|THE GREAT WHITE FATHER
A. D. HAMMES
'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
'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.
FEDERAL GOVERNMENT INSTALLATIONS
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.
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
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
THE GREAT WHITE FATHER
H. J. CADELL
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
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
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
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.
THE GREAT WHITE FATHER
W. E. HAYES
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
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.....
THE GREAT WHITE FATHER
C. F. CHARTRAND
Headquarters sales support for you and your customers in the United
States Army and the National Aeronautics and Space Administration, is my
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.
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
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
It will be interesting to note that there are
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.
THE GREAT WHITE FATHER
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
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; !
THE GREAT WHITE FATHER
C. C. LASHER
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)
C. K. RIEGER
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.
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
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
lot of business, I hope, first internally and then let
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
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
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
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
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.
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.
|FAR FRONTIERS AND OUTPOSTS
DR. H. M. SASSENFELD
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
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
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
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.
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
Finally, TABSOL suits the needs of the guy
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
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
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
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
|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
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
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
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
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.
DISTRIBUTION OF PERSONNEL
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
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.
HOW SALES CAN HELP 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
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.
to Table of Contents
Section (Part 6)