Conference 7.286::digital

    Considering how well the PC group did last year, yes, I think it makes
    eminent sense.

>>                  -< How much profit did the PC group make? >-


Good question.  FWIW, my experience is that account managers (in my district,
that is) did a good portion of the "sales effort" in selling PC's.  Since they
couldn't book the orders themselves, they put them thru PC-BY-DEC, the PC sales 
rep or thru a distributor.  Soooo, while Enrico thinks his people did all the 
work, his business unit didn't pay for a good portion of the sales effort.  Now
that everything is under his P&L now, I wonder if the PCBU's "profitability"
will be as strong.

Ex-Rev

    I concur with .-1 - not only did sales 'push' our PC's, but sales
    support did so as well.... I'd venture to say that any and all 
    of the 'field' people (field people being defined as those who
    are in front of customers day-in-day-out), sold our PC's, as they
    sell all of our products.  Its a damn shame that alot of the 'cuts'
    are coming in the field.  Those of us left are having a very hard 
    time getting motivated.  I don't know anyone who is not looking 
    outside.  Hope the 'managers' remember what its like to do real
    work - that is, what its like to try to please customers, because,
    when all the worker bees are gone, they're going to have to 
    do it....

    I agree with .1
    
    If you wish to ponder on this subject further, go to note 3335 and 
    read some of the replies - especially .26 and .35.  These replies
    talk about the PCBU as a whole and well as what the customers
    and employees think about Digital's PCs.
    
    I think that their success speaks for itself.
    
    /ms
    

re: -1

DEC's PC business was wildly successful last year.  My point, however, was that 
the root cause of that success was not totally internal to the PCBU, and that
the overall "profitability" of the PCBU is not what the SLT thinks it is.

Our public statements have been that the PC business has grown tremendously
and that it's profitable.  Since no adverbs are used with "profitable" and
since PC margins are low, I can only assume that the PC business is only
slightly profitable.

    Do the field people get any type of commission on their sales? Or was
    the point that they did not get any credit because of where they
    directed the sales? Overall I think the cash bonus tied to group
    success is a very positive step. IBM started doing this a few years
    ago, and they feel it has had a very positive effect. For groups
    doing very well like their semiconductors organization the checks have been 
    non trivial.
    
    
    Dave
     
     

    Intel has profit sharing bonuses twice a year, plus every year they
    put aside a kitty (say, $5k of a $60k salary) that is multiplied
    by a factor, depending on how successful your group was in attaining
    its goals.  A mutiplier of five has been typical for one group I know
    of, meaning they get $25k back (net $20k), which also tends to make
    Santa Clara car dealers happy.  On the other hand, your group could
    not perform well, in which case your $5k doesn't even get returned
    (multiplier <1).  kb

    With regards to profitability, I believe the question is how do you
    know the real cost-of-sales when you still have this practice of
    shadow-booking.  If an account rep makes a PC sale with little or no
    help from the PC Sales rep, the PC Sales Rep still gets credit for the
    sale!
    
    Shadow booking has always been, and will always be, a problem.  I know
    of instances in the past, and currently, where socalled sales reps
    survive solely on shadow booking.  They get credit for a sale
    regardless of their effort, if any.
    
    Now, I'm not suggesting that the PC Sales reps don't deserve credit. 
    However, do they deserve credit for every sale in a geography that they
    are not involved with, or have had little involvement?

    
    	re:-1
    
    	Shadow bookings definitely skew our existing measurement systems.
    I, for one, had a deal for 220 PCs thru my reseller who sold them
    to an end-user account for which he was the primary focal point (we
    actually unbundled IBM from the deal). I received credit since the
    reseller is my account, the end-user rep received credit (which was
    actually higher $$ than me) since it was his account that got sold
    to, the PC channels rep got credit since he covers all channels accts
    in the midwest, and the PC rep at PCBYDEC got credit for taking the
    order.
    	The only person to ever talk to the purchaser direct was my VARs
    sales rep. Go figure....
    
    
    		the Greyhawk
    
    	PS - the account loves the PCs and adores the VAR.

    Did anyone answer the original question? I understood the salary
    process in PC's was to grant one salary increase per year in Sept. This
    would be tied to profit. Since PC's made a paper profit the challenge
    was to deliver on the increases. The thought was bonuses that did not
    increase the base pay were the way to go. Has the promise been
    delivered?

    This seems to violate the wage freeze doesn't it?  Seems to me if
    this is true that the PC division is getting special treatment.

    
    I guess I look at things too simply.
    
    The PC Group met their Corporate Plan.  The plan was agreed to in
    advance.  It appears in retrospect (I'm guessing, I don't know what was
    in their plan.) that all they had to do to make plan was to double sales, 
    take a money losing operation and make a profit and make the laughing 
    stock of the PC business into a credible vendor.  How much of your own
    money would you have bet in June of '93 that they could do it?  Not
    much I'd guess.
    
    I think it is great if their management wants to make a gesture of
    thanks! Money is more sincere than a DEC management pat-on-the-head.
    
    A bunch of the comments in this string sound like the Russian's that
    want everyone to be equal in their misery.  
    
    

    I beleive HP has a similar although I don't know if it can return 5X
    profit/investment program as that described in .9 for Intel. I'd love
    to see something like this in place here. 
    
    Dave
    

    re .11
    
    So that's what is meant by the multiplier effect!
    
    Hey, so long as the customer is happy - who cares how much it cost
    Digital, right?
    
    ;-)

Well, I say good for them. If 'sales' want a share of this, how come they 
didn't sell the other items in the DEC catalogue ?

No, PC's sold because they are GOOD, not because some salesman did anything 
out of the ordinary.

All my customers buy DEC PCs

Alan

[who only has one DEC PC at home !]

    No, there are LOTS of GOOD pc's out there - we got on the 'approved
    vendor' list at accounts such as Scott Paper, International Paper, 
    Monsanto (three that I KNOW something about), and others, because 
    the direct salesreps for these accounts worked diligently with 
    the customer, PCBYDEC, the PCBU... to get us put there.  Customers
    make ALL of their vendors jump thru hoops to get onto these lists, and
    tele-sellers just can't do all that is required!
    
    Face it, making the PCBU profitable was a team effort involving ALL DEC
    organizations (at least at the above accounts...) - the followon
    business is also crucial - if they buy our pc's, they look at our 
    net h/w, storage, servers, service(s), etc....  many times PC's
    leverage larger sales and vice-versa.  I'm glad that the PCBU folks are
    getting rewarded.  However, I hope they can 'stand-alone' when the
    direct salesforce no longer gets credit for busting their butts to 
    get us on the approved vendor lists of large corporations.

    
    
    	Or anywhere else for that matter.
    
    
    		the Greyhawk

    re .18
    
    In Canada, Digital is on the federal government's national master
    standing offer....this was worth very large dollars.

    re .18
    
    And in many cases, let's not forget the SALES SUPPORT folks who spend
    countless hours working with customers to get those products approved.
    
    My argument thread in this note is an academic one.  I'm merely
    pointing out the fact that the PC success is due to the effort of lots
    of people, not any one group.  I've stated as much in other
    conferences.  However, when you discuss things like rewards and
    profitability, how do you do these accurately when you've got to take a
    practice like shadow booking into account?
    
    Oh, and by the way, I am a sales support consultant and don't get ANY
    reward regardless of my efforts.  I haven't had a salary review in
    about 18 months, and I received an overall PA rating of 1 this past
    May-June.  Yeah, I'm pissed.

    I'm a sales support consultant as well....

cmon now,,

just becuase you happen to be fortunate enough to be attached to
a product that right now is selling itself, don't mean the
guy who's a really great RALLY/VMS engineer feels any better about
the PC CBU bonus news while he gets laid off!  .

Acutally the way it was explained to me, is that the whole pay
compenstation etc..... structure is quite different than what
us plain folk are used to ....

This place is spooky...



    
    And what about the people on Sable. Sable sales surpassed expectations
    and we didn't get any bonus..
    

The bonus was part of the overall plan.  PCBU met the plan and were paid.

By similar agreement, NIS was incented to sell DEChubs.  They were also paid.

These are one-time cash incentives and have nothing to do with a salary freeze.

If you want these rewards, work in these areas.

Bob

           <<< Note 3343.21 by PIKOFF::DERISE "Reorg's happen!" >>>
                                -< sour grapes? maybe. >-
    
    
    	You should be so lucky to have had a pay rise only 18 months ago!
    
    	I work in DECdirect (Reading) Pre-Sales Tech. Support and no-one
    here has had a review since Fiscal '91!!!!
    
    				Malcolm.  Also not happy!

    re .25
    
    Well, your comments epitomize the general ignorance throughout this
    company regarding sales support, the role they play, and the vast
    contributions they make.  I'm not suggesting they be entitled to the
    same rewards as the sales folks.  But I am saying they play a big part
    in closing and, yes, delivering business for this company, and they
    deserve a reward too.  (Personally, I favor a bonus plan.)  
    
    re .26
    
    All I can say is I hope you are looking for opportunities outside of
    Digital.  Unfortunately, I am reaching the conclusion it is time for me
    to do so.  I would like to stay, but it is hard to see any reason why I
    should.  On one hand I'm told I'm a valued employee, but on the other
    the only reward for my efforts is to tell me I've got a job for at
    least three more months.

re: .27

I think you just put your foot in you mouth, big time, concerning .25

Bob

    re .28
    
    I have re-read the notes in question.  I will stand by my statements. 
    There are some sales people that can get by with minimal-to-no sales
    support.  But most need sales support - especially when you consider
    the type of systems business we do.

    
    While I can certainly understand the perspective of some of the
    non-sales people who are discussing this issue, I feel like someone
    needs to say the following:
    
    SALES IS THE ONLY ORGANIZATION THAT TOOK A 20-40% PAY CUT IN RETURN FOR
    THE OPPORTUNITY TO MAKE THAT MONEY BACK BASED ON PERFORMANCE.
    
    Yes, non-PC sales folks often had to work to get PCs sold into their
    accounts for no credit and no compensation.  It has been my experience
    that operating out of the "if I don't get credit, I don't sell it
    mentality" only harms you.  PCs leverage services and servers. 
    Services and servers leverage workstations and disks.  Pulling it
    together brings in consulting.  We're tied at the hip whether we like
    it or not.  Unfortunately, putting everyone on different metrics does
    often cause heartburn for those not getting rewarded for everything
    they do.  Customers want one face to deal with --- not 10 or 20.  The
    new "account manager" role is to bring it all together and hopefully
    (from the company's perspective) be egoless enough and have a wide
    enough view to recognize the interdependencies.  The metrics do not
    drive that behavior...  That behavior is needed for Digital to grow.
    
    I expect this kind of incentive compensation to only continue.  With
    the re-engineering of the company, each division, business unit, etc.
    is responsible for their own P/L, manufacturing, logistics, etc.  Those
    who succeed will have the latitude to reward their employees --- as you
    are seeing with the PC bonuses, the MCS Sales Kickoff in San Diego, and
    the TOEM Sales Kickoff that occurred in Nashua in July.  Working in the
    Central Region, our kickoff meeting has been postponed to Q2 due to
    revenue constraints.  If we had the revenue to do it, we would.
    
    Personally, I think everyone in this company should be on some kind of
    incentive compensation.  For non-direct revenue generating positions,
    it should be some kind of profit sharing to incent those who work for
    Digital to do what it takes to return us to profitability.
    
    Of course, that requires that the SLT and senior management lead the
    way.  Not having spoken to Bob Palmer or Enrico Pesatori lately, I do
    not know what the risk is there.
    
    FWIW,
    
    Don
    
    

re: .27-.29

I think Bob is refering to the many years I spent in Sales Support, and your
acusation that I am ignorant of their contributions.  I am not.

Also, I don't see anything in my statements that would lead to this erroneous
conclusion.

...and to quote, perhaps "therein  lies the problem!"

8^)

re: .29

In .27 you say,

>    Well, your comments epitomize the general ignorance throughout this
>    company regarding sales support, the role they play, and the vast
>    contributions they make.  I'm not suggesting they be entitled to the

in response to .25.

I don't see where .25 has said that Sales Support shouldn't be rewarded for
what they do.  I also don't see how you can claim that .25 is ignorant of
the role of Sales Support.  BTW, the author of .25 is in the field and works
with Sales Support folks on a regular basis, at least until tomorrow when
he goes off to a job with a better future than the one he has here.

Bob

    First, I never said sales support deserve the same rewards as sales. 
    I don't believe they do - they don't take the risks that sales do.  As
    some one so eloquently pointed out, sales took a 20% to 40% reduction in
    base pay.  What I said was sales support deserves A reward.
    
    Second, regarding the comment implying that sales support is some how
    "non-direct sales," all I can say is - BALONEY!  My experience in sales
    support for seven and one-half years is that sales support play an
    integral role in both pre- and post sales situations.  In fact, I know
    several sales people that will readily admit this.
    
    If there are, or were, people in sales support roles that don't think
    they deserve to be rewarded for their efforts, well that's their
    prerogative.  I personally do not prescribe to this notion that it is
    some how a priviledge to work for Digital, or any company for that
    matter.  I believe that high performers deserve to be rewarded,
    regardless if it comes in the form of a salary review, bonus, profit
    sharing, stock options, or any combination of these.  Otherwise, what
    is the incentive to be a high performer?
    
    There has been talk for more than a year to implement an incentive
    compensation plan for sales support.  To my knowledge, regrettably,
    there still is no plan.  That is really too bad.
    
    And I stand by my statement: there is general ignorance in this company
    regarding the role of sales support.

I agree, now that the "ignorance" is attributed to the general public, and not 
to me specifically.

I basically got tired of waiting for Digital to "Pay for Performance."
They haven't and they don't.  

Other comapanies do.

Bob

    I have a fairly simple view of this:
    
    The product is not setting the world on fire, pricing out of line, 
    not profitable, etc.  New management comes in, develops very
    aggressive goals/metrics, reorganizaes for success, set rewards
    (read bonus) for achieving/exceeding goals, empowers all to do
    what's necessary to achieve the goals, gets out of the way, watches
    as forward progress is made, makes minor tweaks along the way,
    confirms goals achieved, rewards employees, creates new goals for
    following year, let's people move forward, and gets out of the way.
    
    I'm in a product group that has a good product, has extremely 
    agressive/almost unachievable goals for this year, has good people
    and plans, is not organized for success, is being nickled & dimed
    to death and is not funded/empowered to achieve success, etc.
    
    I'm just waiting for the SBU to finally catch up with the PCBU, allow
    us (whoever is left) to use their talents/energy to achieve the goals
    for success, get empowered, get roadblocks out of the way, and make
    lots of money, capture market share, and then sahre in the rewards.
    Hopefully, we won't wait until Q3 or Q4 to do this.
    
    Anyway, my hat is off to the PCBU, wish them lots of success, will
    support them in any way I can (even though it's not in my group),
    and hope to reap the rewards of success over time.  AS you can guess,
    I have no issue with rewards for performance, bonuses, as long as we
    are allowed to make it happen.
    
    Mark