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The concept of revenue-generating vs. non-revenue-generating at most
levels is a false deliniation. It assumes you can draw a hard
line, from top to bottom in the company, between those of us who are
directly responsibile for encouraging customers to give us money, and
those of us who are not. It induces corporate micromanagement.
Value-added and non-value-added (or perhaps value-added and
value-subtracted) is a much more useful concept, because it can be
applied to every business, functional group, cost center, team and
individual in the company. The key is that you have to be willing to
delegate the responsibility of making value-added judgements to the
appropriate level of control.
Stand-by pay is a case in point for the diference between these
concepts. Recently, a high-level corporate decision was made to change
the stand-by pay policy, to the effect that people who are directly
supporting customers receive stand-by pay, while people who are
supporting internal folks do not. This was a deliniation drawn at the
corporate level based on revenue generation, and does not reflect any
judgement of value added. There is no doubt in my mind that having
people available on demand to customers encourages those customers to
give DEC more money. But what about the people who used to be available
on demand to fix network or node problems and thus help speed the
development and delivery or a product to the market? Does timely
delivery of products not also encourage customers to give DEC more
money? And how can the corporate decision makers determine the relative
value added in these two instances?
My understanding of the New DEC is that business units will sell
products to customers, and contract engineering groups to build the
products that they deem sellable. Does that mean that the business
units are revenue-generating, and the engineering units are
non-revenue-generating? Does that mean that people in business units
will be eligible standby-pay, second phone lines to their homes, and
pencils and Post-Its, and engineering units will not?
In a value-added model, the corporation can decide which business units
bring in more revenue, and support those business units. Business units
can decide which products will add more value to their portfolios, and
contract engineering groups to build those products. An engineering group
can decide what services it needs to build a product, and contract with
appropriate service groups. A network service group can decide whether it
is more useful to use stand-by pay or additiona shifts or other incentives
to provide the services required by its contract.
I know this is going to sound like heresy, but it is not the ultimate
responsibility of everyone in this company to generate revenue. The
business units and up-front sales folks generate reveuue; that is their
ultimate responsibility, and their value-added work should revolve around
how best to generate that revenue. The ultimate responsibility of
everyone else in DEC it to support the front-line revenue generators,
or the next group up in their particular location in the supply line to
the front-line revenue generators; their value-added work should be
tightly focused on meeting the requirements of the next group up the
line. Forcing revenue-generating deliniations too far down in this
model (ie, below the first level) tends to remove some of the options and
resources but none of the responsibilities.
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| >>>The concept of revenue-generating vs. non-revenue-generating at most
>>>levels is a false deliniation. It assumes you can draw a hard
>>>line, from top to bottom in the company, between those of us who are
>>>directly responsibile for encouraging customers to give us money, and
>>>those of us who are not. It induces corporate micromanagement..
Agree. Some interesting quotes come to mind from a hard-liner
"if you don't touch the mail, your overhead". Apply that literally
to a certain entity and see what happens.
-Mike Z.
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| re: .2
> My understanding of the New DEC is that business units will sell
> products to customers, and contract engineering groups to build the
> products that they deem sellable. Does that mean that the business
> units are revenue-generating, and the engineering units are
> non-revenue-generating? Does that mean that people in business units
> will be eligible standby-pay, second phone lines to their homes, and
> pencils and Post-Its, and engineering units will not?
I think this will free up the engineering managers to do what they think
best. If spending money on post-its, WSs for home and phone lines help
them generate "better" (earlier, higher quality, less expensive) products
than they would be silly not to approve them. I think that they will find
another scape goat, however, as the real blocks are not the "corporate"
penny pinchers, but the lack of effort on these issues by the very
engineering managers that are complaining. I see little effort in
protecting the individual contributors by most engineering managers and
consulting engineers.
Matt
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