Conference 7.286::digital

    
    	Could you please post this in another location in this conference?
    
    	I didn't quite catch it the 1st 3 times.
    

    Of course, our management's compulsion for reorganization is not to
    question. On the contrary, they are quite proud of it. For those who
    missed it, quoted from the last issue of "DIGITAL today":
    
    DT: Why were the Q1 earnings so disappointing ?
    
    Copperman: During Q1, the SBU went through a significant reorganization
    [...]. In the outside world, mergers of this complexity sometimes take
    years. We did it in about six weeks, and changes like this can be
    disruptive. [...] Obviously, fundamental changes like these, at least
    for a time, tend to create some confusion, both inside and outside the
    company.
    
    How many reorganizations like this one did we have the last 4 years ?
    How many are still to come ?
    
    Helmut

    re. .0
    
    There is an interesting column in the current issue of Business Week which
    speculates about all the problems a young Bill Gates would encounter if
    he tried to build a company with an entrpreneurial culture in France.
    
    If France was an easy place to do business they wouldn't be losing the
    economic race to the US and many Asian countries.

>    lost momentum with its letal downsizing and is loosing market share 

Lethal.

Losing.

You really should spellcheck before you send a letter to the CEO of a
company.

Letters with such errors should go right into the trash.  "English is
not my native tongue" is no excuse when something is important to you.

/john

    .0 We learned from an article in the Financial Times of January 27 that
    .0 you blame the "inflexibility" of the European work force for
    .0 problems at Digital Equipment. You cite France and Germany as examples of
    .0 countries where it is particularly difficult to do business.
    
    You seemed to have read more into the statement then I believe was
    necessary.  I don't believe that anyone (as you say "BLAMES") Digital's 
    problems on the workforce France or Germany.  
    
    .0 The workforce in Germany is so "inflexible" that Digital has
    .0 managed to downsize it from 9,000 to 3,000 since 1992. 
    
    EU business restrictions asside - 
    
    Crying over spilled milk are we?  
    
    6,000 jobs is tough, gosh the USA has lost alot too, I have seen 
    alot of talent leave the company too  - but really what benefit
    is there to dwell in the past?    For your sake and mine hopefully
    Digital can turn this thing around for the benefit of all - regardless
    of where we live.  
    
    
    

    >>Crying over spilled milk are we?
    
    Maybe upset at what has been done to a highly successful and profitable
    company. Clearly the article and the quote blame the employees in
    trade unions for the problems. 
    
    My take on it is, that it is pathetic that we have these discussions
    via newspaper interview and open letter. I would ask Mr Palmer to set
    up a meeting with Christian Brunkhorst and Derek Lee to discuss their
    concerns. I think if Ken Olsen had met them outside the Annual General
    meeting in Boston he would have gone over with a big smile and got to
    the bottom of it. We are making a public laughing stock of ourselves
    for no good reason. 
    
    As for spell checkers, let us discuss the content of the letter. You
    try writing one in French or German and see how you get on. English
    language imperialism does not go down to well in many parts of the
    globe you know.
    
    ..Kevin.. 
    

RE: .6

	John's German isn't that bad.. Watch out what you ask for.

	As for the EU countries, you may get sympathy from your
	fellow employees in the States, but that's about it. We've
	been there, done that.. 

							mike

>	English
>    language imperialism does not go down to well in many parts of the
>    globe you know.

	Actually that's 'too well' but a spell check checker would not
	have found that.  I don't think that's English imperialism.  If
	I wrote a letter to an executive French person, I would certainly
	ask a French coworker to read it over.  (Pardon my french...)

        Reply .6

    Please forgive my fellow Americans for their rudeness.  In our culture
    it is acceptable to be a bigot concerning matters related to spelling and 
    grammar.
    
    --Doug C.
    

>    Please forgive my fellow Americans for their rudeness.  In our culture
>    it is acceptable to be a bigot concerning matters related to spelling and 
>    grammar.
    
says who?

-mark

    
    	RE: Says who?
    
    	Spelling and grammar bigots, of course.
    

>    Please forgive my fellow Americans for their rudeness.  In our culture
>    it is acceptable to be a bigot concerning matters related to spelling and 
>    grammar.
    
What????

Maybe in your neighborhood, but not mine.

And I don't think .4 was being rude at all.  He has a very valid point.  Not all
that relevant (sp?) but valid.  IMHO.

And if you want to discuss rude, I think it is rude to post the same exact 
note in three places in the same conference.  So I guess in that respect, 
.4 is indeed rude.

    
    Stop rat-holing and get back to the subject of Bob bagging other
    people's countries work habits when he should check his own backyard
    before pointing the finger.
    
    You guys are very quick to jump on the wagon if some even intimates
    that the USA "may" not be the best at everything.
    
    A supercilious argument about a few mispelt words is enough to move the
    short attention span of some of you folk, there are bigger issues you
    would think.
    
    As for the downsizing, we Digits here in Oz have been hit as much as
    anyone even though we have always been profitable but we still have to
    bear the brunt of the losses in profits as has every country.
    
    On a positive note, it was good to see the company make a nice
    turnaround last quarter and marketing are starting to get the word out
    about our excellent networking products.
    
    John

    Palmer took over after Digital lost $6,000 millions of dollars.  Not
    exactly a successful, profitable company.  We ignored PC's and UNIX way
    too long.  We are stuck with fixing that problem, while margins are
    going away - and software from a hardware vendor is proprietary (by
    definition).
    
    You need to reduce expenses to survive.  While trying to survive, the
    business model (market) continues to change.  
    
    WHY are our competitors more successful than us in Europe?
    	Revenue/employee better?
        Employees more focused on customers?
    Blaming our problems (in Digital Europe) on management is probably
    right (they are responsible).  But what is the problem, and the fix?
    Certainly the flexibility of the workforce is a factor in the problem
    and the solution.   

    .4 et al.
    
    Ce que je viens de lire est positivement consternant. Es geht um das
    Schicksal dieser Firma und ihrer Angestellten. Say, John, do you really
    think that what this company truly needs are spellcheckers ? Then, why
    don't we massively invest in English courses ?
    
    Helmut

    'you need to reduce expenses to survive'?
    A gross oversimplification IMHO and a neat excuse too.We COULD try to
    tinker with the other factors,like increasing revenue(give EVERYBODY a
    revenue metric and customer driven metric - that would be novel..),like
    reducing cost by reducing confusion and information mayhem (you know, a
    simple ordering system and a simple single reporting system..).
    I'm afraid that we can't get away from the fact that our competitors do
    well in all markets we play in and as yert we don't do well in any
    single market.If the solution were simple,then I know many very
    intelligent people who would have twigged by now.
    I still think the answer is the Bulgarian economy model - whatever the
    rules,if you do the same for long enough,you will be successful

    re:-1 Increasing revenues is prefered. But what if that is not working.
    then what? To survive you need to reduce expenses. 

    re -1.Well direct cost reduction is one alternative.Sell offs is
    another.Increasing leverage is another,short term.Reducing indirect
    costs is another(by this,look at reorg costs for example).All of these
    are palliatives in the search for the holy grail - a strong position in
    a market or markets.
    However,to survive by reducing expenses alone(and I'm not being fair
    here ;-)) is tantamount to saying that none of the other factors will
    change - we will be smaller doing the same thing.This leads to
    perceptions of no change even though the company is undergoing profound
    ones. 

>    Palmer took over after Digital lost $6,000 millions of dollars.  Not
>    exactly a successful, profitable company.  We ignored PC's and UNIX way
>    too long.  We are stuck with fixing that problem, while margins are
>    going away - and software from a hardware vendor is proprietary (by
>    definition).

Yes, he took over when the board canned KO.  However, the same managers 
that fed KO with all the warm and fuzzies are still feeding Palmer with the 
warm and fuzzies.

Nothing's changed except the size of the organizations that used to do the 
real work.    

     >Palmer took over after Digital lost $6,000 millions of dollars    
    
    Are you sure of these figures ?
    
    How much have we lost in the meantime? My recollection is that Ken left
    the company with a balance sheet that was incredibly well stocked, but
    that we have made little or no profit in the meantime, and our net
    worth has gone down and down.
    
    On the question of language imperialism, I take back any unjustified
    suggestions and accept that the point is that many US-American
    colleagues would like to see such an important letter written properly. 
    [It surely wouldn't have happened that way in my day on the GBR :-)]
    
    ..Kevin..

    
    	Maybe a definition of "$6,000 millions of dollars" would help in
    	understanding this.
    

    That's $6 Billion dollars in British english.
    
    David

    re .20
    Actually, if you compare Kens last @5 years (1987-1993) with
    Bob's last @5 years (1993-1997), DIGITAL lost @$15 billion
    of worth under Ken (100pts stock decline * 150m shares), but the
    company's worth has remained relatively constant under Bob
    (share price unchanged at @35).
    
    Ken's demise wasn't hurt by his level of self-appreciation either...
    while DIGITAL was on the ropes, he took home over $10m compensation
    for each of his last two years, compared to roughly 1/10th that
    for Bob.
    .02 K

    Kratz,
    
    I take your point, but I was thinking of the nett worth in the
    balance sheet, not the share value. How is the comparison there in %
    terms ?
    
    ..Kevin..
    
    (is that net nett or nit?)

    
    Well, I'm only a lowly engineer but I understand that to mean
    we lost 6 Billion!  Don't take offence, but BILLION is NOT an
    industry/world wide known thing!
    
    Chet

    YOU HIT THE PROBLEM ON THE HEAD .20  :  NO GROWTH OVER THE PAST 5
    YEARS under this go no where but down style of management.

	Except while there has been no growth, he has stopped the bleeding. And
he did this time after time when things kept going wrong. If we don't see
growth soon I would worry.... but to stop the huge leak we had was quite the
accomplishment. 

    Growth is relative.  In the past five years, revenue per employee has
    doubled.  Had we stayed the same size in employee population, we would
    have to be taking in nearly $30 billion by now.  Fat chance.
    
    Like it or not, it was the right thing to do.  Maybe not always done in
    the best way, but right nevertheless.
    
    tim
    

> Fat chance.

Really?  HP seems to have managed.

| <<< Note 5117.29 by GEMEVN::GLOSSOP "Only the paranoid survive" >>>


| Really?  HP seems to have managed.

	Did HP go from a large company and stay that way, or were they smaller
and grew. A lot of our markets were pretty much dead. We started to head in a
different direction. That direction is now starting to pay off. 

Focusing on personal hardships, unfortunately, just won't cut it.  It should
be obvious after the past five years that this concern is secondary (or lower)
in the minds of the SLT.  The problem is that in spite (and perhaps, because) of
all the hardships they caused, they still have not acheived their PRIMARY goal,
increasing shareholder value.  The record is especially poor when compared to
other companies in our industry.

It appears that the US is ahead of France and Germany in the fire-hire cycle.
We don't need to TFSO anymore, since in many key areas people are voluntarily
leaving faster than they can be replaced.  Maybe the flexibility we really need
is for these areas to take on some work or send some people over here (with
their spell-checkers :-) while we still can.

| <<< Note 5117.31 by PUTTS::BRUCKMAN >>>


| The record is especially poor when compared to other companies in our 
| industry.

	What other companies went from 120k employees to about 55k and are
still doing well? I can only think of IBM for making such a drastic cut and
doing better. Think about it.....

    >>I can only think of IBM for making such a drastic cut and
    >>doing better. Think about it..
    
    I do, I do. IBM is growing, because Lou Gerstner gets out and SELLS. He
    wants to grow revenue as he realises that ist the way to win market
    share in a growing market. One could debate the downsizing to and fro.
    My line is that if we had not gone off on a shopping spree taking on
    thousands of new employees by buying companies in the early nineties,
    if we had had a good package of early retirement, sabbaticals, partime
    work, restrictive hiring etc, plus judicious partnering and trimming of
    the ship, we could have avoided a great mountain of problems. As it is
    we have reorganised our sales force and cut it so often, that we now
    lack the will to get out and fight in the market. That is why I believe
    we need new leadership.
    
    We may have increased revenue /employee, but we did that by outsourcing
    and taking contractors out of the figures! Self delusion, big time.
    Also the employees we laid off were the investment we had made in
    future growth. I can accept that some people like to be loyal, but this
    Q2 was the end of the road for me. Revenue sank, and we waffle on about
    a strategy for growth. I have talked to customers and salesmen every
    working day for the last 18 months. I spend my time trying to
    troubleshoot and clarify things. Sorry, but we need new leadership, and
    you can spell it in any language you want.
    
    ..Kevin..   

    True story....

    A DEC Sales Executive that I once knew related this story to me.  His
    neighbor, who was an executive at a heavy equipment company, asked why
    Digital was having so much trouble.

    To wit the DEC Sales Executive said, "well let's suppose that you had
    to come up with an earthmover that hauled 100 times as much dirt as the
    one you built 5 years ago, but cost 1/10th as much.  Do you think that
    your company would have problems adjusting to that market change?"

    So that really made a big impression on me and I tried it out on the
    first customer that gave me some grief about Digital's woes.  So I
    smugly related the story to the customer at which point the customer
    simply said, "HP and Sun seem to have figured it out!"  After
    extracting foot from mouth, I learned a valuable lesson....

    	There is no shortage of potential targets for blame.  If you
    	are blaming your failure on a particular condition and your
    	competitors are prospering under the same condition, the blame is
    	misplaced.

    So I would say if HP and Sun are doing OK in Europe, then the blame is
    misplaced.

    And by the way, the base note spelling is fine with me.  As an Iranian
    friend of mine used to say, "you are picking nits."  I prefer to
    concentrate on the ideas communicated, rather than the mechanics.

    FWIW
    Paul Brooks
    

| <<< Note 5117.33 by MKTCRV::KMANNERINGS >>>


| I do, I do. IBM is growing, because Lou Gerstner gets out and SELLS. 

	They have the biggest base to work from. They didn't go in a completely
different direction though. Name me one company that went in a different
direction and lost over 50% of their workforce that is doing good.

	While I wish we could be like IBM and their accomplishments are
something to marvel over, IBM was and still is the largest computer company. 

	Look at the possibilities of NT. We could be in a very good position.
Look at the possibilities thanks to fx!32. The possibilities are all here for
us. It's just a matter of us continuing on. The NT and fx!32 stuff didn't
happen until the end of last year. Lets see where these things get us at the
end of this year. If we have not grown by then, then you will have been
correct. I think it is too early to say it now. 

	And I don't disagree that under someone else we might have done better
already. But it is really unknown. There was so much wrong at Digital when he
took over that it is hard to say if anyone else would have been quicker.




Glen

    This seemed like the correct string for this:
    
    If one were going to include the phrase "a gazillion British Thermal
    Units" in a letter to Mr. Palmer, what would be the correct Swedish
    spelling?  And do I have to configure my keyboard for special
    characters?
    
    Tony
    

    
    >	They have the biggest base to work from.
                                   ------------
    
    	From which to work.
    
    	[Stupid American!!  8^)]
    

    There is a front page article in today's Wall St. Journal concerning
    all the problems that Pharmacia Upjohn has encountered trying to meld
    the American work culture with the European work culture.
    
    The problem is unique to Digital management.

    Correction to .38
    
    The last sentence should have said "The problem is not unique to Digital
    management"

    RE:.37
    
    Now, now, as an American your comment is something up with which 
    I will not put.
    

    re .14:
    
    >WHY are our competitors more successful than us in Europe?
    >	Revenue/employee better?
    
    Yes - but your're confusing cause and effect.
    
    >    Employees more focused on customers?
    
    Wouldn't surprise me.
    
    >Blaming our problems (in Digital Europe) on management is probably
    >right (they are responsible).  But what is the problem, and the fix?
    >Certainly the flexibility of the workforce is a factor in the problem
    >and the solution.   
    
    Not sure what you mean. The environment is certainly the same for
    everyone - I can't see how the "flexibility of the workforce" (or
    inflexibility FWIW) is more of a factor to us than the competition?
    
    [Warning: this note has not been spell checked - and it's well past
    midnight here.]

    
    
    We have been twisting this before, but it seen to be that we never
    will figure out that there is a real difference in business
    management between Europe and US. This corporation is ruled by US
    business laws, although US revenue is under 50% of total. And unless we
    don't find a little bit more intelligence to this, we continue to
    shrink, shrink, shrink, shrink ... (sorry we don't have font sizes in
    Notes, the latest would have been the size of 2). The cutting, cutting
    cutting doesn't increase revenue anywhere, especially in Europe. Our gods, 
    let us be at the same amount of work force at least one month, that we can 
    try to achieve  some growth. Maybe the Bulgarian law of economics would 
    help us, anything else doesn't. 
    
    //pasi
    
    PS. Back to english speel checking, should I use a comma "," before the
    words "that", "if", "because", "but" etc.
    

RE: .41   ( re .14:)
    
    >>WHY are our competitors more successful than us in Europe?
    >>	Revenue/employee better?
    
    >Yes - but your're confusing cause and effect.
                       
    Perhaps.  But what I was trying to do is suggest that lack of
    management vision or lack of a flexible workforce don't help identify
    specific objectives that ensure profitability - especially using are
    competition as a benchmark (for lack of a better one).
    
    >>    Employees more focused on customers?
    
    >Wouldn't surprise me.
    
    >>Blaming our problems (in Digital Europe) on management is probably
    >>right (they are responsible).  But what is the problem, and the fix?
    >>Certainly the flexibility of the workforce is a factor in the problem
    >>and the solution.   
    
    >Not sure what you mean. The environment is certainly the same for
    >everyone - I can't see how the "flexibility of the workforce" (or
    >inflexibility FWIW) is more of a factor to us than the competition?
    
    The environment that is different is Digital ($14 Billion/yr revenue)
    lost $5.8 Billion (including restructuring) in FY 91-94.  80K-110K
    employment population.  We were not competitive.  "Flexibility of the
    workforce", manufacturing plant locations, outsourcing effectiveness,
    and many more are a bigger factor to us because  Digital had to change
    more of everything than the competition.  We did poorer planning,
    guessed wrong, etc.
    screwed up. 
    
    

re: .23

>    Actually, if you compare Kens last @5 years (1987-1993) with
>    Bob's last @5 years (1993-1997), DIGITAL lost @$15 billion
>    of worth under Ken (100pts stock decline * 150m shares), but the
>    company's worth has remained relatively constant under Bob
>    (share price unchanged at @35).
    
I find this very difficult to decipher in any way that makes sense.  The
big stock market crash was what wiped out most of Digital's share price.
And the years that followed it corresponded to a major recession.  You're
going to blame Ken for that?  During Bob's tenure the economy has come
out of the recession and the stock market has roared to historic heights,
while our share price has not moved up at all (just as our revenue hasn't).
And you're saying Bob should be proud of that?

In terms of the company's net, my reading is that we lost about $2.9
billion over Ken's last three years (with the recessionary economy) and
we've lost about $2 billion over Bob's first three years (with the
expanding economy).  It's hard for me to see that as a major improvement.

Rather than looking at Ken vs. Bob, i think the time is long past due for
some of the big shareholders to be taking a long hard look at the BOD.

- paul

re: .32

>	What other companies went from 120k employees to about 55k and are
>still doing well? I can only think of IBM for making such a drastic cut and
>doing better. Think about it.....

I'm thinking, but probably not drawing the conclusion you'd like me to--if
anything it seems to point out that making drastic cuts is not the path to
future business success.  And i can only assume that the cutting method was
pushed on KO by the BOD.  And since Bob earlier stated that he saw us
stabilizing at 75-80K employees, one might assume that continued pressure
from the BOD has brought us another 30K below that on Bob's watch.  So
we've paid a total of $4.8 billion for these cuts that were supposed to
make us so much more competitive.  Have we gotten our money's worth?

The IBM parallel is deceptive in that IBM took most of its heavy hits in a
space of 2 years, while we've been dribbling ours out continuously for
almost 7 years.  So even in implementing a dubious strategy of cutting,
we've chosen the most painful way to do it.

What was promising when Bob took over was that he seemed to aware of some
of the really broken processes that were keeping us in a "profit prevention"
mode: the broken supply chain, the poor internal business systems, the
lack of market focus, etc.  But all his attempts to deal with THOSE problems
seem to have been frustrated just as much as KO's New Management System was.
Whatever happened to that supply chain re-engineering project?  And has
SAP/R3 been implemented and solved all our problems of poor business systems
yet?  It doesn't take a rocket scientist to see that the management culture
of this company at the VP level and the next couple of levels below is
VERY resistant to fundamental change and VERY adept at avoiding such change.

- paul

    Pasi,
    
     forget the spell checker, some people would rather devalue your input
    by criticising (note, spelt with a s not a z) your English form rather 
    than your Internationally applicable content. If this was a European 
    based company they would, with the shoe on the other foot, be having
    the same problems. 
    
     If they cant concede this little a ground on language syntax how will 
    they ever handle the substantive difference between cultures across 
    international boundaries.
    
    - John
    

    re .30:
    
	�Did HP go from a large company and stay that way, or were they smaller
        �and grew.
    
    They have grown, yes - but they weren't really small, in 1991 HP had
    89,000 employees (they're at 112,000 now, about the same size as we
    were when trouble started).
    

    Let us think back to the time of KO's departure and BP's intro. There
    were a lot of excuses at the time. Funny thing is, there still seems
    to be a lot of excuses. The one excuse that hurt the most, and still
    does, is that "the employees are not accountable". BP took control
    and stressed that employees will now be accountable for their actions.
    Well, time and employees have gone by the wayside, DIGITAL is still in
    the death spiral, BP still blames the employees (the few who remain).
    
    Accountability? BP can take the credit for cutting employee count, 
    and selling off most of the business, thus in turn getting our cost
    under control. That job is finished, what we now need is a strong,
    committed marketing type to grow the business with the energy and zeal
    that BP showed to contain costs.
    
    We have been down this rathole some many times, in so many places.
    Why do we continue to sling arrows at each other. Employees worldwide
    should not take each other to task for what they read externally.
    I am sure a lot of what BP says is taken out of context and he may even
    speak before he thinks, we all do. 
    
    Anyway, just MHO, for what its worth.
    
    DT
    

    If you look back, in FY91 HP's revenue/employee was ~163k$, ours was
    ~124k$ (with 89,000 and 112,000 employees respectively). Revenue was
    roughly the same at that time (slightly more for HP).
    
    In FY 96, the revenue number was ~343k$ for HP, ~246k$ for us. So HP
    slightly more than doubled their figure, and we just barely doubled it.
    But the number of employees for HP was 112,000 in FY96, for us
    59,100... and HP's revenue is now more than 2� times ours.
    
    HP did have their share in those years but they went to great legths to
    keep their workforce (if memory serves me, they introduced a mandatory
    shorter workweek at some plants to save money, but to keep the employees
    at the same time).
    

    Re .48
    > BP can take the credit for cutting employee count, and selling off
    > most of the business, this in turn getting our cost under control.
    > That job is finished, what we ....etc.
    
    Do you really believe that cutting down the population is a job that
    has been finished ?????????
    
    I don't and I'm not the only one.
    
    Frans 

    No doubt that Bob inherited a very messy financial picture when he took
    over the helm.  He took measures that essentially stopped the bleeding. 
    The actions were necessary and needed to be taken quickly.  This is not
    to say that all of the actions were the most intelligent or far
    sighted, but there was not a lot of time for consensus.
    
    Remember all of our property that was for sale?  It was not really a
    question of what did we want to sell, it was more a question of what
    people were willing to buy.  We needed money and cash spoke loudly.  I
    am sure that to a point this is true of the businesses sold off and of
    the groups of people downsized.
    
    RE: Revenue per employee
    My view on this is that it is essentially meaningless.  We did as much
    with accounting tricks to "improve" this metric than with real
    improvement.  We moved to headcount equivalents, e.g. if a person worked 
    30 hours in a standard 40 hour week they were .75 people.  Then we started
    not including contract workers, etc.  
    
    At the risk of being accused of pontificating (again), The only way 
    to win this game is to grow revenue and grow profits. That is how we 
    are judged by the market.  Nothing else really matters if the goal is 
    to increase shareholder value.
    
    To give an idea of what the market thinks of us look at it this way:
    150M shares at ~$40/share = market cap of 6.0 $billion.  Given that we
    ended the quarter with $2.3 billion in cash, the market values the rest
    of the company at around $3.5 billion - assets, inventory, customer base, 
    and the rest of it.  Now compare that to IBM, Sun, HP or many much
    smaller high tech companies ....  And that's not because of some revenue 
    per employee metric.
    
    I am not certain Bob has shown a talent for increasing revenue,
    perhaps the most pressing challenge.   Accusing employees of being a
    substantial reason for our failures is not leadership.
    
    Ken
    

    re .44
    
    >> i think the time is long past due for
    some of the big shareholders to be taking a long hard look at the BOD.
    
    Very true. At the last AGM there were some pointed questions but no
    resolutions. The shareholders should make themselves felt and rock the
    boat at the next AGM, otherwise I believe we will be so far down the
    slippery slope, there will be no climbing back.
    
    ..Kevin.. 

    re .45
    
    >And has SAP/R3 been implemented and solved all our problems of poor 
    >business systems yet?  It doesn't take a rocket scientist to see that the 
    >management culture of this company at the VP level and the next couple of 
    >levels below is VERY resistant to fundamental change and VERY adept at 
    >avoiding such change
    
    Very well put. My rumour genie whispered to me that the SAP/R3 project
    has hit the fan big time, but I don't know. As for change resistant
    management, that is where leadership comes in. 
    
    ..Kevin..

    The only way to make meaningful improvements in revenue per employee is
    to streamline your business proceeses so that the same number of people
    can actually handle the increased business.
    
    We've tended to "streamline" by fiat -- declaring functions unecessary
    without any serious effort at re-design. This just forces other people
    to perform these functions rather than doing their own jobs.
    
    Of course, we've also laid off people who were directly generating
    revenue. I'm not sure what the rationale might be in this case.
    
    \dave

Back to the original topic, no Ken vs. Bob.

What I think we have here is mainly a cultural clash. Digital is, like it or 
not, a US company. And US ways of doing business, at least in the last 3 
presidencies, is less and less government involvement in  businesses and 
lives. (Smaller is better).

In contrast, even if things may be changing due to economic pressures, Europe 
governments and organizations have much more involvement in every day's life. 
European governments and other parties have stronger say in the running of 
businesses and every day's life. For instance, I was going to relocate to 
Holland a while back. I learned that taxes there are 60+%. Why? Government 
provides many social and public services. Efficiently, I might add, because 
noone was openly unhappy with that rate.

When the time gets tough, regardless of who's fault it is, it seems to me that 
a company may move swifter in the US than in Europe. So regardless of the poor 
or good management, when a company decides to make changes that affect 
directly the employees in Europe, a US one will have a harder time to deal 
with European cultures when trying to inact them. And Palmer may have hit the 
wrong cord with us with the statement, but I would say that the vast mayority 
of US-based companies' CEO's will say roughly the same.

As usual, just my opinion
/OLD

    	A lot of the reactions have been in response to "what will the
    market let us do?".  Hence, Rdb gets sold when someone's analysis is that
    Oracle et al will spend the $$$ and dominate the market, the money
    spent on Rdb may not be recovered and despite the investment to date we
    left the market.  Don't forget we don't have the captive audience to
    the extent an IBM has.
    
    	And my .02 on HP - they had the right product (PA-RISC/UNIX) at the
    right time with the right plan.  Not Unlike VAX/VMS in 1978. 
    
    	The market (*not* Stock Market) is tough, they are the ones who decide
     whether you succeed or fail, regardless of chimps, blimps, or
    whatever.  
    
    	Leo
    succeed or fail 

    RE: .56
    
    <The market (*not* Stock Market) is tough, they are the ones who
    <decide whether you succeed or fail, regardless of chimps, blimps, or
    <whatever. 
    
    I agree with this, with one important qualifier.
    
    The stock market is the most reliable and impartial judge of whether 
    or not you are perceived to be succeeding or failing.
    
    Ken
    
    
    
    

    
    
    	How is Digital percieved in ALL our markets ? We can do
    	business in ANY market, it is nothing to do with "inflexible"
    	employees. 
    	
    	Tell me - is it a  U.S. salesman that is selling our products
    	in France or a Frenchman (or woman) ? 
    
    	Get real - our problem is revenue growth.
    
    	Now tell me, in general detail in this public forum, has our
    	marketing budgets increased, decreased or remained the same ?
    	
    	Tom	
    

re: .44
    >>    Actually, if you compare Kens last @5 years (1987-1993) with
    >>    Bob's last @5 years (1993-1997), DIGITAL lost @$15 billion
    >>    of worth under Ken (100pts stock decline * 150m shares), but the
    >>    company's worth has remained relatively constant under Bob
    >>    (share price unchanged at @35).
   
    >I find this very difficult to decipher in any way that makes sense.  The
    >big stock market crash was what wiped out most of Digital's share price.
    >- paul
    
    Those *are* post-crash numbers (DEC closed at 130 on Oct 19th, 1987).
    K

    re .56
    
    Right on Leo!
    
    As for the thread of this note, anyone from anywhere can complain all
    they want about the state of things.  But that does not change the
    simple fact that things are the way they are.
    
    Everyone, in what is left of this company, around the world is just going
    to have to figure out how to do more with less!  Become creative -
    no pun intended, but "do whatever it takes."  It is all we have left.
    
    All the crying and screaming and moaning, etc., is not going to save
    this company.  It will only hasten its demise.
                                              

    Few of us have the wiggle room to be creative... or more to the point,
    to be able to execute on those creative ideas.  We are in tactical work
    only mode trying to just stay even with less people, and the same or
    more work.
    
    What you see here are people who *have* been busting ass to try and
    "save" what's left of the company.  But when all the hard work goes for
    nil when someone decides to churn the salesforce, or cut another 10%
    from the headcount, you end up with simple frustration.  And I think
    the criticisms are probably well aimed.
    
    You are right, however, complaining isn't going to make it better. 
    
    We are either on the right course, with the right pilot and navigators
    (all 200 of 'em), or we are on our way down the toilet.  Hold on for
    the ride, and cross your fingers.
    

    	RE: stock market
    
    	Does anybody really believe there is a corrolation between stock
    price and reality?  Most of the money is made with the 1/8 point shifts
    and knowing when to trade 'em.  This is what you see day to day, the
    big funds own the place.  It's not unlike trading pork bellies.
    
    	But, on the downside...  DIGITAL's price has revolved around about
    $30 per share.  Nobody is taking it up or down more than that which
    translates to the value of the hard assets + value of intangibles 
    (technology) + wishes and dreams for tomorrow don't translate to much
    more than $5B.
    
    	I sincerely hope this looks better, and I actually believe that it
    will.  Again, the market will judge.

    re .60:
    
    >As for the thread of this note, anyone from anywhere can complain all
    >they want about the state of things.  But that does not change the
    >simple fact that things are the way they are.
    
    I couldn't agree with you more - but 'anyone from anyhwere' should
    include BP, and he can complain about the European workforce, etc. etc.
    but things are what they are.
    
    

    re: the comparison between DEC and IBM...
    
    this was about 20 replies back, the comment was made that IBM did all
    their cuts in one 2 year period. And now they are pulling along quite
    well thank you very much.
    
    Here we (DEC) are, some 7 years on, and there are _still_ cuts
    happening!
    
    For crying out loud people/management, can't you see that this constant
    Chinese Water Torture of 'drip, drip, drip...' has destroyed virtually
    all morale in this place?
    
    Many many of us are committed to helping get DEC back on its' feet, and
    back to roaring along, making the next 3.5 decades the "good old days".
    
    The constant threat of cuts is un-nerving, though. How are we expected
    to work in an environment that, let's face it, you don't know if you'll
    still be here in 6 months time?
    
    If there are more cuts, make them, and damn well be done with it!
    
    Then let the rest of us get back to work without the constant threat of
    the "Sword of Damocles" hanging over our heads!
    
    H
    
    p.s. my situation is slightly different from others; you see, I'm a
    contractor. At times, this makes my job more secure than a lot of the
    poor bleeding permies :'/

    Re .55
    
    > What I think we have here is mainly a cultural clash. Digital is, like
    > it or not, a US company.
    
    So what ?  DEC was a US company under Ken Olsen too ans it was fun
    working for both Ken and DEC, we were proud.
    
    Regards,
    
    Frans

re.58:

>        Now tell me, in general detail in this public forum, has our
>        marketing budgets increased, decreased or remained the same ?

Marketing is that non-essential thing that gets cut first. We _even_ freeze 
advertising when going through a tough quarter.

Dave.

>Marketing is that non-essential thing that gets cut first. We _even_ freeze 
>advertising when going through a tough quarter.
    
    
    Sheer stupidity. Fails word me.

I recall when DEC was the second largest compuer company in the world (in 
terms of computer-related revenue).  That is what Palmer inherited.

HP is now far larger
Fujitsu's computer business is now larger
Compaq is now larger
By Christmas Microsoft will be larger
By Christmas Dell will be larger

Think about that last one.  Dell computer, a company started by a guy in his 
college dorm room that only sells PCs through mail order, will be larger than 
Digital's hardware, software, services, OpenVMS, UNIX, NT, etc. combined.

Thanks, Bob.

I'll take RICHER over BIGGER anyday. Since when is size a good measure of
business success?

You get bigger to get richer (if that's what you MUST do). You get smaller to
get richer (if that's what you must do). 

Yes, I understand that those companies listed are RICHER as well as BIGGER now.
But this could change. You never know. 

Steve B.

    re: .69 Bigger=BETTER
    
    I would wager to say that most of the great industrialists of the 20th
    century would say Bigger=BETTER.  In fact, success is *not* measured
    purely by PAT by Wall Street, *growth* is a measurement of success.
    
    To society at large, is it really a boon to see a GM, AT&T, or
    Digital Equipment shedding tens of thousands of well paying jobs?
    
    And on a personal level, it sucks to be a large company in decline, and
    not a small company on the rise.
    
    Data General shrank, is profitable, and is entirely irrelavent.  As is
    Wang.  Is that *good*?  Who got richer?  I'll admit that a lot of money
    changed hands, and a lot of people got richer, and a lot of people
    poorer.  But I doubt that in the final accounting that shareholder
    value was enhanced by shrinking the companies... although it may have
    helped to allow them to survive - what did they survive as?  Do *you*
    want to work for either?
    
    What was Digital's total capitalization at it's height, it's revenue,
    and it's employee population?  When all is said and done, and we are a
    DG sized, irrelavent company - what will the total loss be?
    
    Our current actions (like shrinking the company) is akin to cutting off
    the flow of blood to extremities when the body is freezing.  It may be
    necessary short-term to survive, but in the long term may cause
    irreversable damage.  If something does not happen, and happen soon, to
    reverse the current course, Digital will cease to exist as a
    recognizable entity.  We continue to shut down the flow of blood to more
    and more critical functions, and some of our decisions are creating
    unrecoverable damage.
    
    

RE .68

Regardless of what Palmer has or has not done, your reply highlights the fact 
that many of the companies that have succeded (Compaq, Microsoft, Dell) are in 
the market space that the previous administration didn't want to recognize.

>> Data General ... Wang...
>>Do *you* want to work for either?

Sure.  I could care less how big or small they are.  I could care much much
less what they used to be.  What they or DEC used to be is irrelevent.  If 
they offered me interesting work at a competitive salary in a decent environment
I'd work for them.  Thats why I came here.  

Those that experienced DEC when it was at the top are very fortunate. And its 
too bad the company isn't what it used to be.  But it is still a great company
to work for and IMO, the best place I've worked. And I've been very happy at 
some of my previous jobs.

Why do I have a feeling I should elevate the flame shields :-(  ?

    |the market space that the previous administration didn't want to recognize.
    
    That would be the toy market, right?

    |the market space that the previous administration didn't want to
    recognize.
    
    And the current administration has done so well in ?
    
    \dave

	When Palmer came in he also had a bunch of problems to resolve. Lets
compare how Digital is today and think about how things were going when Ken
left.

	Ken was Digital. His heart was definitely NOT into laying off people,
because he cared, because he was attached. But lets face it folks, cutting was
definitely needed. I don't know if the extent the cuts had gone was needed, but
some serious cutting had to take place.

	Could/would Ken have made the cuts that were needed at a pace they were
needed for us to survive? I seriously don't think he would have as the cuts
should have been made long before they were actually done. I think the company
would be in worse shape had Ken not left. Financially that is.

I think that the next 6 months will be a critical
period for Digital.  Either things better look up
substantially, or I think there's a good chance that
the company may slide down to the next "level", 
whatever that "level" may be.

BC

compacts pocket, perhaps?

    You know, 2 notes back, as the owner of several dozen shares of DEC
    stock and a trained economist I can comfortably say, you're right!
    Tragically I think we don't have six months we are viewing the end of
    something. The stock is at 34 and appears heading south and we are not
    dominating any aspect of the computer buisness except thinking up new
    excuses for not growing during a bull market in computer buisness. 
    Now on that gloomy note I'd better get back to fixing a VR260.
    
    Fred

    re .75.
    
    Imagine where we might be today had we spent *MILLIONS* of dollars on
    marketing or production instead of on TFSOing the first round of folks
    that we "let go"....remember the first round? "You are the most useless
    people here at Digital, so here is $100,000+ and all sorts of other
    benefits, and please don't come back to work thanks".
    A good management team would have FIRED those who were so useless to
    the company years before, and put out dollars into something POSITIVE.
    I wonder if anyone has kept track of the $$ spent on cutting. 
    
    Were all those cuts NECESSARY?? Maybe not so necessary had we had
    more of an imagination and some guts. How WERE things going when Ken
    left?  Were we better off then or now? With Bill Gates in charge...oops, I
    mean Bob Palmer, we've been dog paddeling in swamp water....at least
    we KNEW Ken's heart was with DEC and that it was more than a  job or 
    another bonus. 
    
    ...just the fact that we've rehashed this a hundred times over the last
    5 years and nothing (NOTHING) has changed --and most things have
    gotten worse-- says something about where we're at. 
    

| <<< Note 5117.79 by CSC32::PITT >>>


| Imagine where we might be today had we spent *MILLIONS* of dollars on
| marketing or production instead of on TFSOing the first round of folks
| that we "let go"....remember the first round? "You are the most useless
| people here at Digital, so here is $100,000+ and all sorts of other
| benefits, and please don't come back to work thanks".

	Correct me if I am wrong.... but the 1st round was under Ken, wasn't
it?

| we KNEW Ken's heart was with DEC and that it was more than a  job or
| another bonus.

	Which is why I said I thought we are better off now....financially. I
like Ken much better. He was more of a personable type of guy. There is more of
a chance of keeping an employee who could make more elsewhere with Ken than
with Bob.



Glen

.80

>| Imagine where we might be today had we spent *MILLIONS* of dollars on
>| marketing or production instead of on TFSOing the first round of folks
>| that we "let go"....remember the first round? "You are the most useless
>| people here at Digital, so here is $100,000+ and all sorts of other
>| benefits, and please don't come back to work thanks".
>
>  Correct me if I am wrong.... but the 1st round was under Ken, wasn't it?

That's correct.  Could be that even the 2nd round started under Ken, i forget.
But then you said in .75:

>  Could/would Ken have made the cuts that were needed at a pace they were
> needed for us to survive?

Obviously he didn't.  From what i heard at the time, layoffs were forced on
him by the BOD and he resisted quite heatedly.

But the question also remains, were "the cuts that were needed" made once
Bob came in?  I don't think so.  The biggest single cut that would've helped
would've been a mandatory enforcement of a 1:20 manager:next-level-reports
ratio above the line manager level with a cut of all the redundant managers
(not hiding them as high level individual contributors or in "business
process manager" or "architect" roles).  But the fad of the early '90s was
to cut the disposable worker bees, so we cut sales to the point where
we couldn't do more than tread water revenue-wise when the "Bush recession"
ended, and we cut services to the point that we couldn't take care of our
existing customers, never mind the new ones we were trying to sign up.

Again, i don't think Ken or Bob is at fault so much as the BOD in getting
caught up in the early '90s business mythology of shrinking out the
"unimportant" workers.  They set the parameters for this debacle.  To
paraphrase a Viet Nam quotation, "To save this company we had to destroy it!"

- paul

| <<< Note 5117.81 by EVER::CONNELLY "Are you paranoid ENOUGH?" >>>

| >  Could/would Ken have made the cuts that were needed at a pace they were
| > needed for us to survive?

| Obviously he didn't.  From what i heard at the time, layoffs were forced on
| him by the BOD and he resisted quite heatedly.

	Then would we be a better company had Ken stayed? I really think
financially, no.

| But the question also remains, were "the cuts that were needed" made once
| Bob came in?  I don't think so.  

	I really don't know if they were all needed. I am leaning towards your
view on this. 

	As far as your manager view goes... I agree.



Glen

>                     <<< Note 5117.72 by 12680::MCCUSKER >>>
>
>>> Data General ... Wang...
>>>Do *you* want to work for either?
>
>Sure.  I could care less how big or small they are.  I could care much much
>less what they used to be.  What they or DEC used to be is irrelevent.  If 
>they offered me interesting work at a competitive salary in a decent environment
>I'd work for them.  Thats why I came here.  

It's very difficult to find "interesting work at a competitive salary
in a decent environment" in a company that does not command its own destiny.
When a company bounces from pillar to post, tagging on the coattails 
of alleged "partners" and "allies" and ducking into the shadows when a major
competitor (who also may be one of those allies) makes a threatening move,
there's little room for the direction setting creative work that many 
in our field would class as "interesting."  Such a company is reactive.  
Its actions are "in support of the alliance."  Its decision process is 
volatile and always subject to second guessing from afar.

Small companies can make a difference, but that's because they choose to
follow their own path, set their own goals, and create the rationale
to be different.
DG is "irrelevant" because they apparently choose to compete in a commodity
area with little attempt to force market direction.  They may be financially
successful in their own way and keep their people (owners, employees, 
suppliers, and customers) happy, but expectations are moderate.

Big companies can be "me too" as well, but they are unlikely to stay big
and maintain their influence, especially in an arena like computers that
is changing as rapidly and in as many directions as the computer arena is.

Stagnation is death.

- tom]