New Market Group Created
Volume 2,
Number 1
__________________________
January,
1983
U.S. Field
Regroups To Take On New Responsibilities
Ed Kramer To Head
Technical Group
Ken Olsen
Explains The Goals Of The New Digital
Win Hindle
Talks About Transition To The New Digital
Ken Briefs
U.S. Senate On Office Automation
Coping
With Unprecedented Change, Intense Competition
Effective
immediately, Sales in the U.S. will be managed through three
Area Management Centers, each of which incorporates existing
Regions. Reporting to Jack Shields, vice president, group
manager, these Area Centers will be responsible for geographic
Sales, the revenue plans, backlog management, and the
consolidation of all operational goals and tasks; this includes
the primary interface to Manufacturing for Order Administration
and product forecasting. They will help the sales organization
to target opportunities and propose plans. They will also
interpret strategic marketing plans for tactical implementation
by the sales function and provide geography-specific support
Programs. In addition, they will be responsible for industry
marÂketing including the government and telephone companies
accounts. They will be located in the Greater Maynard area.
The
first, managed by Chick Shue, includes the Northeast and New
York/New Jersey Regions and is responsible for the telephone
companies accounts. Dick Pascal will replace Chick as New
York/New Jersey regional manager.
The
second, managed by Harvey Weiss, includes Mid-Atlantic and
Southern Regions and is responsible for government accounts. The
third, managed by Dave Grainger, includes the Western;
Southwestern and Central Regions and has responsibility for the
U.S. Area Distribution Group.
U.S.
business operations which have been part of the product groups
will be shifted to these new Area Centers by July 1. For the
interim, each Center will work in association with specific
product groups to ensure that FY83 revenue plans are met. The
transition has already begun and is being managed by Owen Brown,
who is on temporary assignment from the Technical Volume Group.
In
addition, the role of Corporate Sales, to be managed by Jerry
Paxton, is being strengthened. It will now include worldwide
responsibility for new product introduction, sales training,
technical support, international account management, and the
existing sales program function.
Ed
Kramer will become manager of the Technical Group, which has
been temporÂarily managed by Win Hindle for the last several
months. Ed, who has been vice president, U.S. Area Sales, for
the last four years, will report to Ken Olsen and will be a
member of the Operations Committee.
New Market Group CreatedA
product marketing group has been created to meet the equipment
needs of Digital's entire installed customer base., Called the
Installed Base Product Group, it will consist of the Accessory
and Supplies Group (A&SG) and the Traditional Product Line
(TPL).
The
group will also focus on the sale of add-on products, thus
centralizing this function under Wayne Furman. John Alexanderson
has been named manager of the new product group. He will report
to Jack Shields, vice president, group manager.
"The
goals of 'The New Digital' are quite simple. We want to simplify
the company and increase our efficiency and productivity," said
Ken Olsen, presÂident, at December's State of the Company
Meeting. "As much as possible, we want to give each group the
opportunity to first propose their own goals and then to have
complete responsibility for accomplishing their plans.
"Our
campaign has been to have everyone have goals which are theirs
and to give them the freedom to accomplish them," he emphasized.
"I
think we've gotten some good results from many of the things
we've done as part of 'The New Digital'. Some people say we
shouldn't call it 'The New Digital', that we're just trying to
return to some of our old values and we're not a new company.
But, we still call it 'The New Digital'. Some of the good things
that have happened we like to credit to 'The New Digital'," he
explained. As examples, he noted the transfer of business and
planning responsibility to the country managers in Europe,
reorganizations in Engineering, and the recent creation of the
Business and Office Systems (BOS) Marketing and Engineering
groups.
Alluding
to the pending transfer of customer operation responsibilities
to the U.S. field operations from the product groups, he said,
"One of our goals in these changes is to free our marketers from
most non-marketing tasks so they can create effective marketing
programs."
"The
results of change are usually good because every time you make a
change, every time you move or change the furniture, you end up
cleaning house. Periodically companies have to change the way
they're organized because when they stay constant for a very
long time, people start to work on the measurements and lose
sight of the obvious goals; the reasons for their work. We have
been due for changes and the economic slowdown has given us the
chance to begin some of them," he emphasized.
"This
is a transition year for Digital. It is important that we all
underÂstand the important issues that we are trying to address
and what we can do to help bring the company through this a
transition period to a new era of productivity and efficiency,"
said Win Hindle, vice president, Corporate Operations, at a
recent meeting of senior managers.
"The
most important task facing the company is meeting our FY '83
budget. We want the whole corportion to make its goal for the
fiscal year. When we put together the budget we knew it was a
tough goal, but we still intend to meet it.
"Roles
in some organizations have already changed as we evolve into
what we are calling 'The New Digital'. But to succeed this year,
we need to conÂtinue with the same kind of sales and marketing
alliances that have made Digital strong. In other words, the
marketing and sales organizations must work very closely
together in order to make this transition process sucÂceed," he
explained.
Win
also emphasized the need to market and sell what has been
already orderÂed from Manufacturing. "We have a lot of exciting
new products which are in a start-up phase and we want to book
as many orders as possible for these products. However, we have
other products which are not so new but which we have already
ordered. We have to be creative and do competitive marketing for
the products that are now flowing through the Manufacturing
system," he emphasized.
"Marketing
must continue to take a leadership role in the company in the
future," he added. "They must lead Digital to a greater market
share in the segments they're responsible for by organizing the
resources of the company so we can win. They must provide
expertise to users and potential users in the competitive
environment.
"Marketing is the thread that binds
together the various company to make plans clear. It ties
together products, the promotional messages, the merchandizing,
the sales and service plans,and everything around the product
that is needed to make it successful," he said.
He clarified
the meaning of the terms "markting markets" and "sales sells":
Marketing
Markets: Marketers must understand the opportunites in their
designated market segment: the product capabilities and waht the
customers say they will need in the future. They must understand
what products and services are being offered competitively. They must provide the
plans and promotional material needed to support product sales and
those plans have to be written and communicated to related
resources in the company so they are understood by everyone:
sales, advertising, sales training and customer service. The
bottom line is that the marketing plan should make it simple for
sales to sell.
Sales
Sells: Sales must understand the opportunities in the
local areas...the markets as well as the customers. They must
know their accounts very well and be able to anticipate
needs...not just needs related to one part of an account, but
the account as a whole. They also need to figure out what
marketing plans apply to specific segments of an account. They
must deploy the right resources into specific geographies to
maximize Digital's ability to sell products. Their bottomline is
to get results on the plans they have promised the corpÂoration
on an account-by-account basis. They will draw from marketing
strategies from all over the corporation to help achieve their
goals.
"In
The New Digital, some organizational changes have been evolving
for a number of months. They are being put in place to make
Digital more effiÂcient, to make it easier for customers to do
business with us and to make it easier for employees to identify
goals and work to meet them," Win exÂplained .
Considering
office automation for its own operations, the U.S. Senate
inÂvited chief executives of major suppliers to discuss the
current state of the technology as it relates to the Senate's
needs. Ken Olsen was the first to testify before the Senate
Committee on Rules and Administration on DecÂember 8. Excerpts
from his remarks follow:
"For
a long time we refused to use the words 'office automation'
because to some it implied doing mechanical jobs that human
beings performed. It also made the technology sound
intimidating. But this technology, in fact, helps people do the
things they do best, and takes care of dull chores that are not
creative and not satisfying. It frees people to be creative and
proÂductive. It makes their work more enjoyable.
"We
use word processing and electronic mail at Digital, and have for
several years. First thing in the morning when I come in with
half a dozen notes addressed to 14 people, ray secretary keys
them in and edits them on her screen. If the messages look clean
to her, she pushes a button and they immediately go to all 14
recipients anywhere in the world. We now have 8000 terminals at
our facilities around the world, and it is not uncommon to have
my memos delivered by 8:30 in the morning.
"It's
hard to measure efficiency and cost-saving in an operation such
as ours, but being able to communicate quickly, easily, and
positively is very satisfying. In fact, it is hard to conceive
of business life without this capability. My secretaries like it
so much, I am afraid they'd leave if we ever eliminated it."
He
noted that Digital's office automation systems are being used today
to solve informational needs of the Federal government. For
example, a Federal agency uses our systems to track
correspondence and reduce the time it takes to respond to
Congressional inquiries. The White House staff uses our
elecÂtronic calendar and scheduling system. The Federal courts
use our electronÂic mail system to speed up issuing judicial
decisions. Also, a Department of Defense organization has
automated its procurement and purchasing funcÂtions through the
use of our word processing.
He
added that effective office automation networks must complement
and coexist with the networks that the Senate already has in
place, and emphaÂsized that Digital is committed to help solve
the problems associated with multi-vendor networks. We support
industry and government standards for networking and will
continue to try, wherever feasible, to develop products which
conform to existing or planned standards.
"This
is a period of unprecendented change in our industry — a time
when new markets and unique opportunities are opening and also a
time when we are exposed to more intense competition than ever
before," noted Larry Portner, vice president, Corporate
Planning, at the State of the Company Meeting.
"Competition
among computer suppliers has been sharply intensified across the
board. Everybody wants in. The stakes are big, and it!s
easier to enter this business than ever before. The
technological barriers to entry are lower and the potential
rewards are greater than ever before. This is one of the most
dramatic growth industries of all time, and the marketplace is
still relatively immature. The survival mentality, stimulated by
the recession economy, further intensifies competition.
"Meanwhile,
the Japanese have stated an intention to dominate the computer
industry in the 1990s. As a result of and in reaction to their
efforts, the pace of technological development will accelerate.
Not that we'll end up where they've predicted, but now the
technological target is clearer.
"To win
in this new environment, we must bring our unique strengths to
bear. Where we have an edge -- for instance, in service, in
storage systems, in distrituion -- we must use it to distinguish
ourselves from newcomers to the field. We must develop new
markets and stay strong in mature markets. We ahve to stay alert
for opportunities that don't fit nicely into the organizatinal
structure that we currently have. We're going to have to sponsor
a new mode of collaborative behavior so we'll be able to find
important market opportunites and particiipate in them early,"
he concluded.
Digital
ranked as the seventh most admired of the 200 largest U.S.
corporaÂtions In a recent Fortune Magazine survey. It
was second in the office equipment and computer industry. The
survey was answered by 51 percent of the 6,000 executives,
outside directors and financial analysts polled about the
reputations of the ten largest companies in each of America's 20
largest industries.
Companies
were rated on eight key attributes of reputation: quality of
manÂagement; quality of products or services; innovativeness;
value as a longÂterm investment; financial soundness; ability to
attract, develop and keep talented people; community and
environmental responsibility; and use of corÂporate assets. The
overall score for each company was the average of its ratings in
all eight attributes.
Reporting
the survey results in the January 13, 1983 issue of Fortune,
Claire Makin wrote, "Digital Equipment, Number 7, ranks second
only to IBM in the office equipment group. 'Digital is
perceived,' says Michael Geran, vice president and
computer-industry analyst at E.F. Hutton, 'as the company that
founded and continues to dominate the minicomputer market.' For
innoÂvativeness, Digital gets a 7.86 (10 is perfection), eighth
among the 200 companies surveyed. It was rated 8.18 for
management and 8.13 for products, both outstanding scores."
Makin
noted that, "Almost all the high-rated companies stress
motivating and retaining their most promising managers by
allowing them freedom to make deÂcisions within a few broad
policy guidelines." Digital was one of six comÂpanies surveyed
that prides itself on being decentralized.
Digital
ranks third in the office information systems marketplace
after a deadlock between IBM and Wang for the first and second
spots according to the September 1982 issue of Open Systems
newsletter. Last year Digital was not ranked in the Top Ten
listing of Open Systems. "DEC has made a dramaÂtic
one-year jump from way back in the pack," the article said.
"Last October DEC began playing its own
cards—many of which, according to industry observers,
could turn out to be aces." So begins an article entitÂled "DEC,
a winning hand?", which was in the September 29 special edition
of Computerworld OA. The article traces Digital's
entrance into the new market and notes that "minicomputer giant
Digital Equipment Corporation has decided to get tough in the
office."
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