DEC Is Dead, Long Live DEC: The Lasting Legacy of Digital Equipment Corporation
by Edgar H Schein
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Book Summary Information
Author: Edgar H ScheinContributor: Paul J Kampas
Contributor: Peter S Delisi
Contributor: Michael M Sonduck
Edition: Paperback
Audio: English (Original Language); English (Unknown); English (Published)
Format: Illustrated
Published: 2004-08-09
ISBN: 1576753050
Number of pages: 317
Publisher: Berrett-Koehler Publishers
Book Reviews of DEC Is Dead, Long Live DEC: The Lasting Legacy of Digital Equipment Corporation
Book Review: Helpful Assemblage of Facts about DEC as a Case History
Summary: 3 Stars
Professor Schein has written a helpful case history of Digital EquipmentCorporation as a computer industry innovator from the perspective of itsorganizational culture. He draws successfully on his own directobservations during decades of consulting work, and involves others fortheir experiences as well in describing the organizational culture. Themost helpful parts are in the form of notes and comments that occurredduring the rise and fall of DEC. His main weakness as an observer is thathe lumps too much of what was missing from DEC under his continuingreferences to the "business gene." The case history, as a result, is toolight on other aspects of DEC.Anyone who is interested in Professor Clayton Christensen's work onsustaining innovation will find deeper insights into why culturesencourage innovation failure by emphasizing one way of working onissues.
If you just want to understand the lessons of why DEC was ultimatelyunsuccessful as an enterprise, you only need to read Gordon Bell'spostscript in appendix e. Like every other computer company at the time,DEC and its leaders did not have an actionable understanding of theimplications of the ongoing productivity advances in semiconductors andhow nonengineers liked to interact with computers. Our firm did consultingfor another computer maker in 1978 to look at how to outperform DEC, andthe vulnerability to semiconductor trends was clear then . . . even beforethe personal computer became important.
The book fails to explain why DEC was so insulated from profit disciplinesthat drive so many other companies. During its heyday, DEC and its fellowcomputer makers enjoyed exceptionally high rates of repeat sales (wellover 90%) to the same customers. The reason: Software written for onecompany's machine often wouldn't work on another company's machine. Socustomers were stuck. It cost too much and took too much time to rewriteall that code. So you would stay with a vendor who was no longer competentfor quite a long time. The challenge in the closed systems world was tosell the first machine to a customer, and make it work. In the opensystems environment, you have to compete for repeat sales. For DEC, thatwas like AT&T having to compete with other long-distance carriers afterhaving had a monopoly for all of those years. Ultimate failure should nothave been surprising.
Rather than learning more about DEC, I would suggest that you focus onstudying current computing industry technology leaders who have beenconsistently able to adjust their business models such as Dell, BusinessObjects, Cisco, QLogic and EMC. They have processes in place that DECnever had, and it's hard to learn to succeed by looking at a company thatlacked such a key process. Clearly, the lesson of DEC is that working onorganizational development in a technology company without creating anability to perform continuing business model innovation is a waste oftime.
As I finished the book, I realized that those who are hoping that boardswill use better governance to ensure that high technology companiesprosper are being way too optimistic. Few boards can hope to know enoughto even understand whether or not the company is working on the rightquestions.
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