Digital.
"I don't know where they are," Olsen said of the vice presidents.
In the interview Wednesday afternoon, Olsen had difficulty even
admitting that the company had resorted to layoffs, which began in
January 1991. "We're not in certain businesses anymore," Olsen said.
And while the most recent reorganization clearly eliminated the
company's hardware engineering unit, Olsen contended that "we are not
disbanding any hardware group." On Friday, John F. Smith, Digital's
senior vice president, predicted that the company would cut at least
10,000 positions in fiscal 1993, which starts in July.
Deepening financial distress
In his 35 years at the helm, Olsen has traveled the road from hero to
goat and back again about as many times as Richard Nixon.
But Digital's distress is deeper now than ever before; until its
second fiscal quarter, which ended in December, the company had never
reported an operating loss. And in an industry in which competition
and technology are changing at staggering speeds - and profit margins
leave little wiggle room - some believe that the 66-year-old simply
doesn't know what to do.
Even if that is true, he isn't likely to admit it. Olsen is "one of
those people whose egos are so strong that they have managed to blind
themselves to any form of criticism," said Edward B. Roberts, a
professor of management of technology at MIT who has known Olsen
almost since he started Digital. "He is continuing to bring the
company down, while hoping for a magic turnaround."
Digital's board or its shareholders may want a more aggressive
approach. But by Olsen's own design, there is no apparent replacement
for him from inside the company. "Once you pick a successor, it is
the kiss of death," Olsen said. "It limits you. You just have to
overwork everybody and see who survives."
Almost no on does. "Olsen has managed, over the years, almost
systematically to kill both challengers and likely successors," said
Roberts.
Nearly two years ago, Roberts recalled, he sent Olsen a chapter of his
book about high-technology entrepreneurs that concerned Digital.
Olsen said back a nine-page commentary on Roberts' seven-page chapter.
Olsen's most revealing suggestion, Roberts said, was asking Roberts to
diminish the credit he gave to C. Gorden Bell, who is considered the
technical mastermind behind Digital's flagship line of VAX computers.
"He couldn't stand the fact that I was giving Bell credit," said
Roberts.
Indeed, successor speculation seems to chase one executive after
another out of the company. "Ken Olsen has never said that someone
might be a successor, could be a successor or even implied that
someone might be a successor," said John J. Shields, who was widely
viewed as No. 2 when he left, without another job, in October 1989.
"When I was there, Ken always tried to keep his options open."
Shields is now president and chief executive officer of Prime Computer
Inc. in Bedford.
In the last year or so, Digital has suffered several important
defections. Since leaving in the fall, James Osterhoff has yet to be
replaced as chief financial officer. One reason, insiders say, is
that the board has been pressuring Olsen to hire from outside Digital,
which he is resisting." They don't want a yes-man telling Ken how his
finances are doing," said one source. "Very few people want to take
on that job."
Gary B. Eichhorn, a fast-rising executive who was vice president of
general systems business at Digital, also left last year. "Ken has a
very specific philosophy not to name a successor," said Eichhorn, now
general manager of the workstation business unit at Hewlett-Packard
Co. in Chelmsford. "He always told me that this is part of the way
he needs to run the business."
And Olsen seems firmly convinced that he does need to run the
business. By his own admission, he can't even foresee the day when he
would not be in charge. "I'm probably guilty of thinking I'll never
grow old and never leave," he said.
Not likely to be forced out
It doesn't seem that anyone is going to force him out, either.
Under typical circumstances, the board of directory would be the most
likely party to put the squeeze on Olsen." Clearly they have to meet
over the next 30 days," said Willmott. "They need to have an intense
discussion about the future of the company."
But few seriously think that they would consider a future without
Olsen in control. Digital's board consists of only eight members, and
most seem to be tied closely to Olsen - one belongs to a common social
group, for example, and another goes back to Digital's early days.
"The board is very interested when we lose money," said Olsen." We
explain it to them."
The board may not confront the issues head on, but stubborn questions
remain about whether Olsen's style of management, or even his
personality, are appropriate for the situation in which Digital now
finds itself. Both, critics content, were better suited to a time
when the company had a virtual lock on its customers.
Olsen's personal management style has always been unconventional, to
say the least. This is the man, employees report, who canceled an
entire product line in 1982 by issuing a parable about tractors. "He
throws out a thought that can be taken many ways and says, `Run with
this,'" recalls one former executive. "He is truth-seeking, which
presumes that he knows the truth."
Since the start of the company, Olsen has also been a strong believer
in matrix management, a configuration in which all decisions are
shared. This leaves no one person with too much power. "The culture
at DEC has always been that problem solving is more important than
decision making," said Scott Flaig, who left Digital three years ago
as director of manufactured and engineering for the telecommunications
group. "That has been a wonderful way to grow the business. But now
it's hard to find the owner of any given decision. What markets will
we serve? What kinds of products will we make? These decisions
aren't happening."
Growth, in itself, can mask a lot of so-so decisions. But now that
the company is shrinking, a consultant who works closely with Digital
describes it as highly politicized and almost totally paralyzed. It's
very difficult to put your hand on what's happened in there," he said.
"A culture has emerge where everybody says they can get something
done, but nobody really was."
When Digital was growing, and the stakes weren't so high, it was
undoubtedly easier for managers to reach a consensus. Now nobody
wants to stick his neck out. "Because of his management style, Olsen
is just standing back," said the consultant. "But they need a strong
leader in there. Maybe Ken's says of morals is getting in the way of
doing what he needs to do."
It may very well be that Olsen's personality does not mesh will with
the changing computer industry, which requires him to make more
painful decisions than he did back in the days when proprietary
technology and minicomputers - two Digital specially - reigned
supreme. "I don't know if he had the heart to do the kind of cutbacks
Digital needs," said one consultant.
Olsen is idealistic by nature, and some who know him see him as,
firmly believing that he and his 116,000 or so employees can dig their
way out of this predicament. Payne says the recent elevation of both
marketing and software executives shows Olsen "clearly has a view of
where computing is going in the 1990's."
"Most of the people who criticized Ken don't know him, and generally
don't know what they are talking about," added Eichhorn. "I've worked
closely with him over the past five years, and he's one of the most
brilliant people I've met. The company is going through a transition
right now. And they are having some short-term financial problems.
Somehow, people equate that with Ken's lack of leadership."
Today, as DECWorld opens, both Olsen and his company will try hard to
repeal any apparent erosion of customer confidence. "Customers need
to hear a story that they and get realistically priced non-obsolete
systems from DEC today," said Willmott.
Whatever story customers hear, it will be truthful. For as Olsen said
during the interview last week, in a loud more: "Making up stories is
lying, and lying is wrong and immoral and unethical and damaging and
destructive and wrong by anybody's sense."
-
|
| 1896.27 | | COOKIE::WITHERS | Bob Withers - In search of a quiet moment | Thu May 14 1992 14:14 | 7 |
| >================================================================================
>Note 1896.25 Ken Olsen under pressure to produce 25 of 25
>MSDOA::MCCLOUD "BIG fish eat little fish" 19 lines 14-MAY-1992 12:14
>--------------------------------------------------------------------------------
> -< We are DIGITAL >-
>
Unfortunately, I started out working for DEC. � :-)
|
| 1896.28 | RE: .23 - Boy, can I relate to THAT situation! | YUPPIE::COLE | Life's a beach; then you dive | Thu May 14 1992 15:32 | 8 |
| Steve, did the aforementioned Account team include the person respon-
sible for the final P/L of the account, ie, the AGM, Program Manager, etc?
If not, then I would have copied that person on ALL memos henceforth, and
documented my concerns in those memos.
If they were there, that Account team is in BIIIIGGGG trouble! Disengage
ASAP!!
|
| 1896.29 | | ODIXIE::GEORGE | Do as I say do, not as I do do. | Thu May 14 1992 15:33 | 19 |
| Re: 25
Steve, if "We are DIGITAL" why do you refer to it as "MY" problem?
Isn't it OUR problem. Does it not concern you that we bid and price
programs before we understand how to deliver them?
I asked for your opinion as to how to both make a constructive change
using my example AND not get canned. I hope I did not imply that there
was only 1 answer and you had it. In .21 you expressed your opinion of
*what* to do - and I agree with you. I'm simply asking you, in this
situation, what would you suggest as to *how*?
> All of these things are changes we can make and the only way they
> will get changed is by us not by management or policies.
Once again, *HOW*? The above statement is somewhat platitudinous: it
is not an action plan or a statement of work.
Steve
|
| 1896.30 | | ODIXIE::GEORGE | Do as I say do, not as I do do. | Thu May 14 1992 15:54 | 23 |
| Re: .28
Jackson T., no, my direct conversations did not include the AGM. It
did include his Sales Ops manager, though.
The sad part of it is that we will probably win the business, and it
may even be profitable. But we won't have a clue why and won't be
able to repeat it in a competitive situation.
And it's not just that Account Team. They're actually pretty good
folks who are trying to keep their heads above water. Until NMS
collects ongoing ACTUAL program cost and charges the Account Team,
there will be a tendency for Account Teams to negotiate BUP/price
concessions from the Lines of Business; the LOB then has to worry about
ACTUAL margins.
But if we do start charging Account Teams with actuals, LOBs would have
no real incentive to control program costs. ARRRGGGHHHHH!
Plus, I'm afraid this industry is beyond the point where the good
intentions of honest men can correct all ills.
Steve
|
| 1896.31 | An order in hand is worth 2 in the bush | FASDER::AHERB | Al is the *first* name | Thu May 14 1992 23:18 | 20 |
| Steve,
Winning the business is something Digital needs all it can get during
the current lean period. It keeps manufacturing and the rest of the
company "ticking" (even if it's at cost) so that we're ready when the
business does pick up. No one can speak for your case except for the
account team..that includes you.. but, with every buy in at 0 profit,
there should be an account strategy that spells out the "get well".
If this is a Fortune 50 like you said, I believe a total account
strategy that defines the where/when you profit should be the primary
goal with, many cases, acceptance of a perceived "loss" in the
beginning. If this is a one time purchase by your local gas station,
you are right on as to profit up front.
I wouldn't give up on your thoughts and certainly not as a result of
this forum. It's your account team you need to work, not the readers of
this conference. Let us all know when the win comes in and we'll all
congratulate you for you contribution. If you lose, well..no one ever
made money pondering the past.
|
| 1896.32 | Sadly, the issue is now resolved ... | ODIXIE::GEORGE | Do as I say do, not as I do do. | Mon Jul 13 1992 17:49 | 7 |
| There were actually 2 pieces of business proposed to this customer -
one to the corporate level and one to a division. Unfortunately, we
have now been told that we lost both of these multi-million dollar
opportunities. In one of them, our price was either twice the low
bidder or twice the next-low bidder.
Steve
|
| 1896.33 | | ALIEN::MCCULLEY | RSX Pro | Mon Jul 13 1992 18:48 | 15 |
| .23> I was told there was "plenty of money in here to cover anything
.23> we forgot".
.32> -< Sadly, the issue is now resolved ... >-
.32> we have now been told that we lost both of these multi-million dollar
.32> opportunities. In one of them, our price was either twice the low
.32> bidder or twice the next-low bidder.
looks like the thing we forgot was that bidding a competitive
price might preclude padding sufficiently to accomodate unknowns!
Wonder how many jobs that little fumble cost? Too bad the account team
that couldn't be bothered to sharpen their pencils will likely not be
among them...
|
| 1896.34 | Background on Ken Olsen's retirement | SDSVAX::SWEENEY | Patrick Sweeney in New York | Wed Jan 06 1993 09:00 | 22 |
| From Fortune January 11, 1993 p.41 "How to stage a coup" Alan Farnham
Eventually the dean* may communicate the outsiders displeasure to the
CEO to give him a chance to shape up. If he does not, then the board
is free to, ethically, to shoot him. In cases where the company's
performance is merely bad (not atrocious) evidence of the CEO's
unfitness needs to be accumulated. His vacation may prove to be the
ideal time to gather ammunition.
This often happens in the political sphere, says Robert Conquest, a
Hoover Institution Fellow, "One day Khrushchev was the big guy,
getting greetings from cosmonauts in spaces Then he left for vacation.
When he got back, he was out." Ditto for Ken Olsen of Digital
Equipment. His directors waited until he'd left for his annual
two-week canoe trip to start grilling analysts and company
executives. Olsen, returning from paddling, found himself up a creek.
---
*"dean" was defined earlier in the article as the former CEO of a
Fortune 500 company serving as an outside member of the Board of
Directors. In Digital's case it was Philip Caldwell, former CEO of
Ford.--PS
|