Frontiers of Progress - 1961 G.E. Sales Meeting - Part 5
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'You have just heard the opening bars of the Government Sales Symphony. As usual, the military came through loud and clear, but you may have missed the soft rustle of carbon paper and the crunch of used coffee cups that represent the executive branch of Government. But the non-military government market is significant in itself. All together, the U. S. Government is the world's largest single user of pencils, toilet paper, aspirin and other necessities of modern life.

'The government has looked to General Electric for many years for contributions in a wide variety of areas. And for years, our company has maintained sales organizations aimed specifically at dealing with the government. The know how and company prestige thus developed are available to us in selling computers to the government. We all, both in the district and at headquarters, can, should and will make use of these company strengths. Charlie Ruling will give us more specific comments on this later this morning.

'But now, what is the basic story on selling computers to the federal government? Is it really more difficult to negotiate government orders?

In the past it probably was, today it is not!

For example, consider the following scriptures from the book of lamentations. . . .

' In the beginning, there was no General Services Administration contract. And each contract with the government had its own terms and conditions, and these terms and conditions were different from all other terms and conditions. And each contract


was a contract unto itself and no other contract was like unto it. Those were troubled times and the peoples of the land spoke in many tongues and did not get their points across one to the other. In those times, only the holiest of the holy and highest of the high could consummate a contract with the government, and the salesman often found himself on his ass traveling out of the city, while the enemy hosts with their GSA contract went into the temple to make an offering of thanksgiving. And a prophet arose and said, 'Go ye and consummate a GSA contract so that we too may take the same gospel to all of the people. ' And the headquarters salesman got off his ass on which he was traveling and went by jet into the East and did consummate the GSA contract so that all people in government offices throughout the land, yea, throughout the world, could purchase the GE 225, and also the GE 210, without each having a separate contract each unto itself. And it came to pass that in each temple throughout the land, offerings of thanksgiving were made and the following generation of the enemy host was to be found on his ass traveling out of the city.'

'The point is, of course, that the General Services Administration contract is a basic agreement with the United States Gov't. It covers terms and conditions of sale or lease and establishes prices for the current fiscal year.

Now you can easily say, 'So what?'

So this. . . . it completely eliminates the detail problems of negotiating government contracts. Those details have been and will be taken care of by headquarters as a service to you. All you have to do to get government business is to sell the merits of General Electric's equipment and services, just as you would to a commercial customer. With government business on this basis, it's apt to be easier than selling to commercial customers, because the contract has already been negotiated. Couple this with the fact that the federal government, strange as it may seem, is a leader in the field of computer application, and you have the pleasant prospect of dealing with a sophisticated customer who understands the value of our product features, and with whom we do not, repeat, not have to Indian wrestle over terms and conditions.

So now we have the mechanism for selling to the government. Grand, but, do we have a product the government can use, or do we have to develop specials to a lot of fancy military specifications. Well, what do you think? You have already seen how the versatile GE 225 can be used for various business and scientific applications. Well, the government has these same problems. For example, payroll ! Just because the G. I. or civil service man doesn't make much money, it doesn't lessen the accounting problem. And what about inventory control accounting for the world's largest buyer of goods? It's tremendous. But that's not all! The government has personnel accounting, scientific applications, base level operations, and so forth ad nauseam.

Now, even the federal government is smart enough to use standard equipment to do standard jobs. For example, at the beginning of this fiscal year, they had over five hundred standard EDP installations, as you will see. General Electric ranked a dismal last without a single government installation. We want our share of this market. With the 225 we can and will get our share. And the race starts now;


'0. K., now we have a GSA contract and a product. Things ought to be better. Let's look in on

a scene where Mr. Agsa (which stands for after GSA) has wired the district man that he will meet him at the Jackass Flats installation. The district salesman is in the outer office waiting for the headquarters man;

You are there;

The customer information list is just one detail portion of the headquarters staff contribution. Let's go back and start at the beginning. The first thing any business needs is a plan. A sales plan for Government Sales has been prepared, reviewed at headquarters, and copies of it have been given to the regional managers for their review and comments. The final 1961 plan which will embody regional and district recommendations will be issued in June.

             OF STANDARD EDP COMPUTERS - Mid 1960

Now, what is the size of the government computer market? This pie chart shows that of a total of 540 digital computers now being used by the government, eighty per cent are in the hands of the Air Force, the Army, Navy, the Atomic Energy Commission and the National Aeronautics and Space Administration. These five organizations have facilities in many states of the union and in the case of the military, in foreign countries. The remaining twenty per cent of the federal government market is centered in Washington, D. C. All of these 540 machines will be replaced sooner or later. Now, it is expected that the federal government will contract for some two hundred computers for both new and replacement applications during calendar 1961.

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As you know, the Department has assigned sales responsibility to the three regions. Sales performance will be measured against two separate and independent quotas. One for commercial business, and one for government business. We have established a tentative regional breakdown based on the original 1961 government sales quota. . .

The particular allocations are subject to revision as additional information becomes available. The figures are on an 'all sold' basis, and are for government sales alone in keeping with the separate quota philosophy. Now, let's face some blunt facts. Even with the powerful combination of the GSA contract and the GE 225 we would not meet these quotas without meeting major needs of the past. First, we need. . . and now have. . . active management support for government sales. For example. . . Mr. Strickland and Mr. Lasher will participate in our presentation to the Pacific Air Force on May 31. Second, we need. . . and now have. . . . . . a large and growing country wide sales force. . . . and you are that force. . . to carry the GE story to the multitude of customer locations. . . for example. . . . Dick Nosky is calling on the Air Force at Dayton where we have some excellent contacts through

John Turner of the Defense Field Operations Dept. Wayne Wright and Bob Harris in Washington have been doing a lot with very little support. They're going to get more. Third, we need. . . and now have. . . . . authority to establish an adequate headquarters sales unit with its own application engineers to give competent and timely support to the field force and government customers. We have organized the headquarters sales unit on a customer basis as shown in this chart. In addition to sales people, we have established and are filling positions for three application engineers.

Although many of you know the members of the headquarters unit, I would like each of them to say a few words about his particular assignment, so you may be sure of who they are and what they are doing.

Hank Cadell will lead off with some comments on the Air Force situation. Hank....



Bill Hayes and I are both handling the Air Force and would like to tell you about the four P's in the Air Force, business potential, our plans to insure that GE gets a decent share of the Air Force business and power politics that influence the Air Force purchases of data processing equipment.

The Air Force has plans to automate the data processing activities at two hundred bases within the next three years. We have had some experience with these requirements since we have, this year, submitted proposals to the Headquarters Command to the Alaskan Air Command, and also to the Strategic Air Command. We presently are working on proposals for the Pacific Air Forces, the Tactical Air Command and the Military Air Transport Service. The procurement at PACAF will automate nine bases with a good possibility that some of these bases will have multi

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systems installed. The Tactical Air Command is planning to automate eleven bases with an additional system at headquarters TAC. MATS will buy three systems in fiscal '62; these three customers represent a potential for about thirty systems.

Now, let me tell you about the way Will and I plan to work with you field people. In February we received a request from the Military Air Transport Service for information on the 225. We immediately contacted Ray Bowers in whose district the Military Air Transport Service headquarters lies. We prepared a presentation, met Ray in St. Louis, and went out and spent the day with the customer; together, we gave him a good pitch on the 225 and also found out a lot of information that will be invaluable when it comes time to submit a proposal. Headquarters MATS will buy the systems, but these systems will be installed at McGuire, Dover and Travis Air Force Bases. In order to do a complete selling job, we contacted Don Hubbard in San Francisco to call on Travis and Gene Agerton in Philadelphia to handle the contacts with McGuire and Dover. Since then we have been passing on information to these district representatives and will continue to do so until we land an order. The specifications are expected shortly, and we plan to offer assistance to the field in the preparation of flow charts and timing estimates requested.

This is the way we plan to operate, and I believe that we can really help in the future on large systems which will have a centralized procurement. Now that we've covered a little bit of the potential and the plans, let's get into power politics. I would like to introduce Bill Hayes, who is working on a proposal for the Pacific Air Forces in Hawaii. Billy..



All purchases of computers go through the statistical services branch of the Air Force which is under the comptroller. As the name implies, statistical services is a service organization which handles the reporting activity for the other functional areas of the Air Force. Supply is the largest customer; fifty per cent of stats work is with supply. Material dictates how supply must be handled. Other functional areas such as personnel, accounting and finance, and civil engineering are also working on their own requirements, which will be given to the stat shop to perform. We must cultivate all functional areas as well as the stat shop. In some cases, supply has been able to procure their own computer and have it run by the stat shop in supply. We don't really care who buys the computers, whether it is supply, stat services, or others. All we want is that they buy GE 225's.

There are some individuals in the Air Force at Air Force headquarters and in the various commands that recognize the tremendous potential of the 225 with the mass random access file. However, there are many more individuals that must be told the GE 225 story. This is the job that must be done, and we'll back you up one hundred per cent with Sales and Application support. Hank and I will be looking forward to working with you in the field. I would like now to introduce Mr. Fran Chartrand, who is working on a proposal for the U. S. Army in Hawaii. Fran.....



Headquarters sales support for you and your customers in the United States Army and the National Aeronautics and Space Administration, is my job.

The United States Army plans to establish automatic data processing service centers for all active Army and U. S. Army Reserve organizations. These commands will be connected by high speed digital transmission devices to allow transmission of information between levels of command.

The applications for ADPS are supply management, financial management, and manpower requirements, and civilian personnel management. Source data for these applications will be placed in machine intelligible form as a by product of creating the hard copy source document. The plans for fiscal year' 62 through '64 will involve the installation of ADPS at twelve selected major Army installations, as well as headquarters.

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The concept for the Army is to establish service centers and each commander must justify the installation through a series of systems and feasibility studies, and make his requirements known to the commanding general.

Along with the major Army installations, other Army organizations such as the ordnance depots are planning to complete studies by the end of this year at eight depots to replace RAMAC 305's.

In the National Aeronautics and Space Administration, there will be requirements for special computer systems. At present, NASA is well saturated with electronic computers and their requirements will be made known on a case by case basis. In Huntsville, for example, studies are being conducted on a continuing basis to insure that the 1Marshall Space Flight Center has the best available computing machinery to carry out their missions.

It will be interesting to note that there are no formal procedures in the Army for scientific or special computer applications; however, on the business side, procedures and plans have been issued as a directive from the commanding general, United States Army. Here at headquarters, we will keep you posted on the progress of requirements for the Army and NASA and will advise the field as requests for proposals reach the procurement stage.

I will now introduce Bill McNamara, who is working hard to get a customer at Pearl Harbor.



Gentlemen, as tax payers, patriotic citizens, and General Electric salesmen, it behooves us to tell the Navy and the Atomic Energy Commission just what the GE 225 can do for them.

The Navy makes this job easy for us with the setup of the Navy management office. An important function of this office is that of recommending data processing equipment for all Navy installations. These offices are located throughout the country and they operate somewhat independent of one another.

Since they advise but do not decide, your sales effort cannot stop here, but it can start here. Just last Friday, one of the head people of the Navy management office visited Phoenix and was very impressed.

You will be getting more details on where the Navy has equipment and what activity is occurring from time to time. Most of it is in cities where you are now located. For example, the Boston Naval Shipyard has a Burroughs 205 that is working three shifts and they need help.

The operations of the AEC are carried out by industrial concerns and private institutions under contract. These contractors buy independently subject to approval of the AEC. So your real customer is a ghost who oft times is hard to reach. We know many of these ghosts and how to deal with them.

If you live in or visit the cities, towns or hamlets listed on this slide, a call on the manager of data processing or the Navy management office could lead to an order, as Ted Szatrowski of Seattle saw with his own eyes at Hanford one week ago Monday.

Both the Navy and EAC are hard copy people. The Navy personnel accounting machine installations are based on cards, and cards are actually used as orders in the case of enlisted people. The AEC presently has a requirement that certain records must be kept on cards in lieu of magnetic tapes or rams. Most of their present systems in the Navy and AEC are 650's. The overall change is under way. There are groups in both camps today that want more powerful mag tape machines but they need our help. As soon as some of these basic rules change. . . and they will change. . . we should be in a position to contribute to the mass updating of these equipments. Gentlemen, this indeed is a new frontier. O. K. that's the story today. But how about tomorrow and the next day? The government newsletter which you can readily identify by the salesman running inside the pentagon. . . will keep you posted on country wide activities. The first issue is being distributed here today, and more will follow.

The sales to the federal government do indeed represent a new frontier to the Computer Department, but as we have seen, we now have a product and a means to sell it. We have a plan, and we are getting the necessary manpower and management support.

It will be a joint effort, of course. We at headquarters will support you with whatever staff work is needed. You in the district have the basic sales responsibility and ability to fulfill department sales quotas for government business. This year we may have to be satisfied with contributing only ten per cent of the department's orders received. Next year we will be looking for twenty per cent.

Now, one last thing. We know this has been a truly inspiring pitch and Bob Sheeley has asked me to announce that he doesn't want you guys to get carried away and spend all your time on government business; !

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Our speaker for tonight came from a banking family in Kansas City. I understand he was practically disowned when he decided to study engineering at the University of Missouri. After graduation he came to General Electric as a student engineer and first landed a permanent job in 1937 at Fort Wayne in the motor business. His next move was to the field. . . . selling to the Air Force. From there he became commercial engineer for the Appliance Division in Bridgeport. In 1951 he was appointed Division Manager of the Small Appliance Division. In 1953 he became Vice President and General Manager of the Major Appliance Division. . . the division which pioneered the use of electronic data processing for business use in General Electric and. as a matter of fact, in the world. That job was tough enough to keep him for a while. In 1959 he became a member of the executive office of General Electric as Vice President . . . . . Marketing Services.

It's my pleasure to introduce. . . . . a banker by background. . . an engineer by training. . . and a salesman at heart. . . . . . Vice President. . . . . Marketing Services for the greatest company in the world. . . . . Chuck Reiger. (editor note notice his name is spelled both ways on this page)




Gentlemen, I could give you a long talk. I worked many hours on this thing and I can show you my notes. They're right here. I do want to talk to you tonight if I may about a lot of silly things. And some of you who know me, and some of you do, you know I'll get a little mixed up and wander a little bit. But I do hope I can get a message across to some of you to this extent. And that's this. There's a hell of a lot of things that are wrong with the General Electric Company and ,here's a hell of a lot of things that are right. Just like there's a lot of things that are wrong with your Department, and a lot more things that are right. But even more important, I've got an opportunity, since I'm talking and you all can't leave because some of you got money and you're going to stay here till I get through to see who gets those damn prizes. So therefore, I've got an unlimited opportunity and I would like to talk to you for not too damn long, because I deliberately did not go to the men's room so that I'll have to stop in a reasonably short time.

Now look, let's go through quickly what the hell is wrong. And I can tell you and I'm going to be very frank with you tonight. There's an awful lot of things wrong with this corporation, currently, not as many as I'm going to enumerate, but I'm prejudiced. Maybe it's partly because of the fact that I spent 23 years in operations and only two years in services. And you know what services is. Now I'm quite serious on this thing. I think it's something that is necessary but kind of confusing. And maybe this is good that services people should think that way. I think maybe Buzz Wright will tell you a lot more about that tomorrow. Now look let's go through quickly and clear your mind what the hell is wrong. This corporation is a very complex corporation. There's no question about that. We're in 14 or 15 or 17 of the major industries in the country, in the world. You can pick any corporation you want to and I defy you to find one more complex. I don't care whether you take Lever Bros. Royal Dutch, Phillip's. Name it and you can have it. Because I guarantee you we're a hell of a lot more complex and more confusing. Mose people think that General Motors is very confusing. They make motors, they make locomotives, they make little motors and electric motors. And a few other things, but this doesn't even touch the complexity of this organization. And as a result out of this thing you get something that I call inertia that I think is damn complicated and annoying. At least it is to me and I'm sure it is to you. It's as simple as this. Unfortunately, we like to solve problems by simplifying them. And by simplifying them, what we like to do, at least what I like to do is say this is real messy job so why don't we get a guy to head the damn thing up. That way he can make the decisions and that way whatever he says is his responsibility and the Hell with everything else. This is the way the American public organizes. And this is the silliest bunch of crap I ever heard of in my life, bar none. Let's face up to the American economy and the world economy and what have you. This is a very complex, and a very confusing operation. And we'd better organize right along the same line. Now look, tonight I've got a good audience and I'm talking about the salesmen.

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All you guys in Phoenix shut up for a while. I want to talk to the salesmen. You know as well as I do that the way the world runs is that somebody takes a pyramid, he draws a triangle and he says here's the boss man. We're going to have a triangle like this and what is underneath is three guys reporting to me in a nice symmetrical column and underneath them will be six more. And we'll have regional managers, divisional managers, local managers and secretaries, all in a row. This is what I think happens to be one of the basic faults., of G. E., IBM and others. And Tom Watson and Wiz Miller are very close friends of mine but we like to organize uniformly so the boss can understand it. And I think this is pretty damn stupid. Because I happen to think the way we ought to organize is the way the customer can understand it. When you organize the way the customer wants, you're going to have a hell of a different organization from St. Louis or Little Rock or Timbuktu, or Hell's Half Acre. Why in the hell do we organize to suit our leader, who's in the pool. This is pretty damn rough, and I mean it.

Let's get back to what I'm talking about. We're in business for only one damn thing and that's to get an order. And if it takes a different set up to get going and by gosh we've never learned to do this one. We ought to organize to suit the customers needs and this is so important. I don't care about blue books, Harold Smitty or God, and I'm sincere on this one. We've got to face up to what is our problem today and that's the fact that we have got to run our business to get an order. And I would suggest with due respect to the fine gentlemen to whom I listened to this morning and to whom I read their speeches, that we ought to run our factories on the same basis, customer is right. The second most important thing to the customer is the field organization. I happen to have the belief that the field organization does the poorest job of communicating to the factory that I can find. Now I'm going to needle you a bit because I hope you get mad and then you'll talk. You see what worries me most about GE this is the second fault. I'm going to tell you about me first. You see I work for a guy named Cordiner who I've got great respect for. I report to him directly. Now I get mad as hell at what he's doing. You know who I complain to? I complain to Flip Phillippe, who is the comptroller on the same level as I am, and the guy next door. We bitch, we get drunk, we reorganize the company. We know what the hell is wrong with you guys, what's wrong with Cordiner what's wrong with everything else. The next day Cordiner calls me up to his office. He says, what the hell is wrong. I say, "Great boss, just great. "

This is something we've all got to grow up on. We're all now over 12 years old. And we're being paid for only one thing, (miserably I admit) to tell what the hell is wrong. And we're not doing it. We're not living up to this thing. I feel like a sail boat sometimes, you know, I have to see which way the wind is blowing so I can run before the wind. And this is pretty damn stupid. So the only thing that I ask of you is. . . There is no such thing as a non egotist in the General Electric Company and management. I mean everybody modestly admits, including me, we're terrific. And I happen to know I'm right. But, since they know that, stop agreeing with them and tell them what's wrong. And you do it in a nice way. You can say: "Look, you're a hell of a nice guy, I love you, but have you considered the fact that you may possibly have made the wrong decision ?" This is what we need more than anything in the world. I hear the applause, I laugh like hell. You got an order, everybody applauds terrific. You see what I mean. You didn't mean that. What the hell you meant was that why in the devil didn't we have that other stuff so I could get my order. I think this is what we need more, I'm not talking to you all cause I happen to have a very soft spot in my heart for this Department that I'm going to talk about a little later. I'll go nutty on the subject. But please tell what you believe because unless you do, how can these bums know what to design, what to make, how to change policies, how to fix up this miserable bonus plan they've got or do some of these other things. I mean it. Don't applaud me on this one because if I had my way and I'll tell you bluntly as hell I'd put you on a straight commission. Because I'm a firm believer in the carrot and the stick. And I happen to think that some of you would get very rich and a third of you would quit. And I think that's good too, and I mean that. Because you see I think either you produce or you don't produce and you ought to get paid on that basis and if we get the whole damn company thinking this way it'll be real good.

Now I can go on forever about what's wrong, so could you. I can tell you about the fact that we've got too damn many people, I can tell you about how we don't control costs, and I'm going to talk about that in about just two minutes, I can talk about the lousy way we're handling the Philadelphia situation. We ought to face up to the fact that this is a dead issue. We ought to face up to the fact that you wait thirty days and everybody forgets this and will take up with somebody else. But I don't want to talk about that tonight. What I'm talking about is this. You know it used to be, in the "Good Old Days" you controlled cost beautifully, when business was down, by cutting production. And when business was down you cut the hell out of costs because you stopped building things, which meant two things. You stopped buying material and you cut off a good hunk of your labor.

But that's no longer true. Today you can stop building things and you cut off material but you don't cut off your labor. Because there's a hell of a lot more of you guys and me than there are of them. And this is the fundamental problem. There is a lot more white collars, I hear, than there are blue collars.

Now how do you control this. Well this is real simple. You have all the salesmen, when business goes down you cut your advertising, you cut your bonuses, you do everything else. This is not the answer. This is something we've got to face up to verry verry fundamentally. And it affects this department, more than any department in the General Electric Company. But this is a fault, we have yet to learn how to control, our cost, and if you guys have an ounce of sense, you'll get into this one and get a

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lot of business, I hope, first internally and then let it spread externally and get your orders. Now enough of the complaints.

I'll save the complements for last, being no fool. Let's talk about what I think you ought to do. You know there's nothing greater than an expert away from home. And, there's nothing greater than a guy whose talking on a business he doesn't even understand. If you asked me how a computer works, I couldn't even give you the faintest idea, but, then I will say this much I suspect I'm among the majority in this group if we get down to basic facts. And if you're a good salesman, and I hope you never learn how, because this and ten cents will get you a small cup of coffee. The only thing you want to do is explain to someone what the hell it will do for them. Not how it's doing it. I'm sure that you're all going to be taught that or I hope you have. Let's get back to the GE Company, and some of those faults I was talking about. And why I think this department is important. And I'm not pulling any punches on this one. I happen to think very fundamentally of this.

You see when you get back to the thing I was talking about, about people and the kind of jobs they have. I'm talking about the engineers, the accountants, the planners of manufacturing, the salesmen and the others. You've got what is called a fixed load. And I happen to think in some extents maybe it's a burden to the extent that we got so damn many people helping. The real guys who are doing engineering, the real guys who I'm assuming are sitting in this audience and are doing selling, I'm not talking about ammunition passers, I'm not talking about the guys who are firing rifles. And I think there's too few of them versus all the other people in the world. Now where do you fit into this picture? Well I happen to think we've got one of the world's greatest opportunities and I think that if you fellows will quit knowing what a 225 or a 3000 or a 301 or a 7,000,670 does and go about going after your customers. Remember, I told you I was going to lecture about something I didn't know a hell of a lot about, but since I don't' I can talk freely. I want to talk to you a little bit about this thing. I happen to think we've got a problem internally. Here I'm going to a sales pitch for a gentlemen who talked about internal selling, but you can sell it outside too. And it's this sort of thing.

I talked to the utility group who said, "Boy, have we got problems. We've got all new people. Our people are sick. They're all in jail. Prices are down.

Things are a mess;' "So what the hell do we need?" "We need a pricing policy." They need a pricing policy like I need a hole in the head. Can you imagine a pricing policy for a utility group which involves everything from a lightening arrester, which is a little tiny thing with three wires, that they've never promoted and they make for $1.49 and ran an ad in Life Magazine at $9.95. They said this will keep you from your washer blowing up when you get lightening on your house that you don't get anyway.

And they sold 50,000 of them. But, some of you Tooly Brothers might get mad. I should live so long at these prices. But, now this is true. What the hell we need is not a pricing policy. We need a merchandising and promotion policy. And this is something I will say to you that thank God I've finally come to a place in the General Electric Company which is not dead on it's ass and which can stand up and have fun with sex and blank ammunition. Truthfully, here's what I'm driving at, and here's where you guys enter this picture. I happen to have a philosophy which I am sure is wrong, but I want to preach it to you cause some damn fool will buty(??). It's this. I think this company we've got a magnificent opportunity of shelf good items. Forget your business entirely. Quit selling your equipment and doing something everybody knows about. Lets go into a customer and lets talk to him about something he needs and he doesn't know he needs. And believe me they need it. The stock market has been operating terribly successfully for a long time and they operate on the very simple basis. Here's a goy who wants to give you two bucks and some other silly jerk that wants $4 so you compromise at $3 and sell it. And it is a neat sale and everybody is happy. And this is called the law of supply and demand, where you compromise at market prices. Now let me drop that one for a minute. And lets go to another view point. Another problem we've got in this company is inventory control. We have the most magnificent policy of building what won't sell and not having in stock what will sell, of any company I've ever seen in my life. Therefore, this creates a problem of pricing. Now let's drop this one for a minute, and let's go on to the next subject.

This is a problem of how do you get from the guy whose really using this stuff to the guy whose really building this stuff and make a successful compromise on what you're building and what you've got in stock and what the hell the price ought to be. And there's only one answer to this. I'm looking at all of them right in this room. That's you guys and I'm dead serious on this thing. There was touched on today this FASO system. I may be stupid as hell but I happen to believe that we've missed the boat. I'm pushing the devil out of it for the very fundamental reason that the basis of this thing which is, "What's in stock" and I can get an immediate reply. If you gentlemen will pick this thing up and do the next step, you may have the perfect gasser. All of these add up together I think to the fact that you are the basis of selling, not only our company, which I hope you do first, but also everybody else on a basic system of what I call free enterprise. Not that it has anything to do with the fact but it's sensational it's like motherhood and sin and everybody will buy it. I think of the days when I used to love to get out in Louisville and say, "We'll build one little 8 foot refrigerator and we'll make everybody buy one, and we'll sell them for $39.95." Well we can't sell them for $39.95. And some of the public doesn't want to buy them. We've got to face up to the fact that if we're going to win this competitive battle, we've got to first do away with one very fundamental thing. That's all thoughts of standardization and all thoughts of price sheet policy. What do I mean by this? Listen to me, disagree with me if you will, but think about it. Let's suppose, just for the hell of it, that on shelf items, and I'll take something as repentitive and which the whole theory has been beautifully developed and which I disagree with completely, a refrigerator. Any damn fool knows, that unlike a turbine you take a refrigerator, you design it, you guess what the customer wants, and you build it. And then you hope it will sell. I'm not so sure that it's so damn necessary. I'm not so sure that under

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the pricing policies of today that the federal government playing as important part in the decision as they are, that this is a sound policy. These guys are going to take any model and cut the hell out of it.

And therefore, if they have this problem nobody else is going to sell the thing. I think through the type of equipment that you build we can do this. We can unstandardize the hell out of things and we can do one of two things. We can set up a system similar to the one that FASO is setting in. We can do this type of thing. You punch a button today and you can find out that you can get a ticket on the American Airlines from New York to Chicago tomorrow morning at 9:30 if you happen to be in New York tomorrow morning at 9:30 and they'll reserve it. You guys have got this, see, your putting it in for inventory control, but you are eliminating one important thing. At what price was that seat sold at? Now unfortunately, American Airlines because of government regulations, has to have it sold at a constant price. But the market price is not working like that today, Gentlemen, and this is something that you work into your equipment and sell to a customer. You can't live with a price sheet because your price sheet's good for an hour and ten minutes. And then you go five per cent under book, you go ten percent under book, you go what the hell it is. This is the way market is selling. I'm talking about your equipment. What your customer's equipment is selling at. If you'll do this, and guarantee to put in a price transaction along with that, you've got the nearest thing to the New York Stock Exchange.

This model is not selling, I've got 3 thousand in stock at this price. The model below it (and you always have one below it and one above it) is selling. Then why don't you solve the federal government's problem, your problem and the inventory problem at the same time. Why don't you instantly raise the price on the one that is selling and lower the price on the one that's not selling. Because the one that is selling, you sure won't have enough in stock on, and vice versa. . . You guys have got the basis of doing this thing and I don't care whether its screws, hammers, or refrigerators or cardboard boxes, believe me, the fellow who can first set up a system to instantaneously vary prices and control his production of his factory is going to be awfully important. And I'll tell you why, because every competitor sets his prices all for Mr. Big. He's got to have a printed price sheet to do it. The day he can't find that printed price sheet and suddenly the price is rising instantaneously all over the country and he's dead, the guy who can cope with this is going to be the winner. So I suggest toyou strongly, take a look at that one. And I think it could be damned important. Now, I've made sermon on how you guys should run your business. Now I would like to wait for the first product, because there are 83 departments that need it.

I'd like to talk to you a little bit about where the Company's going and where I think it's going to go. We're on a plateau. Things are tough as hell. We've been on a 4 1/2 to 4 billion plateau for a long time. You're all concerned about it and so am I.

There's an awful good reason I think for it and I'd like to tell you about it. Without any question we've been sort of sitting back and consolidating our forces. I've been damn critical of it, awfully critical of it! To the point that I can point out to you without hesitation whatsoever businesses that we should be going into. Here again, you all play an important part. Because you see, we've found out something in the· last five or six years. We found out that our present businesses aren't growing at the rate we think they had ought to be. Now then, as an example, the motor business is not exactly sensational in its rate of increase. But gentlemen don't forget one thing.

The motor business is the most profitable in the General Electric Company. The turbine is not growing at the rate we though it ought to be but it also happens to be making one hell of a lot of money, so is the transformer business so is the industrial control business. I suspect the switch-gear business will be again. This is damn good proof incidentally at how you don't run a business it was milked and it was milked badly. And as a result it made more money for two years and it'll take three or four years to get back into making it. But it will come back again. I happen to be as unimpressed as hell with market position. I'll tell you why. Now I'm taking about company viewpoint. I'll come back to that. I firmly believe that in an industry that is running on the level or is shrinking there is nothing more important than not gaining industry position. This is the most expensive damn foolishness you can do. Because the only way you can get it is take it away from your competitor and if he's got an idle factory too and then, you're just cutting your damn throat. But fundamentally, what we've got to do even in these areas we've got to get into some new businesses, and we've got to get into business with industrial growth in mind. Gentlemen, are the prime factor in most of the industries we are interested in going into and and to gain percent of industry. But it depends on you not as engineers, not as application people, not as product planners, but as salesmen to point out to these boobs what a wonderful chance you've got for them so their industry can grow. Let's take just a few. You're doing a marvelous presentation this morning on the fact that post office automation is coming. Well hell, I think we know this. And I think that you guys are doing something about it. You're doing a lot of talking though about a couple of other areas I don't think that you are really serious about. I talked to you salesmen about it because your factory is not going to do a thing unless you guys get pushing them because only the squea1king wheel gets greased. And only you can squeak it, Gentlemen. You've got the damnest opportunity in the world in my opinion of a little something called medicine. All you've got to do is pick up any book and find out how many pre-med guys are entering school. All you've got to do is figure out how many are going to graduate then look at this explosion of population, then you tell me how long you're going to have to wait in any doctor's office you know. I'd like to know what is going to happen to this country unless medicine is automated. Maybe I'm getting a little bit into process computers but

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but let's get a little bit in and then get the hell out of it in a hurry cause it's a dirty word and I know it. At least in this meeting. My good friend Nelson up here at X-ray was doing the most magnificent job of building an x-ray that beats the batter better, as I put it. It takes a bigger picture, deeper. This is the most unnecessary damn thing in the world. What the hell they need, if you've ever had an x-ray taken... is something that takes it a lot quicker and gets you out of it. You go in and get an x-ray taken today and the first thing some gal says is, "Will you please take your shirt off?" And then you put your chin up there, and they push this thing up against there and about 20 minutes later you're out of there. You need a machine. . . . . we need something, something that will simply go click, do all the adjustments, get them out of there. Nelson finally got the picture.

He's building a machine which costs twice as much as anything on the market but buster, we can run fifty times as many patients a day through your office than are being run now. This is what I'm talking about. Now you take your fancy computers with your fancy numbers. What the hell I'm interested in is something that is a storage unit. Pure and simple, which has a simple read-out for everything on athlete foot or syphilis or what have you, but damn it, they've got to have this thing. They haven't got the time to do this and this is going to be a fantastic business. Take your retailing, let me read you some pure and simple facts on the grocery store business, 1 which I think is fantastic. My figures are completely wrong, but I don't think anyone in this room knows so I can talk freely on them. As I remember ten years ago, there were 350,000 grocery stores in this country. Today, I think, and I can't remember, but I will say there are 250,000. No wait, 187,000, I believe. They're going way way down. This I do know, there were 31,000 supermarkets in the 1950. Today there are 28,000 and they do 81% of the total business done in groceries. Now then, we know from talking to the grocery boys that they don't know how the hell to build a supermarket that will do over three million dollars a year in business and make money. Because when they get them that big they go down. They've gone over the point of no return as I call it. They've got to hire too damn many people and it becomes inefficient to stock the shelves and they've got to have too many people to unload the shelves. It sound stupid. Too many customers and too many check-out clerks. Here's were you guys enter the picture. Automatic retailing has got to come. You guys are doing a lot of talking about it but you aren't selling nobody nothing on anything. Who the hell says that you shouldn't have in Campbell's soup something, because bean soup is selling it automatically lowers the prices on bean soup, if it's not selling and raise the price on consume if it is. And re-inventory the thing and reorder. This you guys can do. But your not asking for it. So again I say, I'm running your business. Now, literally, gentlemen, what I'm really adding up to is this. I firmly believe, that without any questions GE is going to run 6, 8, 10 million billion dollars a year. This is no problem.

To hell with this, this is the simplest thing in the world to get to. But the principle problem is to get down and get the profit net after taxes up with it. And it's got to come in gross industries. And by if I ever meant anything I ever said in my life, it's this. The basis of this group has got to come from your department. And you guys have got to nail this thing. This is why I think you, as salesmen, have got a tremendous future. If you've got an ounce of sense you'll only build it and become very expert in it. In addition to that you'll learn your business so well that they're going to be demanding your services internally and externally in positions that are a hell of a lot higher than you've got now. This is fine, but IBM is going to do just as well. Nuts!! 1 should live so long. I'm dead serious. I happen to know because I talked to Paul. Paul explained to you this is the 27th in a race that didn't run. I remember when I use to get scared the hell out of May tag. I'm no longer scared, I'm not in home laundry any longer. Look, they're smart, they're sharp, and I know them well, but there's nothing I think that is more easily overtaken than the guy in first place. Let's look at the people who have attacked us. Fortunately they got happy too so they're falling by the wayside also. But, it's lean and hungry people that make this world go around and I don't see any very fat ones here tonight. 1 Now let me talk to you about IBM and General Electric. And I'm going to tell you a story. I had dinner with the chief representative for Mitsui in the United States. lean 't think of his name but' it's unimportant really. I love this rascal cause here to me was the sole of diplomacy and I titled him "How to screw your neighbor and make him love it". Because I said, "You stinker, you are ruining our radio market and we after all, had it locked up for years." And he says that I was completely wrong. That the transistor radio as is built by the Japs is not hurting the American and particularly General Electric at all. He said, "Mr. Rieger, is it not true that you are the world's biggest producers of radios?" And I said this is right. Absolutely, unquestionably, we're fabulous. He said, "Well, isn't it also true that you are one of the world's richest corporations?" I said this is absolutely right. As a result of this you are a very rich company. He said you make many of these things. You check the customers who bought your radios. You found out exactly what they want and you build according to that. Is that not correct? I said that's exactly right. What percent of the market do you get? I said about 25%, 27%.

He said, we don't ever go near your customers. All we do is survey the 75% that didn't buy your stuff. And we build what they want. Now, he said, you are a very rich company. He said, you happen to know some people happen to want inexpensive radios. They don't care about quality and so forth. You build a 6-transistor radio. You sell it very cheaply. For those who have lots of money and don't care about price, but want quality, you build an 8-transistor radio. We are very poor company because we have to build a 7 -transistor radio that both has quality and low price. We do not effect your customers.

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Gentlemen, this is a marketing man. Believe me. And for him I have great admiration. Now let me tell you about another application that I happen to think that you guys are fumbling the ball on. I happen to believe that this company of ours, and I suspect all companies has got the lousiest, the most miserable, commercial intelligence operation I've ever seen in my life. And this is just a simple common, what the hell are our competitors doing. There's nothing more complicated than that. And I believe that you can take a moron who can read the paper and who with one of your fine computers and program by a programmer can put this thing on the very simple paper cards or what have you and feed back with some very simple analysis exactly what the hell is going to happen. When you make a move, what is logically going to be their next move. I've seen this done, gentlemen, I've seen it done in photo lamps and it's being done today. With a very simple computer. One of my guys happens to be forecasting the sales of photo lamps a lot better then either the manager of marketing or the manager of sales, and it's very simple. When they get into analyzing the market, they found out that they are not stupid boobs who are buying photo lamps. And the actual use of these things are just as flat as hell.

Oh sure, they go up a little when people take pictures at Christmas time and the summer time, but basically the retail sales are pretty flat. They analyzed it, and got a very simple solution. There was a guy named Mitchell in with Sylvania who got a nutty idea every spring and fall of having a special price promotion. Everybody bought Sylvania photo flash lights and didn't buy anything else and when inventory was gone then they bought again at the next best buy. Well, they analyzed this, they checked this out and counted the promotions, and now I'm proud to say that Mr. Mitchell is no longer president of the bank and our sales are doing well. But how many of you guys have gone into a customer and said we'd like to analyze your business with our fine equipment. It mayor may not be necessary. Sell them your equipment as a means of getting them to sell you their problems. Because this will do the job I think. I think we have not pushed this -- maybe I'm out of order -- - maybe you guys have been doing this --- I just got here last night, so I can talk freely. But look at this thing. Industries will al so need your equipment for quickly analyzing sales of their products. And I'm wondering how many of you guys have approached any trade industries. There's a possibility I think you are still trying to sell a product, you're not trying to sell a service which a customer wouldn't have to have. Would you please think about that. Now look, to hell with all this, me telling you what ought to be done. Your a lot smarter than I am. I want to talk to you for just a new minutes and then I'll shut up and let you have your prizes. I happen to have grown up in a Apparatus business which I thought was stuffy as hell. As a result I sneaked out and got into the appliance business which just fascinated me to death because it was fun. I mean it was one of those kind of things that you got in trouble every day and it was fun getting into and out of trouble deeper. You didn't know what you were doing but you knew damn well if you did something different it would upset somebody and this is good. I mean this is the greatest, most exciting thing in the world. The General Electric Company needs you guys, not for all the crap I've been feeding you to use up time, but because You're in it something like the appliance business. I mean it as a compliment. What I'm talking about is this. You've got a new field. You've got to groan and grin. And more important than any damn thing else I am so delighted you're not set in your ways and you don't say, we don't do it that way. Do me a favor will you. With this kind of a sales meeting. With this kind of a promotion. With this kind of screwball thinking. I mean that as a compliment. You guys can do more to set this company on fire than any thing in the whole world, because gentlemen, we've gone to sleep and we need problem children, and we need guys who are dissatisfied as hell, and we need guys who can get up and say you're a dumb jerk and I can prove it, and we need guys who can say I'm going to take this gal out and I'm going to get what I'm after. And we need guys who can break every damn rule in the Company, barring Anti-Trust. This is what I'm talking about. You have seen here this week, something that I haven't seen for a long time. This is good, don't get old!'.!! I mean if you get old, get up and go with IBM and stay there.

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Gentlemen- I hear you folks are selling computers, so by now you know that you need more than hardware. .. you need programming aids or software to go with the hardware.

I can tell you that hardware without software is like a man without a woman. We don't want you to be without women.. I mean without software. For you we are developing software and we have turned up many pieces of good looking software till now . . . blondes, brunettes and redheads. . . that is, compilers, translators and general programming packages.

In addition, there are information processing centers which are like hotels for the couples of hardware and software. I would like to tell you first that we can provide the proper software and, second, what we are providing.

Programming languages and compilers like GECOM are produced by Charlie Katz Programming Research and Development Group. General Programming and System Studies packages like BANKPAC come from Jay Levinthal's Systems Research and Development Group.

We have over sixty people in both groups devoted to software development alone. These people are dynamic, skillful and highly competent. The groups work primarily on the basic service programs for the 304, the GE 225 and the GE 210. However, a large part of the effort is directed toward more sophisticated compilers and general programming packages to provide better computing systems for General Electric customers.

Most personnel of these groups have been actual computer users and understand thoroughly the user's requirements, and are therefore able to approach new problems with the proper insight to come to good solutions. They know a lot about good and poor software, and, like doctors, they can tell the healthy from the ill. They know the proper measurements .. I mean specifications, which make the software look better and work better than anybody else's software. Our staff is more than adequate and is being increased to extend our competence still further.

Of our competitors, only IBM has more people on their R and D staff. Almost daily I hear of some guy with a good name in the computer business who wants to join us because he feels we are on the right track and have a good group to work with. We are represented on the CODASYL and OEMI Committees, and keep close watch on what is decided on future software and hardware in the country.

As a proof of our good reputation, only recently the COBOL Committee accepted a data description concept that we had suggested and it is being implemented now in GE COM.

We can draw on the company's vast experience in computers. A computer user's group has started and will be contributing many ideas and programs, and will supply feedback so necessary for future improvement and sophistication; and believe me, our G. E. users are quite outspoken when it comes to suggestions or criticism. We put all our effort into our work to make our software the best and we are not compromising quality . .. The analogy between software and women holds again, you can lose your reputation only once.

The importance of software and its impact on our sales effort is well known in higher management circles. For example, every time Mr. Strickland sees me he asks how GECOM is coming along and whether we can make our schedule.

Now, what are the things that we are producing in our software development? Of course you know that GECOM is the star of our line and reflects a more comprehensive approach to the total compiler problem than that exhibited by any of our competitors. GECOM is now implemented on the GE 225. It is a real, existing piece of software and not a phantom. GECOM specs have been available since October last year, and the basic version will be released to field test by the end of June.

GECOM contains  COBOL, ALGOL, FRINGE and TABSOL. TABSOL and FRINGE are exclusively General Electric ideas. Let's take a closer look at the parts that comprise GECOM.

First, COBOL comes as a result of long, confused meetings of the CODASYL Committee, sponsored by the Department of Defense. COBOL allows you to write data processing problems in the English language. As you know, COBOL is now required by the government to be implemented by all manufacturers, and we have it. COBOL covers a very broad range of applications, since COBOL is completely contained in GECOM.

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ALGOL, as the international algebraic language, serves to the sophisticated user in the scientific field. General Electric is the first to incorporate ALGOL in a compiler with COBOL. A major portion of ALGOL will be contained in our basic GECOM, which will be released in June, and a complete ALGOL will be available as part of GECOM by March 1962 for the GE 225. This will also put us ahead of any competitive effort with respect to the implementation of ALGOL.. Even IBM is late on that.

The FRINGE Complex or Report Generator, can be used by itself and can accommodate almost any data processing job most effectively. It cuts down compiling time and produces a very efficient running program. It is ideally suited to serve the guy whose boss changes his mind every day because it is proverbial for accommodating changes. There are many advantages and benefits of FRINGE that do not meet the eye, but become very apparent with use and familiarity with her.. I mean, with the program.

Finally, TABSOL suits the needs of the guy who is new in the computing business, and cannot express his problems in a concise mathematical form. Generally speaking, he can put all of his parameters, constraints and conditions in a table, and the cute TABSOL program takes it from here. The Tabular approach to problem solution is a new concept and has fascinated many users. Again, we are the first ones to incorporate this concept extensively in our software package. No other compiler contains TABSOL this is a G. E. first.

Therefore, all things considered, you can be assured that GECOM is the best compiler on the market. Get another look at it!

In addition to the General Compiler, there will be a great number of programming packages that are aimed at specific markets or applications. They will represent a powerful tool to attack these market areas. To mention a few, BANKPAC will be implemented on the GE 210 and the GE 225. This package will provide easy automation of banks, essentially making it possible to attack the banking automation by filling out a number of forms answering specific questions. It will eliminate most of the tedious definition and conversion work. It will relieve the salesman and application engineer from the burden of making intensive systems studies and writing specific programs to accommodate the frills of a peculiar banker.

We have written a program called SEARCH for the GE 225 that allows you to retrieve information by searching abstracts, making it possible to select according to complicated logical patterns and rules. This program was written for the Western Reserve University. It is running now. There is an interpretive program for the 304, serving the same searching requirements, that has been running successfully since October last year. The GE 225 version of the SEARCH Program is extremely fast and turns out to be faster than equipment specifically engineered for the searching process. It requires only two tapes and an 8000 word memory, which makes it economical for small libraries that have a need to search abstracts. General Electric is first to come out with such a program.

One of our better looking software models is luring a number of you to stay at this motel for several additional day s to get to know her, that is, 'it' better. This is the CPM package. I am sure that you are anxious to know what the fruits of your effort will be.

A project is now in process that will provide a package for the 225 combining the best features of pert and critical path scheduling. This will provide a business manager with a tool for achieving what he most needs. .. to get jobs done on time at minimum cost.

To assure that this software package is available to you on time this project is being carried on using its own technique. From this work will come a complete program for you to give your customers.

We are writing a package for the utility industry, incorporating the problems of utility engineering, load flow and short circuit programs, and also a package for utility billing. This will be completed this year for the GE 225.

I am happy to announce a new compiler for the GE 225. This new compiler, called GEWIZ Compiles, in one pass, formula statements and branch commands, allows indexing and many other features of algebraic compilers. It will be a considerable boost to our recently announced stripped GE 225 version.

Something else, not so much to satisfy new customers, but a means to lure users away from the 650' sand 704' s are simulators and translators. The 650 simulator will be available in July. It will accept programs written for 650' s and run them on the GE225 like a charm. More than that. we will give you a FORTRAN to GECOM translator that makes GECOM programs out of FORTRAN programs with minimum effort. The end result will be efficient programs that the customer can keep and use for good.

These are some examples of software that we are developing for our customers and provide for you to help you sell new equipment. Here again we do more. Like you have to keep women well dressed all the time, we are providing a library service to maintain the software in proper style. Mr. Hal Norris. Manager of Applications Administration. is managing the program library for updating all the material. He will mail additions and corrections to the field to your regional sales managers. If you have very technical questions with respect to the write ups or specifications of the hardware, he will be glad to have these questions answered for you. Of course. normally your headquarters sales supporting people will have

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been furnished the information, but there are exceptions. When a highly technical question comes up, we will certainly be glad to help you out.

I know what you guys are thinking. Telling the customer that we have all the good hardware and software, even with measurements as 38-24-36 is not enough. Customers want to see and try. They don't go for platonic love. They want to see hardware and software in action.

Well, we have got it. You can show your customers hardware and software in action in your nearest information processing center. You may come any time to the I.P. C. and have the equipment demons demonstrated for your potential customers. Your customers can tryout their own programs and be furnished their forty hours free time. And, finally, the Centers give a guarantee for backup. should the customers machine get in trouble. The I.P.C's must be run on a profitable basis and they should be only in places where the market warrants it. Therefore we cannot promise every customer his private I.P. C. After all a single I.P. C. represents a million dollar investment for the company. However, I can assure you there will be enough centers in a year from now to serve each area. Remember the more machines you sell in an area the less you worry about back up. If you come across some bachelor who cannot afford his own machine have him come to the I.P. C. to get a taste of good hardware and software in action. Some day he will order a full machine from you. I.P. C. 's will be focus points for many customers and will provide leads for you to sell hardware.


Six I P.C. 's will be in operation in 1961. 

Tempe, in place now

Phoenix, in place now

Schenectady in July

Chicago in September

Washington in October

And New York in December


Planned for next year are. . . . . 

Cleveland in March

Sunnyvale in April

St. Louis in June

Dallas in July

Atlanta and Seattle in September.

The establishment of I. P. C. should give you another proof that G. E. is fully in the computer business and that you will receive all the support you need.



If I try to emphasize to this group the importance of customer services to selling in today's computer market. . it would be like bringing coals to Newcastle. You people who are out on the firing line know very well the competitive situation in the area of customer services.

To set the tone for my brief remarks here, however, I should like to quote from a recent speech in Los Angeles by D. L. Bibby, president of Remington Rand. He stated 'he believes that "the future success of computer manufacturers lie in a competent field program of education and service." All computers are beginning to look strangely alike, he said, 'the difference must come in a program of having competent men in the field working with users and providing service! '

We also have a study on services provided by computer manufacturers which was done by the John Diebold Organization and I quote from this. . . 'The overwhelming majority of current and potential computer users are definitely influenced by the service extras provided by the manufacturer. This is a competitive fact of life'. (unquote)

What I want to do here is to show you how Application Engineering is organizing in order to provide good customer service, and how Sales support can be used as a major sales tool. At the conclusion of my remarks we shall present some skits showing an Application Engineering view of computer salesmen.

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Application Engineering Broad Functions

Let me review at the start the broad Application Engineering functions. The first of these is customer training, both pre-sale and post-sale. The second consists of the production of a wide variety of customer oriented publications such as systems manuals, programming manuals, application brochures and so on. The third and major function is that of consultation to customers on our hardware, software, systems design and other technical areas. Our goal in life is to produce contented customers who are using computer department equipment efficiently. We have various other functions which I have loosely classified under the title of II Miscellaneous ". These include participation in the development of new products, competitive analysis, participation in customer presentations and others.

Application Engineering Organization

Before we get into the details of the current Application Engineering organization, let me point out that there are differences in the way the Computer Department and competitors are organized to provide software and services as well as in the status of the groups involved. These differences, I believe, are highly significant. The manager of the Applications section reports directly to the general manager, as does the engineering manager, pointing up the duality of software and hardware. In Marketing, Application Engineering and Product Service are on the same reporting level as Sales.

While we try to assist the sales organization as much as possible, the major purpose of our organization is to ensure customer satisfaction and the efficient utilization of Computer Department equipment. We are there to provide service rather than to sell directly. This has great customer appeal, as we know from many customer presentations.

Let's look now at our headquarters organization. The first slide shows the organization reporting to the manager of Application Engineering. This setup reflects the goals of broad industry specialization and certain functional specialization. The industry specialization is to encourage the dissemination of know how, so that people are familiar with the problems and terminologies of their customers. One unit supports financial and government data processing customers. Another serves industrial data processing customers like most of the General Electric departments. A third supports scientific and engineering users. This last group was established January first of this year. Process Control does not appear on this chart having been set up as a separate business early this year.

On April 1, 1961, Customer Publications was split out from the other units. It will get its own management before very long. Early next year, Customer Training probably will likewise be split out from the headquarters units.

The second slide shows the organization of a typical unit, in this case, the Industrial Applications Group. On March first, of this year we confirmed the unofficial decentralization of the Major Support Groups. Eastern regional managers were appointed for Industrial and for Financial applications. The central and western regional application organizations will be set up when the volume of activity requires it.

The field organization is mostly concerned . with providing training to customers, and with providing consultation either in residence or on a visitation basis.

The third slide shows some of the functions that headquarters provides . .. technical backup to specialists . .. development of application literature participation in the development of new products . . . competitive analysis. .. the development of application seminars ... participation in presentations to customers and consultants.


Let me review now the situation in training. We already have training facilities in Schenectady, New York City, and Phoenix. We are presently negotiating for classroom space in Chicago. During 1960, 107 courses were given, most of which were at customer sites. These courses were attended by an estimated 1200 customers, not counting Computer Department personnel trained during the year. I believe all of you have seen the booklet describing our 225 training program at Schenectady, New York. Seven formal courses are described and scheduled for the year. Formal training materials have been developed for most of these courses in multilith form. Besides ambitious programs such as this one at our formal training centers, and the on site training that most post- sale customers get, we are planning a training road show of a presales nature to bring occasional courses to various large cities at the request of the sales organization.

We are gradually increasing our full time training staff in order to meet an ever increasing workload. As of April thirtieth, 1961, we had nine full time instructors, as well as a large number of people providing courses on a casual basis.


To turn to Customer Publications, we presently have three full time people in the publications area. Last year seventeen publications were released. This is an area which needs considerable strengthening. We are recruiting very actively for technical writers at the present time. We are shooting for more publications, of better quality, and more timely in release.


Now for our most important work function. As of April 30, 1961 we were providing active consultation to 56 customers. Several of our people played key roles in the successful completion of the Bank of America job. Some of our other customers who are successfully on the air include Industry

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control Department with the first GE 304, the First National Bank of Arizona and Merchandise National Bank with GE 210's and shortly we expect Portable Appliance Department to be on the air with the first GE 225.

We have worked very strenuously to recruit the best available Computer Applications personnel. In general, the maturity and experience level of the people we have assigned to customers compares very favorably with the average level provided by our competitors. We have tried to provide very personalized support to customers. We have emphasized careful scheduling, close monitoring, and thorough documentation of all jobs. Our philosophy has been one of building strong customers.

We have developed a rough rule of thumb for what we think is reasonable in the way of customer support. This is roughly one man month of consultation for each $1,000 of monthly billings. I want to stress that this is only a rule of thumb and that in some cases it will have to be exceeded and in others we needn't provide this much. We do not want the rule mechanically applied. Some customers are extremely self sufficient and need very little in the way of consultation while others are extremely dependent. We want to provide at least the minimum required to avoid major danger of any fiasco. In truth, the rule is an optimistic goal.


Under miscellaneous services we have a collection of various functions in which Application E'1gineering participates. These include competitive analysis, product development, user organizations, consultant seminars, and sales presentations. In most cases, these areas have taken very low priority, but this situation cannot be allowed to continue. As the number of available troops increases, we intend to devote more attention to what are really important areas of activity.


To turn now to personnel, the Application Engineering Organization is already spending several million dollars a year for assistance to customers of Computer Department equipment. This figure does not include funds spent by other service and software components in the Computer Department. The count of professional personnel in Application Engineering as of April 30, 1961, was 93.

The fourth slide shows the current geographical distribution of Application Engineering personnel. We have people today in twenty-nine cities in the United States. It must be kept in mind that we have several customers in some cities and that customers in other cities are covered from the location shown. As of April 30, we had thirty-five professional people in the eastern region, twenty- one in the central region, nine in the western region, and twenty- seven at headquarters in Phoenix. I might add that we have one man on temporary duty in Milan, Italy and before long expect to have a significant number of foreign assignments. Let's talk about Application Engineering as a sales tool.

In some areas of the Department, I believe there is a tendency to view Application Engineering as a necessary evil, an overhead function that must be tolerated. On the contrary, Application Engineering should be exploited as an important sales tool.

I believe that the Department's services and software organizational setup has major customer appeal. I have talked personally about this to enough customers to know that this is a fact. Our consultation quality and know how ranks very high in the industry of recruiting.

A good training program can also be a sales tool, in that it provides the opportunity to lock customers up for a period of several days, a week, or more and brain wash them subtly. We hope to work with you through the regional managers to schedule pre sales training in major cities, and we hope that you will utilize fully the opportunity to send prospective customers to our formally scheduled courses at our training centers.

A good publication sells long after you leave it on a prospect's desk. We are aware of this and hope to give you significantly more ammunition by the end of the year. Wherever feasible, we have assisted in high level sales presentations and we hope to work with you in providing seminars to consultants. Again, we have to indoctrinate consultants in order to sell to a broader section of American industry.


There are certain recent developments which I think will be of interest to you. In March I was authorized by Mr. Goostree to get a reasonable personnel lead on the orders received rate, as well as to provide an increased training period on new hires. We also plan to provide more support to scientific users and to beef up our publications effort. In general, I believe I can assure you of better service all around from Application Engineering.


I have talked so far on how Application Engineering can help the sales organization. I should like to close with a few ideas on how Sales can help Application Engineering. Recruiting is one of our major problems and you can help us greatly by keeping your eyes and ears open for good prospects. We don't want to touch your customers personnel, but we would be delighted to get people from competitors or from former sales prospects of yours who have bought from competitors. We'd like you not to commit more manpower than really required to get the job, to allow time to get our people in place, not to oversell on detailed manpower specifications. We'd like you to back up the man we assign to the job because he often has to work under fairly trying conditions and relationships. We'd like to see the scope of Application Engineering commitments more fully defined in our contracts and we should like to get from you increasingly accurate forecasts of required Application Engineering manpower based on projected orders received.


The boys in Application Engineering thought that if we turned back the pages of history and dramatized certain events you would get a better idea of what we mean by how sales can help Application Engineering. So without further adieu, let's put the spotlight on sales.

Page 91

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