Трейси Киддер - The Soul of a New Machine

Some part of Data General’s reputation was easy to explain. The company had promoted it themselves, and maybe it had gotten a little out of hand. Richman suggested, “We’ve done so much so well for so long that everyone seems to think we have to be doing something illegal.” A good point, but not a full accounting.

Some years back, in the early seventies, a company called Keronix accused Data General’s officers of arranging the burning of a factory. Keronix had been making computers that performed almost identically to Data General machines. The theory was that Data General had taken a shortcut in attempting to get rid of this competitor. In time, the courts found no basis for those charges and dismissed them. Indeed, it seemed preposterous to think that the suddenly wealthy executives of Data General would risk everything, including jail, and resort to arson, just to drive away what was, after all, a small competitor. But Wall Street didn’t see it that way, apparently. When Keronix made its accusation, Data General’s stock plummeted; there was such a rush to unload it that the New York Exchange had to suspend trading in it for a while. More peculiar was the fact that many years later, some veteran employees, fairly far down in the hierarchy, would say privately that they believed someone connected with the company had something to do with that fire. Not the officers, but some renegade within the organization. They had no basis for saying so, no piece of long-hidden evidence. It seemed to me that this was something that they wanted to believe.

I got this feeling more than once. Turning down the road to Building 14A/B one day, a veteran engineer pointed out the sign that warned against unauthorized parking. “The first sign you see says Don’t,” he remarked. He imagined another sign by the road; it would say: Use of Excessive Force Has Been Approved. The engineer laughed and laughed at the thought.

In a land of tough and ready companies, theirs, some of Data General’s employees seemed to want to think, was the toughest and the readiest around.

Certainly Data General’s reputation had other underpinnings besides advertisements and imagination. In an industry where sharp marketing practices were common, Data General’s were as sharp as any, and by the late 1970s competitors were challenging some of them in federal court. To the contention, leveled in Fortune , that Data General played especially rough with its customers, it was only fair to add that many of Data General’s customers knew very well what sort of market they were in, and moreover, it was clear that the company could not have survived if most of its customers had not felt at least fairly satisfied. But Data General was litigious, toward customers as well as others. “Sure,” said Richman, “if people don’t pay us or breach our contract, we litigate ’em.” They did so at least in part to assure Wall Street that they weren’t the sort of company that would accumulate a crippling number of bad debts.

The salient feature of Data General, however—what that sharp-eyed, astonished visitor from Wall Street would have pondered—was its growth. This was indeed the industry’s salient characteristic. In the main, computer companies that were not dying were growing; they had to do so just to stay alive, it seemed. But no company whose primary business was making computers had grown more rapidly than Data General. Bursts of growth were not uncommon, but Data General had been bursting for a decade, and what’s more, it had been maintaining the highest profit margins in the industry next to IBM’s. All this would have impressed the analyst from Wall Street, of course, but would also have given him pause.

Building 14A/B and its sparse furnishings, the facts that Data General paid its stockholders no dividends and that its top managers dispensed to themselves and other officers exceptionally small salaries, meting out rewards in the form of stock instead—all were signs of a common purpose. The company had displayed extravagance when it came to financing its tendency to go to court. Otherwise, the management seemed bent on saving all their cash to feed the hungry beast of growth. And, of course, the more this beast gets fed, the bigger it becomes, the more it wants to eat. It is one thing for a company with revenues of a million dollars a year to grow 30 or 40 percent in a year and quite another for a half-a-billion-dollar company to pull off the same trick.

Analysts on Wall Street sometimes become boosters of the companies they follow. Looking for an opinion that was certain to be disinterested, I asked an old friend, a veteran analyst of securities, to take a look at Data General’s numbers. He had the advantage of never having followed the company before, and in return for anonymity he agreed to my proposal. A couple of weeks later, he called me back. It seemed to him that Data General was bent on continuing to grow at 30 to 40 percent a year. He pointed out that this meant large growth in everything—in the need for capital, new buildings, new employees. Between 1974 and 1978, for instance, Data General had hired about 7,000 new employees, roughly tripling its numbers; in one year alone the company had increased its ranks by 71 percent. The analyst imagined the difficulties of finding that many qualified people so quickly. And what must it be like, he asked, to work at a place like that? You’d come to work some morning and suddenly find yourself in charge of a dozen new people, or suddenly beneath a new boss to whom you would have to prove yourself all over again. “That sort of growth puts a strain on everything,” the analyst concluded. “It’s gonna be intriguing to see if they get caught.” He thanked me for putting him onto such a marvelous entertainment.

Where did the risks lie? Where could a company go badly wrong? In many cases, a small and daily growing computer company did not fall on hard times because people suddenly stopped wanting to buy its products. On the contrary, a company was more likely to asphyxiate on its own success. Demand for its products would be soaring, and the owners would be drawing up optimistic five-year plans, when all of a sudden something would go wrong with their system of production. They wouldn’t be able to produce the machines that they had promised to deliver. Lawsuits might follow. At the least, expensive parts would sit in inventory, revenues would fall, customers would go elsewhere or out of business themselves. Data General got one leg caught in this trap back around 1973. Six years later, a middle-level executive, sitting in an office upstairs at headquarters, remembered that time: “We were missing our commitments to customers. We just grossly fucked over our customers. We actually put some entrepreneurs out of business and I think some of them may have lost their houses. But we recovered from our shipment problems and never repeated them.”

Another way of fouling up had less to do with a company’s own growth than with the growth occurring all around it. From observers of the industry came such comments as: “Things change fast in the computer business. A year is a hell of a long time. It’s like a year in a dog’s life.” In every segment of the industry, companies announced small new products for sale every day. Companies brought out new lines of computers, much more powerful than the ones they replaced, only every few years or so; but considering all the work that went into them and the fact that they required a redirection of effort throughout a company, the pace at which these major announcements came was very rapid too. Conventional wisdom held that if a company fell very far behind its competitors in producing the latest sorts of machines, it would have a hard time catching up. And failure to stay abreast could have serious consequences, because major new computers played crucial roles in the other business of the companies; they helped them sell all their little products and, often, their older types of machines.