Conference 7.286::digital

    I've heard about the company, but can't remember where it was
    referenced.  Perhaps it was in Charles Garfield's Second to None, a
    book which details the benefits of teaming.  You've peaked my interest. 
    I'll try it.
    
    Another interesting tape program is called the Quiz Kids;  it's about
    the group that included Robert McNamara and demonstrates the limits of
    a purely financial and control approach to running a business,
    culminating for McNamara in the tragedy of the Vietnam War.  He tried
    to run it as he ran Ford, through quantitative analysis which was then
    summarized for the public in the nightly body counts on the evening
    news.  
    
    The program is riveting.  Strongly recommend it.
    

    "All memos at Semco are limited to a single page, topped with a
    newspaperlike headline that gets right to the point.  There are no
    exceptions, not even marketing reports."
    
    "We never promised anyone job security, so we never had to break this
    promise."
    
    "Semco doesn't have as many bosses as it used to, and those that remain
    aren't very bossy.  As workers began to exercise more control over
    their jobs, the need for supervisors diminished.  We also have reduced
    our corporate staff, which provides legal, accounting, and marketing
    expertise to our manufacturing units, by more than 75 percent,
    eliminating the data processing, training, and quality control
    departments, among others."
    
    "We don't want to be a big, happy family.  We want to be a successful
    business."
    
    "About a third of all Semco employees have the option of taking a pay
    cut of up to 25 percent and then receiving a supplement raising their
    compensation to 150 percent of normal if the company has a good year. 
    If Semco does poorly, on the other hand, they're stuck with 75 percent
    of their salary.  This program rewards those willing to take a risk,
    and lets some of our labor costs fluctuate with profits and losses."
    
    "We have competely eliminated secretaries, receptionists, personal
    assistants, and other ungratifying, dead-end jobs from our payroll.  In
    keeping with our philosophy of 'natural business', everyone at Semco
    fetches their own guests, copies their own papers, and sends their own
    faxes."
    
    "We ask people to think about what they would like to be doing in five
    years and then prod them to request training that takes them there."
    
    "Before anyone is hired or promoted to a leadership position, he/she
    must be interviewed, evaluated, and approved by all the people who will 
    work for him/her.  Also, every six months Semco managers are evaluated 
    by the people they supervise, who anonymously complete a multiple-choice
    questionnaire we developed for this purpose [the book includes it]. 
    The grades are posted for all to see.  There are no hard and fast
    rules, but those who consistently get poor marks (80 out of 100 is
    average) usually leave Semco sooner or later."
    
    "Semco's standard policy is:  no policy."
    
    "We whittled the buraucracy from twelve layers of management to three
    and devised a new structure based on concentric circles to replace the
    traditional, and confining, corporate pyramid."
    
    "Whoever decides he needs a computer goes out and buys one.  Whatever
    anyone feels is necessary is all right with us.  The catch is, everyone
    has to learn to operate it themselves.  Our worries about making one
    computer compatible with another are over.  It's every microprocessor
    for itself and to hell with economies of scale."
    
    "We made all sorts of financial information available besides salaries
    [salaries are publicly posted].  Of course, not everyone could
    understand it.  Some workers didn't know the difference between profits
    and revenue.  So with the union's help we began classes to teach them
    to read balance sheets, cash flow statements, and other documents."
    
    
    I hope you are getting the idea by now:  you've GOTTA READ this book!!!

         Damn....I mean THANKS! I'm off to the book store! ( Sounds too
    good to be true!)
    
                                                  Peace,
                                                  -RAM-  

    
    re: .1
    
    For a more detailed and analytical look at the phenomenom
    of the Whiz Kids and McNamara, read Deborah Shapley's book
    _Promise_and_Power:_The_Life_and_Times_of_Robert_McNamara.
    
    It traces his love of quantification (and his seduction by
    it to the exclusion of virtually *all* qualification) back
    to his Harvard Business School training.
    
    Beyond Vietnam, it also discusses his helmsmanship of the
    World Bank during its' most ambitious years.  The book traces
    both his good qualities: restraint during the Cuban Missile 
    Crisis, his metamorphosis around strategic nuclear doctrine; 
    his drive to help poor people the world over, as well as his 
    bad qualities -- body count in Vietnam; his unwillingness 
    to vary from the party line, no matter his personal conviction
    that the war was "unwinnable" militarily.  Perhaps most important,
    Shapley stresses that the man *refuses* to look back -- implying
    that he was never able to do the self-analysis necessary to 
    learn from his own mistakes.
    
    Glenn
    

    
    
    	re .0
    
    	What type(s) of businesses does Semco do? 
    	I'm intrigued by the fact that they eliminated data processing,
    	training, and quality control..what was the impact on their
    	business, other than adding to the bottom line by cutting jobs?
    
    	John

    re: .4
    
    Thanks for the recommendation.  Just saw the book the other day and it
    looked interesting.  I was tempted to buy it and now will.  
    
    This notefile is getting expensive!
    

    re:  .5
    
    The company makes big pumps, industrial-size blenders, Hobart
    commercial kitchen equipment (slicers, scales, diswashers), and also
    delivers turn-key biscuit-baking production lines.
    
    The book makes it quite clear that quality was not sacrificed by
    eliminating the *department* in that the people making the product had
    already learned how to and made themselves responsible for delivering
    quality.  (No quantitative evidence for this was adduced, so we're
    allowed to have our doubts about this--but it ain't against the laws
    of physics you know....)  Likewise, it was clear that training was
    being invested in, just that it was bought out rather than done 
    in-house.  Most of the savings in central staff came from on-the-job
    cross-training, a policy of job-rotation every 2-5 years, and the
    simplification of work processes I think.  They just got the skills
    so well distributed that a central function no longer made sense for
    a lot of things that narrow specialists would have needed centralized.
    
    One thing I didn't mention about the company that makes a difference
    here:  their maximum headcount was less than 900 at the peak.  Small
    organizations have a little bit easier time avoiding the extremes of
    Taylorism.  (However, the Massachusetts Department of Motor Vehicles
    used to be, and almost every new car dealer still is, a clear
    demonstration that you can bureaucratize even with only a half-dozen
    people if you are really determined to do so.)  By Taylorize, I mean
    take the skills out of a job by making it just a tiny fragment of the
    whole of what customers receive.  When this is done, "workers" become
    hands without a brain and "management" becomes brains but hands-off.
    
    A key attitude underlying all that is reported in the book:  our people
    live their other life like adults, making decisions and all.  Let's
    assume they can do that at work, too....  But the price of this is:
    if workers are adults, they don't need a Father or Mother at work so
    there are not a lot of Father or Mother (supervisory) jobs at Semco.
    
    
    I won't try to further justify the book, because the book itself does
    it so much better than I could ever do here.  I only paid $21.50 or so
    at Wordsworth.  That's a pretty good price for the entertainment value
    alone...  and it's definitely not just entertainment!
    								Russ

         Excellent basenote, Russ. Thanks a whole lot. Any others ?
    
    
                                                - RAM-

    Russ,
    
    I hate business books; I'm skeptical about the claims made in them on
    the one hand, and on the other, I like to learn by doing. However, as
    I feel the "learning by doing" option closing down in our Company,  I am 
    more attracted to learning in other ways. Hence, I believe that I will go 
    get this book. By the way, it is also true that a recommendation from you
    goes a long way toward turning skepticism to curiousity. Thanks for 
    taking the time to point the "skeptical but curious" to this source.
    Best,
    Bruce
    
    

    re: .0
    
    I did get the book.  It's excellent so far (half way through it).
    
    If you want another - from the other end of the spectrum - read Soap
    Opera, the story of Proctor and Gamble.  Anytime you begin to think
    that Digital is getting oppressive and too top down in its management
    style, read a chapter or two from this book.  The pure image that P&G
    promotes is just that, image.  If you've read The Firm, then you have a
    sense of what P&G is like.  Oppressive, all consuming, totally
    controlling.

    Hah, have to look for that book.  Met a woman in Cincinnati that left
    P&G because of their strangeness.  (Women's sandles must not show
    "toe-cleavage"!)
    
    Now is there a book that describes the wierdness of EDS under Toss
    Perot?
    
    

    >Now is there a book that describes the wierdness of EDS under Toss
    >Perot?

    when i first interview with EDS in 1985, Perot was still the boss
    at EDS, this is like one year after GM bought EDS and all these EDSers 
    were going to Detroit from Texas in their nice black suits to live
    and settle in Detroit and work closely with GM employees. it was an 
    exciting time and the clash of the EDS and GM culture was a shock to 
    every one !

    at the start , they used to take us young new EDSer hires to these GM 
    plants around Detroit to see our new customer up close, we went on for 
    tours, we all dressed in nice black suits, white shirt and ties, 
    (BAD IDEA !)m what a scene that was! from that day on i never went to 
    a GM plant again wearing a tie or a suit.

    by the way, if you never been in an auto plant, you should do that,
    it is like going in a different world, i always felt excited going
    into one, it makes your adiriling go up because so many activities going
    on around you all the time. 

    \nasser

    
    DETROIT is a different world.

    >Now is there a book that describes the wierdness of EDS under Toss
    >Perot?

I *liked* some of the weirdness that went on under h.r.p.  I was at EDS
before and after they bought him off -- How would YOU like a $700,000,000
TFSO package ?  One of the neat things about the management I saw was
this:  If there a problem all of the managers even remotely related to the
issues went into a room and vied, argued and fought for the permission to
work on it.  Talk about taking ownership of an issue.  I was impressed.

Of course, nobody could suffer too many failures and survive, EDS (my corner
of it anyway) believes in cutting their losses.

A very competitive environment to work in.

Scott :)

  >>  by the way, if you never been in an auto plant, you should do that,
    
    Oddly enough, the only auto plant I've been to was a Ford plant in...
    Brasil (Sao Paolo).  But they didn't make mavericks...

    JUst finished reading this book. The author strikes me, as someone who
    isn't really sure what he is doing. He certainly doesn't make it clear
    that the innovations in his companies , if you can call it that, was
    all premeditated..
    
    
    q
    

I also started reading this book last evening and it is definitely the best
"business" book I have ever read! I only read the first 100 pages or so
but will definitely finish the other 200 or so this evening.

This should be compulsory reading for all managers , starting with Palmer,
that are trying to figure out how to "turn around" this company.
It is mentioned in the book, that a lot of big companies (IBM,Philips etc.) 
are queuing up to visit this company to see how they manage things. Wish that
Palmer did the same.

Here follow some  passages that are still going through my mind , and of which
I am thinking :"How would DEC look like if we implemented this ?".
(I am doing this without having the book directly in front of me , so 
forgive the free translation and maybe not 100% correct figures).

"We had implemented a complete security system, with badges, removal passes,
checks, guards etc. to minimize risk of stolen equipment etc.
But do you check after dinner with your family if some forks are missing? No,
because you trust your family members. So I decided to remove all this
security nonsense. The rate of missing equipment stayed the same in beginning
and later DECLINED, because people started to realize that missing/stolen
equipment affects THEIR results and thereby THEIR salaries"

"All financial information is public. The salaries, who spends how much on
what, who is traveling where and how much it costs."

"We had , like most companies, piles of paper describing policies and 
procedures. And than we had of course whole departments , to update all these
P&P's as soon as we changed one. One day I circulated a new policy to all my
managers and asked them what they thought of it. But I had stapled them 
together in such a way, that you could only read it, if you removed the staple.
After a week, I received the original back, and all managers said that they
approved the new policy. The document was still stapled together! I decided
to cancel all policies and procedures except one: the only policy we have
is : there is no policy. And think of it: Do do have a policy and procedures
book at home, describing what your wife and kids can and cannot do?"

"I realized that there was a serious problem with the motivation of our
employees. Most of them were not getting to work because they liked what
they were doing or somehow felt responsible. That was, because we didn't treat
them as responsible ADULTS, but as as individuals that needed a mother or
father (=manager) as soon as they got to work. So we made everybody
responsible for what they are doing. Every group manages his business as if
it is there OWN business. They are responsible for buying there goods,
doing the marketing, selling it etc. Of course, they can buy these services
from other groups, but they are also free to go to outside companies. Again,
if you were managing your own company, would you have to be TOLD to search 
for the cheapest supplier, the best travel rate etc.? No, because it is YOUR
business, and YOU are responsible for the results"

"We also canceled all travel forms, regulations, approvals etc. Every group
is responsible for his own travel arrangements. Everybody knows where other
people are going and what that costs. If you were running your own company,
you also would probably stay in a two star hotel , rather than a four star"

"When people have to be laid off, everybody can give his vote who has to be
'the victim'. It is not a manager that decides who of the group members
will be laid off, but the group members that decide who in the group (or the 
manager) will be laid off."

"In a recent survey 40%(?) of the students mentioned Semco as the company that 
they would like to work for"

Having read only half the book, I think I can summarize the main conclusion
as follows: People are the most valuable asset of a company. Therefore it
should be priority number one, to have happy and motivated people. How to 
achieve that? Make them RESPONSIBLE for what they are doing. Let them run
their group/department etc. as if it was their OWN company.

Now I realize that the above is easier to achieve in a company with 1000 people
than in one with 100.000 people. But why not split them in 100 subdivisions
that are >COMPLETELY< autonomous. And with that I mean: They should operate as
any other small company. They can hire/dismiss people, invest, make travel
arrangements, marketing plans etc. etc. When things go wrong , THAT specific
group would be affected and not some other group at the other end of the 
globe.

This book gave me definitely some serious food for thought. Cannot wait to
finish it tonight !

An absolute must.

Timo