Frontiers of Progress - 1961 G.E. Computer Department Sales Meeting - Part 6
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BACK AT THE RANCH

J. E. HOGG

Bill Mann has emphasized the importance of being customer-oriented. Indeed, the keystone to General Electric's progress has been the pioneering of this marketing philosophy which focuses the business on understanding and serving the real needs of today's customers.

I personally support the company's philosophy of customer orientation, and so do my associates in Marketing Administration. We are keenly aware of the sensitiveness of your relationships with the customers before, during and after the sale. We know that we must sell good products competitively, yet profitably. .. Products which meet the customers needs. Our marketing people must be honest, well informed, and well-trained. As one of the supporting organizations, we are dedicated to help you meet your commitments on time.

Only under these conditions will both the customer and the company be satisfied. During the evolution of this marketing philosophy, our company had to develop new organizational structures and outline new marketing functions to implement this concept. In our department two of these functions, Marketing Administration and Personnel Development, have been combined; filling a vital supporting role in meeting the objectives of the business.

These are the areas of support we work in:

1. Forecasting and scheduling the products you sell. 

2. Establishing the procedures and processing your orders. Following them continuously until our commitments have been fulfilled.

3. Establishing the two-way communication channels and transmitting vital information to you and other levels of management.

4. Selection, training and placement of superior marketing personnel in our various marketing functions.

5. Working with each of you in your self development program.

Back here at the ranch we have made significant achievements in each of the areas which we would like to discuss with you. Wrangler "Prod Em Parsons" will tell you about his new hay bailing machine for bundling up all your activity reports. He will discuss another bundle called SAM, and how he plans to distribute it over his rural free distribution system. At this time, I would like to introduce "Wrangler Prod Em" Al Parsons.


BACK AT THE RANCH

A. G. PARSONS

It's a pleasure to take time out from prodding back at the ranch to enjoy all the constructive criticism of the past three days. We have three more things going for you . . .

one. .. The Sales Administrative Manual

two. .. Distribution and Mailing List

three.. The Proposition Activity Report

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First, the Sales Administrative Manual was conceived to be your handbook on Marketing and Department Policies and Procedures, associated with your daily business activities. SAM is now one-third complete. We plan to get over 25 inserts written, approved and distributed to you by the end of the year on subjects of highest priority, determined from your requests during the past few months. As soon as approvals are obtained, we will send you the information informally through the marketing bulletin.

Current marketing bulletins ready for distribution are: Program debugging and testing policy Use of G. E. leased wire telephone network - Equipment trade-in policy.

We hope your secretaries put these marketing bulletins in your copy of SAM under the appropriate tab where you can find them when needed. When you get the formal SAM insert, your secretary should file them in place of the original Marketing Bulletin. The secret of a good storage and retrieval system in this case is a well trained secretary.

Now about rural free distribution.

Fred Stearns recently developed a complete set of addressograph plates tabbed for complete distribution coverage by function. This is the first major move in establishing a single marketing section list. .. to be sure all of you are getting the latest information.

Procedures are now established so that Fred gets information on individual status changes directly from various sources so that his lists are always current. Also, Bob Kroon, working with Finance Office Services, is establishing a central reproduction and distribution operation in the marketing area. All marketing distribution will funnel through this one operation; giving us better control, increased efficiency and better measurement of volume and effort involved. We now have a workable system which will improve as we grow and gain experience. Finally the status of our Proposition Activity automation program. The volume of proposition activity reports from the field is very encouraging. We quite honestly would rather book orders than reports. But I want to make it clear that the proposition reporting system has always been planned as, and will be, a two-way street. And let me say that we realize some of you feel that this is not the case because you haven't received help or answers to questions you have asked for by way of the system. To repeat, the system is a two-way street. You must remember, however; that before you will see immediate results other than action on your specific requests for help on a particular problem, certain activities must take place.

Here's what happened back at the ranch; Harold Gran immediately edits each report when received. The edited report immediately goes to Miss Lambett at the Flexowriter. The hard copy by-product is distributed for action to Sales and Application Engineering. The same day, the paper tape, which is programmed for the 225, presently goes to the tape to card converter and interim reports are printed out.

We get orders received reports and proposition activity reports. These are used by Harold Gran, working on Monthly Rolling Forecasts, and by John Malkie for preparing long range forecasts, and information for planning the peripheral mix in ordering production on the factory. This information also goes to Marketing Research.

Your daily contact with prospects and customers is our best source of information about the needs of the market. What type of products are gaining the greatest acceptance, and which sales strategies are presently most successful. All of your individual reports --when we put them together at Headquarters-provide indicators which will be used by Marketing Research, Product Planning, Sales Analysis and Planning operations, and Management, in making decisions for future plans. This means policies, products, and services will be scheduled on a timely basis to get greater customer acceptance. Your information makes us aware of competitors' activities in actual customer situations. And believe me -your reports show that our competitors' standards vary from area to area, customer to customer, and product to product. The only thing standard about our competitors appears to be their traditional business suit attire.

The programmer is now working, and we expect to get our first complete assortment of reports and summaries from our 225 by August. Then we will send you reports that will save you time and effort and provide you with the tools for more productive sales activities. Here are a few of the summaries and reports now planned for you:

1. Customer mailing lists

2. Quotes outstanding

3. Prospects lists.

Each of the above can be broken down into several lists showing you:

1. Current proposition number assignments by customer.

2. Actual opening dates of propositions

3. Date of first call

4. Status of customer on last call

5. Your estimated closing date

6. The application and market

7. Product or products considered

8. The $ value of individual and total prospects and practically any other analysis which you may request.

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For instance, here are a few statistics from your reports which we supplied to Sales Management at the end of the first quarter. For the first quarter, on an all- sold value.. that is, figuring all equipment at selling prices ., the actual value of proposition effort reported was $86,000,000. This, added to last year's carry-over totals $166,000,000 of open prospects. These amounts do not include orders received and booked, or lost business reported during the first quarter. We also found for the first quarter that for both the 210' sand 225' s the ratio of prospects to salesman- by- region was:

Eastern Region 3+

Central Region 9

Western Region 11

We know that the Eastern Region ratio is not correct -- that they are heavily loaded with prospects --they are obviously too busy to make out and submit activity reports. And well they might be. Since the record of equipment orders received, both the 210's and 225's, through the first quarter, was:

Eastern Region 9

Central Region 8

Western Region 2

We also found that 54 salesmen had cornered 339 prospects valued at about $200,000,000. Now, if we equate this to about 150 salesmen in the field at the end of 1961, we come up with a potential of $600,000,000 worth of prospect orders. This is not far-fetched.. to get $100,000,000 worth of business, we need total prospect to value ratios somewhere (slide 7) between 5 and 10 to 1.

As you can see, even our unsophisticated tab operation delivers many useful statistics to aid us at Headquarters to plan better and provide the support tools you people in Field Sales need to do the job that lies ahead.

Next, is corral-keeper Clark, whose job is to continue the servicing of the customers out there in the corral.


BACK AT THE RANCH

G. F. CLARK

To make your job easier, Contract Forms have been tailored to satisfy customer needs. These forms which spell out the terms and conditions of the order, were designed to help you be competitive. Our job is to support you in the field by processing your orders as quickly and accurately as we can. That's why the forms you are now using were sent to you, so that we could give you quick, efficient service. These forms didn't measure up to what we thought they would do for us, because special conditions have been added.

Let me tell you about some of these special conditions that have been coming in attached to the contract forms. They are:

Changes to the warranty clause;

Agreement to furnish engineering drawings and design information to tie in with other manufacturers' equipment;

- Changes affecting rental payments;

- Requirements for more applications engineering and Product Service people;

- Debugging time exceeding the standard time allowed;

- Deliveries we cannot meet due to prior sales or current schedules;

- Requirements for equipment not yet available

We recognize these are unusual conditions to meet particular situations. If these occur, we are ready to assist and advise you. If you men wait to accumulate exceptions and recommendations and send them in on the contract, you may be embarrassed in front of the customer. Check with us in advance. This will prevent competition from sneaking in while you are champing at the bit in the field waiting for Headquarters' formal approval which we can help you obtain earlier in the game. So tell us about these special conditions as soon as you know about them,

The objective of the Contracts Administration Unit is to see to it that the equipment you sold is delivered to the customer on time and we know that you've sold them more than just hardware. We know that in order to satisfy your commitments to the customer, many other conditions must be met. For instance, is the software package ready? Is the cus

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tomer's site ready? Is the customer's personnel trained and ready to use the equipment? Have we promised compatibility or interchangeability with equipment the customer now has on his site? Are the customer's programs ready? Are the customer acquired accessory equipment and supplies ready to be used with our system to do the customer's job? Our job is to represent you to our manufacturing people to insure the timely delivery of the equipment you sold. Our job is to represent you to our engineering section to insure the timely delivery of the equipment your customer needs. You're out in the field, talking to another prospect, while we're here at home making sure that the man you sold will be a satisfied customer. The quality of the job done in this area depends on the quality and timeliness of the information you send to us. We want to do this job the way you would do it if you were here. So send us all the information as soon as you get it.

Mr. Hogg:

And now I would like to introduce "Big Bull" Duster, otherwise known as "Breeder Bull" whose job is to produce strong hardy "Little Bulls" to expand the herd out there on the range.


BACK AT THE RANCH

W. C. DUSTER

78 of you have participated in our Marketing Training Program which has been informally christened the Astronaut Program. Many more men will follow in your footsteps.

I should like to review for you the field manpower buildup over the last year-and-a-half.

Here is the Computer Department Field Sales organization as it was on January 1, 1960 .. nine offices, sixteen men and one woman.

The first Astronaut Training Class graduated April 1, 1960, and within a month many of these men were in the field. Here is the way the Field Sales organization looked then. The red indicates new additions of office and personnel! Eleven offices and 27 people. By mid-June it was apparent that our Sales program was moving well beyond earlier expectations and a decision was made to recruit and train another group of salesmen. Astronaut II Program comprised this group of men, about half of whom were knowledgeable in the computer field. The other half were new to computers, but willing and able to pitch in and do a job. All had excellent appetites.

In early September, Sales plans were approved which provided for a continuous recruiting and training of field sales engineers. On October 1, 1960, this is the way the field organization looked, fourteen offices, 36 people. By the end of 1960, the Seattle, Boston, and Phoenix offices were opened. Our total Field force was comprised of 38 exempt personnel and 26 members of Class III and IV were in session here in Phoenix. Here they are just before graduation on February 23. These two classes together were larger than our total training efforts up to that time. Class V graduated April 28. Our present class, the sixth, will complete the course July 14. This is the field roster to date: twenty offices, 84 people. .. a 400% increase since January 1, 1960.

Fifteen of you in this audience are members of Astronauts VII and subsequent classes. Our plans are to continue through this year with four more training classes of 15 - 18 men per class.

Looking back over the past year, the need for a large number of trained Marketing personnel came upon us very rapidly in early 1960. There were obstacles, but none that were insurmountable. In February, 1960, shortly after John Hogg transferred from the field, he hired me into what was then a one-man symphony to assist in Astronaut I Training and to develop a longer range program of Marketing Personnel Development. The job was a little bit like running a railroad engine and laying tracks at the same time. Many of you have helped measurably to get this important program rolling. We are very grateful for this assistance.

So far we have recruited 100 men for sales positions and have graduated 78 sales engineers and pre-sales application engineers. Our course material, techniques, and facilities have constantly improved. In the facility area, we have literally covered a lot of ground.. from our classroom in the vault at Deer Valley Park.. to the old E and CR classroom.. to 400 West Camelback.. and now to our new training center at the Guaranty Bank Building in which we occupy quarters on the second floor. We plan to remain there until the plant expansion is completed. I am extending an invitation to each of you to stop in and visit us there. Twenty-one classrooms and an auditorium are planned in the Deer Valley expansion to meet the Department's training needs of all types. I hope all of you will have met our staff of instructors by the time you leave Phoenix. This is what they look like:

Arthur Ferguson Frank Sass Cora Mae Jones Elliott Kaufman John Coppinger

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Don Scholtz Bob Stanton

Concerning our plans for the future (and in our case future meaning tomorrow, May 19) astronauts VII begins a ten-week course. Astronauts VIII begins June 12, ending in late September. Astronauts IX begins July 10, ending in mid-October. Astronauts X September, ending in late November.

To recruit and select the remaining groups of men, we have expanded our recruiting to the field level. . . where it properly belongs. Recruiting will be conducted in the field by the Regional Managers with the assistance of Marketing Personnel Development, E and CR, and Application Engineering. One of the main tasks now under way is the development of more course material. .. such as computer applications (computer sales situation cassettes) more material for machine teaching. We are deeply involved in selection and use of the proper media for communicating technical and sales information in the formal classroom environment and to you in the field.

Two programs in machine teaching are completed in an experimental state. A four-part tape slide training presentation comprised of 82 slides and a 68 minute narration has just been completed. At our request and direction these were prepared by

A and SP, and with slight modification, they can be used as a sales tool with customers.

1. GE 225 system which you saw the first part of during the presentation last Tuesday. 2. Programming

3. GECOM

4. Sales features

We plan to use SSM principles as the basis for district sales meetings. An instructor training program was conducted in Phoenix by Marketing Services earlier this spring and nine members of our Department are qualified as instructors --including Charlie Heist and Warren Prince. Marketing Personnel Development stands ready to get this important phase rolling.

Now what can you do to continue helping us?

1. Send us top-grade referrals. Some of our best people have been obtained in this manner.

2. Help us in developing cassette material for our sales classes and for use in District Sales meetings. We want to learn what was the turning point in the sale. Or.. as Bill Mann expressed it "There is a key to every sale". What have these keys been in our sales?

3. Keep us posted on the important things which you feel need to be covered in formal class in Phoenix. Personnel Development is a dynamic never-ending pursuit.

The future looks terrific! We are customer oriented. Our training organization is a dedicated, highly motivated, enthusiastic, competent group of experienced men and women. Our program is under a full head of steam and is rolling.

We are a vital part of your sales team and we are proud to be so. You can count on us to support the sales effort 1000 per cent.


BACK AT THE RANCH

J. E. HOGG

Pitchfork Parsons, Corral-Keeper Clark and Wild Bill Duster have high-lighted a few of the activities here at the ranch this past year. We could talk about many others. To sum up. . . . . .

Marketing Administration and Personnel Development contributes to your self development program, contributes in training, contributes in order processing, to support the sale of a good product sold profitably to satisfied customers to meet their needs. This is the keystone of the General Electric Marketing Philosophy which guarantees success.


FRONTIER SERVICE

T. E. SANSOM

As a member of our Marketing team, Product Service is probably closer to your direct selling activities in the field than any other department function.

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We work directly with you on our present customers and near future customers, and as a result we know the necessity for close cooperation and communication on the day-to-day field activities, as well as the longer range Plans and Programs.

Today I want to review a little of where we have been, tell you about where we are going, and point out how we think this will affect and assist you in your pursuit of more and more customers for our Products and Services.

Last year about this time, we had about thirteen data processing computers installed and operating. We had in Product Service about 230 people, and we were working practically around the clock to make satisfied customers out of just customers. During the past year, the number of installed and operating computers has more than quadrupled. The amount of personnel, material, and facilities which we have focused on Service and Support has approximately doubled. This rate of expansion in Service and Support has approximately doubled. This rate of expansion in Service and Support is going to be commonplace for the next few years. Now, how is all this affecting you in your activities?

To date, Product Service has probably been of greatest assistance to direct selling in the area of demonstrated service ability. Our reputation in the computer business has definitely been bolstered by this demonstration in the eyes of prospective customers. You are currently selling this service ability and reputation. We in Product Service are directly assisting wherever we can.

We will continue to back you up on this.

Another area of assistance has been our site preparation liaison with customers and prospective customers. This assistance has been somewhat limited, and some of you have not been reluctant at all in pointing out some of our apparent short comings. We are working hard on this, and in a moment I'll tell you of some of our plans.

Our third major assistance to Sales is in insuring that you can safely and confidently say to prospective customers, 'Ask the man who owns one', how good our service is! !

So, that's where we have been! Now, where are we going? (Curtain Opens)

To date, all of our activities have been masterminded, directed and controlled from Phoenix. This has successfully launched our service ship, but now the Field Service Activities must join the Marketing fleet and become a full fledged member of this fleet at sea. The desk admirals must transfer field responsibilities to ship captains on the bridges of the product service ships who are daily looking down the muzzles of the enemy guns. The Phoenix- based desk admirals must concentrate on overall future battle plans, provisions, budgets, logistics, and master strategy, while measuring the current results of present plans and strategies.

Now, the 'New Frontier' plan: Effective July 1, 1961, the Western Regional Service ship will sail with a crew in place of about 140 trained and experienced service men at twenty different customer locations, a Field Support Center in Los Angeles now implemented and stocked with an inventory of approximately $300, 000 in replacement parts and supplies and commanded by the Western Regional Service Manager, Vince Balhorn.

Vince will direct the day-to-day service activities in the Western Region from his bridge at the Field Support Center in Los Angeles. A little about Vince. ., he has been in the computer business for five years, with Remington Rand and General Electric and with the Computer Department since 1958. Most of this time has been spent in contributing to our success on the B of A contract.

Effective August 1, 1961, the Central Region Service ship will sail with a crew in place of twenty four men at eight locations, a Field Support Center in Chicago modestly stocked with parts, and commanded by the Central Region Service Manager, Ed Churlin.

Ed will operate from the Central Region Field Support Center at 840 South Canal St., Chicago. He has been in the computer service business for about ten years with several data processing equipment manufacturers. He joined us in 1959, and has spent most of his time with us on the 312/225 type equipments.

On August 15, the Eastern Region will join the fleet with a crew in place of 48 service men at 18 locations, a Field Support Center just north of the Teterborough Airport in South Hackensack, New Jersey, implemented and stocked with about $100,000 of replacement parts and supplies in inventory, and commanded by the Eastern Regional Service Manager, Ray Davisson.

Ray has some five years in computers and automation, and has been with us since 1957.

This shift of field direction responsibilities from Phoenix to the marketing regions will take a little while to shake down, but by the end of this year, the benefits to you and your customers should be heavily felt. Such benefits as close-at- hand sources of technical information on our products; rapid and frequent availability of site preparation specialists; close-in availability of replacements parts, assemblies, and supplies; rapid assignment of service assistance where needed; on-the-scene management resolution of personnel and equipment problems; and local consultation with your regional sales personnel on changing marketing problems and conditions.

Those are the highlights of our increasing emphasis on direct assistance to Field Sales. Meanwhile. " back at the ranch, other necessary Product Service activities must be carried out by the desk admirals.

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In order to provide our Regional Service Activities with trained service personnel and equipment operating and servicing information, we have a technical information and training unit, commanded by a Bank of America veteran, Jack Eardley. Jack is assuming this new responsibility after six years of experience with General Electric, of which about four years have been in the Computer Department on the GE 100 and 210 equipments.

Occasionally, we have problems with equipment in the field. These problems require detection, analysis, close investigation with engineering and manufacturing, and a solution devised with instructions and material for accomplishing the fix. Then, the information gained from these experiences must be translated back into the current product planning and engineering design work on future products. This work is done by our Service Analysis Unit commanded by Owen Reece. Owen has been in the G. E. family for about nine years and has devoted most of his five years with the Computer Department to just such work on all of our products.

In order for our Regional Service Activities

to be adequately staffed and supplied for current and future service requirements, there must be a continuous analysis of present service effectiveness, an aggressive measurement of what our competition is up to, and a steady planning ahead function carried on in Headquarters. This Installation and Maintenance Unit in Product Service is commanded by Edwin Poe. Ed has ten years of G. E. experience, and has spent most of his four years with the Computer Department on the GE 100 and 210 equipments.

Up until a few weeks ago, the Industrial Process Control Computers were a member of our family of computers. At present, the Industry Control

Department is absorbing this line of products. Since it is going to take a while for this transition to jell, we are continuing to provide service on these products until Industry Control gets into gear. This unit of our Headquarters activity is commanded by a G. E. Product Service, fifteen year veteran, Bob Buies. Bob's experience with the Computer Department over the last five years has been on ERMA, the 304, the 225, as well as the process computer family.

Even tho' Lacy, and his boss, think that all we do is figure out more ways to spend more and more of his money, we do spend a little time estimating costs, keeping track of and analyzing our financial experience, making budgets and then explaining and defending them, establishing administrative methods and procedures, housing ourselves around the country, and implementing our Supplies business. This unit we call our Product Service Administration unit, and it is commanded by Carl Worlock. Carl has spent his eighteen years with G. E. doing these kinds of things, and his last two years with us have been a big help.

Somehow, we must find people who are interested, or can be interested, in service work. Then after we get them, they always have little problems such as ... 'How do I get my family moved;' 'What's with this hospitalization insurance;' 'Transfer me quick... my ex-wife is after me for alimony;' or 'but the judge said thirty days in jail'. These interesting activities are handled by our specialist in Personnel Administration, Lee Jeffery. Lee came out to Phoenix to help clear the sage brush when the Department first moved here, and has been in the G. E. family for about eighteen years.

That's our Product Service family, and those are some of our plans for moving ahead with the 'New Frontier' .

And now to show you our version of a typical episode in the day to day marketing activities of one of our regions, I give you - The 'Product Service

Players' presenting in three acts, 'Marryin Bob'.


PROSPECTING

R. D. JORDAN

Fellow Salesmen, .. now that your ears have stopped ringing, and you are able to hear once more, it's a pleasure, a privilege, and a responsibility to appear on your program.

I say 'pleasure' because I never yet met an advertising man (or woman) who didn't like to talk, , . a 'privilege' because the short duration of my talk multiplied by the number of you here will cost the department approximately $3750 in man-hours. ., a 'responsibility' because you and the company are thereby entitled to get something back from this investment'.

I might also add that it is with a distinct sense of refreshment that I face you gentlemen this morning, because most of the talking I do every day is amongst other advertising people, and sooner or later, under such circumstances, you are bound to find yourself talking to yourself, Like the worm who popped out of the ground one bright, dewey morning and saw another cute little worm. Said our hero: 'I love you, let's get married.' 'Don't be a dope,' said the second worm, 'I'm your other end'. '

I am going to spend my allotted time on a subject which is as controversial as sex. .. as univer

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sally sought as fame and money. .. and as thoroughly an integral part of the life of a business as are the three just mentioned factors a part of the life of man.

Specifically, I am going to talk about that intangible yet very real, that sometimes nebulous but infinitely precious commodity called image.

Everything in life . .. every individual every business large or small. .. every nation everything' animate or inanimate. " either creates its own image or has an image created for it . .. for good or for bad. Psychologists may not agree, but in my opinion there is no such thing as no image at all.

Image is a product of the mind. The image approach recognizes that companies like ours are like individuals; they have distinguishing characteristics, and in the business world these characteristics set them apart from their competitors.

We of the General Electric family here in this room share an interest in and a responsibility for not one but three images: a corporate image which is the composite of knowledge, feelings, ideas and beliefs associated with the company as a result of the totality of its activities.

A product image which is the public's impression of the company in terms of its product leadership, quality and performance. And... an institutional image which is the impression the public has of the company in terms of corporate leadership: progressive company, fast growing and expanding, product innovator, research -mindedness . .. and its contributions to National Defense.

What your customers and prospects think and feel about General Electric determines not only whether they will buy our products, but whether our company will outlive many product lives.

In planning image objectives, it is not enough simply to encourage a 'general good feeling' about our company. .. or about our department. .. or about each of us.

No . .. public opinion must be firmly rooted in an understanding of the five basic public relations objectives:

1. General Electric is a good citizen. It fulfills its responsibilities to customers, owners. employees, suppliers, and the public.

2. General Electric is the leader in research and engineering.

3. General Electric is vital to our National Defense.

4. General Electric is an inspiring example of free, growing, and profitable enterprise.

5. General Electric makes products of outstanding value.

These are the permanent ingredients of our good image. .. the five distinguishing characteristics which survey after survey have indicated are associated with the best known corporate symbol in America: the General Electric monogram, and the implementation of which has made our company's slogan 'progress is our most important product' one of the world's most widely recognized corporate slogans.

The essential role of mass media in image building is readily apparent in where people get their impressions of General Electric experience with General Electric products is common in more than three in four of the public . .. but the fact that other forms of contact also strongly influence the creation of an image shows up when people tell their main source of ideas about General Electric: 29% say they have gotten most of their ideas and impressions through owning and using products, 27% got their main impression through TV, 41% through reading feature stories and publicity, 10% through advertising and 10% through radio.

Space advertising campaigns, and newspaper and magazine articles and publicity are as good or better than television or product experiences in helping build the company's corporate leadership image as shown by the top line on this chart. In short, the way most people get to know General Electric is through:

1. Experience in owning or using its products.

2. Exposure to mass media communication.

I emphasized that important phrase 'get to know' because it succinctly underlines the absolute necessity of keeping everlastingly at the task of communicating through mass media insofar as it is economically practical and feasible to do so.

The most devastating words in the history of all business enterprise are to be found in the Bible in the second chapter of Exodus.

You will recall that Joseph had been sold into slavery in Egypt, but that through intelligence, thrift, and shrewd business enterprise, he had so prospered that his name was known throughout the entire land as second only to the king.

And then the Bible completely clobbers poor Joseph with these words:

'And Pharaoh died, and there arose in Egypt a new king which knew not Joseph.' In these United States last year, about 1,500,000 people died and with them passed away whatever favorable impressions they may had of General Electric and the goods and services marketed by you gentlemen.

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And, your guess is as good as mine as to how many new 'kings' will arise every day in the area of your particular market place: kings who know not Joseph.

The favorable experience people have had with GE products has contributed to the formation of the company's over-all image.

'Do things go wrong with General Electric products too often, only occasionally, or hardly ever? '

Hardly ever. ..  53%
Occasionally. .. 18% 
Too often . . .    3%
No opinion . . .  26%
                     ____ 
                     100%

Please do not misinterpret these figures from the study only in the light of any unpleasant experience you may have had with any of your customers: In the terms of the company survey I am referring to throughout these charts, the three percent of the public who reported excessive difficulties with General Electric products is small.. but actually represents statistically three million customers perhaps a couple of these were yours!

The last corporate image study shows a modest rise in the public's feeling of familiarity with a number of leading companies . .. and here, Gentlemen, may I paraphrase an old familiar saying by twisting it to read: 'a company is known by the company it keeps. '

Though our company is one of the best known of all industry, its four point gain on 'familiarity' over the previous study is smaller than that of Alcoa, Dupont, Gulf Oil, Sears Roebuck, and Westinghouse: in short, General Electric does not seem to have fared as well as these other leading companies in communicating new ideas. Note that word' communicating, , Gentlemen, for it circumscribes the eternal responsibility of all of us.

However, take immediate comfort from the fact that General Electric and Westinghouse stand well ahead of other companies in their same general field. Here for the first time, we see several other companies. .. IBM, RCA, and General Dynamics included.

These companies in particular are seeking to enlarge their image . ., to give it wider scope and dimension.

Commanding attention is not accomplished through one-shot or short-term efforts, but require sustained, planned programming over a long term.

Whether name recognition and general favorability operate to the benefit of a business depends crucially on whether public experiences and contacts with a company are embodied in particular, concrete impressions which give life, strength and personality to the company's activities . .. that are enduring and not easily dissipated by chance events that are beyond the company's control.

Which statement leads naturally to the thought that is in the minds of many of us:

'What effect will recent unfortunate events have upon the image of our company?'

Certainly there will be some effect, but in the opinion of our New York office public opinion research consultants who are even now feeling the pulse by one or more studies in depth:

So deep and wide is the reservoir of good will enjoyed by our company. .. so well built and strong is the structure of our corporate image . . . that there will be little or no lasting impact upon it at all.

The dominant elements of General Electric's corporate image are its product reputation and leadership qualities. Compared with eight other top US companies: Dupont, U. S. Steel, Texaco, Westinghouse 'The Telephone Company, ' Sears Roebuck, and General Motors, General Electric's 'reputation profile' scores nine points higher above the average for all nine in both product reputation and corporate leadership, and well above all eight in recognition of its defense contributions.

Our company's product image is relatively strong in all areas . .. ranging from 52% . .. or nine points higher than the average of the other eight top US companies mentioned previously. . . for dependable products down to 31% or seven points higher for' outstanding product performance. '

In 'corporate leadership' the story is much the same: 'progressive company' ... eight points above nine company average 'product innovators' . .. 12 points up, 'develops new product uses' . . . 11 points higher, 'research minded' . ., 13 points above.

Now. .. let's turn to the image of greatest meat-and-potatoes interest to you and me: the image of our department and of its products and services.

There is no doubt but that many of the sales influencing components of our several images as a company rub off to some degree on new departments and on their products and services. There is little doubt but that the salesman who can say: ' I represent General Electric' has a better chance of getting in faster to see Mr. Big than one who represents a lesser known company. But... here much of the advantage stops because of two closely related factors:

1. Lack of familiarity with the General Electric product you are selling.

2. An over-riding strong product, corporate and institutional set of images associated with competitors in a specific, concen

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trated area which has been traditionally theirs.

This, then is the frontier upon which we stand and its a lonely one but with four shining objectives on the way to image creation and success:

1. General Electric is in the computer business to stay.

2. General Electric makes computer products of outstanding value.

3. Offers unexcelled programming and applications service.

4. General Electric computer products and services have proven acceptance in the market place.

Not that these objectives alone will produce the ultimate image that our management seeks .. .  rather they are like the building blocks of a space platform from which our business can soar.

Two of your Regional Managers have written me within the past few weeks to say in effect that we now have such great recognition and acceptance for our systems in the banking industry, that we should taper off our banking promotion and help build the same stature for our products in other fields. This in itself is the greatest tribute to the power of advertising in support of what up until now has been but a handful of determined and terrifically competent salesman that I have ever heard in more than thirty years in this profession.

And, the most sincere thanks of Coleman, our agency, and myself for helping us dig up the facts for these advertisements: pre installation case histories in which the banking executive says why he bought GE. ... new order advertisements the swing is on to General Electric:

The millionth account series updated to larger and larger significant numbers.

For more than a year these ads have been pounding away in the Wall Street Journal, Audigram, and American Banker on the theme of 'proven acceptance in the market place' and actual night after night 'outstanding product performance'. These same themes have carried through all of your trade shows in all advertising there is nothing as ageless or more powerful than confidence spoken through the lips of hardheaded, highly respected business leaders in a buyer's market.

For the future . .. whatever the field or the product. .. we turn again to you for comparable image making material like this. In general your customers will love it . .. it will help your stature with them (besides giving you that little extra glow from seeing the job you sold publicized widely) and lastly provide the bit payoff: sales back-up for your fellow salesmen.

I pray for the day. . . and I am sure Messrs. Lasher, Goostree, and Sheeley join me . .. when' sales are so numerous that we'll have to restrict the offer, but until that day comes the offer stands: In one way or another. ., through advertising, sales promotion, publicity, and trade shows, we'll gladly publicize nationally all the case histories you can bring in!

Aside from the case histories outstanding product performance advertising which we are continuing as rapidly as material becomes available in other areas, several of us of late have developed a strong allergy towards the 'battle of the numbers' or the 'cavalcade of ciphers.' After all, we have come to believe, nomenclature is most useful for cataloging purposes, but a customer doesn't lay several hundred thousand dollars on the line for a number: he puts up his money for a service . .. an asset.. ., a management tool.

Running throughout practically all of the image questionnaires which many of you returned to me is a plea for great emphasis on point No. 3 of my previous slide. .. namely; 'General Electric offers unexcelled programming and applications services. '

If further credence to these statements is needed, I'd like to show you one portion of a survey amongst 1,000 executives recently completed by the magazine Scientific American.

Scientific American asked amongst several other questions:

' Assuming that several computer and data processing systems meet minimum requirements, please number (one through seven) the listed factors . .. in order of importance. .. as they would influence your selection of a vendor company for each type of computer and data processing system. '

Here are the results for business computers and data processing systems: 'price is almost an automatic reflex, of course and is the number 1 factor. Price aside or competitive, however, automatic programming techniques is highest un the list of factors, closely followed by technical assistance,

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followed by stature of the vendor company, and price following in that order.

To quote our General Manager, Lash recently said in a talk before a customer group and more recently in his presentation to chairman of the board Ralph Cordiner and other members of the executive office:

'A vital aspect of our computer industry is the importance of programming, or the art of using computers. We have almost as much technical effort devoted to programming as we have devoted to hardware engineering. We are making significant contributions to programming technology. We are convinced that this is a real avenue to opening new applications and reducing present customer costs by making it easier to use, operate, and replace computers without re-doing all their operating procedures and set-up. '

Which all reminds me of a stanza from a poem that I read at our first National Sales Meeting and which holds a powerful moral for all of us: 'so tell me quick and tell me true, or else my boy. . . to hell with you ! Less how the product came to be . .. more what the damn thing does for me. ' This advertisement. .. shown here with its supporting literature. .. which you saw recently in the Wall Street Journal, Scientific American, and Fortune is an example of our new philosophy.

It will be followed by others in the same vein the next to be on the critical path method programming package for use with GE 225. Each successive advertisement in this series will further develop an image that: General Electric's computers department not only makes equipment of outstanding value but helps you 'King Customer' find more ways to utilize information processing in your overall business management and control. .. more effectively and efficiently than has heretofore been practical or possible.

In short, as a spokesman for the American Management Association puts it: 'The mere acquisition of a computer is fast losing its competitive advantage, and in the future, the competitive edge is going to the company which figures out how best to use the capabilities of the computer.' Unquote.

GE programming techniques will be an important part of this figuring. The theme of your National Sales Meeting is 'Frontiers of Progress. ' Having had a modest part in setting this theme, I should be lacking in 'parenthood, , if I did not at least tie in some of our work with it.

Thanks to some dedicated people in my group like Coleman Ross, Ray Shanahan, Jim Sutton, Bob Bonheimer, Jim Dewitt. .. to name some veterans . . . plus Jim Doyle, Bob Widmark, Bob Clarke, Jim Priest, Bob Moczulewski, and our four girls Darlene, Evelyn, Shirlee and Pat ranging in continuity of service from two weeks to two years. .. Advertising and Sales Promotion in this department has come a long way since November 1, 1956 . .. and still has a long row to hoe.!

The profile up that mountain represents the growth of the Advertising and Sales Promotion subsection budget from one advertisement, one data sheet and one person (myself) in November 1956 throughout 1960 and projected to January 1962.

We have been in the foothills. .. we are now just beginning to scale the heights.

With each added dollar, has come a greater sense of responsibility. I assure you. .. for today the dollar ear-marked for selling our department's products and services demands of my group and Bob's a keener realization of the responsibilities involved.

It also demands greater inventiveness, imaginuity and pioneering.

'Prospectin' to my associates and myself means picking away at pay dirt in the form of media or mailing list circulation amongst customers and prospects.

From such 'prospectin' last year came more than 8,000 inquiries in the form of letters, telegrams, magazine 'Bingo cards' and so on. Carefully sifted by sales before being passed along to you. these inquiries resulted in a minimum of 4,000 'nuggets. ' out of which if even one half on one per cent resulted in a 'strike' the program would have paid for itself many times over.

In the examples of the work of my associates which I should like to review very quickly in closing, I am sure you will see much that is real progress. Many projects which represent pioneering as far as our department is concerned. .. and all to one common image: to help you sell.

We now have for your immediate use, an expanded new banking, mailing list broken down into individual districts so that each mailing may be personalized with your facsimile signature and go only to your customers and prospects in the banking industry. This new list covers 2.135 banks. Run-offs on this list have been furnished each district manager

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upon his return. He and his salesmen may thereafter add (or subtract) as many additional names as he wishes.

Similarly, we are discussing with Tom the establishment of mailing lists for other key markets as rapidly as practical. One additional list of consultants is already well under way. .. others will follow.

Speaking of consultants, Bob and I are working on plans for a series of seminars at Crotonville in late fall for these very influential' customers.' As a matter of fact, the prologue to this meeting was developed with the thought in mind that it could be used not only at Crotonville, but before other external groups as well.

Within the past few months we have put in place the beginning of a dynamic visual aids group including complete sound motion picture equipment for 'quickie' in-plant photography. Although but one full-time man and part time of a girl clerk at this date, 'shoot-em-up'! Bob Clarke has already shot eight such quickies. .. including one for Bob Harris on the new 1,200 card-per-minute sorter and a pictorial progress report on F ASCO for George Gamble.

In addition to Bob's direct efforts in this area, we, John Hogg and myself, have either produced or have in production five sound strips, under Bob's supervision. .. four on the GE 225, one of which you saw Tuesday. ., and one on 'The ABC's of Computers' for use with management groups. Also on film and to become available as soon as time permits are the makings of a motion picture on how computer installation at the First National Bank of Arizona. During Ray Barclay's presentation you saw, of course, the new 'Manufacturing Competence' film. .. now also available.

The data book has now progressed to a new permanent format and along with it is its companion a new condensed pocket-sized data book will be continuously up-dated.

This year and during the first quarter of 1962 'Mrs. Bell's Check' will be telecast 250 times through two public service programs 'TV Digest' and 'World in Motion. '

Sales backup in the form of new and revised manuals. .. brochures, specification sheets, article reprints and so on . .. and not to forget. .. our stable of good-will builders. .. means that sales promotion continues at a high rate.

Space advertising is prepared in cooperation with us by the McCarty Company. Media on the schedule include on a regular program basis: the Wall Street Journal, Audigram, U. S. News and World Report, Data Processing, Harvard Business Review, Control Engineering, Scientific American, American Banker, Fortune, Business Week, Electrical World, Modern Office Procedure, Production, Datamation.

Representing a total circulation to 2,100,000 interested individuals.

Now available for your guidance is a new 'Advertising Advices' medium in which are spelled out marketing section policy with respect to cooperation with customers on press conferences,' 'local, regional, and national space advertising, ' 'direct mail distribution, , and so on.

From the Sermon on the Mount there is a famous passage which reads: 'Whoever shall compel thee to go one mile . .. go with him twain. '

We in Advertising and Sales Promotion are prepared to go that second mile with you. ., on the road to success and prosperity.

I began this talk on a religious note . .. so let me conclude on another. Let me remind you, Gentlemen, that the Christian Church is almost 2,000 years old.

It is known by its image to all races and colors. You will find it in every country and in every climate. Its products and services can be truthfully described as the greatest of their kind the world has ever seen.

Yet. .. it rings the church bell every Sunday morning . . .

We thank you.


THERE'S GOLD IN THEM HILLS

C. C. LASHER

When James Watt invented the steam engine and Faraday the electric motor, neither they nor anyone exclaimed, 'This is just what we need to accomplish the industrial revolution'. But it did accomplish a revolution, and later, historians recognized this fact and gave it that name. I predict some day historians will recognize that electronic communications and computer systems started the information handling revolution, just as the invention of the steam engine started the industrial revolution.

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The steam engine and the electric motor have been major factors in bringing us the highest standard of living the world has ever known. They did this by multiplying the power of man's muscles.

But as the world of business becomes more complex, the mountains of information and paperwork have grown beyond man's ability to properly handle them. We must now multiply the power of man's intellect.

Just to maintain the historic rate of national progress for the next ten years will require that the gross national product increase three times as fast as the available work force.

In manufacturing organizations, banks, insurance companies, and other business establishments as well as the government bureaus, the magnitude of clerical work is increasing so fast it will exceed the available supply of people unless our information handling ability is made more efficient.

A few years ago, the Hoover Commission established that the Federal Government produces 25 billion pieces of paper each year. If this paper were to be placed end to end, it would reach to the moon four times in triplicate. One-sixth of our gross national product is devoted to paper handling. We are becoming an economy and a society of paper shufflers. In the past, we have concentrated on direct productive efficiency. Our clerical work force is increasing much faster than our production work force.

The future opportunity is in increasing our information handling efficiency. . . opportunity for General Electric as a manufacturer.

But, I don't have to tell you that because you know and believe in it. If you did not, you would not be here and if I did not believe it, I would not be here and I also believe that just as General Electric has long been a leader in the broad field of energy handling, so will it be a leader in the broad field of information handling.

Now I want to narrow the scope of this talk to digital information processing systems. . . our primary interest, and examine first General Electric's motivation and progress as a user and as a manufacturer.

I assume many of you are General Electric stockholders, or know of the position of its shares on the stock market, and that you are aware that General Electric's profitability last year and so far this year leaves something to be desired. This would not be surprising perhaps, if General Electric were growing dramatically. But over the last five years we have been on a virtual plateau in terms of total outputs. General Electric is. . . must. . . be dedicated to growth and must enter new businesses to provide that growth. And it must improve the efficiency of its operations to provide not only the funds for this purpose but also to reverse the declining profit trend.

Information handling provides both opportunity for growth. . . as a manufacturer. . . and opportunity for increased efficiency as a user. Thus far, General Electric has moved more aggressively as a user than as a manufacturer. Just how rapidly is illustrated by the fact that in 1954, the first large scale electronic computer system for business data processing was installed by General Electric Company at Appliance Park in Louisville, Kentucky. The July, 1954, Harvard Business Review had this to say, and I quote:

'The philosophy underlying GE's decision to install this million dollar computer represents, for the most part, a radical departure from current business thinking. It charts a course which many organizations large, medium, and small. . . could follow in harnessing high speed computers to business applications. Thus the practical problems which had to be explored and solved in the course of GE's pioneering move may be enlightening to the executive still uninformed or troubled with doubts about this controversial new administrative tool'.

That's what Harvard Business Review had to say seven years ago. General Electric is the largest commercial user of electronic computers in the world with 100 computer systems installed and operating on information handling problems throughout the company. In the process, General Electric has acquired a wealth of operating know how and experience in computer systems unmatched by any other organization.

From our experience as both a user and a manufacturer, we recognize the value of information handling and the growth to be expected.

This is tremendous progress in less than seven years.

The communication computer system for the company's finance and service operation will be, when completed, another milestone with its 12,000 miles of communications circuits, re-servicing 56 warehouses and 34 product departments. We expect it to be the most extensive on line system in industrial use. This time the hardware is General Electric hardware. . . not competitive equipment. . . and General Electric will benefit doubly from this pioneering effort through leadership in improving performance and reducing cost, and through the sale of additional equipment.

It is difficult to estimate the potential value of such a project to the company. We in General Electric frequently spend millions of dollars on new developments with the hope that someone eventually will find a use for what is being developed. Sometimes these payoff; sometimes not. I do not mean to case aspersions on non-business oriented research projects. But the FASO project, at far less expenditure, is the springboard to at least a half a billion dollar market in the next ten years and there is no question that it is a desirable product. . . that a customer wants and needs it now. The Computer Department is 'inventing' to accomplish this job. . .

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has to satisfy the customer. And, believe me, what satisfies General Electric customers will also satisfy many others.

This ability within General Electric to provide realistic constraints and objectives for engineers and systems designers working on advanced technological information handling products, is one of General Electric's' secret weapons' in the competitive battle.

As a practical matter the FASO System will be a demonstrable system, saving the company money, at least two and perhaps five years sooner than if the subject were tackled on an abstract basis. We are in the bank business because of the ERMA project and we will be in the data communications business because of the FASO project.

I want to talk about the information handling business from the standpoint of company management's perspective, what the outside world things, and what the Computer Department thinks and is planning.

In the last year, the company has directed its attention to more consciously directing effort toward growth. Mr. Cordiner singled out the following five areas as those being pursued; at the year end press conference:

1. Atomic power and other new energy devices. 
2. Stationary gas turbines and commercial
jet engines.
3. Space,
4. Industrial automation,
5. Computers.

This is the first public statement of this kind committing General Electric to the computer business.

I can best characterize the present executive office climate toward our business by:

There is no question of the company's willingness to provide funds. Any limitations are our own in the Computer Department. We want to be sure we are growing in an orderly, sound and reasonably efficient manner.

About a month ago, Mr. Cordiner visited our plant for a full day. In a breakfast meeting with all of the exempt employees, he pointed out to them that General Electric would invest sixty million dollars in terms of negative case flow in the computer business by the end of 1962. He noted that if all the company departments required this investment, the company would have spent within a five year span six billion dollars.

While the purpose of this statement was to call to the attention of the Computer Department people the seriousness of their responsibilities it also carried with it the full implication that company management intended to devote resources of this magnitude to becoming a leader in the information handling business.

The management confidence in our department has increased immeasurably in the last year as we successfully did the things we said we were going to do.

If anything, we are under pressure to make more progress. . . to move faster and farther in the business.

What does the outside world think of General Electric and the computer business? One of our major problems is creating the right image in potential customers minds. Data processing customers are just becoming aware that General Electric is in the computer business. General advertising directed toward the newer technologies has been so overplayed by companies trying to enhance the corporate image, that it receives little attention by either the sophisticated or unsophisticated potential user.

Our repeated advertising in banking journals has done a good job in making bankers aware of our abilities. Elsewhere our identification as a computer supplier is weak.

In contrast, the attitude of both security analysts and other manufacturers is that General Electric has made excellent progress.

Consultants in the industry have come to highly respect our offerings.

Recognition of General Electric as a major computer supplier will only come as we can point to jobs successfully done. Then advertising can be made to be more effective in image building. For the present, nothing is more effective than the spoken word. We encourage Mr. Cordiner , the company management and particularly you gentlemen to pass the word that General Electric means business in the computer industry.

Now, what do we in Phoenix think? Most fundamentally, we think the limit to our rate of expansion is the rate at which we can grow a reasonably efficient organization. Opportunities for technological contributions abound. It is the rule rather than the exception that a new project should be an order of magnitude higher in value than its predecessor.. . or than equipment presently being delivered to the market place. New application opportunities abound. The combination of untapped new markets and dramatically higher performing, lower cost equipment in the future makes an ideal climate for growth, even against established competition. We have demonstrated the ability to grow, which means we have necessarily performed in all of the essential elements of our business. This year, in terms of output, we will be a larger than average General Electric Department. . . a status achieved in five years. Realizing the great opportunity, and confident of our ability, everyone in the Computer Department is eager to make faster progress in this exciting business.

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THERE'S GOLD IN THEM HILLS

H. A. STRICKLAND

Fellow salesmen: including the 16 old timers who have been here 16 months.

I'm delighted to be with you, it's been a wonderful meeting and I got here last night - I wish I had been here the whole time. I certainly have enjoyed what I have seen so far. You fellows have certainly come a long way in five years - pardon me in one year. In fact, when I see the way the meeting has been conducted it reminds me of a story which General Jimmy Doolittle told just a few weeks ago. It seem some of our Apparatus people go on a fishing expedition every spring up in the Miramichi River which is up north of Maine in a province of Canada and Jimmy Doolittle was one of the fishermen who joined the expedition. He told of a young fellow who had inherited approximately $600,000 and proceeded within a few short months to spend it all. He was asked by his friends how he had spent it. And, he said, well, about 1/2 was spent on loose women and liquor and the other half I guess I just wasted.

When I got into the airport last night, I found I was very thoughtfully to be picked up. I was told that I was to stay out at the Superstition Ho. But, I had already made arrangements to stay at another hotel where I usually stay when I come out. We had to make some hasty readjustments in the schedule. When I tried to get Clair Lasher on the telephone and there was quite a bit of confusion trying to get the call through, and finally Ken Geiser came on the phone and Ken said, well, really, I'm stalling. I said, well Gee, isn't Clair around? And Ken said. well, he's in the pooL It wasn't until I got out here later that I found out on what basis he was in the pool. For a while until I had the story straight I thought we had the problem of finding another manager. But, it was nothing quite that serious.

Then there is the story about the man who had just been appointed president of a very substantial company and was being interviewed by the press. The press asked him to what he attributed his appointment. "Is it because you are an outstanding engineer?" No, he didn't know much about engineering. "Were you an outstanding marketing man?" No, he didn't think that had anything to do with it. "Well, gee were you a good financial man, a good accountant and keep track of expenses, etc.?" No. he didn't think that had anything to do with it. The only thing he could think of was that one day he dropped his personnel card and somebody stepped on it with their golf shoes.

Well, Bob Sheeley told me half of this audience has been with General Electric for less than a year. This is just amazing, especially when I see how well you folks did with this meeting. Of course the Company has only been in the Computer business for a short time so naturally the members on the computer team couldn't have been out here for too long a time. As you probably know, the Department has doubled or more than doubled every year. since its establishment. Now, I would personally like to welcome each of you who have been with GE or transferred to the Computer Department and the Industrial Electronics Division, and those of you who have come from outside the Company. I especially would like to welcome you to a membership in our General Electric family. What I have seen of the program since I have been here. I think it is clear that you have gotten a little bit of an inkling as to what company General Electric is. But, I don't think you can get the full feel of what General Electric membership means in so short a time. I'm certainly pleased that some think has been communicated to you as a result of this meeting.

Now as new members of this family I think you are naturally interested in the Company's and in the Computer Department's present and future role. at least as I see it. You probably know you've joined a very large company. In fact it's the fourth largest in the United States. Its annual sales. in spite of the fact as Clair Lasher told you that we've been on a plateau at about 4-1/2 billion dollars. This is a little misleading when we talk about a plateau. because in a company as large as this. one that represents probably 1% of the national income. there are always businesses which are declining as well as those which are building up. So. maintaining a plateau is nothing to be ashamed of. For instance. the ordering of jet engines for aircraft which was a five or six hundred million dollar business a few years ago, has reduced by a drastic rate. not because General Electric leadership is on the rocks. but simply because the need for jet engines as part of our national defense policy is much less.

The Company employs about 3/10 of a million people and is owned by more than 1/2 million share owners - it is a widely diversified company. It is probably more diverse than any other company. I think this is hard for people to realize because the other large companies are large because they do the same thing over and over again. The telephone company. it's a gigantic company. Their services are such that it is quite possible for the president to understand it. This is true of the automobile company. its true of the oil company and I think the steel company had the bulk of their products in some 27 different product lines. It's only when you come to a company like General Electric that the size is made up of such tremendous diversities. In fact the biggest

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business is conducted in 15 out of the 25 basic industries and that is something which is quite a job incidentally to gather statistics unless they are several years old and I'm not sure that it isn't larger than that today.

Someone estimated that at one time there were some 200,000 different products in the Company lines not counting sizes and colors. I do know these businesses are organized into more than 100 product departments of which the Computer Department represents one of the most important. It is a fact that the average General Electric product department qualifies in its own right as one of the 500 largest corporations in the United States. You will look at your Fortune magazine. it published the 500 largest industrial corporations. in that list you will find companies which are smaller than the average General Electric product department. General Electric manufactures in 11 different countries outside the United States and Canada and approximately 250 outlets in 94 countries and our International GE people tell us that this is a broader coverage than any other company of which they know.

Now historically. this is a company which has been pre-eminent in the energy field. It has provided products to generate. transmit. switch. convert and to transduce energy to both producers and users of electricity. After all. a light bulb is a way of transducing electrical energy into light. Appliances usually transduce either heat or torque. So either from a producers point of view in our turbines and generators and our appliances we are perfectly an energy business. But we also have an important information handling background. and an even more important information handling future.

Thomas Edison founded one of the companies which merged to become the General Electric Company. At one time the company was even known as the Edison General Electric Company. Now Edison as you may recall discovered what was called the Edison affect. which described the phenomena of the movement electrons from a hot filament. a phenomena upon which the electron tube and the entire electronics industry was based.

The Company was active in early radio communications. A man named Alexanderson. a very famous early General Electric engineer developed a very high frequency alternator. High frequency for those days. it carried his name. and was quite an engineering marvel. It brought about the high-powered capability which permitted long range radio broadcasting. In the early 1920's General Electric. together with the telephone company established a company which they called RCA. as a Radio Communications Arm for the United States. At that time no one expected radio to be important for entertainment and broadcasting as such. Of course it did and with the subsequent growth. the Government sought to divest General Electric and the other contributors of RCA of their ownership in it. The present General Electric Company Building at 570 Lexington Avenue. was originally built as the RCA building. This was one of the assets which General Electric took over under the proceedings.

General Electric is also an early builder and user of computers. It had some computers as early as 1920. I am told in fact that the General Electric Company subcontracted to IBM in World War II the first electronic computer that the company ever built. During World War II the demand for armament control together with the demand for greater engineering scope and competence in electronics went a long way toward building a modern information handling base in General Electric. Of course today. the Company does more than a billion dollars a year in electronics and is the largest electronic manufacturer in the United States. A fact which is not as widely appreciated as perhaps it should be.

The Company's Defense Information Handling competence which was the first to grow, principally because the big new market that developed in the post War era offered an excellent opportunity to grow. Then the industrial electronics market also began to grow a little later until almost five years ago the Industrial Electronics Division was set up to serve the Company's industrial electronics customers for information handling products and systems. It was immediately apparent that the market for industrial information handling was certain to have a strong systems content. and we have as a company a strong tradition in systems. In fact, it was this systems competence which led us to believe that information and energy systems would no longer be separate in the future and that we must be in the information systems business, if for nothing else just to protect our energy business. Of course its a much broader market than that but as a basis we had to do at least this.

We realize that because we produced a substantial portion of the equipment for energy systems we are in a good position to make combined information energy systems.

However we lack the significant amount of systems ingredients for industrial information systems. We did not produce the appropriate computers or data loggers. for controls. Our sensor limit lines when limited principally to the determination of electrical quantities and our communications capabilities were just beginning to develop. We had to develop at least a minimum number of initial missing links if we were to become an important factor in the industrial control systems business. Let alone being ready for the larger business-wide information systems which we thought were inevitable.

In the past several years. your Company has made and is making a substantial investment towards this end. I am very proud of what has been accomplished.

Regarding our instrument X-Ray Department, a very substantial activity aimed at establishing the company of a very important supplier of electronic sensors covering the important. especially to the medical automation field.

Industry Control is applying modern automation control and computer control techniques on an

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industry basis, primarily the basic industries like steel and paper. Our specialty control business has done a very bold and imaginative job in applying servo and program control techniques to machine tool control. Automatic inspection and automatic warehousing. The company is making outstanding stands in communications - while we are in a leading position today in mobile radio, and we are now coming up very fast in the point to point and micro-wave field.

Last year we announced the first solid state multiplex equipment and as you have just recently read we have established a subsidiary company which plans to erect and operate a world-wide system of satellites to provide international communication capabilities to an extent to which nobody even dreamed of until just recently. Such communication competenance is going to stand us very well in combined communications computering systems which provide so much opportunity for the future.

The most of your are especially interested in computers for data processing. So I will speak for a moment about their background in General Electric. We got into the business as you know, by taking the full systems responsibility for the Bank of America checking account automation computer system. It incidentally, represents the largest single commercial electronic order which has ever been taken. It was taken with only three General Electric people assigned to the project. There was a real systems order. Given the contract, we not only agreed to prepare the equipment, but we agreed to such things as the amount of lighting which could be involved. the number of employees, the square feet of floor space, the amount of air conditioning, and guaranteed maintenance cost for six years. Somebody even forgot to add the people needed for a second shift. So we started out with an engineering problem which was twice as big as we originally planned. It was a very significant contract, but we had thought very naively that we would transistorize the Stamford Research Laboratory model which the bank had developed previously and that we would be in the computer business. But as your associates got into it more deeply they found that unfortunately that they couldn't do this and solve the bank's problem and meet the contract terms to which they had agreed. As a result they spent an unplanned million dollars on systems engineering before they came up with a solution.

All of that's behind us now. As you know, the system is working beautifully and greatly exceeds all our guarantees and the contract was completed last month on schedule. In connection with the job your associates developed the magnetic character recognition system which is now the standard for bank automation in the United States and Canada, the United Kingdom and Australia, and is being considered by Italy and the continent of Europe. This fete was accomplished over the objection of some very stiff competition.

Overall I believe that the ERMA story represents one of your most amazing business achievements of the decade. You and your associates in the Computer Department can take great pride for the record you have made for yourselves on this project. You have subsequently obtained orders for systems --the last information I had was 21 but I understand you have some more since then - from competition with the oldest and best established bank equipment firms.

However, the Department undertook to develop the electronic portions of the 304 computer from National Cash Register. These two projects provided the base on which to build this organization team, dedicated to become one of the principal factors in the computer business. As the department grew in strength and stability it began to develop the process computer business, and to establish a general purpose data processing business. Both of these businesses have already grown to the point that earlier this year it seemed appropriate to assign section status to the process control business and to transfer it to another organization.

This was done to free up the Computer Department for the major assault on the data processing business which we are undertaking, and to still further progress our leadership in computer control of industrial processors. In your scant five years of existence you have achieved quite a few "firsts" already. First you accepted and successfully completed on schedule the largest single industrial electronic order in history. You developed a now widely used magnetic ink character recognition system which is perhaps the most significant contribution for information handling technology since the invention of the punched card. You were the first to use a computer to design computers. Although some four years later Bell Laboratories has announced that they now have done it. You developed and put into operation the first two operational solid-state computer systems. You operate the Redstone Arsenal Computer Center which is the largest in the world. Here all of the pre-fire calculations were made for the first successful United States satellite shots. You developed and made available the most advanced programming aids yet offered to the market. You have designed and are installing the most extensive on-line computer communications system in industry today. As Clair Lasher mentioned this FASO system hooking 12,000 miles of communication lines. serving 56 warehouses and 34 product departments. You've also produced a number of "firsts" in computer control. such as the first steel mill control and the first steam power plant control.

Several years ago I was occasionally asked if General Electric really intended to be an impressive factor in the computer business. This question has not come to my attention recently. but in case there is the slightest doubt. I would like for the record to point out that the company not only intends to be an important factor but plans to achieve at least the number 2 position in the computer business in the period immediately ahead. Beyond that time I see no reason why we cannot eventually successfully challenge the present number 1 encumbent. The first position comes naturally to General Electric. As a result of your meetings I am sure that you are familiar with the newest products of the Computer Department. I am also sure that you must also realize that we are working towards a full line of

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data processing equipment. Your customers need this equipment on the advanced information systems it makes possible.

We are in an economic era in this country. where the need to solve large and complicated problems on an integrated basis is growing at such a rate that it is now profitable to solve them.

Let's look at some of the distinctive General Electric strengths that you and I can use to obtain General Electric pre-eminence in this information handling market. First. we have already received a substantial acceptance in the banking field. but we can and will continue to build on it. Second we have a good start with out success at Western Reserve University in the Information Storage and Retrieval market. This is an outstanding market opportunity and one in which our military experience in the indexing information field should certainly payoff. Third. we have the ability to assemble data processing and the communications systems. The FASO system represents one of the most advanced yet proposed. Together with your company's communications strength we possess an outstanding opportunity in this market. Fourth. we have good competitive equipment now and are rapidly working toward a full line. including unique peripherals. Fifth. we have in General Electric's GECOM the hottest programming package on the market. We will continue to lead in such programs. Sixth. we have an Internal Automation Operation which generates and gathers information to help a user adapt his needs to better use data processing. These people offer a unique service that can help you better serve your customers. Seventh. we have regional vice presidents and Utility and Apparatus sales staffs to help you with customer contacts. Eighth. we have five company laboratories devoted to computer technology with the excellent competence already in place in your own department. You also have ample capital to develop and produce those products you most need to meet your customer's needs. General Electric treasurer. John Lockton. recently stated that the General Electric Company could support a level of business upon $11 to $12 billion a year. This is three times our present level and ten times the size of IBM. Ninth. we have flexibility - we are not limited. but need to make policies which are compatible with a large number of existing systems in customer's hands. Tenth. we can provide integrated computer systems. whether the integration is the communications or matched process control systems. Eleventh. we can use the Company as a laboratory to tryout new systems and as an exhibition place. And finally. we have a broad established international operation to aid in the off-shore markets.

Now. we took a look at twelve of these GE advantages compared with those of principle competitors and we found that no single competitor has more than six. So you have at least a 2 to 1 advantage in those areas.

In the last few minutes I tried to sketch a little background. There is one item however. which I have not mentioned. This is the part that sales and marketing must play in this venture. We are in a business with a strong marketing flavor. The business machine companies invented modern marketing. Today NCR and IBM have inherited the tradition of Patterson. the founder of NCR. who also started modern selling. John Waters Grant. and IBM's Watson. were both able apprentices. and these companies today - and their the present day marketing competence can be traced back to these gentlemen. Today. my own respect for your chief competitor, is not based on their engineering and not on their manufacturing competence, but for their marketing competence. You gentlemen are the principal players in a big league that is perhaps even bigger than you think. Of course you know that the past and projected growth of the electronic data processing field. But perhaps you don't know that now that your company has ordered the data processing business for real. it is only logical to expect that additional related products may from time to time be introduced. The marketing organization of which you are a vital part. provides a logical channel to take such products to market. So - as you look down the road. you might only have the opportunity to play for big chips in the big league computer contest. but you also have the opportunity to build what can be the predominant business marketing organization of the country. You are part of a great company. You are in the most challenging and dynamic of the Company's new businesses and one which can through the contribution that makes the productivity. provide a tremendous boost for the free world. Your Department has already shown what it can achieve against the stiffest competition. There's only one hitch - illustrated by a story of a farmer and his wife who were asleep in the middle of the night and they were awakened by their grandfather clock when it began to chime. It got up to twelve and then went on to 13 - 14 and finally got up to 16 and then 17 before it stopped. The wife turned to the farmer and she said "John. John. what on earth time is that?" He said. "Martha. I don't know. But there is one thing that is sure. that it's never been so late before. We better get up and go to work." So let's get up and go to work and God Bless you.

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