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A Brief Overview of DEC History

Digital Equipment Corporation (aka DEC or Digital) was a major player in the creation of a new technology during its 40-year history. Ken Olsen, an MIT-trained Massachusetts engineer, founded DEC in 1957 with his college friend, Harlan Anderson. Today we sometimes forget all that Digital created so let's look at just a few highlights. Throughout the 1960s, DEC produced a series of PDP computers, the first commercially viable minicomputers. It also produced the popular VAX computer family, the first laptop computer, DEC One, and the first MS-DOS computer to use 3 1/2" floppy disks, which later became an industry standard.

DEC was the first commercial business connected to the Internet with Digital.com being one of the first domains. They created AltaVista, for many years the popular search engine. They moved to an entirely new 32-bit platform, which they referred to as the super-mini. Released in 1978 as the VAX 11/780, it immediately grabbed the majority of the mini-computer market.

By the late 1980s, DEC was the world's second-largest computer company, with over 100,000 employees. Feeling invincible, they branched out into software, producing "hot" niche products for a variety of applications. However, most ran only on DEC-designed products, and customers frequently used third party software instead. The downturn in sales, combined with Ken Olsen's disdain for advertising (he believed that well-designed products would sell themselves) and various other reasons--depending on one's point of view--led inexorably to the company's decline. In the early 1990s, the layoffs began.

Robert Palmer became CEO but he couldn't reverse the tide and the layoffs continued. Oracle bought DEC's database product, Intel bought the chip business, Cabletron (now Enterasys) bought the networking business, and on January 26, 1998, Compaq acquired what remained of the company. Hewlett-Packard took over Compaq in 2002. As of 2003 some DEC product lines are still produced under the HP name.

In addition to its innovative technical contributions, DEC also made lasting contributions in other fields.  Much of the work done by HR and OD professionals at DEC was--and continues to be--state-of-the-art. We had enormous freedom and encouragement to innovate. Work we did is still foundational, e.g. learnings about how to manage complex, interdependent, matrixed organizations and the transformation of the HR role to one of business partner. What DEC was doing twenty or more years ago is still new for some companies.
 

The DEC Culture

Ed Schein points out in the first chapter that, "The DEC culture emphasized--to an extraordinary degree--creativity, freedom, responsibility, openness, commitment to truth, and having fun." It was all that and more.

One of Digital's great contributions was its approach to employee and leadership development. The company produced leaders at every organizational level, men and women who helped the company become not only a technological and organizational powerhouse, but in to the early 1990s, the employer-of-choice for people in its industry. During its lifespan, the company employed more than 130,000 people, many of whom went on to influential positions in other companies, carrying with them the lessons they learned at DEC. I was fortunate to be part of the organization during these creative and productive years. Here are some of my research findings and insights about how and why leadership development was so prolific.
 

Managers vs. Leaders

The fundamental differences between managers and leaders were well summarized by Warren Bennis and Burt Nanus. (Leaders, 1985). They pointed out that to manage means to bring about, to accomplish, to have charge of or responsibility for, to conduct. On the other hand, to lead is to influence, guide in direction, course, action, opinion. There is a profound difference between management and leadership, and both are important. "Managers are people who do things right and leaders are people who do the right thing (Bennis & Nanus, 1985, p. 21)."

Leadership ability is the differentiator of who will make significant, lasting, and transformational contributions to enterprises and communities. Granted, managers make important contributions, but the sort of leadership we're talking about is more an orientation and a way of being than it is a set of skills or techniques. It's important to differentiate between the transformational leader and the manager or transaction leader.

Transformational leaders are mission-oriented visionaries who use inspiration, charisma, and the excitement of the vision to enroll and motivate others. Individually and developmentally motivated, they look at old problems in new ways. They stress and value intellectual ability, problem exploration, and experimentation. They're risk-takers; oriented toward the future, embracing change, and questioning existing culture, norms, values, and beliefs.

Managers (or transactional leaders) are goal and strategy oriented. They motivate others by bargaining or contracting for the exchange of effort/output for rewards. They stress and value rationality, limiting options and choices when problem soling. Day-to-day and operationally oriented, they are risk controllers who generally accent established norms, values, culture, and beliefs.
 

How Leaders Develop

Thanks to thousands of studies we are relatively clear about the content, processes, and effects of leadership, however we know a lot less about where leaders come from and how they are developed. There are three key points we can make: First, leadership development is assumed to refer to a process occurring gradually and incrementally over time, across an individual's life span. Therefore, when trying to understand the development process, it's important to look at critical events and influences throughout a leader's life.

Second, since a key function of transformational leadership is the development of followers, leaders are themselves agents of others' development. However, a leader can't facilitate the development of another beyond his/her own developmental level. Therefore, the continuous development of leaders is essential to ongoing and continuous transformation of both people and organizations.

Third, a review of both leadership and human development literature reveals seven factors that explain the origin, acquisition, and development of transformational leadership. Without going into detail, the factors influencing leadership are early family experiences, developmental tendencies, previous leadership experiences, the influence of mentors, participation in workshops and seminars, and the individual's ability to deal with conflict and disappointment.

The factor that requires more discussion, and which touches on both family and dealing with conflict and disappointment, is the Once-Born/Twice-Born theory postulated in 1977 by Abraham Zaleznik in the Harvard Business Review. The Once-Born are defined as those who made reasonably straightforward adjustments to a mainly peaceful and harmonious life with little discrepancy between expectations and reality. They are the managers. The Twice-Born have had more of a struggle resulting in a sense of isolation, being special, wariness, greater self-reliance and involvement in one's inner world, increased expectations of performance and achievement, and sometimes a desire to do great things. They become the leaders.
 

What Made DEC Different

DEC was a laboratory for leadership development and those who were successful within the corporation embodied and practiced what the company preached. The attributes that made DEC different are easily identified.

The empowering corporate culture was unlike that of most companies. The rules of the road for how to succeed at DEC were synonymous with the company. There were nine "rules" that everyone knew and that any former DEC employee will routinely mention when talking about the company:
1. See what needs to be done and do it; develop a vision for what you want to accomplish.
2. He/she who proposes does.
3. Do the right thing; don't wait to be told what to do or how to do it.
4. Make it happen.
5. Push back if you don't agree or think the "wrong" thing is happening.
6. Invest in and build trusting relationships.
7. Truth will be discovered through conflict and debate.
8. Keep/deliver on your commitments.
9. Get buy-in before moving forward, even in the face of conflict and competition; influence is the way to do this.

From a leadership development perspective, it would be hard to live in such a culture and work this way over an extended period of time and not develop at least some leadership ability.

There were definite DEC attributes, principles and practices that supported an environment in which leadership flourished:

Fast growth during the 70s and 80s provided unparalleled technical, professional and managerial opportunities. In addition to frequent promotions, there were also "growmotions," when employees changed jobs and responsibilities without a formal change in title, job level, or salary but always with heightened intellectual stimulation and outlets for creativity, learning, and development.

Carefully recruiting, attracting and hiring the best people. DEC was considered the place to work and applicants tried hard to make contacts and get hired. The employment process was rigorous, resulting in was an employee population that was both self-selected and carefully screened before it was hired. There was also a prevailing belief was that if a particular job didn't work out, an employee would be encouraged to find or create a position better suited to his/her talents.

High value on individual development. The high value placed on every individual's personal, technical, and professional development ensured that employees received the formal training essential to being and keeping current in one's field. It also enabled considerable inter-personal, intra-personal, and management development. Competence in these arenas is essential to leadership development.

Coming of age--personally and professionally--while at DEC. The work environment was characterized by a high level of cultural attunement and alignment to the company's values and mores, combined with a sense of community that extended outside the workplace. It was not unusual for most of one's friends--and many in one's family or social circle--to be DEC employees. This was a system that was extraordinarily self-reinforcing. In this culture, people experienced developmental activities, both formal and informal, that formed indelible and lasting values, beliefs, and behaviors. They continue to define many DEC alumni--who they are now and how they approach work and career.
 

What Was Learned and How Was It Used?

I have interviewed several alumni, all of whom have had distinguished post-DEC leadership careers. What they all have in common is a particular mix of individual predisposition and motivation, which when combined with the opportunities and environment provided by Digital's culture, resulted in extraordinary leadership development.

My interviews revealed three freedoms that describe the most lasting, impactful, and significant aspects of what was learned during their years at DEC.

1. The Freedom to build and sustain respectful and trusting relationships as a basis for working with others, transacting business, and collaborating to achieve goals, while supporting and growing other people.

2. The Freedom and opportunity to see what needs to be done based on what is "right" for the company, and then following through, taking responsibility, engaging others, and being accountable for the results of your vision or proposal.

3. The Freedom to question assumptions and push back, debating ideas, proposals, and products on their merit, despite inherent conflict with the belief that truth and the best path will emerge from this process when you focus on the content and not on attacking or diminishing individuals.

In the end, this is the most significant and lasting legacies and contributions of the Digital Equipment Corporation. Thousands of people, shaped and impacted by these values and ways of working, were let loose on the world to influence others and make lasting contributions to technology, the practice of leadership and management, global enterprise, and the community at large.

View from the Lighthouse on Org Cultures Today and Their Impact on Leadership Development

While organization culture is but one variable in the leadership development process, it's an important one, particularly for early- and mid-career employees who are learning about both management and leadership while forming career aspirations, goals, and plans. The two most significant factors that influence individual behavior in organizations are the behavior that is role modeled by those who are in positions of authority, power, or esteem (e.g. a mentor) and how the organization's reward system, both formal and informal, systematically operates to identify and reinforce the most desired behaviors (which may not be the same as what's espoused). What constitutes desired behavior is a key element of an organization's culture. Learning occurs by observation, direct interaction with role models and reward systems, and personal experience--learning by doing--as the individual experiments to discover what works or doesn't work, and what's rewarded and by whom.

Over the past ten years, and especially since the last downturn, the burst of the dot-com bubble, and 9/11, I've seen organization cultures--specifically and generally--change dramatically. Here are but a few examples of drivers and outcomes:

* Massive downsizing and outsourcing continue to reduce the perceived value placed on individuals and their contributions, leave the survivors fearing for their jobs, while they do the work of many in unstable conditions.

* When financial margins and earnings are razor thin, the margin for error is also reduced. There is considerably less opportunity and tolerance for experimentation and risk-taking. This in turn impacts innovation, which is, for many companies, still the fuel of their economic engines. So, a vicious circle ensues. It also impacts how people and organizations learn and the willingness to try new approaches: there is no learning model that guarantees success on the first try.

* When training and development are considered discretionary expenses and are among the first to be cut, not only the activities that support the development of management skills and leadership expertise are impacted. The development and maintenance of technical skills is also reduced, and this is the price of admission.

* I have both first-hand experience with and anecdotal data about corporate cultures (read work environments) that have become just plain toxic. Here's what former client said to me, an experienced and accomplished senior executive in his discipline and company: "I have not experienced such a stressful time in industry in my entire career. Management is in crisis and has reverted to more and more of the same behavior that gets organizations in trouble. Cutting people and stopping developing employees is not the way to revive a business."

Yes, I do understand economic reality and what many see as the price of survival.

And, what we're concerned with here is leadership development and how it is supported and enhanced by corporate culture--or not. If you recall that leadership development is a life-long growth process that's heavily impacted by critical events and influences, that leaders themselves are a main source of the development of other leaders, and that one can't facilitate the development of another beyond his/her own developmental level, and if we believe that a continuous supply of talented leaders is essential, then the need for a work environment that supports and contributes to development becomes clear . . . and urgent.

But the conditions described above can hardly be described as growth or development inducing--quite the contrary. When individuals experience even major difficulties and learn to deal with them effectively, this can contribute in effective ways to their development. But a steady diet of adversity with no means for resolving it and no end in sight eventually has an opposite effect.

If you read the last issue of View from the Lighthouse about the book Execution, perhaps you'll remember that author Bossidy's frequently quoted statistic is that over the last three years, close to 40% of the top 2500 CEOs have been removed as a result of their leadership failures. This says to me that the crisis is already upon us, AND these are the same people who, we hoped, would contribute in positive and proactive ways to the development of the next generation of leaders.

So, at the end of the day, what does all this come down to? I think we're on a collision course. At least an entire generation of potential leaders will have felt the impact of recent conditions, the strategic and tactical decisions that followed, and the erosion of organization cultures that are worker-friendly, developmentally supportive, and productivity enhancing.

To coin a phrase, I think we're in a classic "pay-me-now or pay-me-later" situation. Because leadership can't be outsourced.

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Resources
If you'd like to read the chapter that I wrote on this topic in DEC Is Dead, Long Live DEC, DEC's "Other" Legacy: The Development of Leaders, go to http://www.coastwiseconsulting.com/article_DECs_other_legacy.htm

DEC Is Dead, Long Live DEC: The Lasting Legacy of Digital Equipment Corporation by Edgar H. Schein (Editor), Berrett-Koehler Publishers, 2003.
(http://www.amazon.com/exec/obidos/tg/detail/-
/1576752259/qid=1071622302/sr=1-5/ref=sr_1_5/102-0707484-
1511300?v=glance&s=books)

Leaders: The Strategies for Taking Charge by Warren Bennis and Burt Nanus. Harper and Row, 1985 (2nd edition, 1997).
http://www.amazon.com/exec/obidos/tg/detail/-
/0887308392/qid=1071691500/sr=1-3/ref=sr_1_3/102-0707484-
1511300?v=glance&s=books

Managers and Leaders: Are They Different? by Abraham Zaleznik. Harvard Business School Press, 1977 (reissued as an HBR Classic, 1992).
http://www.amazon.com/exec/obidos/tg/detail/-
/B00005UMLO/qid=1084235698/sr=1-3/ref=sr_1_3__i3_xgl14/104-7209313-
3203108?v=glance&s=books

Wikipedia, the free Internet encyclopedia, tells the Digital story with multiple links which will provide a greater understanding of the technological advances DEC made in the burgeoning computer industry.
http://en.wikipedia.org/wiki/Digital_Equipment_Corporation

DECAlumni.com is a website for those of us who once worked for DEC. Some pages are "members-only," but there is unrestricted access to various pages, including one that lists the websites of members.
http://www.decalumni.com

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