Digital Founder Happy to Hold No. 2 Spot
Kenneth H. Olsen has news for those placing bets on the heated competition between Digital Equipment Corp. and IBM: Digital’s happy to remain No. 2.
“It’s a lot easier being No. 2. It’s a lot easier to have the growth potential there. We don’t have ambitions for size, we just have ambitions for doing a good job,” said the co-founder and president of Digital.
Not that Digital is anywhere close to surpassing industry leader International Business Machines Corp. IBM is still more than five times the size of Digital if revenue figures are compared.
But lately Digital has been stealing IBM’s thunder, introducing a succession of hot computers and reporting record earnings quarter after quarter.
Digital’s strength has been in the mid-size computer market, where its VAX machines are best sellers. Originally designed for scientific and engineering work, they now are used for a wide variety of computing purposes.
IBM, by contrast, is coming back from a slump in which its profit fell in both 1985 and 1986, its first back-to-back earnings declines since the Depression.
Olsen, who started Digital with $70,000 in venture capital in 1957, has guided the Maynard, Mass.-based corporation as it has become a $9 billion-a-year giant. And he’s rubbing IBM’s shortcomings in the behemoth’s face with full-page ads screaming “Digital Has It Now,” referring to his company’s superiority in harnessing computers of all sizes into smoothly running networks.
As for Digital’s future growth, Olsen isn’t willing to speculate. But he says no company can continue to grow at Digital’s pace.
“I’ve been predicting for a long time we can’t do it and we’re still doing it. One of these years it’s going to be true.”
Olsen, a big man with a little extra girth around the waist, turned 61 in February. But he said it’s premature to speculate about a successor.
“It’s always the kiss of death. You don’t pick your leader and then give him a do-nothing job because he’s been knighted. You don’t make him assistant to the boss. You take all the people you have that are possible contenders and just add more and more to their work load and see who survives it and grows.”
Digital has no mandatory retirement age. “I used to say I was going to retire at 65--I’m not so sure anymore.”
Though he is Digital’s guiding force, Olsen said he likes to stay out of day-to-day operations. He said his job is to be a leader, not to create corporate policy but to make sure it’s followed.
“A leader doesn’t have to invent anything. The joke is, and this is often true--find out where everybody’s going and go out in front and lead them.”
He pointed to the preparations for DEC World as a example of his management style. He said he applied no pressure to get the massive trade show organized; instead, peer pressure and the challenge was enough motivation.
“I could not have--nobody could have--forced people to work this hard,” he said.
Olsen said he misses his job when he goes away, such as on his annual canoeing treks to Canada. But he said the company “works very much without me.”
“This whole affair (DEC World), a magnificent thing, I had almost nothing to do with. I never even thought to have it reviewed. This is true of most of the company.”
