RESOURCES BEHIND THE SCENE
R. J. BARCLAY
Thank you, Bob... it is certainly a pleasure for us in the
Manufacturing Section to welcome you to the Valley of the Sun. Also we are
delighted to have this opportunity to tell you something about our
Manufacturing Section, its facilities, people, and our growth.
The Manufacturing Section is responsible for achieving the optimum
combination of men, materials, time, and equipment necessary to deliver
the products ordered by marketing, in accordance with the drawings and
specifications furnished by engineering. In performing this function, we
must maintain consistently high quality levels, good working conditions,
low costs, and short delivery times.
In our efforts to achieve this rather formidable aim, the Manufacturing
Section does not stand alone. We avail ourselves, as necessary, of the
vast knowledge and facilities of the company's research laboratories and
the Manufacturing Services Division. This slide indicates our relationship
with these components, and illustrates the organization of the Computer
Department Manufacturing Section. We will briefly discuss each of these
subsections. This slide illustrates the principle functions contained in
the Materials Organization this sub-section is the principle contact for
the Manufacturing Section with Marketing and is responsible for department
ware schedules. As the name indicates, this subsection is concerned
with our direct material starting with procurement, its movement through
the factory, and finally shipment. From a supervisory standpoint, I am
pleased to announce that effective May 22 I will no longer be an actor and
this position will be filled by Neil Donovan. Although Mr. Donovan is not
present today, he will be able to join us Thursday and Friday of this
week. This sub-section is under the able guidance of John Sorauf and
consists of the functions shown on this slide! A significant contribution
to our product quality is through the design and construction of
sophisticated test equipment which you will see in your factory tour. I
will return to this subject a little later and discuss some of our quality
concept philosophies. This sub-section is the heart of our Manufacturing
Organization. It is ably directed by Bill Lord who has all the necessary
supporting personnel to allow a high degree of flexibility and quality
construction. This sub-section was directed by Bill Wells until the
beginning of this month. Bill has been extremely successful in providing
special equipment and techniques which has made our operation second to
none. This function is primarily concerned with the future and is
constantly striving to maintain our leadership position. Stan Schure,
otherwise known as Mr. Landlord, has his hands full in this operation. At
the present time, he has two buildings under construction. .. one at
Phoenix and one at Palo Altohas six different leases around Phoenix to worry about, in addition
to juggling personnel and equipment in our present crowded facility.
Stan's organization is also available for consultation work outside the
The area of product quality and reliability has long been a major
strength in General Electric, creating for us customers who recognize the
value of superior performance. We in the Manufacturing Section fully
appreciate what a dynamic effect properly functioning equipment in the
field can have on your prospective customers. You may therefore understand
why we stress the importance of a total quality control concept in our
Manufacturing personnel are quality minded and enter the scene early in
the life of a computer, beginning with product planning, following through
the design stages, Manufacturing Operations, and into test. These same
personnel are still concerned with the computer after delivery, to
capitalize on field experience.
Our Quality Control philosophy assures product quality at the lowest
practical level of assembly. In every phase of manufacture we point toward
quality standards that are at least equal to and more often higher than
those of our competitors. By way of illustration I'll mention just three of many examples: First, in the
manufacture of our code memories we apply a very strict acceptable quality
level to the initial inspection of cores. As each memory plane is
completed it is 100% tested through every circuit loop. Again when the
planes are later stacked and terminals connected the memory is given a
complete check-out. Second, printed circuit board components must pass
rigorous functional tests prior to assembly on the boards. Each completed board is further circuit tested and subjected
to vibration test to weed out intermittent components or terminations.
Third, our computers make extensive use of wire wrap termination. Here we
have a much superior connection which is not subject to vibration damage
or to soldering pitfalls. This method gives us a distinct advantage when
comparing with competitors equipment and by the way it results in a
savings of about $2, 000 per average system.
Our quality control program extends into the area of feed-back
information. From regular defect reports generated in our manufacturing
areas, combined with field service reports, provide the kind of
information needed for corrective action. Detailed planning permits us to
select for test and measurement, those elements which are going to seriously affect, in one way or another, the
operation of the equipment as the customer intends.
Summarizing, we feel that our coordinated program has resulted in
improved equipment being delivered. Currently we are pleased to note that
customers are experiencing in excess of 96% good running time on their
equipment. We see an improvement in the time required to get a new
computer system running and available for customer personnel. Six months
ago it was not unreasonable to expect total installation time to consume
three or four weeks. Currently this same work can be accomplished in
something less than two weeks.
This slide indicates the hardware output that we have produced in the
last three years, and what we expect to produce during 1961. You will
notice that in 1958 we produced one ERMA system for the bank, in 1959 we added
three NCR systems and six more Bank of America systems for a total of $6,
800, 000. In 1960 we produced 33 computer systems at nearly four times the
output of 1959. In 1961 the line has been increased substantially and we
will produce better than $46,000, 000 billing. The hardware produced in
1962 will depend upon the orders you get.
This next chart shows our present facility. We are now utilizing 70,000
square feet of factory floor space and have a capacity of $50,000,000.
When our new addition is completed as indicated on this chart we will have
a factory square footage of 176,000 and a capacity of $116,000, 000 or
almost one and a half times our present capacity. At the present time the
entire Deer Valley Park Plant has over 200, 000 square feet of floor
space. After January 1962, we will have nearly 400,000 square feet, or
almost double what we have today. Furthermore, we are planning to make
many of the mechanical components that we are now buying. This will give
us better control over the manufacturing cycle and inventory levels.
Flexibility in the manufacture of our products will also be improved. We
will be fabricating, welding, and assembling doors and skins complete. We
will be machining parts for our new peripheral line such as the sorter,
the encoder, and the card reader. Furthermore, we will be fabricating all
computer and peripheral frames. This means an additional investment of
almost $600,000 in sheet metal and
other machine shop equipment. The savings resulting from this
additional machine shop activity versus vendor parts and assemblies will
net us over $200,000 in 1963.
Your customers require high speed reliable systems to perform their
We have the facilities---we know how to produce the systems, we have as
good or better quality than our competitors, and our capacity next year
will be almost one and one half times what it is today. Therefore, we need
the orders to maintain the increasing production trend, that has been
evidenced by the last three and one half years.
We thought you might like to see some pictures we took the other day of
some of the people and facilities we have been talking about.
This first slide shows our manufacturing facility, a paragon of modern
architectural imagineering. It is newly constructed, completely air
conditioned, and resides majestically amid elegant and lush outdoor
This next slide is our quality control laboratory. I told you that
every part that goes into a computer is carefully and rigidly tested to
assure customer satisfaction. Our chief quality control engineer has
available all the latest precision test equipment to enable his staff to
accomplish their analysis with extreme accuracy.
This is an example of our modern manufacturing equipment. When our
multi-million dollar factory addition is complete, at the end of this
year, modern automated manufacturing equipments such as those shown will
be installed to further improve delivery to customers.
Just a little more on our manufacturing staff. Like all soundly managed
businesses, our general manager delegated to a team of manufacturing
specialists, the manufacturing staff, the responsibility of guiding the
manufacturing function in its contribution to the attainment of overall
Here is a picture of our shipping area. To assure that our precision
equipment will arrive at the customer's site in perfect condition, our
shipping unit practices extreme care. Here are two of our shipping
specialists packing one of our more expensive computers.
Here is our quality control in action. Nothing but the finest
components are incorporated into our systems. To guarantee this, all
incoming materials are carefully inspected by our Quality Control people.
These few scenes of manufacturing, of course, are satire. Now we would
like to become serious again and show you in film some of our
manufacturing facilities, processes, and people.
At this time we want to invite all of you to see the Manufacturing
facilities. Our people will be on hand to meet you and to answer your questions regarding the
manufacturing operations. Tours are scheduled on Thursday and Friday.
BEHIND THE SCENE ACTIVITY
K. L. McCOMBS
'Things sure go smoother when I let you know about my problems ahead of
time. These words pretty well sum up the message of the skit you have just
seen. We are here to do everything we can to help you in your sales
efforts. It goes without saying that we can't help you if .we become aware
of your problems too late to suggest possible alternative courses of
action which may be more desirable to you r customer, to you, and to the
department. You don't have to go it alone in the customer's office. Others
can and will help you. These gentlemen you have just seen may be lousy
actors but let me assure you that they are very competent in their
respective fields. They are instructed to orient their efforts toward
helping you make sales.
Bud Crutchley, our manager general, tax, and personnel accounting is
expert at establishing simple workable routines for handling cash and
other accounting items between headquarters and the field. Aside from
helping you get rid of clerical burdens, Bud is the man to give you
answers to your customer's questions about sales, use, excise and property
taxes on our products and questions related to the billing he renders your
customers. Another service that Bud gives you that means almost as much to
you as an order is the prompt delivery of your own pay check. Payroll is
the one schedule in the department that has never slipped.
Denny Peper, our manager cost accounting, directs his sales efforts in
the field of cost estimating. Many of you become involved in this problem
when special equipment or services are needed and no prices are available.
Accurate cost estimates are then essential for establishing reasonable
prices to your customer. The essential ingredients of an accurate cost
estimate are (1) complete information and (2) reasonable time.
Tom Hage, Manager Budgets and Measurements, serves you for the future.
Tom's projections of growth, needs and timing for new facilities and
manpower are only as good as your collective consensus of sales
opportunities. If you are pessimistic . . . . facilities, manpower, and
consequently equipment for your customer may not be available when you
need it. If you are overly optimistic management may have to face the
problems of layoffs in the factories and idle facilities. If your
estimates of future orders obtainable are realistic equipment will be
available when your customer wants it.
As to application in finance of our own equipment, we will not be
shoemaker's children much longer. Bill Van Wagenen, Manager Procedures and
Data Processing is rapidly programming department data processing work to
go on our own computer. Payroll and some other work is presently being run
on the 304 at Tempe and GECOM programs are being written to put this on the GE 225 in August.
Our total integrated system will follow this fall. Bill is often in a
position to help your customers through Harold Weiss's group, with many
conversion and procedural problems. As one of your customers, Bill's
contacts with other customers in a user relationship can be a valuable
assist to your sales efforts.
Contract accounting might be more aptly titled customer accounting.
Cliff Steward, Specialist contract account, has the job of taking cost and
other records we keep for our own uses and rearranging them in the format
and manner requested by your customer. Cliff is concerned with all the
ramifications of cost plus, fixed price, target ceiling, redeterminable
and 'We'll work it all out at the end' kinds of contracts. He can give you
counsel and advice in these areas. George Snively, Manager, Credit and
Collection, is our gambler. He bets GE money, and
his job, that your customers will be financially able to pay their
equipment rent for six years down the road. However, you need not ignore
any prospects because you believe they don't have sufficient financial
strength. George's job is to find some basis on
which to accept every order. He can only do this if you advise him of
prospects early so he can obtain sufficient
information. You will be interested to know we have never turned down an
order for credit reasons. Time will tell us what our collection problems
Frank Moran, our internal auditor, has assisted the internal auditors
of several customer departments on questions of audit checks and audit
routines involving computers. He is available to assist your customer or
Lastly, all of us in Finance have a wide acquaintance among financial
people in General Electric and with many financial people in outer
companies through various professional groups in which we maintain an
interest. For instance, I personally know all Managers Finance in General
Electric Company and we generally have an annual meeting to discuss mutual problems. There are other meetings and contacts in
the areas served by my associates we are always pleased at the opportunity
of working with you on sales problems where you feel
we can make a contribution.
Orders from customers are the big opportunity for all of us. Only you
can bring them in and we are here to help you do it.
KNOWING THE GROUND RULES
I. L. STEPHENSON
Gentlemen. . . The opportunity to be with you at this meeting is indeed
a welcome one and while it may be true that the law doesn't help you sell
computers, it's here to stay and we will not be long on the selling road
unless you are aware of the proper course to take.
Most of you, I understand, have certified that you have read,
understand and will comply with the company's policy on compliance with
the anti-trust laws (commonly referred to as policy 20.5).
This policy will undoubtedly go down in the history of the General
Electric Company as the most talked of and worried about policy that has
come down the pike. At the time of its initial issuance, it was indeed a
unique step on the part of the corporation but in the light of
developments in the last year, the pattern undoubtedly will be followed by
many others. Because of its importance to you and the impact it has upon
the conduct of your daily business, it may be helpful to offer some
explanation as to the purpose of the policy and give some indication as to
how it might best be complied with.
To the uninitiated it may not readily be apparent that the Policy as
written imposes limitations and restrictions upon General Electric
employees which go beyond the requirements of the antitrust laws; This in
keeping with management's decision to follow a very conservative course in
this area. Basically, the policy is a recognition on the part of the
company that it intends "To comply strictly in all respects with
the antitrust laws. "
In addition to prohibiting employees from exchanging or discussing
prices, terms or conditions of sale with competitors, it also provides
shall be no exchange or discussion of any other competitive information
with competitors. It is in this latter general category that the policy
exceeds the presently established prohibitions of the antitrust laws. The
reason for including the latter prohibition in the policy is because
experience has shown that when such discussions are engaged in, they
frequently provide a basis for a finding that competitors have conspired
and agreed with one another in establishing prices, terms and conditions
of sale. Up to this point I assume there is some confusion as to what is
meant by the phrase 'any other competitive information'. I believe in
general that phrase is intended to millrace any information upon which
decisions as to prices, terms or conditions of sale may be based, such as
the cost of producing a particular product. Activities similar ly
prohibited would be the participation in price reporting programs of trade
associations or programs which attempt to formulate for publication'
standard production costs'. The policy also forbids company employees from
responding to competitive advertisements which offer price information in
response to a written request: This regardless of the fact that such
publications are of a general or trade circulation.
The question might now be asked, just what can we do to get the job
done and not violate the policy. Everyone recognizes that we must obtain
competitive information but I hope at this stage all of you know what the
sanitary sources of this information are. Under 20. 5 the fact such
relationship exists does not foreclose those charged with the sales
function of a particular component from doing business with that concern,
nor from discussing prices, terms, conditions of sale or other competitive
information to the extent the information disclosed is consistent with,
relevant and necessary to the company's relationship as vendor to that
competitor. Insofar as trade association activities are concerned, the
policy does not prohibit participation in statistical reporting programs
which require the reporting of sales in broad product or price categories
as a means of surveying the industry, provided the statistics so gathered
are published on an industry-wide basis without identification of the
sales of individual companies. Similarly, exchanges of information such as
engineering techniques, methods and forms of organizing work or techniques
of production are not barred by the policy although, of course, every
precaution should be taken to avoid disclosure or receipt of proprietary
or confidential information.
A word now about the 'Philadelphia Story'. Some of you may have
occasion to explain or answer questions regarding the recent plethora of
adverse publicity given General Electric and other companies in the
electrical industry with respect to violations of the antitrust laws. To
my mind there isn't a more convincing reply than that recently given by
Mr. Cordiner in a speech before members of the Computer Department: He
said, most people don't stop to realize that General Electric has
employees equal in number to one-half the population of Phoenix with its
exploding population, yet Phoenix is not given a bad name because daily
within its boundaries a variety of misdemeanors, felonies including murder are committed.
As background for a brief explanation of the major antitrust laws, I
should point out they are by no means new in our society. Every political
platform from the first to the present has contained an antimonopoly
pledge: The avowed purpose being to prohibit 'corporate abuses'. You will
recall reading about the formulation of trusts in the oil and tobacco
industry: They were broken up under section one of the Sherman Act which
"Every contract, combination in the form of trust or otherwise,
conspiracy, in restraint of trade or commerce among the several states or
with foreign nations is hereby deemed to be illegal. "
Section two of that statue provides: 'Every person who shall
monopolize, or attempt to monopolize, or combine or conspire with any
other person or persons, to monopolize any part of the trade or commerce
among the several states or with foreign nations shall be deemed guilty of
a misdemeanor. '
The decisions of the Supreme Court which atomized the Standard Oil and
the American Tobacco Companies serve to focus attention upon the fact that
Congress in enacting the Sherman Act left it up to the courts to interpret
some very broad and sweeping language in reaching a decision as to what
constitutes an unreasonable restraint of trade. This uncertainty incited a
clamor for more and better antitrust laws. The year 1914 was a banner year
for all political parties: the Federal Trade Commission Act and the
Clayton Act were passed. The former statute again in very broad and general language made it unlawful to engage in
'unfair methods of competition' and 'unfair or deceptive acts or practices
in commerce'. It is now well established that the FTC Act prohibits false advertising,
selling below cost, disparaging competitors and their products, bribing
customers, claiming testimonials falsely, giving secret rebates, acquiring
a competitor's trade secrets unfairly and enticing an employee of a
competitor to leave his employment.
Significant provisions of the Clayton Act were those prohibiting price
discrimination (except when the action was taken to
meet competition). Exclusive dealings, interlocking directorates and the
purchase of stock of a competing company. Such conduct was forbidden where
the effect may be 'substantially to lessen competition or tend to create a
monopoly in any line of commerce'. Again the Congress left to the Federal
Trade Commission and the courts the task of deciding what particular
types of conduct were proper or unlawful. The principal attack of the
statute was not on monopoly but against probable
oppressive business conduct. It was designed to check practices in their
incipiency, to prevent corporations from growing
monopolistic in size and illegal combinations; These
were the things the Sherman Act had failed to stop. IBM was found to have
violated the Clayton Act by leasing its machines on the condition that
only cards manufactured by IBM would be used by the lessee. The court held
that this arrangement deprived other card manufactures of a market for
Undoubtedly, all of you have heard of the Robinson-Patman Act. This
statute was enacted in 1936 as an amendment to the Clayton Act and is
commonly referred to as the price discrimination act. It makes unlawful
the payment of anything of value for services or facilities or the
furnishing of services or facilities to one customer without making them
available to all competing customers on proportionately equal terms. The
provisions of this law also contributed a new feature placing a buyer in
violation if he knowingly induced or received a discrimination in pric(e?) For
this act to be applicable there must be at least two independent sales of
goods of like grade and quality to two different competing purchasers at
Time will not permit a more detailed discussion of the antitrust laws I
have referred to, but perhaps it will be of interest to summarize the facts in one
recent case. To me it is a vivid illustration of the extent to which
courts will go in finding a basis for violation of the Sherman Act. I
refer to a case brought by the Department of Justice against the
Pittsburgh Plate Glass Company and several other manufacturers of mirrors.
The chief government witness was a Mr. Jonas who testified that he had
heard of a proposal to raise prices during a meeting of the Mirror
Manufacturer's Association. Pittsburgh Glass was a principal supplier of
plate glass and to a minor extent a manufacturer of mirrors; It was not a
member of the association at the time of the meeting referred to; however,
a Mr. Gordon, Pittsburgh's Sales Manager, was in town and attended some of
the association meetings. Jonas testified that he called Gordon to ask him what he knew about the raise in
prices. According to Jonas, Gordon replied that "In some of the rooms
he had heard the fellows saying they would like to get their prices
increased, and although he was not trying to tell Jonas what he should do
or not do, he thought Jonas ought to be getting more for his product".
After the association meetings were concluded, representatives of the
principal mirror manufacturers met in a hotel room and agreed to end price
cutting and to simultaneously announce price increases. Pittsburgh Glass
was not represented at this meeting. Jonas further testified that after
the agreement had been made, he telephoned an assistant of Gordon's in
Pittsburgh to report the outcome of the meeting. He requested the
assistant to notify Gordon of the agreement. Jonas also testified that in
a subsequent telephone conversation, the same assistant reported that the
message concerning the agreement had been conveyed to Gordon. The
assistant testified to the effect that he had received no calls from
Jonas; however, the telephone bills of Jonas's company showed calls to
Pittsburgh Glass on the two days which Jonas claimed to have talked to the
assistant. The evidence was clear that all the manufacturers who had
attended the closed meeting announced identical price increases on the
same day. Pittsburgh Glass announced its price increases the day after.
Despite the fact that the record showed that an up swing in price was imminent because of a shortage of plate glass,
Pittsburgh Glass was convicted of violating the Sherman Act which
conviction was upheld by the Supreme Court.
The remarks I have made concerning the antitrust laws would by no means
be even partially complete unless you have some idea of the serious
consequences that can befall a company or an individual unfortunate enough
to fall within their clutches. Clear and effective affirmative remedies
against violations are provided; They are both varied and extremely
foreboding: 1. Valuable property rights become unenforceable. . . . .
Meaning leases of property, patents and patent licenses. 2. Damages Competitors, customers suppliers and others are entitled
to recover treble damages if they have been injured in their business
or property as a result of the antitrust violation. 3. Judicial controls
are exercised . . . . Courts are not limited to imposing a mere
injunction; they have proceeded to order the disclosure of technology,
compulsory sales of products and dedication of patents to the public. 4.
Divestiture, divorcement and dissolution become a reality. . . . Stock
holdings in other companies have been divested, manufacturing divisions
have been severed from other divisions of a company, organizations have
been dissolved and individuals ordered to resign as officers or directors.
5. Fines and jail sentences are imposed . . . . As recently demonstrated
in the Philadelphia cases, perhaps the most painful consequences to an
individual which can result from an antitrust violation are fines and jail
sentences. Both are now very real to the individual corporate employee who
indulges in prohibited practices. To digress for a moment, I should like
to make brief reference to some of the problems which have arisen
regarding letters of intent, contracts and lease agreements. Each of you
should understand that a proposition letter submitted to a customer
constitutes a valid offer and all that is required to bring a contract
into existence is an acceptance of such offer. Should this occur, the
company would not be in a very favorable position contract wise. To avoid
this we have prepared various printed standard forms of agreements, one
of which should be used in conjunction with each proposition letter by
"This offer shall continue in effect for thirty days from date and
is subject to the terms and conditions shown on the attached copy of
equipment lease agreement form CK 30. "
In this fashion the details of a proposed definitive contract are made
known to the customer and any reply which suggests changes in or additions
to those provisions then becomes a counter-offer leaving the door open to
negotiate the final agreement.
Both with respect to letter of intent and lease agreements, I strongly
recommend that you do not undertake in the field to prepare new or revised
terms and conditions, rather you should send to Phoenix a statement of the
basis for agreement with the customer so that an appropriate legal
document can be prepared. In other words, if any bad contracts are to be
drafted, let me be the one to do it.
APPLYING YOUR KNOWLEDGE
H. M. DUSTIN
'Legal aids in the selling area'
During our first national sales meeting in 1958 and many times since
then in our sales training programs and elsewhere, I have spoken of the
costly litigation that has resulted from failures of General Electric
representatives to take appropriate safeguards required by company policy
6.1, for example, which applies to prohibition against, and approved ways
and means of receiving confidential information from people outside
General Electric. I have frequently spoken of other legal complications
which arise in the selling area and fortunately most of you have escaped
the consequences of what could have been dangerous situations, but,
putting it mildly, it is risky business to rely on luck when legal matters
and unlawful conduct are involved.
In view of this experience, my talk today will take a little different
approach to that part of the sales effort which could involve grave
legal consequences, and I have chosen this approach in an effort to
explain more fully how your department's patent operation can help you
avoid trouble and, at the same time, help you attain your sales
The dangers involving the receipt of confidential information are more
serious than most people think and the generally relaxed attitude toward
this is usually based upon a misunderstanding, of what is meant by
'confidential information' or ignorance of the consequences of improper
use of competitor's customer's confidential information. Another reason
for this relaxed attitude is probably because this type of information, or
requests for such information, often comes from a customer. While it is
recognized that we must satisfy a customer, there are certain safeguards
which can and should be taken before adopting his suggestions.
Confidential information comes in many forms and under many circumstances.
One common example is where a customer has developed a systems approach to
satisfy its own business needs or has employed a research institute to do
it for him. He usually regards himself as a pioneer and wants to be the
only one or at least the first business to use what he's developed. Bank
of America is one case and Sears Roebuck is another. A second common
example is where a customer requests us to supply equipment which will tie
in with equipment of a competitor, thereby making it necessary for us to
seek detailed technical information of that competitor.
With these generalities in mind, let me give you a little background
information so you'll better understand what I am talking about. Then I
shall give you a number of examples of ways in which we have avoided
difficulties in our relationships with other companies, with our customers
and with agencies of the government in an effort to show you how difficult
situations can be avoided if you will let your patent and legal counsel
know what you'd like to accomplish, as early as possible in your
negotiations, and before you find yourself deeply involved in a situation
which may be extremely difficult if not impossible to correct.
What is confidential information? The popular or layman's meaning is
'don't tell anybody', but the courts have given the terms
"Confidential Information" and "Confidential Relationship,
" a much broader meaning. In short, the terms mean, as you would
expect, any information received in confidence must not be disclosed to
anyone outside the recipient company , but the more serious restraint is
that this information may not be used or incorporated in a product of the
recipient company so long as the information remains confidential.
On other occasions I have mentioned my favorite candy bar case but, in
an effort to give you something new to think about this year, I will only
mention that in that case the defendant company adopted a cellophane
wrapper suggested by the plaintiff and the court held that, even though
the suggestion was not patentable, and even though the suggestion was not
made with the specific statement that it was given in confidence, if the circumstances are such that a reasonable
man would consider it confidential, then the defendant company must, and
it so held, that it must share the profit which resulted in the adoption
of this suggestion. This share of the profit was no small sum because if
it was shown at the trial that sales of this candy bar had increased sixty
percent starting immediately after adoption of the new wrapper Since that
early case there has been an avalanche of suits brought by both
individuals and companies against those who appropriate and use
confidential information. Many of you may think a candy wrapper is so
foreign to our business that it is not applicable to us so I will give you an actual case which is directly at point in our line of
A company which I shall call the 'plaintiff company' employed a
research institute to develop a data processing system and in the course
of this development they conceived a new recording medium which served as
a source document. The plaintiff company then approached what I shall call
the 'defendant company' and proposed that the defendant construct a number
of systems for the plaintiff following the teachings of the laboratory
model developed by the research institute. The defendant company
finally decided it could not undertake this large project in the time
required but, without the knowledge of the defendant company's top
management or patent counsel, the manager of the data processing division
of the defendant company appropriated the recording medium and
incorporated it into the defendant's system. This system was then
disclosed at a joint computer conference by the defendant company's
representative. Immediately thereafter, scorching correspondence
transpired between the managements of the plaintiff and defendant's companies and finally a letter was written by the general counsel of the
plaintiff company threatening and promising legal action if the defendant ever sold a system incorporating this recording medium. Incidentally, and
perhaps not so incidentally, the manager of the data processing division
was fired and a year later the data processing division of the defendant company was dissolved. This is only one of many sad stories of those who
have seen fit to appropriate confidential information. The Genera Electric
Company has had many experiences similar to the ones I just gave, in fact
there have been so many, a pamphlet entitled 'Watch That Submit' has been
printed. A copy of this is included in the packet which was given to each
of you. This pamphlet contains the text of company policy 6. I that I
mentioned earlier, it is printed in large type and can be read in a few minutes, it gives some of the General Electric "sad
stories" and describes how to handle submitted ideas from strangers,
customers and the general public and it tells what to do with oral
disclosures, those submitted by mail and otherwise. It is well worth
reading and should be tucked away in your briefcase for reference when a
need arises. There are two serious danger areas in addition to those given
in 'Watch That Submit'. The first arises when we are seeking information
of a competitor's equipment so we might tie in our own equipment with
theirs at a customer's site, for example.
If this becomes necessary you should not receive any technical
information unless and until you have a release from a confidential
relationship by way of the following agreement:
To provide a basis for free and unrestricted discussions pertaining to
certain technical developments of the __________________ Company
relating to ___________________ Product
It is hereby agreed by and between the parties signatory hereto that neither party will assert a claim
against anyone based on the allegation or condition that information of any kind or type concerning such developments
transmitted or received by either party in the course of, prior to or following, such discussions was of a confidential or proprietary nature,
whether relating to design or use of the products involved.
Nothing herein, however, shall be construded (construed??)
so as to in any way prejudice the rights of either
party under the patent laws of the United States or any foreign country.
General Electric Company By______________________
By -----------------_ Six copies of this agreement are included in your
packet for you use. Additional copies may be ordered from the department
patent operation, as you need them. In using these forms, complete two copies by filling in
the date, the subject matter of the meeting, the name of the other company, and have both copies
executed by both parties, give one copy to the other party and return the other signed copy to the Computer
Department Patent Operation, preferably with an explanatory letter. If you
encounter difficulty in having the other party sign, you should
immediately communicate with the Computer Department patent or legal counsel for advice and assistance.
The second source and form of confidential information arises when an
employee leaves one company and goes to work for a competitor of that
company. An employee in a responsible position often receives company
confidential communications and manuals, and it seems to be the practice
among the younger men today to take these manuals and communications with
them when they leave the company on the assumption that they were issued
to them personally. This could not be further from the truth because this
material is the property of the originating company and if the information
contained in them is used by the employee in his new position and adopted by the new employer, both
of them are subject to a suit for 'breach of trust' and 'appropriation of
confidential information'. If any of you have accidentally or unwittingly
brought to the General Electric Company any documents or manuals or other
written information which, by their very nature, or by printed notice on
the document itself, contains confidential information, you are urged to
either destroy them or to remove them from the General Electric premises
and not to disclose this information to other General Electric employees.
A department instruction will soon be issued making this action mandatory.
This is a very serious matter and I urge you to take this advice
When it becomes necessary to disclose General Electric confidential information to a competitor, such as in
the case where our equipment will be tied with theirs, you are again urged
to seek the advice of your patent and legal counsel so General Electric's
rights may be protected. Just such a case arose in the Medium A-C Motor
and Generator Department in its relations with IBM. The letter agreement
between General Electric and IBM was executed by both parties so as to
protect General Electric against appropriation of its confidential
information and at the same time it did not subject IBM to unnecessarily and unreasonable
Another sensitive area related to your sales effort is the unauthorized
use of copyrighted material and by this I mean copying portions of a
copyrighted work of another company and incorporating those portions in
our own manuals. Another form of this same unlawful practice would be a
case where a
person receives a single copy of an interesting copyrighted work and
other copies are not available through proper channels, and then in his
effort to circulate this interesting information he reproduces it or
authorizes or suggests its reproduction for internal or external
distribution. These acts constitute copyright infringement and they would
subject the General Electric Company and the individual to civil damages
and furthermore they would subject the individual infringer, and others
knowingly aiding the infringing individual, to a criminal fine of up to
$1,000.00 and imprisonment up to one year, or both, under title 17,
U. S. code... paragraph 104, just in case you would like to look it up.
Doing business with the government is getting more difficult as time
goes on and the attitude of some congressmen is such that business
relations with the government may become even more difficult. As in the
case of different businessmen, different government agencies have
radically different philosophies and practices. For example, those
agencies which operate under the ASPR's such as the Army, Navy, Air Force,
are quite reasonable, but the new agencies such as the AEC and NASA and
the laws which created them, are such that the government retains the
right, title and interest in all inventions made under a contract. Any R
and D contract presumes a certain amount of special design and equipment development even though incorporated in a
standard piece of gear and in any event the ASPR's provide optional
clauses which must be negotiated: such as authorization and consent
whereby the government authorizes the use of any patented invention in the
equipment delivered under the contract. The government usually tries to
include a patent indemnity clause, but this too can be negotiated out of
the contract to relieve General Electric of its obligation to indemnify
the government for damages and costs for patent infringement. Success in
these areas is possible providing steps are taken early in the
negotiations, preferably in the first negotiating session, to include
authorization and consent and to exclude the patent indemnity clause.
A more difficult problem in government contract negotiations arises in
excluding from the patent rights clause, those inventions which have been
conceived prior to the date of the contract but embodying, for the first
time, in the equipment delivered under the contract. So that the excluded
inventions will not come as a surprise to the government in the late
stages of contract negotiations, the sales representative should discuss
the contemplated contract with the patent operation at the outset,
preferably at the proposal stage so the research laboratory and other
components of the company can be contacted to determine whether related
work has been carried on elsewhere and whether the resulting inventions
should be excluded. The letter accompanying the proposal can simply state,
if the facts justify it, that related inventions are being investigated
and exclusion of them may be requested if and when a contract is awarded.
Any proposal to the AEC and NASA should be cleared with the patent
operation before it is submitted, because of the extremely severe contract
terms imposed by these agencies.
Without going into details here, the best general advice seems to be,
if you have a choice between different agencies of the government, it is
much safer to deal with the Army, Navy and Air Force rather than NASA and
Contrary to most beliefs, your department attorneys try to help you
accomplish your objectives in ways that avoid trouble and legal
complications. If the course you have chosen is confronted with dangerous legal
consequences we try to suggest other courses posing fewer and less severe
dangers, but there are some things that are impossible, for example,
suppose someone comes in and says:'1 want to do this legally, you
understand, but I want to open a whore house on Central Avenue and
Camelback Road. How do I do it?' Obviously, if you do it you'll end up in
jail sooner or later. In all seriousness, if you propose a course of action that is destined
for trouble, it is our responsibility to advise you of the consequence of
this course, as against another which we may suggest. You, as salesmen,
with the approval of your manager , have the power and authority, within
well defined limits to take a calculated risk in the pursuit of your
chosen course of action. When there is no known course that is free of
risk, we try to give you advice upon which you may best judge the
advisability of taking one calculated risk as against another.
In taking these risks, do not confuse power to do something and
authority to do it. For example, Mr. Lasher as General Manager has the
power to sell the Deer Valley Park Plant, but he does not have the
authority to do it without board approval. You will all do well to learn
the limits of your authority and to remember them at all times.
K. W. MICHAEL
You've got it. . . . . . . . And it's got you:
Thank you, Bob. Gentlemen: You've got it ! and it's got you: Let me
repeat that loud and clear. You've got it! And it's got you:
On your 'Frontiers of Progress' today.. . It stands for General
Electric and for that concrete symbol of quality that the name General
Electric represents. It... or General Electric. . . all that. . . that
name. . . stands for.. . can and does accomplish much on your behalf as
salesmen. It helps to open the door for you. . and this in turn opens the
way for sales!
Here the door to sales is being opened for you by 'Frontiers' and by
'Progress. ' This door to sales is also being opened for you constantly as
sales representatives of the General Electric Computer Department. . .
carrying on the long tradition of quality and progress. The welcome mat is
yours because you have it. . . You have General Electric. Backing you in
your sales effort is real depth of support available to you and
administered in your behalf right from 570 Lexington Avenue New York, to
13430 North Black Canyon Highway. I am referring to probably the finest
consulting services available to anyone anywhere. . . in Engineering,
Marketing, Research, Finance, Manufacturing and Employee and Community
Relations. As good as this support is, in the final analysis the sales
responsibility is yours.
But this is not the only assist you receive.
Successful sales are made of many things. A part of the team assisting
you that I want to discuss is Employee and Community Relations.
What is E&CR? And how does it assist you?
E&CR in carrying forward its functions contributes its own
ingredients to the mortar binding together the structure of a sound
Computer Department organization.
What are these ingredients? What does it mean in terms of Employee and
First, it means the careful selection and placement of employees. You,
as the Department's contacts with King Customer, are subject to especially
close scrutiny in the selection process.
This process of selection and placement is not a haphazard one.
E&CR is on the move constantly to recruit only the finest. . . . . .
Interviewing and seeking out only those who can and are willing to
maintain the high standards represented by the name: General Electric. It
is these people who day in and day out stand in back of. . . and ready to
produce for. . . you. But to get the best, you must give the best; and
this E&CR does by maintaining an excellent climate of employee
relations that attracts and keeps good employees.
Manpower management will always be the most critical area in our
corporate structure. This applies with equal force to the area of pay,
benefits, good working conditions and other job satisfactions which are
the more tangible parts of our job and in the far less tangible area
covered by the highly variable factor called morale.
Close attention to these tangible and intangible factors is the
principal function of E&CR.
It means. . . . in addition to recruiting and placement the
administration of a comprehensive program of personnel practices covering.
. . . . .
Maintenance of Personnel records. Attention to health, safety and
security of employees.
The opportunity for advanced training and through special
self-development courses. . . . . To illustrate, you will recall the
course in effective presentation
The main purpose. . . to make you a better representative of GE. ..
better prepared than our competitors.
What does it mean to you in the field of compensation and benefits?
Simply this. It means compensation commensurate with the demonstrated
contributions of the employee as constantly measured against community
standards. It means the constant review of this program to determine
proper position evaluation, and to insure timely performance review.
Under our insurance program, if serious illness, accident or death
should strike you or your loved ones, you are relieved from the financial
burdens and worries when you need this help most. For example, Insurance
Plan: Life Insurance. . . 2X annual earnings. 3X for accidental death.
Weekly sickness and accident benefits for you. Medical and surgical
coverage for you and dependents. Personal Accident Insurance: Available to
you at low 76 cents per $1, 000 per year. Savings and Security Program:
Save from 1% to 6% of earnings. Company adds 50% of
your contribution after 3-year holding period. Pension Plan: Normal
retirement age 65. Pension.. 40% of total company and employee
contribution. Has disability, early retirement and survivorship option.
Emergency Aid Plan: Financial assistance in real emergencies. Tuition
Refund Program: Reimbursement of tuition for college level, work-related
Under our Savings and Security Program it is rewarding to save
Under our Pension Plan you can establish a base for your financial
independence upon retirement.
Your company has pioneered in many of these benefit plans and their
continued improvement made them among the best in the industry.
In the field of community relations and communications, it means
maintaining a position of leadership in the community.. . making possible
the establishment of a community and business climate which is
conducive to the successful operation of the business.
It means practicing good citizenship and accepting civic responsibility
in all cities where our plants are situated or where we have other
representation. It means encouraging local management and employees to
take part in all worthy community
activities, including contributions to charitable institutions,
memberships in civic groups and in all ways showing that our employees are
trying to be good local citizens and good community neighbors.
To accomplish our goal in this phase, it is necessary to develop and
implement this climate by extensive internal and external communications.
We must seek to inform our employees and the community of our program,
plans, and position on matters affecting each of them.
In some 130 different GE locations throughout the nation this
groundwork of good community relations has already been laid for you by
the E&CR function in the area.
But you must also realize that community relations is everybody's
responsibility. Each Computer Department employee. . . especially you. . .
is a unit of community relations within themselves. This is the contact
with the public that creates favorable or unfavorable impressions which
may be an important factor in the sale of our product.
In the field of labor relations, it means the maintaining of a climate
of employee satisfaction in the field of employee-management relations
with the goal of continuing uninterrupted production to back up your sales
effort. It gives you the assurance that the product you have sold will be
delivered on schedule. . . without interruptions due to labor strife. The
overwhelming rejection of union representation by Computer Department
production and maintenance employees slightly over a year ago reflects
credit on the effort of everyone in the Department to maintain and enhance employee
satisfactions. Its continuation can give you a big plus in your sales
Yes, all of these functions administered by E&CR. . . compensation,
benefits, and personnel practices plus maintaining a favorable climate of
employee and community relations. . . contribute in a significant measure
to your success as a part of the Computer Department team. They are an
important part of the over-all depth of support you have in your sales
Gentlemen: You've got it !This means you have the
Computer Department.. You have General Electric. .. You have all that GE
represents. . . . . . on your side every time you make a call on a
It's got you: This means that GE has selected you to be its sales
representative and has placed you in this position of opportunity. . . on
the' Frontiers of Progress''.
It is the combination of these two: You've got it. .. and It's got you.
. . that makes for the fielding of a perfect, championship team. . . an
unbeatable combination. . . that will enable us to reach the goal we will
all accomplish in 1961 and in the future. . . Sales and more Sales!
RESOURCES IN THE FIELD
W. A. MANN
Good morning, Gentlemen.
Y' know, one of the greatest assets a writer . . . or for that matter a
speaker can have is brevity. Every time I get the urge to orate for a
couple of hours I remember the story of Sandy. It
was in an English class and his teacher was saying, "there are four
requisites to a good short story. 'o'. These were, she said,
"brevity, a reference to religion, some association with royalty and
an illustration of modesty. Now with these four things in mind, I will
give you thirty minutes to write a story." Ten minutes later, Sandy's
hand went up. . . "That's fine, Sandy" she complimented,
"and now read your story to the class." Sandy read. . . "My
gawd, said the countess, take your hand off my knee:" Listening
Listening to the post-mortems at breakfast this morning about last
night's happy-hour, I can't resist telling you the story about the man who
was complaining about is new son-in-law: "He can't drink and he can't
play cards." "That's the kind of son-in-law to have.!" said
a friend. "Naw," said the man "He can't play cards. . . and
he plays. He can't drink. . . and he drinks. "
Y'know the fast pace you fellows are going at in
this computer business reminds me of the housewife who wrote to a big New
York department store recently, "Dear Sirs, " she said,
"Please cancel my order for maternity dress which you were supposed
to deliver three weeks ago. My delivery turned out to be faster than
Well, at least that "boss" had a sense of humor. Now, before
you tell me that I've got the customer and the boss mixed up, I want to
ask a question. I'll bet I could ask it of a thousand working people and
rarely get the right answer. The question: Who is your boss? And I'll put
it to you who is your boss? Perhaps at this point you'll accuse me of not
checking up on the latest computer department organization directory. So,
I'll tell you I am well acquainted with Clair lasher, Lacy Goostree and
There's only one boss. Here is a quick story about an alert salesman
who knew this and knew it well. Some years ago when Twentieth Century Fox
advertised in the New York papers to fill a vacancy in its sales force,
one applicant replied: "I am at present selling furniture at the
address below. You may judge my ability as a salesman if you will stop in
to see 'me at any time, pretending that you are interested in buying
furniture. "When you come in you can identify me by my red hair. And
I will have no way of identifying you. Such salesmanship as I exhibit
during your visit, therefore, will be no more than my usual work-a-day
approach to a customer, and not a special effort to impress a prospective
And from among more than 1,500 applicants, the redhead got the job.
As I said, there's only one boss. .. and whether a person digs ditches,
washes shirts, or runs large corporations that boss is the same. He alone
is the fellow who pays all of our salaries, and who decides whether we're
going to stay in business or not.
This boss doesn't care much about the past. . . whether we've been on
the scene a long time or a little while. The minute we start to treat him
shabbily we're out of business. . . fired. The customer . . . the real
boss. . . has bought and will buy everything we have or will ever own.
He's bought our homes, our clothes, our cars. He pays for your education
and mine and our children's education. He pays for all of our bills and he
pays them in the exact proportion to the way we treat him.
The man who works here in your plant or the salesman who works out in
the field may think that he's working for the fellow who signs his
paycheck. He is not! His boss is the person who buys the product or
service at the end of the line. And if the person doesn't like the product
he won't buy it, and pretty soon if this keeps up he fires the man on the
line or the salesman in the field. He is no respector of rank. This boss
will fire everybody from top to bottom if he isn't treated the way he
wants to be treated. And how does he do this. He just spends his money
somewhere else. I've known this boss for nearly forty years. And the most
important secret I've learned about him is that it is he who's in charge
of the business. This secret. ., the biggest secret behind the success of
a business. .. is the key to the marketplace. But even if you have the
key, using it effectively is something else again.
Gordon Dean, the late former chairman of the Atomic Energy Commission
said that the best way to be truly useful is to seek the best that other
brains have to offer and then use them to effectively supplement your own.
Here is another secret about your boss. . . he continually expects you
to satisfy him. He, as often as not, has no respect for the hour of the
day or the day of the week. If you fill his needs the way he wants them
filled you stay in business. . . if not. . .
you're fired. And all the short work weeks and trumped up make work
schemes in the world won't help you one bit.
Before I give you a few of my suffestions (suggestions?)
about how to use these
secrets in turning the key to the market place, I'm going to point out to
you one of the most interesting observations I've made in nearly forty
years of selling. If you've ever been at all curious about men who became
great successes in the world, and I for one have, then listen to this.
Have you wondered what the difference is between a man who gets to the
top. . . and the who does not? as far as I can see there is no single
formula that you can put your finger on. . . except desire. . . and
knowing where you're going. Some of the men at the top are graduates of
our finest schools with top grades and near perfect scholastic records. .
. men from old families. But some of our highest paid executives come from
broken homes, worked their way through the mills, the mines and the farms,
and had dirty fingernails for many years before they reached the filtered
air of the executive suite.
But they all had a few things in common. . . and I think it would be
stimulating for us to take a brief look, not at their differences, but at
similarities. For one thing, they all had that tiny, inextinguishable
spark called desire. . . it :may have been money at first. . . but not
always. . . and it always winds up as a desire for achievement. These men
have never been satisfied with what they have accomplished no matter how
great their achievements may have been. They are all men who realize you
can't stop and coast. They long ago realized that you are either growing
or dying in the business world. There is no such thing as sitting back and
saying, "Well, we're in . . . now we can relax" There have been
a lot of companies some of them giants at one time or another) that
made that mistake. They are no longer around.
The second and important thing all these men have in common. .. is the
ability and the personal incentive to work long hours. The man on the
assembly line may come to work at eight and leave
at five, but not the man in the front office with the private washroom.
He may be at his desk at six or seven in the morning and likely as not on
Saturday and Sunday, and he is still there many nights long after it's
dark outside. I will tell you gentlemen here today, as I have many times
before told my colleagues throughout my region that as a former engineer I
know first hand of the professional demands upon your time. But I have
often told them, as I will tell you now, that for a man who aspires to the
his business, for a man who feels the responsibility and the need for
putting something back into the community. . . forty hours a week is
simply not enough.
To get to the top you have to live your job. It has to be so
challenging and so interesting that it just about fills your life.
This has been my credo as a salesman. . . I commend it to you.
And this brings me to the main point I want to make before you today.
When you come into my region, or for that matter any region of the seven
other regional vice presidents, we will not only help you in every way
possible to advance you objective. . . selling computers. .. but will, as
I have, continue to take a lively interest in your business, as we do in
all of the company's businesses. The best analogy that comes to mind is
drawn from football, and even though we're out of season, I think it will
bet my point across.
The role of the regional vice president is not that of a quarterback,
or ball carrier. You and your colleagues call the plays and carry the
ball. My role comes closer to that of a combination of coach and scout.
Any quarterback worth his salt wouldn't dare walk out on the field without
a concise picture of the opposition's strong and weak points and any ball
carrier who expects to keep his face out of the mud at the scrimmage line,
better have a working knowledge of what the opposition is going to throw
at him. In short, a front ranking team has a lot more going for it than
eleven bruisers with grass stains on
their seats. It has coaches, scouts, trainers and a host of others
interested in its success. Where I make my contribution is back in the
locker room before the game. And, While I'll be at your side when you're
on the playing field, you're in command of the team and that's the way it
should be. Now, just a word of caution. If you want me to be on the
sidelines during scrimmages, you'd better have the foresight to call me in
for the skull-sessions.
One fellow. . . he is no longer with us. . . came into my office
several years ago and greeted me by saying, "Bill, I am mighty glad
to knew you, and I would have come down and got acquainted sooner, but
I've had to spend the last month trying to find office space and I finally
got located yesterday!" I overcame the urge to throw him out and
tried to explain as patiently as I could that it might have been helpful,
if not courteous, to come in and get acquainted when he first came to
town. It happened at the time our apparatus offices had over two thousand
square feet of prime office space going begging right next door to me!
One of the most remarkable men of our time, Lem Boulware, said recently
in what turned out to be his valedictory to his company officers that we
have many advantages over competition. We have more products, more
contacts, more people who want to buy from us. And thus we should have
inescapably a very superior opportunity for highly profitable sales. Now,
in order to take advantage of these opportunities we've got to have, as
Lem said, a separate intelligence system for each customer. We need to
know what is going on and what is the attitude of and our opportunities
and problems with each person of influence in the customer's organization.
Here's how my intelligence system paid off' one time. Some years ago
one of my Milwaukee salesmen dragged himself into my office, slouched down
into a chair and complained that the turbine
order he'd been working on for months would probably go to a competitor
of ours. Was there, he wanted to know, anything I could do to help. Price
and shipments were in line, he declared and he said the customer liked our
product. But somehow, the competition's salesman had got through to the
top brass with a more impressive story than ours and it looked like he was
going to score. An exhaustive check into our relationships with this
customer over past years showed everything to be in good order, and yet,
we were losing out.
Years ago I learned that there is a key to every sale. Although, if you
sit around waiting for it to fall at your feet, you'll eventually petrify
in your chair. It takes work to find it. Finally,
late one Saturday afternoon after we'd plowed. through every scrap of
paper we had about this customer we found the clue that led to the key. It
was so simple that we'd overlooked it the first time. The clue? My brief
longhand note of some months before tucked among the papers. It said. . .
"Don't forget to call Mr. X (our customer) about the proxy
solicitations." How did this tip us off?
Holders of large blocks of General Electric stock are contacted by top
field marketing people prior to the annual meetings to urge them to sign
and return their proxy statements. We reasoned that if this customer, a
big owner of General Electric stock, would focus his attention on the
inconsistency of holding vast shares of General Electric while at
the same time giving a substantial piece of business to a competitor,
we might get another chance. The net of this was that we met with the
I had determined the extent of his holdings) and pointed out this
inconsistency and asked for another chance. Because we had offered a
quality product, because our price and shipment were right and because we
took the trouble to know in depth all about the customer we got the
business! This points up a fact that I have long observed, there are three
kinds of people. .. those who make things happen, those who watch things
happen, and those who don't know anything happened. Happily, which kind we
want to be is entirely up to each of us. As far as
I am concerned, I've always thought that the greatest pleasure in life
is doing what people say you cannot do. (Witness the failure of
prohibition). I suppose by now that the account of Ray Bowers' success at
the First National Bank in St. Louis is common knowledge here. But every
time I recall how we got this "impossible" sale I feel real
good, and I'd like. to tell you about it because it may suggest ways in
which my colleagues and I across the country can help you in similar
circumstances. As you may know, I have no operating responsibility and
indeed should have none. However, I make it a point to
be readily available to guide and counsel any of the company components
in this region on marketing, public affairs and other problems of mutual
interest. Part of my job is to make top level friends before we need them.
When Ray first came to St Louis less than a year ago, he checked in with
me and we promptly helped him get located in our building and made
available to him all of our services so that he
could get right to work selling computers. One of his first goals was
the First National Bank in St. Louis. It turned out to be a pretty bleak
Ray when he discovered, after I had introduced him to the officers,
they were about to sign with IBM.
I think it fair to say though, that had not the president and chairman
been friends of mine and of General Electric for many years we might not
even have been told of this. However, the officials of
the bank, in order to be fair to their General Electric friends had
decided that they would encourage Ray to make a proposition assuming that
when it was compared with IBM's it would be self evident even to us that
we were not in the ball
park, and that our only alternative would be to drop out, meanwhile
expressing our thanks for a "chance".
Well, Gentlemen, as you know Ray is not one to give up this easily, and
I haven't been selling for nearly forty years without learning that man a
"No" can, with intelligent hard work, mean "Maybe. "
Sure, we felt discouraged, but not for long.
Have you heard the fable of 'The Devil and The Dagger'? Let me tell it
to you. It has meaning for situations like this.
'It seems that the Devil was having a sale of a lot of his wares. There
was on sale the Rapier of Jealousy, the Dagger of Fear, the Noose of
Hatred, each with its own high price But on a purple pedestal, gleaming
dully in the light, was a worn and battered wedge. This was the Devil's
most prized possession, for with this alone, he could stay in business.. .
and this was not for sale. It was the Wedge of Discouragement. '
Sometimes fables like this have a way of showing the causes of our
troubles in a kind of roundabout way that's a lot more interesting than
having someone preach at us.
Now, I think discouragement comes from only two things. . . one. . .
lack of information, or two. .. a situation over which we have no control.
And I have found it's seldom the latter.
Surely, we felt there must be a key to this market. What was the
information we needed that we didn't have? It proved elusive throughout
all the phases of negotiation and, as it turned out, was not to be ours
until a fateful luncheon in the bank's executive offices late last year.
One Friday afternoon when the prospects of our selling the computer looked
gloomiest I got a surprise call from my good friend the executive vice
president of the First National' He said his top officers would like Ray
and me to join them for lunch early the following week. Now, although our
company keeps, with my endorsement, substantial deposits in their bank, it
is rare indeed for a customer to throw so elaborate an affair as they were
planning merely to award a letter of intent. Rather, I suspected, and
rightly it turned om, that this luncheon meeting was, for the bank, to be
the easy exit tempered with good cheer and fellowship.
This is an old trick, and I've seen it tried many times before. It
quickly put me in mind of
the two salesmen going home Friday night. "I had
a marvelous day, " said the first, "Made lots of friends for
the company. " "Me too", said the second salesman quite
understandingly, "I didn't sell anything either. "
This kind of "marvelous day" we wanted no part of. As the
lunch dragged on with none of our bank friends quite willing to come to
grips with the issue, I told our hosts that I could see they were
pondering a difficult decision. But, that if my years of experience had
taught me anything it was that there is a key to every sale if we could
but find it. To the executive vice president of the bank I said directly
and simply, "What do we have to do to sell you a General Electric
Computer?" He was glad we'd jumped in with both feet. .. it sort of
took some of the pressure off him.
"Well, " he began, --and there was a long pause. This wasn't
going to be easy for him. And then he said a perfectly astonishing thing.
"We think and our consultants think that General Electric has the
best computer system for our work." This was astonishing! In light of
their intent to give the business to IBM, it was incredible!
Then Ray picked up the ball. "Have you signed the contract
yet?" he asked. No, they hadn't. "If you like our system best,
" he went on, "how about you and our key people getting together
this week to iron out the details so that we can get the order?"
Obviously searching for any comfortable excuse to delay coming to grips
with the issue, they told us they would be in New York at a bank meeting
the rest of the week and wouldn't be able to see us.
Well, Gentlemen, the upshot of this was that our team of Sheeley,
Prince and Bowers went to New York too! There, John Lockton and Paul
Wallendorf lent impressive support to our presentations to the bank's
officers, and we hammered home the idea that we wanted the business ,that
we would go to any reasonable lengths to get it.
That G. E. got the order is now of course, a matter of record. But, let
me point out how we used another key to the market place.
Sure, we had a better product, but that in itself wasn't enough. You
can scarcely expect a computer salesman, even if he's as good as Ray, and
Gentlemen, let me say he's tops in my book, you can hardly expect him to
get a customer's top officers eating out of his hand in sixty days. I try
to help bridge the gap between the "decision makers" among our
customers and the "do it" people with whom you will normally be
working.. I like to think that keeping the door to the bank's executive
suite open so that Ray and his team could maneuver effectively, helped us
in a significant way to get this sale.
Gentlemen, time, your patience and my en
durance happily combine to call a halt, and I will tell you no more
stories of the big ones that didn't get away. If you like, we can
"toss the hot rivet" during lunch and later this afternoon.
It's been a long morning, and at times like this I always remember the
young minister who was invited to preach in a college town in Texas. He
was young and more ambitious than wise and he used every illustration he
knew that could possibly apply to his theme, and it was way after twelve
when he finally said "Amen. "
After the service the college president grasped his hand and said,
"You voice was clear and your thoughts were good, but I like to see a
man have his had baled before he tries to deliver it. "
I want to leave this idea with you. I think
that ringing the cash register is the single most important thing we
have to do in our business! But don't try to do it alone. As Lem Boulware
also said, any given G. E. salesman has a wealth of talent available to
him: his fellow salesmen, we regional vice presidents, our suppliers,
bankers, distributors, our dealers, and all of our associates from the
home plants and offices. Don't struggle alone to find that you've
"reinvented the wheel." Study you prospects, line up your allies
in this, the greatest selling tram in the world -- and count on us to help
you when and where you need us.
Again, let me underscore don't try to "go it" alone. If you
do, you are about as short-sighted as the fellow who goes into the poultry
business without a rooster -- and that's putting one hell of a lot of
faith in the stork!
Gentlemen, thank you very much.
WHERE IS THE PAY-OFF
L. W. GOOSTREE
When the computer department was established in Phoenix our primary
objective was to serve General Electric's traditional industrial customers
and to serve the data processing market on a selected basis. Our strategy
was to serve the banking segment of that market while building the
necessary resources and know how to compete successfully in the total
commercial electronic computer market.
Our conclusion of the ERMA contract and the crowd in this room today
shows that our strategy to date has been successful. We have established a
firm reputation in the banking field.
Please let me emphasize here that the company recognizes computers as a
good business for the continued growth of General Electric. It is one of
the five new growth areas in which the company expects to build a new
General Electric extending well beyond its long established business.
During a recent visit to Phoenix Mr. Cordiner said that by the end of this
year General Electric will have invested $60 million in the computer
business. He then went on to state that General Electric is committed to
invest more money in the computer business than it has ever before
invested in any other business in the past and any other currently
planned. Thus, we have the tremendous resources of the General Electric
Company backing us every step of the way.
The fact that Mr. Cordiner and the company places this amount of
confidence in us is quite a compliment. At the same time it places quite a
responsibility upon us. . . the responsibility to succeed. It means that
we must help attain the objectives set down for these new areas of growth,
which he described, as "the coming sources of economic growth, new
employment and great profits for the General Electric Company!!
Our record to date proves that this confidence has been well placed.
Let's look at the record. We have doubled our business every year since
the computer department was located in Phoenix in late 1956. We see no
reason why this year should be an exception.
Just a couple of weeks ago almost five years to the date since we were
awarded the bank of America's ERMA contract, we shipped the last system
to complete that contract. We are developing new peripheral equipment
which will surpass anything currently available. We are expanding our
manufacturing area to handle the increased business expected from you. We
are broadening our product line and will expand our marketing efforts, and
we are increasing our headquarters activity to give you the support needed
on the sales firing line.
From our past experience it is evident that to be a major factor in the
computer business that we will have to enter other market areas than those
traditional to General Electric. Our strategy calls for doing this on a
selective and orderly basis. To confirm that we are really in the general
purpose computer business let's hear from the O'Rourke gang and some of
the jobs they are planning to pull.
HERE IT COMES
T. J. O'ROURKE
Here's one of the famous cattle brands of the
Old West . . . . .
All right, you transplanted Texan, what does
But. .. that's enough of the old West. . . Today we'd like to talk
about one of the newest western brands, a brand that's even more famous.
The 225. Yesterday, we told you about how the original Arizona Rangers
fought the good fight. . . and made the frontier a safer place for
customers who think for themselves. . . . . We showed how our original
single-shot weapon, the GE 100 was the forerunner of the rapid fire 210,
and how it has been augmented by the 210/225 double-barrel scatter gun.
Both barrels are loaded. .. when you go out to rescue a "captive
customer" from those Indian Bad Men. . .
You may wonder, which barrel do I use?
We can give you some rules to guide your thinking, but it depends on
the particular competitive circumstances.
It's up to you to choose the correct barrel for each sales situation.
Yesterday, we covered some of those situations that are better targets
for the 210. Today, we'll show how the Arizona Rangers can help you fire
that other barrel.
Meet IGOR BEAVER, a brand new graduate of the Astronaut Program, as he
is about to call on
Mr. Bigg Prospect, president of Far Flung Enterprises, Inc. and
Limited. . . . . . . . . . .
HERE IT COMES
J. A. RICHMAN
. . . . . . . You bet he can solve your problems, Mr. Prospect; and you
guys can too, because we are ready to actively go after the utility
market!!! And how are we going to accomplish this? A new strategy built
MORE sales manpower in headquarters,
MORE sales manpower in the field,
MORE and better customer -education. . .
Fellas, our friend prospect here has been talking too much and too long
with the wrong people. These competitors are good salesmen and they have a
good product. But, they can't begin to give him what General Electric can!
You know, our Company has been building equipment for utilities for
more than eighty years. We have people today that have spent their entire
business lifetime working with the utility problems. Our people understand
these problems, and we have the best and most economical solution for
You'll all agree that to sell computers to utilities, we must have a
"complete package to offer". We've had parts of this package so
far, but now (or very soon) we'll have a complete "utility
package". The complete 'Utility package".
GE Card Reader
225 Off-Line Printer
In addition, we are developing new applications . . . . in these areas.
. . .
Heat Content Gas Billing
Reduced Stores Inventory
Land Use and Growth
And, in these areas . . .
Plant Record System
And these. . . . . . . . .
Meter Sample Testing
In addition to these new applications, we have come up with what is
truly an "integrated accounting system".
New concepts. ..
Here, in one system, are all the accounting functions.
In addition, of course, we will have our engineering. . scientific
capabilities. Along with these new applications and concepts, we will use
a new approach.
Our new approach will include both the top management level and the
We're going to use our regional vice-presidents and other top
management people. We have a real asset here and are missing a bet by
failing to use these people. . . . . Right along with this new approach,
we're going to work with a new attitude. We're
going to wake up to the fact that we do have the best total system to
offer. It's logical that we be a major supplier of computer equipment to
utilities and they are looking for us to do this.
You know, we're all guilty of cowering a little in front of the giant
ONE-BM. They're tough to fight and they have good equipment worst of all,
there's a million of them around! Look at Ray and Leo in St. Louis.. two
of us against three-hundred of them in Ray's district alone. But that's it
. . . . This fear of them and their masses is like a sacred cow and none
of us is doing anything about it.
Well. . " let's kill this sacred cow. ., and be done with it.
There's no need to be afraid of them. We don't have to fight them. We
have the most to offer!
Did you know. . . .
According to a survey of January first, considering both business and
process computers, G. E. is second only to One- BM in this utility market:
We have the best to offer. .. all we need do is help our customer to
Finally, we are developing new sales aids. . . .
Generalized Proposal Sections System
Shows and Conventions
Let me take a few minutes here, to tell you about our new utility sales
kit. This will be distributed to all salesmen to use, as an aid in talking
to utility customers.
Here's what the customer presentation binder looks like . . .
You'll notice it has a special cover that enables you to set the book
up on your customer's desk and use it as a flip chart presentation for
one, two or three people.
Following the first page which introduces the sales kit, are
photographs of the 225.
Then we have a four-page presentation outline. Using the outline, you
can discuss the topics you want; and then reference the appropriate pages
for charts, figures, etc.
Following the outline is a series of charts showing various operations
in customer accounting, including billing, cash posting, file updating,
These charts have also been prepared in large form for group
presentations and are being sent to each district office to aid you in
your presentations to large groups.
Following the charts are some sample bill forms, meter reading forms
and some sample reports. Extra copies of these reports and forms are
included in the second part of the sales kit, which is left behind with
There is a timing example that illustrates the simultaneity of the 225.
We've included the calculations so you can trace through the example for
Several system configurations, as they apply to various size utilities,