Customer Reviews

DEC Is Dead, Long Live DEC: The Lasting Legacy of Digital Equipment Corporation

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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.

That DEC was able to survive for as long as it did was largely attributable to its ability to innovate in a field that was so new it had not yet coalesced around certain standard systems, software and networks. However, as the computer industry became in effect a commodity market, and the buyers began to value price over innovation, DEC found itself increasingly unable, and in fact, unwilling to compete. The engineering culture which valued innovation and required creative freedom, did not want to subject itself to the requirements of being a commodity player which demanded autocratic operational efficiency and control over how resources were allocated.

Although DEC is now long gone, even readers who were too young to use computers at the time of its demise will find familiar truths in this book. As the old saying goes, the fish in the tank does not see the water it is in. Neither do we often see the cultures in which we are ourselves embedded. The real lesson of this wonderful book is to show us how our corporate cultures often prohibit us from doing the right things, even when we can see them clearly. Sometimes culture is most easily visible in the things you need to discuss, but that are simply "not on the table" for discussion.

There are many lessons here too, for companies that seek to innovate new products and services, and how to balance the creative freedom desired by the engineering culture with the "money gene" culture of sound executive management. The names of companies that have failed to realize the full financial benefits of their technical innovations is too long to list here. But the DEC story is a must read for anyone who seeks to balance innovation with sustainable economic success in any organization.

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.

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.

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.

We hear a lot about "knowledge workers" and innovation. So how does one run an innovative business based on knowledge workers? DEC did this for about 30 years, before being bought by Compaq. The title means the company is gone, but it's values live on via its employees.

The author was a consultant that worked with the executive management for a number of years. His thesis is that the policies that helped the company create rapid growth ultimately failed to help it when the market changed (e.g. the PC appeared). Further, the company's culture (and that's a popular phrase in this book) had genes for innovation, individualism, engineering and technology but lacked a "money gene" required to make a viable business.

When DEC was growing, it was OK to have multiple projects tackling the same problem. However, as growth slowed, the funds didn't exist but the company had no mechanism for pulling the plug.

So go out and read it, and decide for yourself whether this is going to apply to Google.

this is one of the best business books i have read. it is super-relevant for anyone in high tech but is also recommended for any business person.

schein combines narration with theory & analysis in telling the story of DEC's meteoric rise and eventual sale to Compaq. the book is a rare mix of story-telling and more "academic" theory about management, strategy and culture. what makes the book so exceptional, beyond schein's insights and storytelling, is the unprecedented access he had to DEC executives.

I may be a be prejudiced since Mr. Schein agreed to collaborate with me on this book (I was to write the technology section, which he apparently dropped) and then went back on his agreement when he ceased communicating with me after I did my part. That said, the coverage of the cultural aspects of DEC is reasonably good, but the authors miss the point entirely that DEC was merely a culture. Management malfeasance, technological gaffes, horrid marketing, and a centralization of power that defied the so-called "management martix" were equally responsible for the DECline. And have have two decades of journalistic, consulting, and analyst experience to back this up.

Still interested? Wait for the paperback, borrow a copy, or get it used!

This is basically one long "I Love You" note to Ken Olson. There are little to no details on what DEC actually produced, just how great their management team was. And from talking to people that worked there, it wasn't as utopian as this book would lead you to believe.

I would have given more than two stars if the book didn't have the word "technology" as part of the title. I'll admit, I was fooled. If you're looking for a book on how to write managerial process PowerPoints, this is a good start.

This reads better than any novel that you will pick up. A great place to learn Schein's concepts of organizational culture. This is a must read for anyone in or leading a business that is being disrupted such as newspaper, TV broadcast, music, stc.

When I started reading this book (the first two chapters) I was a little hesitant at reading further as it was a very ambiguous prep for the story. However, after I started chapter 3 I was excited to discover how inline Ken Olsen's views are with my own and my own experiences.

I initially got this book in order to learn why a company fails and try and avoid the pitfalls that DEC encountered. As I read further into the book I found that the strengths of the culture were symbollic of humanity in general, and to discount the culture was to discount some of humanities most fundametal and essential attributes.

Corporations as entities are setup to run in perpetuity; however, the most difficult obstacle to longevity is vitality. Many companies today that have been around for more than 40 years really don't offer much in the way humanitarian benefits. In other words, you're not going to work at a GE and expect to revolutionize anything. The immediate problem is that as corporations get more and more hardened their vitality is lost and the very culture that inspired them to be innovative disappears in favor of purely existing. How do you combat this?

DEC's legacy is not the products that it produced, but the vitality that sprang-forth from people who sought something more and were empowered to reach their dreams. A company's true worth cannot be known until you see how many companies/ideas came out of it, not as spin-off's, but as inspired, elegant, and useful innovations/products that in-turn inspire others to reach their dreams.

Overall the book does a good job of relating the facts of the ultimate rise and fall of DEC from a monetary perspective, but it does an even better job or relating how inspiration, motivation, and empowerment can truly create "magic" in both the past and in the present. The spirit of DEC lives on, indeed the spirit of America lives on...