Conference 7.286::digital

    Christian!  Long time no hear - I see you ended up in Stow - still
    asking tough questions eh?
    
    Well I have wondered about the same thing recently.  I am *CURRENTLY*
    a product line manager (remember the old structure) and decisions of
    an investment nature have been made within the product line, subject to
    normal Project Approval Review Board (PARB) - i.e. varying levels
    of signoff involving Product Line Manager, Country Services Manager,
    Area Services and Finance Managers , etc...  dependingon amount of
    capital (risk) involved.  In the UK, anything over � million is out of
    our product line direct approval but the PARB process has worked (even
    if somewhat slowly) and Capital Appropriation requests (including some
    biggies have been signed off).
    
    Now, you ask the interesting question - what about  the *NEW* CBU
    oriented Digital.  It is clear that the CBUs own the Profit/Loss
    responsibility but sorry to say that Digital's statutory accounts
    and auditing procedures (which ain't gonna change so quickly) oblige us 
    to maintain adherence to the old product line based expense/income
    bookkeeping.  Even the notional "accountability" offered to Account
    Managers recently is based upon a "logical view" of the statutory
    accounts.  i.e. Sales Accounts received "reports" of their business
    -they did not receive actual ledger output as did the product line
    management people in the subsidiaries.
    
    So in the short term what is happening from my point of view is the
    following ;  
    
    Services oriented Product Lines and Delivery Units are becoming cognisant 
    of the fact that they will become a "cost-only" delivery organisation.
    
    Product Line Management preparing to move into a "service Product
    development" type role
    
    PARB are sitting on most large CAR requests for two very good reasons ;
    
    	- recent Finance instructions
    	- awaiting CBU announcement/responsibilities/budgets
    
    Some people are "soliciting" announced or to-be-announced CBU
    management.  E.g. "Give me $1million funding and I'll build you
    a super-dooper DECthingy service which you copuld probably sell for
    $2million".  CBU response is not negative at this stage but is
    non-commital  - this is hardly  surprising as these organisations
    have yet to get to grips with world-wide business budgeting.
    
    
    No formal CBU Business Plan review process/signoff is in place at this
    stage from our point of view.  Some CBU directors have been asked to
    "support" our CAR and PARB requests still in the pipeline.
    
    That's the way I see it from the trenches 
    
    Cheers,
    Chris.
    
    P.S.	$3 million for Software Improvement? ? ? - get outta here!
    
    	No - seriously this Corporation has a SERIOUS problem on software
    	quality - I've escalated this to Dennis Roberson recently and I
    	believe that there is support at that level - trouble is how to
    	get the multiple CBU's to take their "share" of this - ain't gonna
    	be easy.
    
    

    Christian,
    
    There is no doubt that a hierarchical organization is not only hard to
    understand and operate; it provides endless opportunities for muddying
    the water and evading responsibility. If it's hard to pin respons- 
    ibility onto people then they should be measured by profitability.  
    This raises three issues:
    
    a)	Investment management
    b)	Cross- charging, or ...
    c)	Company break up.
    
    From where I sit in a territory, sales and services company, we don't
    seem to manage investment at all.  Every June 30th all programmes, and
    accounts come to an end and we are all reborn on 1st July with our sins
    forgiven.
    
    Cross -charging would mean that the territories would sell their sales
    and service capabilities to the CBUs and buy product from the PBUs(?).  
    Products and services supplied by other units would be cross- charged at 
    agreed prices (not cost) and every unit would be profit- responsible at 
    the end of the year after allowing for investment pluses and minuses. 
    A possible option all- round is to buy or sell in the open market.
    
    The fact is that cross- charging is hard for all sorts of reasons and
    hardly ever works within one set of accounts, not least because
    financial accountants put income and expenditure accounting before
    output or activity- based accounting.  So, bottom- line, the only 
    realistic way to achieve measurement and control of complex and 
    extensive activities is company break up.
    
    Britain's chemical company, ICI, is just about to split itself into (I
    think) separate chemicals and pharmaceuticals companies because they
    found it too hard to manage both within one organization.
    
    In your example, this would mean that whoever is bidding "Software
    Process Improvement worldwide" would have to come up with an investment
    case, backed up by sales orders from other profit centres-- and from the
    open market-- who have made their choice between in- house and free market 
    options.  When it comes down to competing claims for funds, it becomes
    relatively easy to prioritize.  Thereafter you need to be able to measure 
    their success in meeting their investment forecast, i.e. costs, revenues, 
    net funding.
    
    I don't suppose this helps at all in your present situation but then
    that's a reflection of what still needs sorting out.
    
    David P

    
    Fact is we're living through a period of transition of proportions
    quite unknown within Digital. It's not just the honest soldiers in the
    trenches that are still trying to understand where to point their
    weapons -- so are many of the Colonels.
    
    It's inevitable with the magnitude of internal & external change. I 
    suspect the best thing is to buckle down & cope with the uncertainty 
    until it has passed (6 months? 12 months?).
    
    For some folk, this is intensely frustrating, especially when you work 
    across multiple industries/territories -- & if you have any form of 
    planning or budgetary process in place for FY94. Unfortunately, I can't
    see any immediate panancea -- although I would have no problem with a
    more directive leadership style for a few months if that helps clear
    the log-jams. The time for defending fiefdoms is past, wherever they
    are based. Defending profits seems more timely ...
    
    BTW, - 1 states that a hierachical organisation is hard to understand
    -- shouldn't that read matrix as hard to understand? Most hierachical
    organisations I've worked in were very easy to understand -- one boss,
    clear objectives, direct acountability. May well have had other failings,
    but clarity was not a problem.
    
    
    Colin
    Colin 
    
    

    Re .3
    
    Quite right. It must have been the old trouble again.  I'm sure I  
    meant "matrix management" ... or at least I do now.
    
    Dave_P

    Does anyone know who'd I'd contact to get a listing (DTN & LOC) of all US
    CBU Field Marketing Managers?
    
    Thanks,
    Julie
    

    Which CBU? PBU?

    I need ALL the US field marketing managers for each CBU.

    
    
    
    Why not ask Ed Lucente as he now owns 5 of them...
    
    Perhaps the marketing folks are keeping their heads low right now? ;^)
    
    cw