Snapshots of DEC

By Richard Seltzer

DEC was the creation of its co-founder and president Ken Olsen, who for four decades shaped the cadre of managers and the corporate culture that motivated and enabled one generation after another of creativity and innovation as his company grew from a small team in 1957 to a global corporation with over 140,000 employees when it was bought by Compaq, which was then bought by Hewlett-Packard. Fortune Magazine called Ken "the ultimate entrepreneur". This book consists of articles written for the company's employee newspaper in 1982-1983, around it's 25th anniversary, reflecting on the company's past and future. They provide insight into the myriad challenges of a rapidly growing company in the pioneering days of the computer industry.

• Language: English
• Publisher: Seltzer Books
• Release date: Oct 16, 2018
• ISBN: 9781455448180

Book preview

Snapshots of DEC

articles by Richard Seltzer from DECWORLD the company newspaper 1982-1983

Preface

DEC - The First Twenty-Five Years

Gordon Bell Talks About Engineering at DEC

Ken Olsen on Engineering Education

PDP-11: All Out to Win

Innovations and Risk-Taking -- Views on the Future of the Computer Industry from Captain Grace Hopper, Computer Pioneer

Captain Grace Hopper's Lessons

DEC's General International Area (GIA): Sales and Service from Sydney to Toronto, from Tokyo to Rio

Going International: the seeds of DEC's worldwide business

Jean-Claude Peterschmitt Remembers - The growth of Digital Europe

DEC Introduces Personal Computers

Preface

DEC was the creation of its co-founder and president Ken Olsen, who for four decades shaped the cadre of managers and the corporate culture that motivated and enabled one generation after another of creativity and innovation as his company grew from a small team in 1957 to a global corporation with over 140,000 employees when it was bought by Compaq, which was then bought by Hewlett-Packard. Fortune Magazine called Ken the ultimate entrepreneur.  This book consists of articles written for the company's employee newspaper in 1982-1983, around it's 25th anniversary, reflecting on the company's past and future. They provide insight into the myriad challenges of a rapidly growing company in the pioneering days of the computer industry.

DEC - The First Twenty-Five Years

by Richard Seltzer, from DECWORLD, the company newspaper, September 1982

From modest beginnings in an old mill in Maynard, Massachusetts,  DEC (Digital Equipment Corporation) has grown, in just 25 years, to be the second largest manufacturer of computers in the world (according to published surveys of the worldwide industry). Its products -- from tiny microprocessors to large mainframe computers -- have  become models of excellence in diverse markets and applications, helping individuals as well as schools, governments, research institutions and large and small companies of all kinds to perform their work more efficiently and effectively.

To respond rapidly to market needs, DEC divides its business into manageable pieces and delegates responsibilities to many individuals, rather than concentrate them in the hands of a few individual initiative, integrity arid accountability are encouraged at all levels. This work environment means that the talents, inspirations and efforts of many different people can quickly be brought into play to meet the shifting challenges of the highly competitive computer business.

In many ways, the most recent year was one of the most challenging and satisfying in the company's history, demonstrating the vigor and flexibility of this large organization and the resourcefulness of its 67,000 employees.

Our twenty-fifth year was a great one. says Ken Olsen, President. "We grew 20%, invested heavily in new products, were able to offset strategic price decreases by reducing our costs in than ten years. That's not bad in the middle of a worldwide recession. We have reason to be proud.

We have suffered from having good times for too long. he explains. "People, countries, economies and companies cannot tolerate good times for very long. It's not healthy.

Ken Olsen, President of DEC

"We had several years when things seemed too easy. Our sales people had to spend most of their time telling customers how long they'd have to wait to get our products. Demand for our existing products made it impossible for us to develop new products. Throughout the company, we developed bad habits.

"Two years ago I was frustrated. It took three years to develop a new product. It took four months to get a printed circuit board. We had committees on top of committees to check everything.

But now, says Ken, "after a lot of effort and the recession, we are good. Now you can get a printed circuit board in a week; and the new products move so fast, it's hard to keep up with them.

We did quite well with our old ways of doing things, notes Ken. Now the way we've started turning things around, we'll be so efficient I don't worry about anybody in the world.

Win Hindle joined DEC in 1962 as assistant to the president. He was promoted to product line manager in 1964 and to vice president and group manager in 1967. He became vice president, Corporate Operations in 1976. (Photo by Peg Blanchet, U.S. Area News)

Win Hindle Remembers -- Managing a Fast-Growing Corporation

"When I started at DEC in September of 1962, the company had about about 400 active employees. It was growing well/ That year we did sales of $8 or 9 million. Of course, at that time we were a privately held company, and were not disclosing our sales and earnings information to the outside world.

"My first Job was assistant to Ken Olsen. He gave me a variety of assignments. For instance, I started a formal engineering scheduling system to ensure that engineering got done on time, and I also recruited some engineers and sales people.

"We had a small Personnel Department, but we had very definite ideas about how to handle people and how people should manage. We had a strong feeling for the individual and wanted to be sure our Personnel policies enabled us to provide Jobs that people would be excited about and could accomplish, that had goals and measurements, Many of the same things we talk about today, we were Just as interested in then,

"We recruited mostly in the Massachusetts area. I think at the time I Joined we had only one sales office and that was in Los Angeles, where Ted Johnson was the manager. Then we opened a second one in New Jersey, just outside of New York. A year or so later, when we needed to open a sales office in Chicago, I was sent there to hire someone to open and manage it.

We had a Works Committee that was the chief policy-making body, as the Operations Committee is today. Ken was the chairman and, as his assistant, I was the secretary and had to prepare the agenda and write the minutes. In that committee we decided that we were spending too much time on current issues and not enough on long range planning. So we decided to get away from our usual settings in the Mill and hold a meeting somewhere else. Later we decided we should really get off and away, not Just go to a motel. So we had a meeting at somebody's cottage in the woods. That's where the name Woods Meeting came from -- a meeting away from the plant where you consider longer range issues.

In those meetings, we would plan the size of the company over the next five years. As it turned out, when we compared our actual performance to the long range plans, we found that we had usually grown faster than anticipated five years before.

PDP-6 and the product line structure

"We did, however, face a very critical problem around the time of the introduction of the PDP-6 in 1964. That machine was larger and more complex than we should have attempted considering how small the company was at the time . We had difficulty finishing the hardware engineering and the software, and all the best engineers in the company were recruited for that project to try to make it work. While they were concentrating on the PDP-6, where we were losing money, no one was working on our other machines -- the PDP-5, PDP-7 and our modules -- that were making money.

"It was at that point that Ken realized that we had to change the organizational structure so that we wouldn't arbitrarily put all of our resources into one product and to make sure that we spread our resources in the same proportion as we were seeing success.

’So it was out of that experience with the PDP-6 that the product line structure in the company came about. Each product line budgeted resources that nobody else could take from them, and those resources had to be planned by the beginning of each fiscal year, and the plans had to show how we were going to make a profit.

"We could have gone out of business because of the PDP-6 if we hadn't made those changes. Fortunately, we were in good shape with our other products