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CAN THIS MAN REV UP DIGITAL?Marketing whiz Bruce Claflin has to fire up sales--fast
Bruce L. Claflin has spent the past 18 months battling to turn around
Now what? Claflin is charging full steam ahead, hassles or no with Intel. In the days following Digital's suit, he began calling big customers to explain the company's position and calm any jitters. ''But I found it alarmed them more than reassured them,'' he says. Now he's explaining only when asked and making it clear that Digital will continue to hawk Intel products--even though the chip giant has hinted that it might cut off supplies. ''Intel's strategy is to try and cause us harm in the marketplace,'' Claflin says. ''So we need to step up our efforts.''
And fast. Palmer thinks that Claflin--a 22-year veteran of IBM and the marketer behind the wildly popular IBM ThinkPad laptop PC--is up to that challenge and more. On July 1, Claflin, 46, became the executive with responsibility for the largest chunk of Digital's revenues, taking over as senior vice-president of a new marketing and sales organization that must now do more with less. Over the past three years, the sales group has been slashed nearly in half, to 5,600 people, while the pressure has mounted to boost Digital's revenue growth beyond its anemic 4.5% rate. Palmer is banking that Claflin's knack in PCs--he turned in profits despite a 7% dip in sales--can work elsewhere at Digital. ''Bruce delivered a profit and exceeded all his goals,'' says Palmer. ''That's an example of better execution.''
And that's what Digital badly needs. Claflin's first mission is to ignite sales of both Intel- and Alpha-based computers. His plan: get Digital's fragmented business units to line up behind a single effort to push computer hardware and services tied to Windows NT, Microsoft Corp.'s fast-selling operating system for corporations. He says he'll do that by focusing on vertical markets--telecommunications first--and stressing a line of computers stretching from PCs to mainframes that can run any NT-compatible program off the shelf.
Trouble is, Compaq Computer Corp. has the same idea. On June 23, the PC giant made a $3 billion offer to buy computer maker Tandem Computers Inc., which builds large-scale computers. By now, Digital should have been way out ahead. It jumped on the NT bandwagon early--too early, as it turned out. Microsoft's operating system needed an overhaul before corporate customers were enthused, and Digital's efforts to link its Alpha computers to NT never produced explosive sales. Now, NT is taking off, and Palmer is counting on Claflin to make up lost ground. ''Claflin has as good a shot as anyone at making a difference,'' says Steven M. Milunovich, an analyst with Morgan Stanley Dean Witter Equity Research. ''But it's late in the game.''
And investors are growing impatient. After an initial spike in sales because of pent-up demand to replace older Digital computers, sales of the flagship Alpha computers have sputtered from a white-hot 87% growth rate in 1995 to a sorry 4% in 1997. Now, the company is facing mounting pressure from shareholders, including a proposal to force the company to consider buyout offers. Claflin is feeling the heat. ''Before he came to Digital, he didn't have to worry about board issues and shareholder issues,'' says Bill L. Fairfield, chief executive of Inacom Corp., a computer reseller and a friend for 15 years. ''Now, he's directly exposed.''
The youngest of three rough-and-tumble boys from a middle-class family in Radnor, Pa., the former high school fullback concedes: ''At one level, I'm afraid. I don't want to fail. But I love the challenge.''
Claflin began testing himself at an early age. The summer before his senior year at Penn State University, he bought an old pickup and drove West, ''just to see whether I was capable of doing things on my own.'' He landed in Boulder, Colo., where he worked in construction by day and lived in his truck by night. After a few weeks, he moved on, but the truck broke down in Utah, and he hopped freight trains for the rest of the summer, riding the rails back to finish his senior year. After that experience, Claflin says, ''I was ready for a paycheck. I never wanted to live like that again.''
TELECOM TARGETS. He will no doubt earn his paycheck this year. In the coming months, Claflin has to hammer home the message that Digital has one continuous product line, from low-margin machines based on Intel chips to higher-margin computer servers using Digital's powerful Alpha microprocessor. That means coordinating a freewheeling sales force. In the past, customers sometimes dealt with eight Digital reps, one for each business unit.
But no more. To get the sales force on board, Claflin has come up with a commission structure that pays for ''selling all of Digital,'' instead of skewing compensation to favor Alpha computer sales. Insiders say Claflin also plans to abandon the current tactic of boosting Alpha sales by focusing on nine broad market segments, ranging from 3-D computing to large corporate databases. Instead, he will launch industry-specific teams that will focus on companies shifting to Windows NT. The telecom industry is first up: Digital has budgeted funds to target AT&T, MCI, the Baby Bells, and their suppliers.
Claflin also is pushing Digital to be more responsive to customer requests. Just ask Terry Boyd, manager of global computing and telecom services at DuPont Co. He says Claflin delivered quickly on his promise to simplify Digital's global pricing, ending the patchwork of prices in different countries that has been a long-standing complaint among big customers. ''He seems to make things happen,'' says Boyd.
The question now is whether Claflin can make things happen quickly enough.
By Paul C. Judge in Boston
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Updated July 4, 1997 by bwwebmaster
Copyright 1997, by The McGraw-Hill Companies Inc. All rights reserved.
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