
DEC's No Output Division Memo (1982) [pdf] - zhte415
http://archive.computerhistory.org/resources/text/DEC/dec.bell.no_output_division_C-I_TF;productivity_review.1982.102630376.pdf
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OliverJones
Late 1980s joke: "How many people work at DEC?" "About a quarter of them."

Pay increases were a percentage of each group's payroll. Several groups had
CTs (corporate turkeys). These were highly compensated people with a dotted
line relationship to Dr. Bell's No Output Division. The deal was, they could
work on NOD projects to their hearts' content, but they should not expect
raises. That allowed the raise budget to be spent on the other folks.

For a while they had a policy that poor performers had their performance
reviews delayed. This meant that you couldn't tell if it was you yourself who
was incompetent, or your manager. (Incompetent managers often were late doing
performance reviews for their people.)

Now all that's left is the Digital Credit Union. It's sad; they had many great
people and some great products.

------
A_Beer_Clinked
Nice find. Relatedly I found this brief history of DEC: From:
[http://www.encyclopedia.com/topic/Digital_Equipment_Corp.asp...](http://www.encyclopedia.com/topic/Digital_Equipment_Corp.aspx)

>There was virtually no organizational structure during Digital’s early years
because Olsen was committed to creating an environment much like the research
labs at MIT. A temporary position as liaison between MIT and IBM in 1959
convinced Olsen that the hierarchy at companies like IBM did not allow for
creativity and the flow of ideas.

Sound familiar to anyone here?

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13of40
I used to work at a fairly big software company that was on about version 6 of
a product with a 2 or 3 year ship cycle. They'd spent years trying to get away
from the waterfall model, but there were still gaps on the order of maybe 8
months between ship cycles where the teams had nothing to actually work on.
(To clarify, what does your QA team do while all of the PMs and architects are
off designing stuff and devs are barely scratching out prototypes in the
dirt?)

As a result, they would have these planning drives where everyone would get
mobilized to work out details for the next release's engineering system.
Dozens of committees would be formed, meetings held, PowerPoint decks
produced, the Director and his staff would hold tense weekly meetings and
curse and growl at each other over graphs and spreadsheets of "progress".

Then finally, the big day would come, day one of the new engineering system,
and ----- crickets. A week later everyone would have forgotten the buzzwords
and names of the initiatives and would be back to waterfall.

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TravelTechGuy
That reminds me of a discussion we had when I was working for ____* (one of
the large tech companies in Silicon Valley): The conclusion arrived at was
that if a freak meteor would hit our campus and take out just middle
management, the rest of the company could come in tomorrow - hold a mandatory
memorial service - and go on with their work, with higher productivity.

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cafard
Interesting and amusing, but pointless task forces aren't what ruined DEC.

~~~
sqldba
What did?

~~~
Jedd
This is a profoundly complex question. Or, rather, answer. : )

Everyone knows one Ken Olsen quote, though few people know it's taken hugely
out of context[1] - it was quite prescient at the time (and the next few
decades) though with a bunch of RPi / IoT / HUE gear in my home now, perhaps
he was wrong after all.

Mind, his anti-TCP position is almost as naive / famous -- but aligned with
several other CEOs of large organisations that are still with us.

Is there ever a single sound-byte-able response to the question 'what killed
company X?'? Probably not. Perhaps they backed the wrong architecture. Or they
naively went up against Microsoft (a very different beast to the cuddly MS of
today). Or they disrespected their customers just a wee bit too blatantly. Or
their QA dropped unforgivably (or at least uncompetitively) low.

[1]
[http://www.snopes.com/quotes/kenolsen.asp](http://www.snopes.com/quotes/kenolsen.asp)

~~~
scholia
DEC was in the minicomputer and workstation businesses. It got squeezed to
death between IBM at the high end and the upward expansion of the PC business
at the low end.

A $25,000 MicroVAX was cheap and wonderful when it could replace a $250,000
mini, but not very attractive once a $2,500 PC-based server could do the same
job.

DEC also had a bit of a NIH problem. For example, it did its own (expensive)
PC, which wasn't IBM PC-compatible. Later, it launched Windows NT machines
based on its own 64-bit microprocessor, the DEC Alpha. Then it did its own
version of the ARM chip, the StrongARM (which later reappeared as the Intel
XScale before being sold on again).

DEC also lost its star software designer, Dave Cutler, the man behind DEC's
biggest success -- VAX VMS -- by cancelling his project. Bill Gates promptly
hired him, and said he could bring whoever he wanted to Microsoft.

Cutler wrote Windows NT, which ultimately freed Microsoft from its huge
problems with IBM and OS/2, and provided a transition path from DOS-based
Windows to a real OS.

For younger readers, the top workstation companies were DEC, Sun, HP, Apollo,
Silicon Graphics etc. The top minicomputer companies were IBM, DEC, HP, Wang,
Data General, Prime, Nixdorf, NCR etc. Not many survivors from that lot, but
they were big and powerful at the time.

~~~
TheOtherHobbes
Alternatively, DEC was built on a 1950s business model where customers (not
necessarily final users) were skilled and educated scientists, developers,
academics, engineers, and bizops people - basically hands-on hackers of one
kind or another.

Its R&D and marketing machine was created to match this market. As long as
most of the computer buyers in the world shared that culture, DEC did very
well.

DEC had no experience designing and selling commodity/appliance computers to
the general public, and not much interest in same. This may have been Olsen's
fault. I suspect he just couldn't imagine his wonderful computer engineering
machine selling crappy microcomputers direct to ordinary Joes through retail
and mail order.

At the high end there was always an interest in taking on and beating IBM, who
had a monopoly on the very high end of business and scientific computing, but
for whom the PC was just a flukey minor side project. (IBM didn't understand
commodity computing either, which is why it was pushed out the market by the
clone makers.) DEC made some headway but never quite understood that the
business high end is not the same market.

So the reason there was no DEC PC and we're not all using DEC clones is
cultural. Gordon Bell was - as usual - ten years ahead of everyone else, and
worrying about this at the start of the 1980s when VAX was well on its way to
making DEC a giant. There are DEC memos about this period at bitsavers.org,
and they provide some insights into how DEC failed.

DEC engineering, especially in VLSI, was easily the best in the world. Alpha
was a thing of beauty, and an affordable Alpha PC would have killed Intel, MS,
and maybe even Apple, and advanced the PC market and perhaps the Internet by
five to ten years, and created a completely different culture around commodity
computing.

~~~
scholia
_> DEC engineering, especially in VLSI, was easily the best in the world.
Alpha was a thing of beauty, and an affordable Alpha PC would have killed
Intel, MS, and maybe even Apple, and advanced the PC market and perhaps the
Internet by five to ten years, and created a completely different culture
around commodity computing._

DEC's Alpha PCs were actually quite reasonably priced, but all the software
was written for x86. There was zero chance of Alpha killing Intel or Microsoft
without broad software support, and even with it, there's no guarantee it
would have won.

------
radoslawc
NOD should be by default in every big company

~~~
paulajohnson
For a while in the 90s Japanese companies had NODs for exactly the same reason
Olsen gives: they didn't want to admit that they were firing people. The form
varied, but typical examples would be an assignment to guard a tree or wait in
a specified room for someone to give you work. The idea was to enforce
isolation, boredom and loss of status to the point where the unfortunate
employees would voluntarily quit; a kind of 9-5 solitary imprisonment.

Its actually a really brutal method of downsizing without paying redundancy
money. Be careful what you wish for.

~~~
Jedd
In Japan I think the phrase is called Window Gazing -- the employee / victim
is provided an office with a nice view (presumably of things they could be
doing instead of draining resources from the company) and left to draw their
own conclusion.

In Australia many years ago -- early to mid 1990's -- we had a spate of large
public organisations being privatised, with a predictably large number of HR
casualties. There was typically a brief queueing system, as some token effort
at redeployment was considered ... but in reality once you'd been side-moted
to a Window Gazer role, you know precisely where you stood.

The phrase used locally was 'being led into / sitting around in Flight Deck'
\-- that being the name of the frequent flyer awards club of one of our two
major airlines at the time. (That airline's completely gone now -- make of
that what you will.)

~~~
KineticLensman
One of my places of work had a department known as 'the Departure Lounge'
because of its high exit rate

------
spacecowboy_lon
Its not excessively hard to make people redundant especially in the USA I
don't see the issue that DEC management have here.

~~~
dded
It was part of DEC culture, not US culture.

------
versteegen
Judging by the complete lack of information on Google beyond copies of this
memo, I would guess that the idea was never taken up.

------
shiftoutbox
DEC Sounds a lot like ConEddison, NYC's utility company . To bad they don't
have a Gordon Bell .

------
DonHopkins
At Sun they would promote those people to Vice President in Charge of Looking
for a New Job.

