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Ken Olsen

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| Ken Olsen | A Servant Leader | | | |

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Corporate Leadership has evolved in the 21st century with its primary focus being customer service and satisfaction. According to the Harvard Business Review, “during the last half of the 20th century, business leadership became an elite profession, dominated by managers who ruled their enterprises from the top down.. Executives were motivated by power, status and money at the expense of the customer and employees. Hierarchical control of the decision-making process resulted in people losing trust in the ability of their leaders to build businesses dedicated to serving the customer. Instead, executives served their financial interests and those of the shareholders. Customers and employees rarely factored into the equation. Ken Olsen, the founder and CEO of Digital Equipment Corporation, was a visionary in many ways. i The products Digital Equipment Corporation produced set the stage for what exists in the computing world today. DEC was a pioneer in computer networking. Digital’s Alta Vista Internet search engine was 30 years ahead of its time, and the VAX minicomputer brought computing out of the large data centers and into the business. Under Ken’s watch, Digital Equipment Corporation grew to $14 Billion in sales and employed 120,000 people, second only to IBM. Ken integrated his personal values and developed a set of principles that he practiced while at the helm of DEC. At the core of Ken’s leadership style were his belief in integrity, truth and honesty. He believed that everyone’s ideas were valuable, and that open discussion would lead to the best solution for the problem at hand. Ken encouraged all employees to go wherever and speak with whoever they needed to to derive the best solution to the task at hand. Olsen’s leadership style attracted the best and brightest engineers in the industry. He insisted on providing excellent products, superior service and truth in disclosure in the sale of DEC products. Ken’s principled leadership style led to the creation of a worldwide organization that was fun, challenging, ethical and extremely successful. Everyone I worked with during my 25-year tenure at DEC loved to go to work. Ken insisted on paying his sales team a salary rather than work on commission so that there would be no sales of equipment or services that were not necessary for the customers operations. The sales force had other ideas concerning their compensation and were lax in generating sales. In my opinion, this was the beginning of the end for Digital Equipment Corporation. Ken missed an opportunity to enter the personal computer market because he considered anything other than his minicomputers as toys. His biggest mistake was that he did not believe that there would ever be computers in the home. With the advent of low-cost personal computers from IBM and H/P eating away at Dec’s market share, Ken missed a valuable opportunity to capitalize on his VAXstation technology. Another error in judgment that contributed to the downfall of Digital Equipment Corporation.
As Digital began losing market share due to lackluster sales, layoffs were soon to follow. Ken, being loyal to his employees offered outrageous severance compensation to employees that were let go. The first round of layoffs were voluntarily and cost the company $1.9 Billion dollars. Subsequent layoffs totaled $4.3 Billion dollars which were unsustainable for the company to exist. True to his leadership style, Ken took care of his employees at the expense of the company he had built.
In conclusion, Ken Olsen’s servant style of leadership proved to be Digital Equipment Corporation’s ultimate demise. Ken was a great leader and provided guidance, expertise and the ability to motivate his employees to deliver best in class equipment and services. In the end, however, he failed to identify “red-flag conditions” namely, his personal bias towards his products that impacted his objectivity when making major decisions. Ken dismissed personal computers as toys; he paid his sales staff a salary rather than commission, he did not believe personal computers would be popular in the home. Ken missed many opportunities that led to the death of Digital Equipment Corporation.
Flawed decisions made by influential leaders due to bias and emotional attachment can lead to errors in judgment. In much the same way An Wang destroyed his company, Ken’s ‘emotional tagging.' Prevented him from viewing challenges objectively.
Having met Ken on some occasions during my tenure at DEC, it is difficult to categorize the man according to a pre-defined leadership style because he was uniquely all styles of leadership. Ken’s “people-oriented” or “servant style.” served to develop some of the best teams of people and products the world has ever known. His “laisse-fair” or “hands-off” style of leadership allowed his development teams to reach their full potential.
Ken was a charismatic individual in that all that knew him would follow his lead anywhere and at any time. Ken made it a point to participate in the decision-making process but allowed the team members to chart the proper course of action on any project. Olsen was an a “transactional” leader who leads by example. On many a weekend, one would see Ken wandering down the halls of the corporate offices in the Old Mill in Maynard and speaking with whoever he came across. Ken was the type of person that would take a new product home with him and pull it apart and put it back together to see if there were any flaws or enhancements that could be included. Digital's inability to recognize the opportunities presented by the rapid pace of technology was instrumental in its demise. What is interesting is that without the groundbreaking technological breakthroughs originally developed by DEC, none of the other companies would have come to fruition. For example, Microsoft’s Windows operating system has incorporated machine clustering and networking as well as disk shadowing that was pioneered by DEC. DEC had the world's first internet search engine Alta-Vista that was thirty years ahead of its time. Ken’s insistence that there would be no personal computers in the home was premised on “cloud computing”, a concept that only recently has come to fruition.

Works Cited:
Jack Falvey - Hot Negative, Chapter 3. (n.d.). Retrieved March 26, 2016, from http://www.falvey.org/hot_neg_ch3.shtml

Ken Olsen. (n.d.). Retrieved March 26, 2016, from http://www.nndb.com/people/224/000267420/

Ken Olsen, Co-Founder of Digital Equipment Corporation, Dies. (2011). Retrieved March 26, 2016, from http://hightechhistory.com/2011/02/08/ken-olsen-co-founder-of-digital-equipment-corporation-dies/

Ken Olsen, Co-Founder of Digital Equipment Corporation, Dies. (2011). Retrieved March 26, 2016, from http://hightechhistory.com/2011/02/08/ken-olsen-co-founder-of-digital-equipment-corporation-dies/

Lessons from Ken Olsen and Digital Equipment Corp. (n.d.). Retrieved March 26, 2016, from http://sloanreview.mit.edu/article/lessons-from-ken-olsen-and-digital-equipment-corp/

Malone, M. S. (n.d.). DEC's Final Demise. Retrieved March 26, 2016, from http://www.forbes.com/2001/01/19/0915malone.html

Manktelow, J., & Carlson, A. (n.d.). Emotional Intelligence in Leadership: Learning How to Be More Aware. Retrieved March 10, 2016, from https://www.mindtools.com/pages/article/newLDR_45.htm
Prive, T. (2012, December 19). Top 10 Qualities That Make A Great Leader. Retrieved March 10, 2016, from http://www.forbes.com/sites/tanyaprive/2012/12/19/top-10-qualities-that-make-a-great-leader/#580ee07a3564

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[ 1 ]. https://hbr.org/2010/04/the-new-21st-century-leaders-1.html
[ 2 ]. https://amphilsoc.org/sites/default/files/proceedings/Olsen.pdf VOL. 158, NO. 3, SEPTEMBER 2014

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