Entrepreneur: Ken Olsen
by Miki Saxon
Ken Olsen, who, in 1986, Fortune magazine called “America’s most successful entrepreneur” has died.
That won’t mean much to many of you. In fact, many won’t recognize the name of his company, Digital Equipment Corporation, better known as DEC, or the minicomputer it built.
54 years ago Olsen used $70,000 seed money and built a company second only to IBM, with 120,000 employees working in 95 countries.
Ken Olsen may have been an autocratic manager, but his approach to people differed greatly from the norm of the time.
In Digital’s often confusing management structure, Mr. Olsen was the dominant figure who hired smart people, gave them responsibility and expected them “to perform as adults,” said Edgar Schein, who taught organizational behavior at M.I.T. and consulted with Mr. Olsen for 25 years. “Lo and behold,” he said, “they performed magnificently.”
What happened?
Olsen and DEC were brought down by the same attitude that almost killed IBM and is best summed up in Olsen’s own words.
“The personal computer will fall flat on its face in business.”
It is a lesson that entrepreneurs should learn: no matter how successful your company holding on to the present and ignoring or minimizing the changes in your markets can be a death sentence.
Olsen was ousted by his board because of that refusal to change after 35 years of success; six years later DEC was sold to Compaq (long before Compaq was acquired by HP).
There are many lessons to be learned from Olsen’s story, but one of the most important is found in his attitude towards people. Olsen always hired the smartest people possible, told them what he wanted and then got out of their way. He unequivocally believed that
“Our employees are our greatest asset.”
Image credit: Wikimedia Commons
