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Edgar H. Schein is currently Sloan Fellows Professor of Management Emeritus at the Sloan School. He is also the Founding Editor of Reflections, the Journal of the Society for Organizational Learning devoted to connecting academics, consultants, and practitioners around the issues of knowledge creation, dissemination and utilization.
Many discussions and articles that chronicle the rise and fall of Digital simplify the failure to either "The president [Ken Olsen] blew it," or "They missed the PC revolution," or some combination of both. This book shows how the culture that so successfully nourished creativity and genius in the company's nascent days brought chaos, confusion, and internecine warfare in later days when the larger company faced a host of competitors and needed to efficiently produce commodity items. I think that the authors go a little too lightly on the role of (mis)management in Digital's failure, but they do a good job of bringing to light many other aspects of Digital's problematic history. The authors seem a bit full of themselves at times, but they have a compelling and sobering story to tell.
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MIT Sloan School of Management Professor Edgar Schein does a marvelous job telling the story of the rise and fall of Digital Equipment Corporation, the former #2 computer maker in the world behind IBM. The business reasons behind DEC's economic failure have been widely reported (missing the advent of the PC, having too many projects going at once, failure to market products effectively, etc.) However, the big question to be answered is why did these failures occur? To quote one passage, "Why did an organization that was wildly successful for thirty-five years, filled with intelligent, articulate powerful engineers and managers, fail to act effectively to deal with problems that were highly visible to everyone, both inside and outside the organization?" Schein looks at DEC's failure through the lens of its corporate culture, and how it prohibited their executives from making the decisions, and taking the actions necessary to survive. Fans of Ed Schein will know his famous "Three Cultures of Management" paper, in which he describes the "Executive", "Line Manager" and "Engineering" cultures, all of which must exist and be balanced against one another for an organization to survive. Schein argues that DEC was dominated by the engineering culture, which valued innovation and "elegant" design, over profits and operational efficiency. This engineering culture dominated even the top levels of DEC, where proposals to build PCs out of off the shelf parts that were readily available in the marketplace, were shot down because the machines were thought to be junk compared to the ones DEC could build themselves.Read more ›
I recommend this book to anyone who is familiar with DEC or wishes to understand its enduring legacies. It is also a useful case study on who a company that was doing so well could ultimately fail; are Microsoft and IBM really immune from this fate?
I used DEC equipment during its heyday from the late 1970's throughout the 1980s. What I value most is how the technical experiences I recall from that time were given depth. The author's narrative binds together a collection of internal memos and personal recollections of many of those who were working at DEC when many of its fateful decisions were made. In general, responsibility for the ultimate failure of DEC to survive as a company is laid with the senior management, in particular with CEO Ken Olsen. The same attributes that made DEC great and innovative were the ones that lead to its downfall. Alas, DEC is not dead but lives on in all the innovations it introduced.
I would like liked to have seen some more details on the technical innovations and more exposure to the myths and legends that many of us were weaned on. But that was not the main thesis of the book so it's not a deficiency per se.
Though written in a straightforward and matter of fact way with little flourish, I was engrossed and quickly polished it off. This book needed to be written.
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One of the first computers I worked on was a Dec-10. I also used one of the PDPs. Then I later was sysadmin and wrote Fortran code for a Vax 785. So I was rather nostalgaic over DEC's demise. This would have seemed inconceivable in the mid 80s, when DEC was at its height, and second only to IBM. But Schein's analysis points out that the seeds of DEC's fall were already flourishing at its apex.
One merit of the book is how it points out that it was not just Ken Olsen who made all the bad decisions. Notably that the "PC was just a toy". It was also the rest of the top management. Worsened by a complex matrix management structure. This had the effect of drastically slowing decision making.
The book is a sad tale of what might have beens. For instance, it is well known how DEC missed the PC revolution. But it also dropped the ball on networking. DEC came up with DECNET by 1984. It had many very capable network engineers. But DEC's routers and switches were only for DECNET. DEC could have been DEC+Cisco, if it had migrated aggressively to the Arpanet/Internet. Sure, it had some presence in the latter. But not enough. It kept pushing its DECNET and in the end the Internet just drove DECNET into irrelevance.