The Simplest of Leading Indicators
I still keep in touch with many of my ex-colleagues from my 17 years tenure at Digital Equipment Corporation (DEC) that ended for me in 1993. When I left they were still the second largest computer company in the world, but the board had recently ejected co-founder Ken Olsen after 34 years at the helm. Ken has always been affable, widely respected, humble and a morally robust father figure, but had been replaced by a hitherto impressive direct report of Senior VP Jack Smith who’d gotten a two level promotion — Bob Palmer. Many of his subsequent radical changes and downsizing upset a lot of staff, many cynically referring to his always well coiffured appearance with a nickname of “GQ Bob”.
Palmer presided over losses in 5 years that exceeded the total profits of the company in the preceding 35 years, before selling what was left to Compaq, who in turn sold out to HP.
One story about him struck a chord with me:
I worked for a number of years in “The Mill”, the ancestral home of Digital Equipment Corporation. Each day, I’d walk up the hill from the lower Thompson Street parking lot and into the Thompson Street lobby, past the very-near-to-the-door visitor parking area (“Blue Pass Required!”). Each day, I’d see a white Porsche 911 parked in visitor parking. After months of this, my interest had been piqued, so I asked Security who was the visitor that parked their Porsche here day after day. “Oh, that’s no visitor; that’s Bob Palmer’s car. He’s VP of manufacturing. “Isn’t that VISITORS ONLY parking?” I asked?” I just got a shrug back. So I figured out where his office was in the Mill and took a walk down there. “Palatial” is the word that came to my mind; with huge office areas and practically no people. I formed my opinion of Bob Palmer that day, and it never changed the rest of the years I was at Digital.
When I was in the UK PC Dealer team back in 1983–84, one of our account managers (David Bedding) visiting prospective PC resellers always did one piece of due diligence, and would walk away from anyone who violated it. He would measure the distance from the nearest visitor car parking space to the front door, and the nearest space reserved for employees (and especially so a Director) to that same door. If the visitor spot wasn’t closer, he wouldn’t sign them up on principle. He’d just report back that he was “underwhelmed” at the prospect of recruiting them and declined to waste his time doing so.
It was simply the best leading indicator of attitude to customers that no business plan could mask.
With hindsight, the other leading (negative) indicator was the owner having a goal to cash out after achieving scale and to drive the business with that objective above all other considerations; the road 2–3 years later was littered with the remains of those outfits.
Meanwhile, the ones that obsessed over their service to their customers, above all else, did far better. But that’s obvious, isn’t it?
