L ECTURE E NHANCERS
Henry Varnum Poor was perhaps the first American to draw an organization chart, during his study of railroad management in the 1860s. Poor’s chart was in the form of a tree, with the president and board of directors as the roots, the operating divisions and service departments as the branches, and the lesser superintendents and employees as the leaves.
Traditional formal organization structure can stifle an organization’s customer service. To meet the needs of customers, a more fluid approach is needed. An example of this is the customer-supplier relationship developed by Digital Equipment Corporation, which attempts to build lasting partnerships with its customers by anticipating not only the day-to-day requirements of customers, but also help them plan for the unexpected as well.
An example of this occurred at 3:30 a.m. January 4, 1988 when an electrical fire in Chase
Manhattan Bank’s main production site in Manhattan wiped out all the fifty-story building’s power—including all computer systems. This was the first day of the banking new year and
Chase expected to process well over its daily average money transfer volume.
When Chase purchased its equipment, Digital assisted in planning for the everyday and backup operations crucial to the bank’s relationship with its customers. They also supported a secondary site which was fully operational and configured to meet the backup processing requirements of the main production facility.
The situation for Chase was potentially threatening. If on-line systems failed to process even one day’s worth of transactions, the bank could be subject to serious penalties. Two Digital field service crews were on the scene before dawn—one downtown and another at one of the bank’s contingency sites. Simultaneously, a Digital team from manufacturing, sales, and field service banded together, coordinating overnight delivery of additional parts and peripherals. That same day, the operational site was fully operational, enabling Chase to successfully complete 95 percent of its business volume. Digital continuously worked with bank personnel until the main production site was back in business. For Chase customers, it was business as usual.
Businesses, having become convinced of the value of teamwork, are starting to redesign offices to accommodate the teams. Braun Inc., the small appliance manufacturer and Gillette Co. subsidiary, recently celebrated its move from a traditional office building in Lynnfield, Mass. to a two-story, 38,000-square-foot site where employees meet at oases furnished with cafe-style tables and chairs, computer terminals for Internet browsing, and aquariums stocked with exotic fish.
“We wanted to change the rules and create a more open environment that would encourage communication and collaboration,” said president Bruce Cleverly. “We had already restructured our business by creating cross-functional teams that allow our finance, logistics, sales, and marketing people to work together based on specific products. We needed an environment that reflected our new approach.” Braun is hardly alone. Over the last decade, International Business
Machines Corp., Chrysler Corp., AT&T Co., and Ford Motor Corp. have all redesigned their office spaces with an eye toward flexibility and open communication.

Not surprising, the office-furniture industry has capitalized on the trend, aggressively marketing flexible furnishings for the flexible workspace. One example: Personal Harbor, a
Steelcase Inc. product that helps companies build their own collaborative office spaces with cabinets on wheels, screens with dual functions, and other portable furnishings.
To be sure, the much-maligned cubicle of Dilbert fame still exists. But at Braun, the standard cubicle now includes stylish glass openings that allow employees to see beyond their own gray walls and reflect light from the banks of windows that line the office.
Braun’s Cleverly described the impetus for creating the new, open office: With company sales expected to reach the $500 million mark next year, the firm needed more space, giving it a ready-made opportunity to move to a more open floor plan. So Braun hired architects Jung &
Brennan Inc. to draw up plans for renovation of some additional leased space. Under the architects’ direction, contractors tore down walls, connected two floors by way of a spiral staircase and created a meeting place in the lobby with the look and feel of a living room.
Additionally, the new floor plan encouraged socializing by developing islands where the company’s 170 employees could meet in small groups.
The company still uses offices, but windows lessen the isolation that previously characterized the executives’ old offices. And strategically placed meeting places make it possible for people to gather for impromptu or planned discussions throughout the day.
Jim Barter, a Braun product manager, says the new office has encouraged brainstorming and reduced the amount of time it takes to gather information. “It’s easier to connect with the people you need and share ideas. You just walk out the office door,” he said.
L ECTURE E NHANCERS
Kenneth H. Olsen, founder and CEO of Digital Equipment Corporation, is known for his autocratic style. However, at the same time he strongly believes in delegating responsibility, something other computer entrepreneurs have found difficult to do.
In delegating responsibility, Mr. Olsen was always willing to forgive worker mistakes. John
F. Smith, Digital’s twelfth employee and now the vice president for engineering and manufacturing, recalls buying a $7,000 soldering machine, a huge investment at the time, that proved unreliable. He says he came in nights and weekends to adjust it so Mr. Olsen wouldn’t realize his error.
Ultimately, Mr. Smith bought a replacement machine, moved the lemon to a vacant storeroom, covered it with a canvas, and thought he had gotten away with it. Several years later he came across the machine and idly lifted the covering. He found a hand-lettered sign that read
“Smith’s folly. (signed) Ken Olsen.”
An eminent nineteenth century physicist once predicted: “X-rays will prove to be a hoax,” and “Radio has no future.” In 1904, aviation pioneer Octave Chanute said: “The (flying) machines will eventually be fast, they will be used in sport, but they are not to be thought of as commercial carriers.”
• “There is no likelihood man can ever tap the power of the atom.” (Robert Milikan, Nobel
Prize in Physics, 1923)

• “Heavier-than-air flying machines are impossible.” (Lord Kelvin, President, Royal
Society, 1895)
• “This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.” (Western Union internal memo, 1876)
• “Who the hell wants to hear actors talk?” (Harry M. Warner, Warner Bros. Pictures,
1927)
• “Sensible and responsible women do not want to vote.” (Grover Cleveland, 1905)
• “Airplanes are interesting toys but of no military value.” (Marshal Ferdinand Foch, professor of strategy, Ecole Superieure de Guerre)
• “The wireless music box has no imaginable commercial value. Who would pay for a message sent to nobody in particular?” (David Sarnoff’s associates, in response to his urgings for investment in the radio in the 1920s.)
Even the U.S. Commissioner of Patents in 1844, Henry L. Ellsworth, said, “The advancement of the arts (of invention) from year to year…seems to presage the arrival of that period when further improvement must end.” A later director, Charles H. Duell, stated in 1899 that
“Everything that can be invented has been invented.”
Such shortsightedness continues into the modern era.
• “I think there is a world market for maybe five computers.” ( Thomas Watson, chairman of
IBM, 1943.)
• “There is no reason for any individuals to have a computer in their home.” (Ken Olsen, president, chairman and founder of Digital Equipment Corporation, 1977)