Conference 7.286::digital

    I don't entirely understand the circumstances you describe---my skills
    are not in the area that yours evidently are.  However, I understand
    enough to believe that you are reacting correctly.  There is a
    temptation to stick to the old plan when resources are taken away---
    I guess it's some kind of "macho" or "stiff upper lip" thing.  To stick
    to the old plan is quite wrong, in my opinion.  It encourages those
    who control your resources to short you, because they feel you can
    "make do with less" and still meet your commitments.  After enough of
    this, of course, you can't.  If you don't tell them, quickly, then you
    have the greater part of the fault for the failure.
    
    A while ago my development manager unexpectedly declared a holiday:
    no work on the project was to be done that day.  I'm sure she intended
    it as a morale-boosting thing, since we'd all been working quite hard.
    However, my first reaction was to tell her that all of the project
    deliverables were delayed by one day.  She didn't like that much
    (the word was "inflexable") but she accepted it.  (Not that she had any
    choice.)  It didn't really make any difference, because our schedules
    weren't so precise that we could predict down to the day when a piece
    would be ready, but I felt that a matter of principle was involved.
    
    It sounds like you've gotten a larger dose of the same problem I got,
    and I think your concern is quite properly placed.  If everybody did
    what you are doing, perhaps those who control resources would
    understand the consequences of shifting them around.
        John Sauter

    re .0
    
        Budget cuts are always disagreeable, but budget cuts without the
    indication of the business priorities for the use of the remaining
    cash are, IMHO, irresponsible.  It's just this that we've seen both
    last year and this, for the systems development budgets.
    
    A corrolary would be cost cuts without prioritization of the use of
    the remaining resources is equally short sighted and irresponsible,
    almost criminaly so in the current economic environment.
    
    David Goldblatt - Europe I.M.

    Doesn't .0 conflict in a direct way with one of Ken Olsen's recent
    thoughts on how Digital ought to managed?
    
    (In paraphrase) After a commitment is made, and budget and resources
    are allocated, don't touch the budget or resources.
    
    It's a good idea because it encourages stability and doesn't encourage
    money to be spent as soon as it is granted "just in case" it disappears
    by whim.
    
    (I'm assuming that this was an ordinary effort, and not one that has
    been overtime and over budget for several quarters and needed to be put
    out of its misery)

    If your home is burning down around you, you don't worry about
    building a garage.  
    
    That light at the end of the tunnel could be a train coming.
    
    IMHO,
    Joe

    What would happen if you took a risk and overspent your new
    budget number but were successful in bringing in revenues ????
    
    My guess would be a pat on the back assuming you could justify
    the new revenue did come in because you over spent (and took
    the risk).
    
    Lloyud

    The information for intelligent business decisions usually resides at
    the level of management where you can still be close enough to feel the
    real (not the imagined ideal) marketplace.  Top management intervention
    in these areas that ought to be controlled by the manager closest to
    the action can be explained in two ways (and I don't presume to know
    which is which in any case). 
    
    1) Top management doesn't recognise the limits of its knowledge,
       its "reach exceeds its grasp", in an old-fashioned cliche.
    
    2) The appropriate level of management is not taking the risks or
       assuming the empowerment that it could.
    
    In case 1) someone should be screaming upwards "Get out of my turf!"
    while in case 2) someone should be screaming downwards, "Get off
    your butt!"  I fear that managers at the bottom don't push back
    effectively in case 1) and that managers at the top don't demand
    high enough performance in case 2).
    
    Perhaps both levels are blind to how much they need and interfere
    with each other.
    
    Dick

It sounds like .0 is a typical case of eating our seed corn.  Yeah, we feel
satisfied over the short term and we starve in the long term.

Its sad, but I've seen it continually.  While management close to the work
feels the pain, management further up make edicts that meet their metrics,
regardless of the business consequences.

BobW

I think this is forced by the street and money.   We as a company have
gotten kicked many times for posting dismal results and then investing
more into R&D.

The pity of this whole thing is that companies (not just DIGITAL) seem to
be forced into this pattern to help the majority of theinstitutions (read
funds etc) dress up their results for their quarterly reports.  The small
investor (me and you) would really like the stock to go up, and from experience
(gee from WAY WAY back) realize that noone can build Rome in 90 days.


					Bill

    The base note also belongs in the ASIMOV::MARKETING notesfile.
    
    Ray

    A quote from a class I'm taking this week on Investment Evaluation
    Methodology:
    
    	"A company's most profitable time is sometimes that period
    	 just before they go out of business."
    
    Translation: If you're in trouble, and all you focus on is "cutting
    costs" without an eye to increasing revenue and doing things
    differently, you are not in a healthy position.
    
    	- No more bottled water
    	- No more Wall Street Journals
    	- No more lunches while traveling on day trips
    	- No more mileage within 25 miles of Maynard (since recinded)
    
    Does it sound like we're on the right track, mentally???
    
    :^|
    
    /se

    I remember that a sign of a troubled company was when the CEO started
    appearing in ads....
    
    Of course...more pizza deliveries to the pentagon means....?
    
    Gil
    

    
    If we somehow vaporized 25,000 of us tonight, when the survivors came
    back to work what would be the difference? We would be a company
    smaller by 25,000 people. 
    
    We would not be better. We would not design, make, sell, and service
    better products more quickly. We would not be smarter.
    
    For years we have known that at Digital you throw people at problems.
    If we cut out the people, the problems will still be there. The major
    problem is that our expenses are designed into our products: they can't
    be squeezed out, they have to be designed out. 

    John H.

	If 25,000 people were let go many of those left would be
	demoralized. It would be obvious to all that the company had
	changed, that it was no longer the company we hired on with.
	Many people both inside and outside of Digital would immediately
	be convinced that Digital was in far more trouble then they had
	previously thought. As a result many customers would look to
	other suppliers and many employees (especially the very best)
	would start looking for new jobs. Sound good to you?

			Alfred

    Companies across the U.S do it all the time. When I hired into Dec in
    1984 I didn't expect lifetime employment. Having been with Xerox,
    Sperry and Wang, I was used to the way U.S companies treat people,
    and for some reason these companies just keep going and going.
    
    It would make me very happy if Digital can avoid letting a "lot" of
    people go, but it is becoming hard to fathom how that will be achieved.
    Since I am in that department that sees all our orders, the amount
    coming in is not encouraging. And I for one believe, if you don't have
    orders, you don't stay in busiess.
    
    Dave

    RE: .12
    	
    	I'm paraphrasing the text, but it was something like ...
    
    	>> everybody knows that when we have problems we throw
    	>> people at the problem
    
    I think this is one of our biggest problems. Throwing people at
    problems can be VERY expensive, and methinks we do it with too much
    gusto.
    
    /se
    
    
    
    

    This is precisely our problem. The cost of sales is way too high in
    DEC. We need to reduce the cost of sales by having a leaner, more
    efficient salesforce, co-operating with CMPs and OEMs in order that we
    sell more for less. 
    
    
    /andy/

    Andy, this rasies an interesting point that affects me.  I'm in an
    industry that was and is neglected by Digital at least in terms of
    supporting CMP's.
    
    As a consequence of this, Sun has got all the good ones.
    
    How do we lower cost of sales, when some CMP's need equipment, cash,
    and technical assistance?

    re: .16
    
    The "cost of sales" isn't being driven up by the number of sales reps
    that we have.  We are pretty much in parity to other companies in our
    sales force numbers, and behind IBM since their latest reorganization.
    
    What drives the "cost of sales" number up is the way sales reps have
    to spend their time.  I routinely watch the sales account manager for
    my main account spend hours on the phone trying to accomplish things
    that our "automated" systems are supposed to do, but don't.  Hours on
    the phone trying to unscramble conflicting software policies that make
    an orbital ballistics formula look simple.  *Many* hours on the phone
    trying to track down the Corporate person in charge of "mumblefratz".
    Hours in meetings of eight or ten people figuring out how to sell our
    solutions, not to the *customer*, but to our own internal bureaucracy.
    
    Getting the customer to buy something is the easy part sometimes. 
    Getting internal DEC people to agree to sell and deliver something
    is usually a horrendous task.
    
    FWIW,
    
    Geoff Unland

    Monetary/technical/other support to CMP's is supported by senior VP's
    to my certain knowlege.  DEC sales wars get in the way.
    
    How to reduce CoS?
    
    		1/ Reduce beurocracy, get rid of a reporting structure 
    		   that means that Sales spend more time trying to
    		   work DEC out than sell to our customers.
    
    		2/ Cut down the number of offerings in similar markets.
    
    		3/ Adopt a twin pronged approach of selling systems by
    			a) Selling software, let hardware be a natural
    			   follow-on
    			b) Work with CMP's ( people such as ORACLE)
    			   to reduce our CoS by letting them do it
    			   for us
    
    		4/ Create a centralised, integrated Marketing organisation
    		   that are measured on SALES.
    
    
    /andy/

    re:
    
::It would be obvious to all that the company had
::	changed, that it was no longer the company we hired on with.
    
    
    	But Alfred, wouldn't you say that that's already obvious to all?
    ...and that to anyone hired before 1984 or 1985, it's quite obviously
    no longer the company with which we hired on?
    
    The 1984-1987 period changed Digital -- probably irrevocably -- so
    much, that those of us here before then can barely believe that is, in
    fact, the same company.
    
    -DM-

	re .18:

	Right on, Geoff. We don't have too many people - we have too
	much internal clutter, and support systems that plain don't
	work.

	re .19:

	Right on, Andy. 

	The common factors, to me, are:

	1. We need to decide what business(es) we are in, and then FOCUS
	   on them.

	2. Instead of hordes of people looking busy, we need to have a
	   smaller number of THE BEST people who really know their stuff.
	   Today we can have (in some accounts) a salesman who does little
	   except buy lunches, several consultants who are effectively
	   salesmen, and nobody who knows much at all about Digital's
	   products and services. More often they know something about
	   a small fraction of the technology.

	   The effect of a team consisting of a real "barrow-boy" sales
	   person, an experienced consultant who understands business
	   AND technology, and one or more expert techies, can be quite
	   amazing.

	At DECville we saw it all again (for the thrid or fourth time):
	top management decided that what customers want is SOLUTIONS,
	so invite the top customers and keep that nasty old technology
	out of sight. What happened? We had hordes of customers in the
	Technology Park all the time. They were fascinated by the VAX
	4000, VAX 9000, ftVAX, FDDI, DECstation 5000, NAS, Electronic
	Publishing, Clusters, TP, CASE, etc. etc. Those supposedly
	"business oriented" senior managers asked some very searching
	questions about our technology, and were a lot easier to explain
	things to than any bunch of Digital managers I've ever met.

	/Tom

    re .21
    
    I think Tom has identified one of the key practical problems which
    gets in the way of doing many things in Digital.  It is what I call
    "the messy desk syndrome".

    When there is so much clutter on the desk that you can't find the
    job you just left before the last visitor, that is the Messy Desk.
    
    When you throw away the final draft, thinking it is an obsolete copy.
    
    When you can't find the file in your A1 because you don't remember
    where you filed it, that's the messy (electronic) desk.
    
    I think that we have grown and changed in size, structure, and content
    so much in the past decade, that our management can no longer find
    the backbone of the company, the essential core that gives us a
    corporate identity.

    Our corporate desk is so messy, so cluttered with non-essential
    activities (not business), that it is hard to even know if we're
    on a win or lose track.
    
    IMHO,
    
    Dick

    And the machine that generates all this mess is called a......
    
    computer.
    
    
    Dave
    
    

    Tosh! It takes a human to really mess things up.
    
    
    /andy/

    .21> We don't have too many people - we have too much internal
    .21> clutter, and support systems that plain don't work.

    AMEN!  I'm a Sales Executive and have 14 years of selling with DEC.
    This will be my 10th DEC 100 (big deal).  Let's take *today* in the
    office:

    	(1) The company from which we get our postage meter send a
    	    representative to my office to ask if they could please get
    	    the bill paid (we are a remote office)....I handle it...I have
    	    to...we have no way to send out material until we get a meter.

    	(2) We are working out of a DUMP.  I will not allow customers into
    	    the office - it would be most embarrassing. Even when they offer 
    	    to come to the office I request that they don't .. I take the
    	    time to take the literature/quote/etc.. to them.

    	(3) We are told to cancel our bottled water service.  That leaves
    	    the commode and a communal sink which is just outside the
    	    rest room (note singular - one toilet for the DEC office and
    	    the other people in the building).

    	(4) We get a call from an office about 150 miles from us.  Seems
    	    as though our mail is being sent there..."where are you?" and
    	    we have to handle this.

    	(5) This office has been opened for four months and I still to
    	    not have a terminal on my desk to read mail, do quotes, etc..
    	    most is done from my house, on my system, my printer.  To get
    	    the stuff that we *do* have in the office, two sales people
    	    took a day off, drove 140 miles to another office to "borrow"
    	    a terminal and printer.

    	(6) We don't have a fax so I spend time driving across town to
    	    a commercial fax service to retrieve 6 totally worthless
    	    faxed pages.

    Yep...we really need to reduce the cost of sales in this office.  I was
    hoping to stir up about $500K to $1,000K this year for this new office
    of DEC ... I did that in the first three months....now...take a wild
    guess at how much business there is out here...and where it's going.

    ...and...more...I'm just too tired to mention it all and if I start
    recalling today...I'll just get drunk...again.

.21> Instead of hordes of people looking busy, we need to have a
.21> smaller number of THE BEST people who really know their stuff.

    As I said, I'm a Sales Executive with a lot of successful experience
    behind me...I think that I know my stuff...I think that I'm a damned
    good sales person ... I love selling ... I love to beat the hell out of
    the competition ... but...take a good hard look at how I spent/spend my
    time and tell me that this company really gives a damn how much
    experience I have and what I can do.

.21> Today we can have (in some accounts) a salesman who does little
.21> except buy lunches, several consultants who are effectively
.21> salesmen, and nobody who knows much at all about Digital's
.21> products and services. More often they know something about
.21> a small fraction of the technology.

    The term that is applied to that is sometimes called "strategic
    selling" but we have yet to discover that this is NECESSARY.

    Do I sound somewhat "caustic", Tom?  Yep...I am.  It's been a very very
    very bad day...

    Jerry

Re: .25

Jerry has given us a very real graphic example of why the shotgun approach to
cost cutting is undermining some of the foundation of the company. Instead of
taking the time and energy to find out where specific expenses are too high 
(and I mean which sites, which groups, etc.) the directives come down that
literally destroy field morale. All organizations within this corporation
do not spend or misspend equally.

-Terry

    Time was when a DEC manager wouldn't let a directive from KO or anybody
    else get in the way of his doing the right thing.  We had hiring
    freezes and hired, because there were managers that fought and won the
    battle to exempt some project for specific business purposes.  We had
    travel freezes, and traveled; the same approach was applied.
    
    What I think happened is that we filled many middle management
    positions with people who don't understand push-back and therefore,
    can't do it.  Since when have there been edicts that weren't
    challenged?  If managers are unable or unwilling to challenge an edict
    that doesn't make business sense, we have already lost part of what
    helped us become successful, and I worry that we also lost the ability 
    to tell someone that (s)he is too chicken for their job.
    
    Am I all screwed up?
    
    Dick