Product Description

In the annals of American business, Digital Equipment Corporation's case history ranks among the most interesting. Over its 40-year lifetime, it reached the Fortune 50, had sales of over $14 billion, and for a time was the number-two computer maker, behind only IBM. It also was a computing pioneer, creating a great many of the innovations we take for granted today. Yet it failed as a business and was ultimately sold to Compaq. In this book, DEC insiders analyze the culture of innovation that drove DEC to the top - how it was created, how it evolved, and why it ultimately collapsed. Author Edgar Schein's past and current consulting clients include Apple, Citibank, General Foods, Hewlett-Packard, and others.

Product Details

• Amazon Sales Rank: #521596 in Books
• Published on: 2003-06
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 317 pages

About the Author
Ed Schein was Chief of the Social Psychology Section of the Walter Reed Army Institute of Research while serving in the U.S. Army as Captain from 1952 to 1956. He joined MIT's Sloan School of Management in 1956 and was made a Professor of Organizational Psychology and Management in 1964.

From 1968 to 1971 Schein was the Undergraduate Planning Professor for MIT, and in 1972 he became the Chairman of the Organization Studies Group of the MIT Sloan School, a position he held until 1982. He was honored in 1978 when he was named the Sloan Fellows Professor of Management, a Chair he held until 1990.

He is currently Sloan Fellows Professor of Management Emeritus and continues at the Sloan School half-time as a Senior Lecturer. He is also the Founding Editor of Reflections, the Journal of the Society for Organizational Learning devoted to connecting academics, consultants, and practitioners around the issues of knowledge creation, dissemination and utilization.

His consultation focuses on organizational culture, organization development, process consultation, and career dynamics, and among his past and current clients are major corporations both in the U.S. and overseas such as Digital Equipment Corporation, Ciba-Geigy, Apple, Citibank, General Foods, Procter & Gamble, ICI, Saab Combitech, Steinbergs, Alcoa, Motorola, Hewlett-Packard, Exxon, Shell, AMOCO, Con Edison, and the Economic Development Board of Singapore.

Schein has received many honors and awards for his writing, most recently the Lifetime Achievement Award in Workplace Learning and Performance of the American Society of Training Directors, Feb, 3, 2000 and the Everett Cherington Hughes Award for Career Scholarship from the Careers Division of the Academy of Management, Aug. 8, 2000.

Paul Kampas is a consultant, researcher, and author with over two decades of multi-disciplinary experience in technology, systems, and strategy. Hi is principal of Kampas Research, a consulting firm that provides research, writing, thoughtware (intellectual tool) development, and educational services on technology, systems, and strategy.

Customer Reviews

The lasting lesson of DEC
MIT Sloan School of Management Professor Edgar Schein does a marvelous job telling the story of the rise and fall of Digital Equipment Corporation, the former #2 computer maker in the world behind IBM. The business reasons behind DEC's economic failure have been widely reported (missing the advent of the PC, having too many projects going at once, failure to market products effectively, etc.) However, the big question to be answered is why did these failures occur? To quote one passage, "Why did an organization that was wildly successful for thirty-five years, filled with intelligent, articulate powerful engineers and managers, fail to act effectively to deal with problems that were highly visible to everyone, both inside and outside the organization?"

Schein looks at DEC's failure through the lens of its corporate culture, and how it prohibited their executives from making the decisions, and taking the actions necessary to survive. Fans of Ed Schein will know his famous "Three Cultures of Management" paper, in which he describes the "Executive", "Line Manager" and "Engineering" cultures, all of which must exist and be balanced against one another for an organization to survive. Schein argues that DEC was dominated by the engineering culture, which valued innovation and "elegant" design, over profits and operational efficiency. This engineering culture dominated even the top levels of DEC, where proposals to build PCs out of off the shelf parts that were readily available in the marketplace, were shot down because the machines were thought to be junk compared to the ones DEC could build themselves.

That DEC was able to survive for as long as it did was largely attributable to its ability to innovate in a field that was so new it had not yet coalesced around certain standard systems, software and networks. However, as the computer industry became in effect a commodity market, and the buyers began to value price over innovation, DEC found itself increasingly unable, and in fact, unwilling to compete. The engineering culture which valued innovation and required creative freedom, did not want to subject itself to the requirements of being a commodity player which demanded autocratic operational efficiency and control over how resources were allocated.

Although DEC is now long gone, even readers who were too young to use computers at the time of its demise will find familiar truths in this book. As the old saying goes, the fish in the tank does not see the water it is in. Neither do we often see the cultures in which we are ourselves embedded. The real lesson of this wonderful book is to show us how our corporate cultures often prohibit us from doing the right things, even when we can see them clearly. Sometimes culture is most easily visible in the things you need to discuss, but that are simply "not on the table" for discussion.

There are many lessons here too, for companies that seek to innovate new products and services, and how to balance the creative freedom desired by the engineering culture with the "money gene" culture of sound executive management. The names of companies that have failed to realize the full financial benefits of their technical innovations is too long to list here. But the DEC story is a must read for anyone who seeks to balance innovation with sustainable economic success in any organization.

A provacative read
Many discussions and articles that chronicle the rise and fall of Digital simplify the failure to either "The president [Ken Olsen] blew it," or "They missed the PC revolution," or some combination of both. This book shows how the culture that so successfully nourished creativity and genius in the company's nascent days brought chaos, confusion, and internecine warfare in later days when the larger company faced a host of competitors and needed to efficiently produce commodity items. I think that the authors go a little too lightly on the role of (mis)management in Digital's failure, but they do a good job of bringing to light many other aspects of Digital's problematic history. The authors seem a bit full of themselves at times, but they have a compelling and sobering story to tell.

Needed to be written, needs to be read
I recommend this book to anyone who is familiar with DEC or wishes to understand its enduring legacies. It is also a useful case study on who a company that was doing so well could ultimately fail; are Microsoft and IBM really immune from this fate?

I used DEC equipment during its heyday from the late 1970's throughout the 1980s. What I value most is how the technical experiences I recall from that time were given depth. The author's narrative binds together a collection of internal memos and personal recollections of many of those who were working at DEC when many of its fateful decisions were made. In general, responsibility for the ultimate failure of DEC to survive as a company is laid with the senior management, in particular with CEO Ken Olsen. The same attributes that made DEC great and innovative were the ones that lead to its downfall. Alas, DEC is not dead but lives on in all the innovations it introduced.

I would like liked to have seen some more details on the technical innovations and more exposure to the myths and legends that many of us were weaned on. But that was not the main thesis of the book so it's not a deficiency per se.

Though written in a straightforward and matter of fact way with little flourish, I was engrossed and quickly polished it off. This book needed to be written.