Back when Dell had acquired EMC Corp., there were concerns locally regarding the impact of Dell’s acquisition, that it would result in layoffs at EMC. In fact, many of those concerns hearkened back to the late 1980’s- early 1990’s period when such (former) giants of the technology world such as Digital Equipment Corp. (DEC), Wang Laboratories, Data General Corp., et.al., conducted waves of layoffs and eventually faded from the market. This was particularly ironic and tragic in the case of DEC, which in 1988 had been a very close number two to IBM. IBM’s sales reps were feeling the heat of competition from DEC and for the first time the confident feeling that IBM “owned” the data center was in question. Digital was the premier company in Massachusetts and a global brand whose market share grew from its traditional focus on science and engineering expanded out to other markets as well.
So, what happened? Much of the post-collapse analysis tended to focus on DEC’s (by extension to Ken Olsen) late entry to the PC market. In fact, the famous quote from Olsen, “There is no reason for any individual to have a computer in his home” was dredged up again as if to place a marker as to how and when DEC turned for the worse. By the time that the remains of the company were sold off to Compaq (itself another victim later) Olsen had been dismissed by the board of directors and was long gone from the scene. Bob Palmer had been promoted from VP of DEC’s semiconductor division to CEO. By that time the company was in disastrous shape and was bleeding red ink. Essentially Palmer’s mandate from the board was to repair what could be repaired and get the company in shape to be sold. In this regard, Palmer did his job as directed. The unthinkable was reality.
Internally in Digital, there was a misperception amongst some employees that the layoffs were all Palmer’s fault, he was the bad cop as opposed to the venerated Olsen’s image of the good cop who would never do such a thing, etc. In fact, around the company, Olsen was referred to simply as “KO” or just “Ken”. Ken Olsen was one of those industry executives (including HP and IBM’s Watson) who had opposed layoffs and believed in a need to retain all the company’s employees. A lofty ideal but one that could not be supported. In 1987 at the apex of DEC’s existence, the company employed over 140,000 worldwide. From 140,000 to zero is certainly a long way to fall.
I pointed out the resurfacing of Ken Olsen’s famous PC quote. PC’s were just one product line in Digital. There were several product lines in the company. In fact, DEC was the company that introduced interactive computing to the world, and there were other areas of innovation. What was internally coded as the “portable operating system”, later to be known as Windows NT under Microsoft originated in a DEC laboratory. A precursor to present day chat and social media applications, VAXnotes, was a DEC innovation. VAXnotes was an application that only saw internal use and was regarded as a “silly internal thing” used only for unimportant conversations. This opinion was expressed to me by a sales rep to whom I demonstrated my VAXnotes conference which supported concurrent engineering between US and European sites in logistics engineering. Hardly a silly application. DEC had fostered other innovations which were developed by some of the industry’s most brilliant computer scientists and engineers.
We could point to various technically-related examples as the undoing of Digital, and other former technology vendors as well also. However, the organization and its structure and resultant impact on the customer base need to be examined, not to illustrate history but rather as a relevant factor for the present day, 2017 and beyond.
There seems to be a never-ending tendency in growing organizations to establish and enlarge a bureaucratic structure replete with redundancies. In the technology companies, these redundancies usually are represented by positions throughout sales and marketing, and product management groups whose value should be examined. Think of the Monty Python-like “Department of Redundancy Department”. In an IBM or other large company, you will find positions with titles like ‘Director for the sub-directorship of XYZ geography”. This is an exaggeration; of course, however, I have observed that your local state government runs smoother than an IBM and I believe that to be correct and not an exaggeration.
Technology companies usually separate the customer-facing from their internal groups, but this practice is far off the mark in terms of customer relationship management and adding value for them, etc. I believe that every group and every employee needs to be measured viz. the value they can add to the customer. In my experience, I’ve found that it is essential that any dealings with customers should do so or else you are wasting their time and money. One also needs to be on a certain technical level with customers and their organizations, e.g., understanding an application and/or hardware and how it works inside the customer organization and effect on business processes and productivity, etc. Even those employees in the warehouse and distribution functions can have a good understanding of supply chain management and therefore contribute to productivity for both their employer and its customers.
A common practice amongst technology vendors has always been to “handcuff” a technical/content expert to a sales rep who is meeting with a prospect. Presumably, the reason for this is that the sales rep does not have enough technical knowledge to deal with questions of a technical nature that would come from a counterpart at the prospect. I have seen this practice taken to an extreme when the vendor representatives outnumber the customer at a meeting. In the business strength never lies in numbers, yet that lesson never seems to be learned.
This is not some idealistic perspective, but rather the nature of the technology market and technology customers. There should be no place for endless bureaucracy, “valueless chains”, etc. This is exactly what can be traced to the failures of past tech companies. The (unchecked) growth of the employee populations was always looked upon as positive, both for the company and the localities where the headquarters and remote locations, contribute to the economy, etc. Personally, I support job creation and supporting our economy, but not to just create positions for the sake of job creation. Any company that is in the early phase its development should use the examples of the now deceased technology giants to one, prosper and continue prospering, and two, ensure that they relate to their customer base in a much more direct manner. The current practice of hiring a “Customer Success Manager” is just another form of evading the responsibility and laying it on one person to “manage” the customer. If Customer Success Manager refers to a liaison with a customer organization and streamlining communication to a 1:1 relationship then fine. However, this should not be used as an excuse for others in a company to not be part of a real value chain.
It should be evident now that the number of corporations that employ hundreds of thousands is farther and fewer between, and perhaps that’s the way it should be. It shouldn’t be just a buzzword to be nimble and agile, etc. Once an organization reaches a certain point it should hit the pause button and see whether it has fostered yet another bureaucracy which in the end is a defeat. In this writer’s opinion, this is what really tipped the balance and spelled the end for all of those “Lost Empires”.