History:Culture Shock

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Title: Culture Shock
Author: Clint De Gabrielle - Tymnet, President
Created: March 17, 2005

Mc Donnell-Douglas purchased Tymshare and then went about integrating the various elements of Tymshare into McDonnell-Douglas. It became a culture shock for both Companies. Tymshare had always been a very dynamic Company that built itself by aggressive actions, whether in acquisitions, sales activities or in internal development. McDonnell-Douglas had a culture that required constant review of operations and strict rules on change.

In the early days after the acquisition, Mc Donnell Douglas was surprised by the amount of freedom that Tymshare managers and employees had to make decisions and to take action. They found that their rules were not always followed and that actions were taken that they considered risky. When more of these actions turned out successful than not, they were even more surprised since their culture believed that any decision needed at least two levels of approval before it was implemented.

Much of the busines and technology of Tymshare was strange to McDonnell-Douglas and its people. As a result the discomfort caused by the Tymshare methods of operation led to some questionable decisions on the part of McDonnell-Douglas. One of these was to move the manufacture of the Tymnet Engine to a McDonnell-Douglas minicomputer manufacturing facility in Irvine California. Where once the manufacturing was done down the road by Tymshare people it was now done miles away by an organization that had a set of rules that didn't fit well with the dynamic growth of Tymnet and it's Private Network business. Now Tymnet was required to provide a six month forecast of needs by specific configurations and the products were transferred to us by a cost developed by the Irvine facility. The Tymnet cost for Tymnet Engines rose by 15%-20% and delivery turn around that had been thirty days became six months. Where before when we had a special requirement for delivery or configuration, we could go down the road and sit down with the Manufacturing Manager and work out the problem, we now went through a set change order procedure that required two levels of approval on the Tymnet end and an additional two levels of approval at the Irvine facility. Where once we were able to turn around in about thirty days we now found ourselves needing four to six months to effect change.

The financial area of the business was also put under McDonnell-Douglas systems. A McDonnell-Douglas employee became the resident Manager of Finance in San Jose and the budgeting, cost reporting and disbursement processess were conducted in conformance with the McDonnell-Douglas systems. The incentive compensation system for Sales Represenatives came in for close scrutiny, when it was discovered that several Sales Reps. were making six figure incomes, so when a new year's sales plan was set up, the Finace Department became involved in setting quotas and attempted to establish limit on earnings. The limit was given up but quotas were established based on the previous years performance, with no regard for one of a kind happenings. This caused a number of problems that resulted in quota setting being returned to Tymnet the next year. I don't think that the acquisition was ever comfortable for McDonnell-Douglas, even though Tymshare performance beat expectations year after year.