8 ms·

DEC's No Output Division Memo (1982) [pdf]

82 points by zhte415 11y ago

radoslawc 11y ago
NOD should be by default in every big company
- danieltillett 11y ago
  I am in two minds about this. It is great to build a culture where nobody is fired, but at the same time if the weight of carrying dead wood gets too high - well you go the way of DEC. On top of this a lot of dead wood is not dead wood in a different environment - it might be better all round to let people move on to new opportunities.
  - cbsmith 11y ago
    I think you don't understand how NOD's work. It's a soul crushing experience that is far worse than firing people and giving them layoff severance.
  - driverdan 11y ago
    > It is great to build a culture where nobody is fired No it isn't. You should be firing people who don't pull their weight and everyone should know about it.
  - dragonwriter 11y ago
    > It is great to build a culture where nobody is fired It is great to build a culture where you never need to fire anyone because you are good enough at hiring, and at placing, moving, and counseling (a two-way process!) those you have hired to be able to effectively utilize them. And, if you've done that, then its good to actually not fire anyone. But, outside of that, I don't see the value of a culture where nobody is fired; especially if it achieved through internal segregation where it cannot avoid being visible to people within the organization that the "not firing" is largely a charade.
- paulajohnson 11y ago
  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.
  - radoslawc 11y ago
    Yes I've heard about it. It was even mentioned in "Silicon Valley" TV series. I guess it did the trick before internet era. Now you can be paid for looking at cute cat pictures whole day ;) Joking aside I was skeptical about this being a way to force someone to quit, but after some unbelievable boring projects I totally get this. You just cannot for longer time periods just play billiard, table football, browse HN.
  - Jedd 11y ago
    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 11y ago
      One of my places of work had a department known as 'the Departure Lounge' because of its high exit rate
cafard 11y ago
Interesting and amusing, but pointless task forces aren't what ruined DEC.
- sqldba 11y ago
  What did?
  - Jedd 11y ago
    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 11y ago
      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.
A_Beer_Clinked 11y ago
Nice find. Relatedly I found this brief history of DEC: From: http://www.encyclopedia.com/topic/Digital_Equipment_Corp.aspx http://www.encyclopedia.com/topic/Digital_Equipment_Corp.asp... >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?
versteegen 11y ago
Judging by the complete lack of information on Google beyond copies of this memo, I would guess that the idea was never taken up.
spacecowboy_lon 11y ago
Its not excessively hard to make people redundant especially in the USA I don't see the issue that DEC management have here.
- dded 11y ago
  It was part of DEC culture, not US culture.
- ch_123 11y ago
  I seem to recall reading somewhere (I can't recall where unfortunately) that Ken Olsen was averse to letting people go, and when DEC was forced to downsize in the 90s, the redundancy packages were so generous that it cost the company more to lay people off than to retain them.
TravelTechGuy 11y ago
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.
OliverJones 11y ago
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.
shiftoutbox 11y ago
DEC Sounds a lot like ConEddison, NYC's utility company . To bad they don't have a Gordon Bell .
13of40 11y ago
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.
shiftoutbox 11y ago
DEC Sounds a lot like ConEddison, NYC's utility company . To bad they don't have a Gordon Bell .
DonHopkins 11y ago
At Sun they would promote those people to Vice President in Charge of Looking for a New Job.

82 points by zhte415 11y ago

radoslawc 11y ago

NOD should be by default in every big company

danieltillett 11y ago
I am in two minds about this. It is great to build a culture where nobody is fired, but at the same time if the weight of carrying dead wood gets too high - well you go the way of DEC. On top of this a lot of dead wood is not dead wood in a different environment - it might be better all round to let people move on to new opportunities.
- cbsmith 11y ago
  I think you don't understand how NOD's work. It's a soul crushing experience that is far worse than firing people and giving them layoff severance.
- driverdan 11y ago
  > It is great to build a culture where nobody is fired No it isn't. You should be firing people who don't pull their weight and everyone should know about it.
- dragonwriter 11y ago
  > It is great to build a culture where nobody is fired It is great to build a culture where you never need to fire anyone because you are good enough at hiring, and at placing, moving, and counseling (a two-way process!) those you have hired to be able to effectively utilize them. And, if you've done that, then its good to actually not fire anyone. But, outside of that, I don't see the value of a culture where nobody is fired; especially if it achieved through internal segregation where it cannot avoid being visible to people within the organization that the "not firing" is largely a charade.
paulajohnson 11y ago
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.
- radoslawc 11y ago
  Yes I've heard about it. It was even mentioned in "Silicon Valley" TV series. I guess it did the trick before internet era. Now you can be paid for looking at cute cat pictures whole day ;) Joking aside I was skeptical about this being a way to force someone to quit, but after some unbelievable boring projects I totally get this. You just cannot for longer time periods just play billiard, table football, browse HN.
- Jedd 11y ago
  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 11y ago
    One of my places of work had a department known as 'the Departure Lounge' because of its high exit rate

cafard 11y ago

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

sqldba 11y ago
What did?
- Jedd 11y ago
  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 11y ago
    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.

A_Beer_Clinked 11y ago

Nice find. Relatedly I found this brief history of DEC: From: http://www.encyclopedia.com/topic/Digital_Equipment_Corp.aspx http://www.encyclopedia.com/topic/Digital_Equipment_Corp.asp... >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?

versteegen 11y ago

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

spacecowboy_lon 11y ago

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

dded 11y ago
It was part of DEC culture, not US culture.
ch_123 11y ago
I seem to recall reading somewhere (I can't recall where unfortunately) that Ken Olsen was averse to letting people go, and when DEC was forced to downsize in the 90s, the redundancy packages were so generous that it cost the company more to lay people off than to retain them.

TravelTechGuy 11y ago

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.

OliverJones 11y ago

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.

shiftoutbox 11y ago

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

13of40 11y ago

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.

shiftoutbox 11y ago

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

DonHopkins 11y ago

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