Recession, S-Curves and Digital Equipment Corporation - History of Computing: Learning from the Past - page 186

in some way inaccurate. In their updated version they add an authors note on Excel-
lence 2003 where they try to justify their publication in terms of excellence value.
They totally ignore DEC in this commentary. However a paper written by Crainer and
Dearlove [11] analyses the companies in the topic ten years later and report that
Michelle Clayman found that
' the companies featured in the topic beat the stock market by one percent,
whereas the mass of unexcellent companies beat the stock market by around
12% over the five years following the topic's publication' .
Sheth [12]( page 4) comments that DEC was a fun place to work and suggest it was
no wonder that Peters and Waterman [10] considered DEC as on of the 15 exemplars.
However, he goes on to question DECs status at the end of the decade and its late
entry into the PC and workstation market, going on the describe the company as one
where executives were fleeing, and layoffs, once an abhorrent practice in DEC, were
now occurring.
McGrath [13] wrote of the product strategies of high technology companies and
has a number of extremely pertinent comments to the situation the DEC found itself
in the 90's. He explores the importance of strategy, and the need for changes in strat-
egy as technology changes, the reaction to stagnation of strategy and the potential for
diversification. He comments on the selection of Palmer as the CEO and also looks at
some of the products that DEC had and their potential for strategic advantage that was
not followed up on. He also has commentary on many of the competitive companies
at the time and their strategies which either helped them survive or aided their demise.
McGrath [13] implies that DEC strategy on the Internet was only developed by
Palmer in 1997 which was, in his opinion a few years too late. This was taken from
the company report of 1997. However this strategy had been developed a few years
earlier within the company . Rose Ann Giordano had been made VP of the Internet
Business Group in 1994 to develop the vision and strategy but this was not recognised
as strategic by Palmer until later, many saying that he did not understand the value of
the Alta Vista product range.
Pettigrew, Thomas and Whittington [14] talk of the diversification index for the
Fortune 500 companies declining from 1.0 to 0.67 in the period 1980 to 1990 as di-
vestiture replaced diversification driven by the shifting of corporate goals from
growth to profitability and pressure from shareholders and financial markets. This led
to the ousting of many CEO's, including Ken Olsen, by increasingly independent
boards. The move from diversification appears to go against some of the findings as
quoted by Pettigrew, Thomas and Whittington [14] where related diversification
linked closely to core business was superior to unrelated diversification.
General Georges Doriot in the address to the Newcomen Society 4 stated that when
you have a strong president your directors should be very peaceful. In fact DEC direc-
tors were placid for most of DECs history. Often board meetings were said to be more
of a social event than a formal board 5 . The board members were weak according to
4 Digital Equipment Corporation, the First Twenty-five Years, Kenneth Olsen speech to the
Newcomen Society, Newcomen Publication Number 1179, Sept 21 st 1982.
5 Interview with former board member in Boston, October 2009.