Volume 9, #2_______________________________________________________________ February, 1990
"MGMT MEMO" was written by Richard Seltzer in Corporate Employee Communication for the Office of the President. It was written for Digital’s managers and supervisors to help them understand and communicate business information to their employees. You can reach Richard at firstname.lastname@example.org
The Merger Of Product And Industry Marketing -- Why & Where Next?
Marketing Directions by Peter Smith, vice president, Product/Industry Marketing
Account/Industry View by Bob Hughes, vice president, National Accounts
Organizational Changes In Industry And Product Marketing
International Accounts Marketing Organization Formed
Management Challenge: Encouraging Diversity Within Digital, While Appearing As One Company To Our Customers by Win Hindle, senior vice president, Corporate Operations
Digital: The Corporate Citizen by A1 Mullin, vice president, Corporate Relations
Using Technology To Advantage - Digital’s Network And The Free Flow Of Ideas by Win Hindle, senior vice president, Corporate Operations
Digital To Institute Drug & Alcohol Testing Program For Certain Jobs In The U.S.
‘Headcount Equivalency’ To Be Used For Fy91 Budget Planning
DECWORLD ’90 Scheduled For Next Summer In Boston
Robert Everett Receives National Medal Of Technology
Sam Fuller Elected IEEE Fellow
Rubin Olsher Appointed To UCAR Foundation Board
At a gathering of marketing managers in Marlboro, Mass., in November, Peter Smith and Bob Hughes explained some of the reasons behind recent organizational changes and talked about future directions. The following two articles are based on their comments.
To put into perspective the recent organizational changes — bringing together Product and Industry Marketing — we should look at the conditions that led to their creation. In the early 1980s, the company had two major problems areas: our interface with customers and our asset management. It was not unusual for Digital sales specialists from different product lines to call on the same customer and suggest different solutions or to offer the same VAX computer with different delivery dates and terms and conditions. Our asset management problems were particularly evident in the size of our inventories and our return on our engineering investment.
In response to these problems, we gave increased power to the geographies and established Product Business Units (PBUs). We gave the geographies more responsibility for tactical profitability and for organizing to improve responsiveness to customers. Meanwhile, on the engineering side, the "PBU" approach made it easier to measure our return on investment. In support of those efforts we created Industry Marketing and Product or Applications Marketing.
Over the last five years, we’ve done a lot better job of dealing with our customers, and we did a tremendous job in improving our asset management. In other words that reorganization was very effective in helping us meet the problems of the early 1980s.
During the late 1980s, customer requirements have changed, and technology has advanced very quickly. As a result, today we face a new set of problems. We need to bring the product and technology side of the company much closer to the customer requirements. The account management and customer requirements part of the company has to become more influential in our product direction. And the main role of marketing now is to act as a change agent and integrate our marketing plans across the entire company.
At the same time, we are concerned about short-term business, especially in the U.S. So much of our marketing activities must be in support of immediate opportunities, helping account management to get business.
The new "business segments" are playing a key role in tying together the investments of the company and providing new ways to look at the company’s plans and returns. We have to understand the importance of that integrating mechanism while maintaining our functional expertise. And we also have to understand and adapt to the new, intensified account management focus in the Field.
Some specific changes exemplify these general ones. For instance, the Digital Customer Centers or DCCs are intended to serve as a conduit to convey all of the capabilities from inside the company that can serve the customer — whether from the business segments, the PBUs, application groups or services — and to support the account management focus and the Enterprise Integration focus in the Field. We have already established three DCCs in the U.S. — in Detroit, New York, and Atlanta - and several more are planned and are under way.
The company also is putting in place a set of interrelated strategic plans. For instance, the business segments, PBUs and application groups have compiled a sales support matrix that represents where the company is making strategic investments from a technology and application point of view and what kind of sales support specialists are necessary. And, at the same time, the accounts are putting together account opportunity maps to represent the requirements of the individual accounts. Those opportunity maps become part of the "district synergy" plans that identify sales support requirements. And those plans become the basis for application solution plans, which then get fed back into the account opportunity map process.
The Educational Services people have cooperated tremendously with the product and applications people to train these sales support specialists in the appropriate areas.
Those two areas — the DCCs and sales support planning — are very important tie-ins between Digital’s product and applications efforts and the account plans.
The better we get at communications, using that feed-back mechanism between the account opportunity plans and the strategic investment of the company, the better we’ll be in terms of having the right support and the right product and solutions capability in front of the customers.
We’re just beginning to work out the new relationship between Industry Marketing and Product Marketing. In my mind, there are at least three key areas in which this relationship can make a big difference for the company.
First, the whole computer industry is guilty of "pouring" technology at our customers. We have been able to produce technology so fast that, in our industry, we don’t take the time to explain how they can use it and what it means to them. Industry marketing people bring with them the ability to communicate product capabilities and solutions in ways that customers can understand. We must add that perspective to the work of product marketing and the DCCs.
Second, in Product Marketing, we’ve done a good job in applications and solutions integration work intended for individual functions and departments such as engineering or manufacturing. But we sometimes fall short in those instances where customers need to integrate across their various functions, instead of just within them. Industry Marketing is a catalyst to that cross-departmental work.
Third, the company continually needs start up work in newer markets. And the industry approach is a good way to identify opportunities and start up new activities that can open major markets for the company.
These are a few of the benefits which Industry Marketing brings. We need to reinforce and maintain the important role of Industry Marketing, and we need to continue to work on building synergy between Product, Industry Marketing and our Sales and support operations.
You can think of organizational change at Digital in terms of the "molting" of a lobster. Every couple of years, we shed our organizational shell to make way for new growth. (Cont’d on page 4)
We "molted" when we were at $500 million in revenue, and we did it at about $1 billion. $2 billion, $5 billion, and $10 billion. Now we’re "molting" again in an attempt to restructure our body to get ready for the next period of growth.
I've been through four of these moltings now. The last time around, we created Industry Marketing and Applications (or Product) Marketing. Now we're integrating marketing and creating an account focus.
I don’t think the molting is done yet. Parts of the shell are organized in a consistent quality fashion and other parts aren't there yet. After all, the end purpose of this game is to create a shell that allows us to grow.
It’s important to realize that we’re all going through this change, and we’re all at various stages of recognizing what has happened, and coming to terms with it emotionally, as well as in a business sense.
The ultimate end point of our organization is to be able to satisfy any customer’s needs for any Digital product or service anywhere in the world, any time the customer wants it, in zero seconds and at zero cost. That’s an end point that we could never achieve. It's physically impossible. Yet it’s a goal very similar to "zero defects" in manufacturing. If you have the goal in mind, you keep shooting for an organizational model or product model that will get you there.
As an example of the same kind of effort, consider what Buick has been doing recently to reduce its selling cycle. About two years ago, they offered to send potential customers a floppy disk for their PC that would let them configure their own Buick at home. Customers could then take a printout to their end-user dealer and negotiate price and delivery.
Later, to shorten the selling cycle even more, Buick provided an 800 number to let customers dial-in by modem from their PC. Now they let customers configure and order their cars directly, on-line, and have the cars drop-shipped to dealers for pick up. This means there is no negotiation, no intermediary, no channel of distribution that customers have to go through. You can order anything you want, anywhere you want, in almost zero seconds.
What was the result? From Buick’s point of view, customer satisfaction went up. Profits went up, too, because customers tend to order more options and more expensive options and are willing to pay more than they did going into the dealer, because now they no longer feel compelled to negotiate price and delivery.
Throughout our industry, there are examples like that of efforts to focus on effective channels of distribution to maximize profit and improve return on investment.
It’s important that we explore in those directions for a number of reasons. Distribution costs in the Field last year exceeded Manufacturing costs for the first time in our history. And it is expected to stay that way. We must focus on cost elements and look for alternative ways to do things.
There are 5,500,000 businesses in the U.S. today, and we make at least 100.000 products. And we expect that there will be as many products coming along in the next five years as we have seen in the last 10 years.
So how do we, as a high technology company, get the technologists close to the customer so customers can buy anytime, anywhere, anyplace? What organizational model do we need?
We haven’t got the resources to do deal directly with 5,500,000 customers. Maybe, eventually, we can develop the technology to do that, but we aren't there yet.
So in the Field, we search for ways to go after the customer. And people in Marketing help us figure out ways to make the products easier to sell and to get to the customer. Together we organize to do that.
In the Field, we decided we should focus on accounts, since they are the people who buy.
Half of our accounts roll up into similar kinds of buying entities called "industries." Of the 5,500,000 enterprises in the U.S., roughly 12,000 represent 80% of the purchasing for information systems in the U.S. Given the fact that you have limited sales and sales support resources and don’t have the technology to go after all 5,500,000 companies, it makes management sense to focus on 12,000, and to organize around that number.
An account focus made sense from another point of view as well. For instance, there are about a thousand finance companies in the U.S. - banking, investment, insurance, etc. Of that thousand, 10% are in the New York area and about 10% are in the Western area. But 35% of our financial services business in the U.S. comes out of New York and only 1 % comes out of the West. Why? This happens because of management attention, organizational direction, and the thrust of our marketing and sales programs. We put in the effort in one place and not in the other. So we thought that if we organized those accounts into a line of business by industry, we could drive investment in the right directions.
For 30 years we Invested by geography. The geography that did the best got the resources. That approach has benefits, but it has its down side as well. In Vermont, New Hampshire and Maine today, there are 35 sales reps walking around knocking on doors looking for $100,000-orders. Why? Because for years the region has done very well and hence has won new resources, who have been sent out to knock on doors. Meanwhile, in New York City there are 174 Fortune 500 companies we don’t even call on. And of the Fortune 1000 companies in the U.S., we have Digital business agreements with only half. That's a situation we’ve got to change.
It also makes sense to organize differently, so that management "adds value" to our sales effort. A typical district manager, with 80 different industries in the district, today adds value primarily from a "personnel" point of view. He doesn't really understand the business. But a district manager, whose focus is a class of accounts in an industry, can understand the business, can add an entirely different level of value, and can achieve much better performance.
Since all of that made sense, we organized industry marketing and sales and software support to go after business by industries and accounts.
But we made one mistake — we confused the Field. We had nine separate managers with nine different plans for executing this. It wasn’t clear how we were going to go from a geography organization to this account organization. And furthermore, we took the whole area infrastructure, which we were trying to reduce, and moved it to the account line of business structure and created the same overhead over again. Instead of simplifying things in the Field, we confused our people.
So Ken Olsen suggested that we call an "audible" at the line of scrimmage. He said, "You had the right idea — focus on accounts — but you created a bureaucracy. So redo it. Create yourself a management structure in the Field that remains the same. Let that be where your resources reside. Then figure out how you want to run that management structure — sometimes by accounts, sometimes by products, sometimes by industries. But leave the management structure the same." That’s what we did.
At the same time he told us that he wants each leg of this lobster to be functionally pure. The marketing side of MEM was doing engineering, and the software piece of the Field was doing engineering, and the sales piece of the Field was doing marketing, and the engineering piece of MEM was doing sales and that was leading to confusion. He wanted us to strive for functional excellence and functional purity. He wanted marketing responsibility in one place and sales responsibility in one place; not to try to control everything; rather to figure out how to get the work done through the districts (in the case of account sales) and through other product groups (in the case of marketing). He wanted sales in one place, but not to try to control everything; rather, to figure out how to get the work done through the districts.
As a result, we now have a simple district organization in the Field where all our people reside and are managed. In addition, 1 now have the management responsibility for the top 200 accounts, which represent at this time about 55-60% of the U.S. business, and the funding for those accounts. Districts will receive half their funding from the accounts group in order to execute the large account focus. And half their funding will come from plans that they put together locally to develop accounts that are local to their districts.
In other words, instead of planning just by zip code, we are in the process of determining how to develop large account plans across all geographies. Then we will roll that plan up by unit and district and have it approved by the account team across geographies.
This is a paradigm shift of the first magnitude — getting district managers to understand that their responsibilities extend beyond their district and that they have a broader plan to execute.
Our intention is to do that now for the top 200 U.S. accounts and to let the districts continue to plan by zip code for the others. Once we have experience in planning this way, we’ll expand; so districts can plan outside of their zip code for the accounts that extend outside of their districts. Eventually every account will be planned on an account basis rather than a zip code basis. And as time goes on, that will change the way district managers view their job.
Bob Hughes and Peter Smith recently announced the combining of Industry and Product Marketing in order to position our marketing resources to more closely link our customers’ needs with Digital’s product offerings. Bob Hughes has assumed the responsibility for managing the Corporate and Named Account Sales program reporting to Dave Grainger, vice president, U.S. Sales & Services.
The following Industry groups have been incorporated into this new Industry/Product Marketing organization and now report to Peter Smith:
o Consultant & Information Systems Marketing— Jim Higgins is the acting manager and sits on the Industry/Product Marketing staff.
o Public Sector Industry Marketing/General Services Industry Marketing - Peter Robohm is the acting manager for Public Sector, Education and Health Care Industry, in addition to his responsibilities as director for General Services Industry Marketing.
o Electronics Industry Marketing/Process Industry Marketing — Robert Horne is the acting manager for the Electronic Industry Marketing group, in addition to his responsibilities as Process Industry Marketing vice president, o Financial Services Industry Marketing — Claude "Sandy" Thomas continues his role as Financial Services vice president.
o Manufacturing Industry Marketing — The Discrete Manufacturing Industry Marketing group continues to be the responsibility of A1 Fink, the acting manager.
o Media Industry Marketing - Bob Farquhar, Media Services vice president, manages the Media Industry Marketing group.
o Telecommunications Industry Marketing — Dan Latham, vice president, continues to manage this group.
o U.S. MARCQM — Ed Kamins continues to manage this group.
Combining these organizations provides the opportunity to optimize marketing resources across the company. The new organization also enables Digital to further integrate customer and market information in the development of solutions and products to meet the changing needs of the marketplace. In addition, the marketing groups will continue to work closely with the sales organization to develop new market opportunities across industries.
The following organizational changes affecting Product Marketing were announced by Peter Smith:
o Sales and Distribution Systems (SDS) — A new Product Marketing group, Sales and Distribution Systems (SDS) includes the existing Distribution, Marketing, Sales, and Service (DMSS) organization and a new focus on retail industry unique applications. Eli Lipcon leads this new group as Sales and Distribution Systems Marketing vice president.
o Software Business Technologies (SBT) — Linda Moore manages this new group which will help Bill Strecker’s DSSG organization to develop and implement a business and marketing strategy for Digital’s software business technologies and associated services.
o Corporate Partner Group and Strategic Programs Group — Peter Graham has joined Product Marketing staff as manager of the Corporate Partner Group (formerly reporting to Eli Lipcon) and the Strategic Programs Group (formerly reporting to Linda Moore).
An International Accounts Marketing organization has been formed, managed by Jack MacKeen, vice president, to better enable Digital to address the needs of customers operating in a global marketplace.
This group will lead and coordinate a broad range of international activities. It will facilitate linkages between the U.S., European and GIA sales and marketing functions. In addition, it will strive for consistency across all three areas in business practices, selling programs, and service and support activities.
The organization consists of two elements:
o The International Accounts Management Office, managed by Dan Burkus, will coordinate the worldwide account planning process and the international needs of industry groups, and will develop international account linkages to the product and service organizations.
o The Internationa! Programs Office, managed by Joe Arayas, will identify and develop business practices necessary to operate in an international environment, coordinate international CSO (Complementary Solutions Organization) support programs, and apply a consistent all-channels strategy across the geographies where appropriate.
These individuals will work closely with the three area organizations and the corporate service groups to ensure that sales, service and support activities focus on maximizing customer satisfaction by improving ease of doing business on an international scale.
"Although we happen to be hosted by the U.S., our efforts in international accounts marketing are meant to address the needs of customers on a global basis", explains Jack. "Our task will be to improve Digital’s image as an international supplier, with the ultimate goal of positioning Digital as the computer industry leader in meeting the needs of international accounts.
"Through account management offices in each area, international account planning processes are being developed using a pilot group of Corporate Accounts. The goal is to have one quality plan worldwide for accounts that do business with Digital internationally. The geographies then fund and manage the approved account plan.
"In support of this goal, some of the issues we are working on include common templates across the world for account planning; integrated planning calendars; international business practices and support programs; and training content for international account managers.
"Our overall thrust is to meet the expectations of our international customers for consistent, seamless management of their business with Digital anywhere in the world. In a sense, this means manage the customer and CSO relationships the way we manage ourselves; i.e., use technology to leverage distributed operations toward achievement of corporate goals and standards."
In the Corporate Operations Committee, people managing Digital’s business segments, geographies, and other key operations come together to establish priorities and make decisions. Each business segment consists of a number of separate businesses. And each geography consists of thousands of accounts. In other words, there are thousands of people responsible for subsets of Digital’s business.
This approach allows for diversity, which is veiy important for the future of the company. We want many people to feel that they are running a piece of the business, because so many projects need focus and a feeling of ownership by those involved. Some ideas will fail, but enough of them will succeed so the company will succeed. That’s why we have divided the company into so many parts and don’t concentrate all our investments in one area.
Our Operations Committee provides an immediate opportunity to stimulate the flow of information in all directions throughout the company. In this committee, engineering groups, services, geographies and functions have an opportunity to integrate our product strategies for the customer to an extent that we’ve never done before. This committee has started the integration and serves as a symbol of the fact that we now operate as one, integrated company.
The "one-company" effort that we see at the Operations Committee level is a manifestation of what we want to occur at all levels of the company - a unification of our goals and management so that we can integrate all of our resources in front of the customer.
We need diversity internally because it provides us with the ideas we need to succeed. But to customers we must appear as one company. We have to unify all of our efforts and integrate them as we strive to solve our customers’ problems. That’s our challenge: How do we foster the diversity inside the company — keep people feeling open and free and keep the ideas flowing freely — and yet integrate our efforts to bring solutions to customers?
The network helps make this possible, but you can override the network. If we don’t have enlightened managers and supervisors, all the benefits of the network could go away, because they could come down hard on people’s ideas, not listen to ideas and discourage people.
A management style that discourages ideas can stifle a company. I believe our Employee Involvement Program is intended to send a clear message throughout the company that we want ideas from everyone, everywhere — including from people who aren’t yet connected to the network — and we will recognize the people who provide good ones.
Basically, the nature of work is changing. Technology is allowing a global enterprise to work together. And companies that are not global will soon fall behind because other more future-oriented companies are going to overwhelm them.
Due in large part to networking and information systems, organizations in the future are going to be very different. Companies that get themselves ready and use these new capabilities are going to be leaders in their industries. But to use the systems well, they will have to use management styles that complement the network capabilities — delegating authority and encouraging independent thought and initiative in order to take advantage of distributed computing.
While this is all new, it’s also very familiar to us. One might say that our company values have been built into our network. The free interchange of ideas, giving people responsibility, trusting people — those values are necessary if a company is to get full benefit from this technology. Management and technology are intertwined.
Our management style isn’t without faults, but it is the wave of the future. I believe we’re on the leading edge organizationally as well as technically. That’s what makes this business so exciting. More and more frequently, customers are asking us to help them reexamine their organizations to enable them to take full advantage of networking and information management technology.
Increasingly, when we deal with customers, we don’t just tell them what we make. We talk about who we are. Our people, our values and our management style are becoming an important part of what we "sell." Our experience in managing our diverse and complex global enterprise helps us help customers facing similar challenges.
(This article is based on a speech delivered at Digital’s Worldwide Public Relations Meeting in November.)
Digital is committed to the concept that it is good business to be a thoughtful neighbor and a responsible corporate citizen and, from the very first, has taken an active interest in the communities in which our employees and their families live and work.
"Digital, The Corporate Citizen," may be loosely defined as, "More than 125,000 employees worldwide acting collectively, with allegiance to Digital constituents: investors, employees, customers, vendors and the communities and countries in which Digital operates."
As a publicly-owned corporation, we must work hard to make our shareholders’ investments grow. Profit is one important measure of our progress in meeting this goal. Bui we realize that the ability of a company to grow and prosper is directly related to the well-being of its employees and their communities.
Our public involvement, therefore, is designed to meet both our business and social goals. We believe these goals are inseparable.
Our far-flung operations demand consistency in the way we present Digital to our customers and the other constituents of the company. 1 call it "One Face to the World." This is an outgrowth of a long-standing corporate philosophy of simplicity. We want all aspects of Digital to be clear and simple. We want simple products, proposals, organization, literature that is easy to read and understand, and advertisements that have a simple, obvious message. We have thousands of employees and many thousands of customers. We have to keep things simple to be sure we all work together. Our decisions and communications must always consider the impact on the people who will be affected by them.
In addition, we must remember that size and success in business beget power, and with power comes immense responsibility. As a corporate citizen, we have responsibility for our acts and their impact on the community at large. What we say, how we say it and when we say it has inordinate impact. A good example of this is the construction, content and timing of our quarterly financial press releases to our investors and the financial community. We are acutely aware of the impact of good news, bad news or, worst of all, surprises on our customer attitudes, stock value, and the confidence of shareowners.
Size and success also create high expectations on the part of employees, customers, investors, communities and governments. We have to manage these expectations and seize the opportunities these expectations create. Our stakeholders have a variety of expectations. For instance:
o investors expect to share in our success;
o businesses and communities expect support and advocacy of shared interests;
o governments look for jobs, technology transfer, tax revenues, and consideration for community health and safety;
o employees, in part, want stable employment, opportunities for personal growth, and a competitive recognition and reward system;
o customers expect solutions to their business problems, vendor commitment, quality products, service and support.
We do not have unlimited resources. Therefore, in managing some of these expectations we should attempt to leverage the opportunities we have for demonstrating our corporate citizenship. For example, AIDS is a worldwide health concern affecting our employees and their families, as well as the community at large. Digital is supporting efforts to educate, conduct research, and demonstrate human support through donations of cash, equipmerit and human resources.
We have given equipment to the World Health Organization in Geneva and to two major Australian health organizations doing significant AIDS programming. Cash and equipment grants have also been made to leading AIDS organizations in the United States.
The "Monet in the 90s Exhibition" is an example of citizenship in the cultural dimension. Here, Digital identified a one-time, high-quality opportunity, which is international in scope and supports three world-class museums. Sponsorship of this exhibition positions Digital as a leader in the arts and enables us to leverage our employee, customer and community relations.
Our citizenship displays itself in a variety of other ways. For instance, Digital creates jobs and, therefore, wealth. Last year, we supported our governments through $348.1 million in taxes. Last year, Digital also donated more than $35 million in cash and equipment to educational, health care, civic, cultural and environmental programs, and matched $5.5 million in employee contributions to non-profit organizations. By our presence in communities and in dealing with our vendors, we create additional jobs and services through a ripple effect.
Because we place pressure on the community infrastructure, in terms of roads, water, electricity, schools, etc., we have the duty of a citizen to support and help the community. We do this not only through taxes, but through direct efforts, particularly in education. Digital supports educational activities with large cash and equipment investments. Through Corporate Contributions we invested close to $13 million last year in: o educational support programs for kindergarten through graduate school;
o local community and employee scholarships;
o T.E.R.C.(The Technical Educational Research Center) an international program focused on interactive technology at the elementary through high school levels; and
o the Digital Faculty Program, a U.S. program to develop and retain valuable computer science and engineering faculty.
We want our employees, their families and neighbors to be proud of Digital and enjoy and share in the fruits of our corporate success. Cultural, civic and educational opportunities abound. For instance, child safety is a major community and family concern. A child-safety program entitled, Kids & Company, presented Digital with an outstanding opportunity. Through it, Digital managed a three-year development phase of a curriculum program for kindergarten through grade 6. This program was created not only to promote child safety, but to enhance a child’s self-esteem. We worked with communities and parent groups to implement the program in Digital communities. Once launched, the plans are to translate the program into other languages for use overseas.
Another topic which relates to Digital's role in society is concern for the environment.
As a good citizen, we believe we have a responsibility to keep our environment free of pollution and to set an example. A number of activities are under way to demonstrate this commitment. We have worked to develop innovative legislation here in Massachusetts and are working on opportunities in Europe to highlight Digital’s capabilities in this area.
Projects already under way include:
o Regione Lombardia (Italy), where we are managing two pilot projects to control pollution and to provide recovery and civil protection;
o The World Meteorological Organization (Switzerland), where one of the major programs is weather forecasting and global change studies;
o Weatherschool (U.S.), a television series geared to elementary and middle schools, preparing students for today’s high-tech world; and
o The Norway Project, a four-prong approach to worldwide environmental issues (academic conference, industry trade show, youth conference, and museum exhibition).
Digital’s involvement in these projects includes cash, equipment, human resource and technical assistance from our marketing, environmental and corporate groups.
We encourage all employees to take responsibility in community, social and government activities. We are always open for proposals as to what the company or an individual on company time may want to do in these areas.
A company of Digital’s prominence and success cannot operate in a vacuum. External forces directly affect the Company’s ability to do business. The principal question in a civic sense is: What are you giving back beyond compliance with business laws and regulations? You can be a corporate citizen and get by. But, what does it take to be a good corporate citizen?
On balance, I’d like to believe Digital has demonstrated it is a good corporate citizen. And many opportunities await us in the future to demonstrate our philosophy and, hopefully, encourage others to emulate us.
Digital’s network of computers connects all of our employees and our managers. It not only gives them an easy way of passing information and requests back and forth, it can also help stimulate ideas and allow the best ones to surface.
I believe the best model for establishing priorities, and identifying and acting on the best ideas is found in our Engineering organization. It’s magnificent. Ideas are suggested throughout the organization, by whoever has the idea.
Engineering ideas rattle around inside the network all of the time. If an idea lasts in the system and the person backing it is persistent, the idea becomes a proposal, asking for funding or other decisions. Then the idea is taken more seriously and gets bombarded even more by opinions from throughout Engineering. Finally, it gets approved or not approved.
Over time, that process has resulted in Digital having a set of standards, products and practices which are the best in the industry.
How did we get the best product line in the industry from such a seemingly chaotic process? It’s the free flow of ideas. Good ideas move ahead based on their merit, and they rise to the top of the pile. Top level engineering managers did not impose these ideas.
The ideas can come from anywhere, even from outside the groups that normally deal with such products and technology. But, out of that intense interaction, and with the advantage of our internal network, comes a strategy and a set of standards and an implementation that are the best in the industry.
We need to replicate these interactive processes and transfer them to the rest of the company.
Of course, the system isn’t perfect. There are a lot of frustrated people in Engineering. Every engineer does not feel that his or her idea has gotten the attention it deserves. And probably, for one reason or another, some ideas have been shot down that shouldn’t have been. But, on balance, we have come out with an excellent strategy.
To me, this interaction is one of the most exciting parts of our company. Out of this very tumultuous engineering effort, we created the most disciplined product line in the industry.
Now, the use of network communications is spreading throughout the company, in particular to the Field. This is necessary as we try to reduce costs and make closer links between customers and the people who design and build our products. Our network and information management products allow direct communicaton and enable us to do away with much of the filtering we have depended on in the past. It will take us awhile to get used to this new working environment, but the results should be exciting and valuable.
As we extend these capabilities and this working style, we will be putting account managers in closer touch with product developers. The ideas of people in the Field and of customers will be added to this free-flowing process that helps generate our products and strategies.
The development organization is familiar with the networked environment. To the Field it is still new and they aren’t using it as as much as they could. The change will take time, but it will happen, and it will be very important for our future. Connecting customers’ ideas directly into our development organization should have a profound effect on our strategy.
Drug and alcohol abuse have been elevated to a major public problem in the U.S. today. As a result, there is a growing expectation that large companies with employees in the U.S. should lead in the overall effort to deal with this problem.
Digital has been wrestling with this issue for many months, working to develop policies and practices that remain consistent with the company’s basic values, while meeting new and complex legal, customer and business requirements. At the same time, Digital believes employees should be responsible for their own behavior, and expects employees to conduct themselves in a safe and healthy way.
Abuse of drugs or alcohol can show up at the workplace in the form of performance problems such as absenteeism, tardiness and inability to do quality work. It can lead to waste or safety hazards in a manufacturing environment, or poor decision making or engineering errors. It can affect customer relations because of behavior that endangers customers’ workplaces and profitability. Consequently, Digital does not condone abuse of drugs or alcohol either inside or outside of the workplace.
Digital has strong substance abuse and employee conduct policies to deal with problems that show up in performance on the job. For instance, the use, possession or distribution of illegal substances on Digital property, or on a customer site, could be cause for termination from the company.
Since alcohol and chemical dependencies are treatable diseases, Digital, through its Employee Assistance Program (EAP). makes various resources available to employees who may have a drug or alcohol problem. Employees who have a problem are strongly encouraged to
take advantage of the opportunity to seek treatment, and are able to do so with confidentiality. For those who seek treatment, the chances of recovery are great, but it is up to the employee to take the first step toward treatment.
The Testing Program
The U.S. government and customers have been putting increasing emphasis on testing as the most visible means for combating drug abuse. In response to an ever-increasing number of requirements and obligations from government agencies and customers, Digital’s Executive Committee has decided to test employees in impacted jobs to determine whether they have used illegal or controlled substances, or are under the influence of alcohol.
At first, this program will affect certain truck drivers in the U.S. (in accordance with regulations from the U.S. Department of Transportation), some employees in the Government Systems Group in jobs requiring security clearances, and those who provide service to a few customers that are particularly sensitive about this issue because of health, safety or security considerations. But everyone should bear in mind that, in the current climate of public opinion regarding drugs and drug testing, the number of people affected probably will expand in response to further government regulations, customer requirements and other business needs.
Digital is setting up a program that has five goals:
o to educate employees about the effects of drug and alcohol abuse,
o to make sure the testing is done consistently, fairly and accurately,
o to make sure people are treated with respect,
o to make sure employees know that treatment and other assistance is available to those who seek it, and
o to make sure information about test results is distributed only to those with a clear need to know.
The people affected will be notified in advance. Each will be given detailed information and opportunities to ask whatever questions they may have in order to help them understand their responsibilities under the program, if they should become subject to it. Digital is aware of the complex legal restrictions and employee relations issues surrounding testing, and will be instituting quality training for affected managers.
For FY91, beginning with the budgeting process, Digital worldwide will change its management measurement for employee population — the way it counts people — to "headcount equivalency." An individual will be counted for the number of hours scheduled to work, expressed as a percentage of the standard work period. For example, a Digital employee who is scheduled to work 20 hours of a standard 40-hour work week will be counted as .50. Current reporting systems will be enhanced to report numbers of employees in total (gross) and by "equivalency."
The program, which gives managers greater flexibility in meeting their needs for people, has been approved by the Finance Committee and the Personnel Management Committee. For more information, contact Cris Day, SSM1 Finance, DTN 276-8294; Ragi Mehta. SRCOF Finance, DTN 244-6160; or Mhairi Paget, MEM Finance, DTN 223-5663.
DECWORLD ’90 is scheduled for July 8 - August 1, 1990, in Boston, Mass., at the World Trade Center. The DECWORLD program, Digitarsworld wide information system symposium and exhibition, originated in Boston in 1983 and has been held here and in Cannes, France, several times since. The North American-focused DECWORLD ’90 event will be followed by a comparable, European-focused event, DECV1LLE, in Cannes, France, in September.
DECWORLD ’90 will be a selling event within an educational setting. Expanding on the Brown University program, it will focus its seminars and demonstrations on Digital’s application solutions and technology that customers need in a rapidly changing, competitive global environment. It will be designed as both a customer and a sales and sales support education program. Over 10,000 customers and their account teams are expected to attend.
Pat Zilvitis will serve as the DECWORLD ’90 Chairman; Peter Zottowill be the DECWORLD ’90 sponsor and provide management support for Pat and the DECWORLD ’90 program. Pat joined Digital in 1987 as Group Marketing manger for IS Marketing. Prior to joining Digital, Pat was president of Martin Marietta Data Systems and vice president of Sales for the Perkin- Elmer Computer Group. Pat also spent 17 years with IBM in various Field and Headquarters positions.
Robert Everett, a member of Digital’s Board of Directors, has been awarded the National Medal of Technology, the nation’s highest honor in technology. President George Bush presented Bob with the medal in a ceremony at the White House.
Bob received the award for his work with Jay W. Forrester of MIT on Project Whirlwind. Project Whirlwind began in 1944 as an idea for a universal flight trainer and aircraft simulator for Navy aviators. It quickly became much more — the first general-purpose, high-speed, real-time parallel synchronous electronic digital computer. Its speed and reliability are now commonplace in the minicomputers and microcomputers that are its direct descendants.
Bob created Project Whirlwind’s basic design, made numerous technical contributions and instructed and guided the Whirlwind team for more than 10 years. Digital President Ken Olsen also worked on the project.
Bob joined MITRE Corp, in 1958 and was named its president in 1969. He retired as president and chief executive officer in July 1986, and became a member of Digital's Board of Directors that same year.
He is presently chair of the Defense Science Board and a senior scientist on the Air Force Scientific Advisory Board. He is a member of the Strategic Defense Initiative Advisory Committee and a member of the Commission on Engineering and Technical Systems of the National Research Council.
The National Medal of Technology was established by U.S. Congress in 1980 to recognize individuals or companies that have made "exceptional contributions to the well-being of the nation through the development or application of technology."
Sam Fuller, vice president, Research, has been elected a Fellow of the Institute of Electrical and Electronics Engineers (IEEE). Sam was honored for his leadership and contributions to computer architecture design.
The grade of Fellow recognizes "unusual distinction" in the electrical and electronics engineering profession. It is conferred only by invitation of the IEEE Board of Directors.
Sam joins four other IEEE Fellows in Digital — Ken Olsen, president; Bob Glorioso. vice president, High Performance Systems; and Mike Riggle. senior corporate consultant.
Sam's leadership contributed to the high performance input/output architecture (CI) which was used in high-performance VAX systems following the VAX-11/750 system; local area networks and the adoption of Ethernet at Digital; and the XCON expert system for configuring VAX systems.
Sam is responsible for the company’s corporate research programs which include groups in Maynard and Cambridge, Mass.; Palo Alto, Calif.; and Paris, France; joint research with universities, and Digital participation in the Microelectronics and Computer Technology Corp., a research consortium of several companies.
He joined Digital in 1978 as Engineering manager for the VAX System Architecture Group and was appointed group manager, Corporate Research and Architecture, in 1981. Prior to joining Digital, Sam was an associate professor of computer science and electrical engineering at Carnegie-Mellon University in Pittsburgh, Penna.
While at Carnegie-Mellon, he was involved in the performance evaluation and design of several experimental multiprocessor computer systems. One widely referenced example of this work culminated in an operational 50-microprocessor system, a forerunner of today’s commercial multiprocessors.
Rubin Olsher has been appointed to the Board of Directors of the University Corporation for Atmospheric Research (UCAR) Foundation, headquartered in Boulder, Colorado. Founded in 1986, the UCAR Foundation is chartered to accelerate the pace at which science serves society. A private non-profit corporation, it develops innovative and productive new relationships among the atmospheric and related sciences, government, and private industry.
Rubin manages and coordinates Digital’s corporate business relationships between the Federal Advanced Research Agencies (FARA), and Digital’s Engineering, Marketing and Field management. He founded the FARA Corporate Task Forces, comprised of key advanced engineering, marketing, and field groups, including Digital’s Federal Systems Group, Corporate Research Engineering, LDP/Science Products, Engineering Systems Products, and Education Industries Group. These task forces selectively participate in joint funding and collaboration with individual university researchers, and targeted scientific research centers, whose fields of expertise focus on computer-related scientific and engineering research.
Don Busiek, vice president, has assumed a new role reporting to Jack Smith, senior vice president, Engineering, Manufacturing and Marketing. In his new position, he will propose the methods and organizational structures for helping Digital focus on software as a mainstream business. He will also address the need for a mechanism for new, innovative, strategic ideas to be proposed, tested, measured and implemented through the Field organization. Most recently, Don served as vice president, Enterprise Integration Services.
Pat Cataldo, Educational Services vice president, now reports to Peter Smith, vice president, Industry and Product Marketing, and Russ Gullotti, Enterprise Integration Services vice president. Inclusion of Educational services on the EIS Management team reinforces the important role training plays in providing total solutions for customers. Membership in the Industry and Product Marketing organization recognizes the importance of Educational Services as a Marketing tool for Digital.
Cary Gherman has been named Corporate Waste Management consultant engineer, reporting to David Barrett, corporate manager, Environmental Health & Safety (EHS), and John Caulfield, corporate manager, Waste Management. In this newly created position, Cary will be responsible for providing full-time environmental support for the worldwide waste minimization initiative. He joined Digital in 1981 as an Environmental, Health & Safety Engineer in the Greenville printed wire board manufacturing facility. From 1986 to the present, he has been a Corporate Industrial Hygienist/Safety Engineer in the Corporate Department of Industrial Hygiene and Safety.
Ron Glover has been appointed Corporate Personnel Policy manager, reporting to Erline Belton, manager, Corporate Employee Relations. Ron has been at Digital over six years as a Personnel attorney in the Law Department. In his new role as Corporate Personnel Policy manager, he will be responsible for providing leadership and strategic direction for policy development in the company.
Russ Gullotti is expanding his current responsibilites to assume the position of overall Enterprise Integration Services vice president. In this role, he will be a member of the Operations Committee. Russ served as CSS vice president and, in 1989, began, to integrate CSS, Educational Services and Software Services functions into Enterprise Integration Services.
Peter Hatfield has been named Defense Agencies Group Market manager, reporting to Harvey Weiss, vice president, Government Systems Group. Peter is currently Defense District Sales manager and will continue in that role through the end of January. Four of the units that report to him in that role will continue to report to him in his new position.
Pan Infante has been appointed vice president. Digital Information Technology, reporting to John Sims, vice president, Strategic Resources. Dan joined Digital in 1973 after a 17-year career with RCA. He has held a series of key financing positions, his most recent being group controller for Manufacturing. He became a vice president in 1985.
Bud Keating has been named GIA Customer Service vice president, reporting to Dick Poulsen, vice president, GIA, and Don Zereski, vice president Customer Serivces. Bud joined Digital in 1981 and has held a number of key management positions within Customer Services. He was appointed Business Ventures Group manager in 1986 and been responsible for GIA Customer Services since last April. Prior to joining Digital, Bud was the vice president of customer services for a Digital OEM.
Joe Lombardi has been named Direct Marketing Organization (DMO) End-User Sales manager, reporting to John Alexanderson, vice president. U.S. Direct Marketing. Joe has worked for Installed Systems Marketing for the past six years, most recently as the Field Development Group Marketing manager. He has also been the acting manager for U.S. Installed Base Sales.
Susan Moloney has been named Manager of ESD&P/MCG (Educational Services Development and Publishing/Media Communications Group) in the United Kingdom, reporting to Paul Gillot, UK Educational Services Manager. In her new position, she has program responsibility for establishing the Digital Video Network (DVN) and Digital Graphics Network (DGN) in Europe. She joined Digital in 1981 as a Marketing Communications Specialist for Digital’s Manufacturing Product Group. In 1983, she joined the Media Communications Group in Merrimack, NH, and has been the MCG Design and Development manager since 1986.
Mark Roberts has assumed a new role as MEM/MarCom manager for Product and Applications Marketing, reporting to Peter Zotto. In his new role, Mark will provide the functional leadership for Digital’s Product and Application MarCom strategies including Advertising, Promotional Literature, Customer Events and Trade Shows, Direct Marketing and Sales Tools. Mark has been with Digital for 19 years. He was most recently Product Operations Manager and Announcement Strategy Committee chairman. He was the first DECworld Manager for DECworld '84.
Barry Rubinson, senior consulting engineer, has accepted the position of technical director, Enterprise Information Management and Transaction Processing, reporting jointly to Hans Gyllstrom, Database Systems Group and PBU manager, and Dennis Roberson, Transaction Processing Systems Group manager. In this position, Barry will be responsible for the integration of the Technical Strategies and Architectures for all the groups comprising Transaction Processing and Enterprise Information Management. In addition, he will be responsible for the development of an overall "enterprise architecture." Barry began his career with Digital in 1974. He helped architect the Storage Controller (HSC-50), which is the basis of VAXclusters and started the Database Advanced Development Group.
Brian Wade has been named Security Marketing
Group manager, reporting to Harvey Weiss, vice president,
Government Systems/Marketing, in Harvey’s role as manager,
Security Strategic Business Unit (SSBU). The SSBU was
created last spring to pull together various parts of
Digital that are responsible for electronic information
security products, capabilities and services. Brian will
be responsible for developing and driving Digital’s
overall Security architecture, products and service
strategies across all markets worldwide. The group will
work closely with the Secure Program Office and Secure
Systems Development in Engineering, and with the newly
formed European Security Office in the United Kingdom. At
Digital, Brian has served as a sales representative and
sales manager in upstate New York and Corporate Account
manager for GTE Corp. Most recently, he was the Business
Development Programs manager for the LDP/Science
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