- The Strategic Gold Standards
- Reorganizing to Rearm
Frank Cary at IBM
- The Competitive Limit of Soft Technology
Amdahl versus IBM
- Transient Technology
Travails of the Mini Makers
- First Movers
The Dawning of the Personal Computer
- Defeated in Succession
An Wang at Wang Labs
- Retrospective Strategy
John DeButts at AT&T
- Foreign Cultures
AT&T’s Recruit from IBM
- The Perils of Incumbency
Sun and Oracle Take Over the Neighborhood
- Self-Accelerating Economies of Scale
Alilile, Microsoft, and Dell
- Choosing the Wrong War
IBM Takes On Microsoft
- Powering to the Apogee
Ken Olsen at DEC
- Tumbling to Collapse
The palace Guard Ousts Olsen
- Field Force and Counterforce
DEC, HP, and IBM in Battle Mode
- Distracted by Competition
IBM Battles Fujitsu and Hitachi
- Navigating the Waves at IBM
Akers Runs Aground,
and Gerstner Takes the Helm
- Squandered the Competitve Advantage
IBM Mainframes and Minicomputers
- Building a Great Business
Paul Ely at Hewlett-Packard
- CEO Tumbles
Hewlett-Packard’s Horizontal Phase
- Limits of Strategy
- Innovation: Apple, IBM, and HP Added in 2003
Chapter 15 - Field Force and Counterforce
Many CEOs would agree—sometimes grudgingly—that the field force is their most potent and productive asset. Great sales reps, properly trained and motivated, can push a mediocre product beyond its expected trajectory. Or ease the company through major delays of frontline products, as Hewlett-Packard’s sales force held the customer base during a multiyear delay in its new RISC minicomputers. Competent field engineers backed by diagnostics and repair technology can prevent customer defections over software bugs and hardware burnouts. But the field force also has its dark side. On occasion, sales executives will block the introduction of radically new products, as IBM’s sales force tried to block Tom Watson Jr.’s transition to tape from punch cards.
New sales representation models can encounter similar resistance even when a change in technology chops away at gross margins. Though a failure to increase sales productivity can be disastrous, flexibility is not the dominant characteristic of most field organizations. A comparison of the IBM, DEC, and HP sales organizations, with a side tour to Data General, will help illustrate the problems.
IBM’s sales reps were considered its crown jewels since the modern company’s formation under Tom Watson Sr. around 1924. Account executives were tall, aggressive, and able to burst through (or at least wheedle past) any customer company’s receptionist blockade to get to the CEO. So if an IT executive rejected the IBM offering in favor of a product clone, the matter didn’t end there. The account exec could quietly suggest to the CEO that “your guy isn’t quite up to the job anymore.” Or so it seemed to many IT execs caught in the crosshairs.
DEC had the opposite profile. Its sales reps were salaried engineers who received no commissions, which Ken Olsen feared would lead to overselling by the “ninnies of the field” (as we speculated Ken viewed his reps). The DEC sales force’s preferred audience was the software- minded scientific, engineering, and process-control community. DEC reps avoided commercial data processing departments, believing them to be bureaucratic and biased in favor of IBM. Similarly, the size of Olsen’s field-maintenance organization was tightly constrained on the expectation that the target customer would be self-sufficient, while “those ignorant end users would suck us dry.”
Little wonder that IT executives called Digital Equipment “idiosyncratic” and “quirky.” The organization produced great hardware, they agreed, but it seemed impenetrable, and no one returned telephone calls. It came as little surprise that enterprise-market analysts like us were largely ignored by DEC’s top management through the 1970s.
Data General Leads the Way
We drew a much warmer welcome at Data General (DG) in neighboring Southboro, Massachusetts, in 1975. DG was, in many ways, the mirror image of DEC. Founded in 1968 by DEC refugees Edson deCastro and Henry Burkhardt (both key to PDP-11’s development), the company assembled its first “Nova” mini in a Hudson, Massachusetts, storefront. Within the first year, employment grew from ten to ninety, and doubled every year thereafter to reach 3,300 people at our visit.
Unit sales rocketed from 110 in 1969 to 690 in 1970, doubled in both 1971 and 1972, and then bounced from 9,000 to 14,000 in 1974. Data General ranked second only to the much-older DEC in cumulative installations. Revenues blossomed to $30.3 million in 1972, $53.3 million in 1973, and $83 million in 1974.
Formed just as minicomputer-based distributed processing was gaining currency, Data General found it easier to navigate the business market than DEC, even though the OEMs made up 70 percent of its box sales (accounting for just 35 percent of revenues, however).