Reveille For Dec's Sleepy Sales ForceGary Mcwilliams
Edward E. Lucente had been on the job for less than a month last May when he began insisting that Digital Equipment Corp. hike its fiscal 1994 sales target by $350 million. That was just a 2.5% increase for the $14 billion computer giant--not enough to change its fortunes or put undue strain on the organization. But it was enough to let everybody at DEC know that the new vice-president for sales and marketing wasn't going to be like any of his predecessors. Clearly, this guy planned to play a major role in turning the struggling computer company around and plotting its future. Sure enough, the higher sales plan, adopted just before the start of fiscal 1994 on July 4, has become known around DEC as the "Lucente tax."
After barely four months at the No.2 U.S. computer maker, the 53-year-old Lucente is already a key player on CEO Robert B. Palmer's hand-picked management team. His prodding of the executives responsible for setting budgets and his aggressive plan for reshaping DEC's notoriously weak sales force have him pegged by insiders and analysts as a likely No.2 to Palmer, perhaps as chief operating officer.
Lucente clearly has the credentials--and the ambition. At IBM, he was a star, heading the important New England sales territory by age 32. He ran manufacturing and development organizations at IBM as well as its corporate strategy and planning group. In 1988, he took over U.S. sales and marketing and later got to run IBM's Asia/Pacific operations out of Tokyo. Lucente "had the potential to be among the handful to run the company," says Texaco Vice-Chairman and Chief Financial Officer Allen J. Krowe, a former CFO at IBM.
DETOUR. At IBM, Lucente adopted the clean-cut style and blue suits that were the norm. Only his French cuffs and an occasional flashy tie set him apart from Armonk's buttoned-down legions. Few who met the serious-minded manager suspected that as a teenager in Pittsburgh, he had been a doo-wop singer. "He's kind of sensitive about that," says George H. Conrades, who succeeded Lucente as IBM sales and marketing chief.
Leaving IBM in 1991 over a disagreement with then-CEO John F. Akers over strategy, Lucente was lured to phone-equipment maker Northern Telecom Inc. by CEO Paul G. Stern, another ex-IBMer. But Lucente left soon after Stern quit last January. He arrived at DEC after what Palmer calls its "most exhaustive" search yet for an executive who could stir up DEC's relatively laid-back sales force of 20,000.
Historically, DEC and IBM have approached the computer market from opposite directions. At IBM, the founder and virtually all the top executives who succeeded him were supersalesmen. At DEC, superior engineering was prized above all. Kenneth H. Olsen, DEC's co-founder and an engineering purist, refused to pay commissions to salespeople, even though all of DEC's competitors did. Olsen felt that a salaried sales force would better serve customers.
But soon after Palmer took over from Olsen last October, he saw that an all-out sales effort would be needed if DEC was to pull out of its four-year slump. Since November, DEC has been pushing a hot new line of computers called Alpha AXP. But hardware speed alone won't restore the company's fortunes. "DEC will have systems as good as anybody's," says Kemper Securities Group Inc. analyst Joseph Payne. "Will it have a sales force as good? It's a big question."
NO COOKBOOK. And one for which Lucente has some ready answers. He's thoroughly overhauling how DEC hires and trains its salespeople. No more relying on transfers from engineering or marketing--Lucente has begun recruiting experienced salespeople and eager college grads. He's making sales training mandatory, too. And instead of internally auditing customer satisfaction, he's hiring outside canvassers. The results, he says, will affect the performance evaluations of top sales executives and, eventually, those of the entire sales force. The trick, Lucente says, "is to make sure we get all of our focus on the customer and off internal issues."
Lucente says his biggest job has been persuading DEC's sales organization to stop expecting a simple formula. "I always get concerned when people look for recipes: 'We're this or we're that,'" he says. The people trying to sell complex information systems to solve specific business problems should "not go to Maynard [DEC's Massachusetts headquarters] for some cookbook of what to do in one situation and what to do in another."
DEC's customers say it's too early to judge what impact Lucente is having, but he's at least inspiring the troops. "Eight weeks ago, I wouldn't have given a plugged nickel for [creating] a strong field organization," says a DEC sales manager. "That's not the case anymore." Lucente needs more converts: Even as DEC reported a $120 million operating profit for the fourth quarter, ended July 3--its first in two years--the company disclosed that product sales declined during the quarter and the year. The proof of Lucente's revamped sales organization will be in reversing that dismal trend.
DEC'S NEW SALES TUNE Under new sales chief Ed Lucente, DEC is -- Recruiting aggressive sales-people -- Making regular sales training mandatory, not optional -- Measuring customer satisfac-tion more accurately via surveys -- Factoring customer survey results into compensation plans DATA: DIGITAL EQUIPMENT CORP.
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