Volume 2, Number 1 __________________________ January, 1983
U.S. Field Regroups To Take On New Responsibilities
Ed Kramer To Head Technical Group
New Market Group Created
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
Digital In The Press
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 marketing 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.
Kramer will become manager of the Technical Group, which has
been temporarily 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.
A 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, president, 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 understand 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 continue 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 succeed," he explained.
Win also emphasized the need to market and sell what has been already ordered 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 corporation 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 efficient, 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 explained .
Considering office automation for its own operations, the U.S. Senate invited 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 December 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 productive. 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 electronic calendar and scheduling system. The Federal courts use our electronic mail system to speed up issuing judicial decisions. Also, a Department of Defense organization has automated its procurement and purchasing functions 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 emphasized 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. corporations 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 management; quality of products or services; innovativeness; value as a longterm investment; financial soundness; ability to attract, develop and keep talented people; community and environmental responsibility; and use of corporate 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 innovativeness, 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 decisions within a few broad policy guidelines." Digital was one of six companies 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 dramatic 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 entitled "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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