DEC Is Dead, Long Live DEC

From an insider, the forty-year saga of the rise and fall of Digital Equipment Corporation, one of the pioneering companies of the computer age. Digital Equipment Corporation created the minicomputer, networking, the concept of distributed computing, speech recognition, and other major innovations. It was the number-two computer maker behind IBM. Yet it ultimately failed as a business and was sold to Compaq Corporation. What happened?
Edgar Schein consulted to DEC throughout its history and so had unparalleled access to all the major players, and an inside view of all the major events. He shows how the unique organizational culture established by DEC's founder, Ken Olsen, gave the company important competitive advantages in its early years, but later became a hindrance and ultimately led to its downfall. Coauthors Schein, Kampas, DeLisi, and Sonduck explain in detail how a particular culture can become so embedded that an organization is unable to adapt to changing circumstances even though it sees the need very clearly.
The essential elements of DEC's culture are still visible in many other organizations today, and most former employees are so positive about their days at DEC that they attempt to reproduce its culture in their current work situations. In the era of post-dotcom meltdown, raging debate about companies "built to last" vs. "built to sell," and more entrepreneurial startups than ever, the rise and fall of DEC is the ultimate case study.

ED SCHEIN is Sloan Fellows professor of management emeritus, a senior lecturer at the Sloan School at MIT, and a fellow of the American Psychological Association and the Academy of Management. Besides his numerous articles Schein has authored fourteen books including Organizational Psychology, Career Dynamics, Organizational Culture and Leadership, Process Consultation, Process Consultation Revisited, and The Corporate Culture Survival Guide. He is the founding editor of Reflections: The Journal of the Society for Organizational Learning, and was also coeditor of the Addison Wesley Series on Organization Development. At present he is devoted to connecting academics, consultants, and practitioners around the issues of knowledge creation, dissemination, and utilization. Among Schein's past and current clients are Digital Equipment Corporation, Ciba-Geigy, Apple, Citibank, General Foods, Procter & Gamble, ICI, Saab Combitech, Steinbergs, Alcoa, Motorola, Hewlett-Packard, Exxon, Shell, AMOCO, British Petroleum, Con Edison, the Economic Development Board of Singapore, and the International Atomic Energy Agency. Professor Schein is married, has three children, and seven grand- children. He and his wife, Mary, live in Cambridge, Massachusetts.

List of Illustrations Preface Acknowledgments 1. Purpose and Overview 1 2. Three Developmental Streams: A Model for Deciphering the Lessons of the DEC Story Part 1: THE CREATION OF A CULTURE OF INNOVATION: THE TECHNOLOGY, ORGANIZATION, AND CULTURE STREAMS ARE ONE AND THE SAME 3. Ken Olsen, the Scientist-Engineer 4. Ken Olsen, the Leader and Manager 5. Ken Olsen, the Salesman-Marketer 6. DEC's Cultural Paradigm 7. DEC's "Other" Legacy: The Development of Leaders-Tracy C. Gibbons 8. DEC's Impact on the Evolution of Organization Development Part 2: THE STREAMS DIVERGE, CAUSING AN ORGANIZATIONAL MIDLIFE CRISIS 9. The Impact of Changing Technology-Paul Kampas 10. The Impact of Success, Growth, and Age 11. Learning Efforts Reveal Cultural Strengths and Rigidities 12. The Turbulent 1980s: Peaking but Weakening 13. The Beginning of the End: Ken Olsen's Final Efforts to Save DEC Part 3: LESSONS AND LEGACIES 14. Obvious Lessons and Subtle Lessons 15. The Lasting Legacy of Digital Equipment Corporation Appendixes A. DEC's Technical Legacy B. DEC Manufacturing: Contributions Made and Lessons Learned-Michael Sonduck C. DEC, the First Knowledge Organization-A 1991 Memo by Debra Rogers Amidon D. Digital: The Strategic Failure-Peter DeLisi E. What Happened? A Postscript-Gordon Bell References Index About the Author