The leaving of Craig and Judith marked the beginning of the end of Novell's revolutionary period. After they left Novell would make money, but not history. But that was not clear at the time, and Ray was not about to give up "shaking the world" just because Craig and Judith were gone.
As the late eighties turned into the early nineties, Ray acted as if he decided that the minicomputer companies were beat -- Novell had done its job against them, and a new battlefield was needed.
Novell was not the only personal computer-oriented company that was rising over the collapse of the minis, Microsoft was another. Not only was Microsoft prospering mightily, Bill Gates had personally vexed Ray on at least half a dozen occasions while Novell and Microsoft were both carving out identities and market share in the eighties.
Microsoft became Ray's next target, and he chose to take it head on. He was going to out-Microsoft Microsoft.
This was an ambition truly worthy of the billion-dollar company Novell had become, and Ray's acquisitions of the early nineties reflected it: Lotus for a spreadsheet to compete with Excel (though this acquisition was not completed), WordPerfect for a word processor to compete with Word (plus a groupware package -- Groupwise -- to replace what Notes would have brought from the Lotus merger), Digital Systems for a workstation operating system to compete with Windows, UNIX from Bell Labs for a server system and development tools, and venerable Netware for a LAN system.
The spirit was willing, but Ray without visionary Craig and presenter Judith, was weak. All of these companies Ray acquired were "over the hill" in terms of their market presence. They had all been leaders in their market at one time, but that was a couple years to a decade ago -- none had adapted well to the Windows environment. They were now in second or third place, and putting out "me too" products that followed Microsoft's lead.
To out-Microsoft Microsoft, all these new acquisitions were going to have to perform heroically, and they were going to have to stretch to reclaim past glory. Getting all these new acquisitions to march to this out-Microsofting Microsoft drummer was the job for a visionary. But, while the senior managers Ray had brought into Novell in the late eighties were highly qualified managers who were steeped in industry experience, they were steeped in minicomputer industry management experience, not personal computer industry history making experience. These senior managers had seen the personal computer industry swallow their companies, but they didn't understand why that had happened. Ray tried, but he found that they were not personal computer visionaries, and he could not call on them to do what Craig and Judith had done.
What this new generation of senior managers did understand was company politics. People are the same no matter what industry they are in, and these people had risen in the minicomputer industry because they were good with people.
Ray's management style was not particularly visionary, he was the deal maker, and a deal maker functions best when he keeps his hand close to his chest. It was Craig and Judith who had compensated for that, and kept Novell rank-and-file looking out, out at the market they served, out at the technology that was growing around their industry, and out at how they were building an industry.
When Craig and Judith fell out of favor, it was a sign that looking out was not the road to success at Novell any longer. Those who stayed with Novell after Craig and Judith left found their fortunes at Novell depended much more on what was happening within Novell than in the outside marketplace. This was a condition these new experienced managers had all seen before -- some many times -- so they adapted very quickly. Within weeks the "glib defectors" were making new policies, and making them to protect their incipient fiefdoms. There was a flurry of memos about how Novell employees should communicate with others, and those memos all ended with an ominous paragraph announcing that ignoring these new policies was "subject to immediate termination." This was the first time this kind of wording had shown up in Novell memos. It marked a distinctive change in the company ground rules.
With startling speed, Novell became a rather average billion-dollar-in-sales-high-tech-company: Most of the senior management worked out of the Silicon Valley area to keep up appearances and to stay in touch with the flow of ideas in the valley. Production parts of the company were farmed out to lower cost hinterlands, such as Utah and Texas. At the New Novell it was not important that the production people have access to the idea flow that senior management did, and ideas generated within the production areas of the company received no more consideration than ideas that flowed around Silicon Valley. The result was a steady loss of anything distinctive about Novell ideas and implementation.
Another Ray practice exaggerated the problem of Novell turning in on itself. When Ray was in "company doctor" mode, he would have layoffs -- in his words, he wanted a company to breathe. But layoffs are a tool that cuts many ways. When a company is in a life-threatening crisis -- and most members of the company feel that the crisis is real -- layoffs can do what they were supposed to: "get rid of deadwood" so the company can cut costs and survive. Layoffs in such a time of crisis work because the company as a community sees the necessity of getting more efficient, and the company acts as a community to make layoff decisions within that survival context. This was the mood of most of the companies when Ray came into to turn them around, so his first rounds of layoffs at these companies worked.
But when layoffs become a ritual which occurs periodically, serious crisis or no, different thinking emerges within the company community. When most of the company members see layoffs as periodic and with no accompanying crisis, then the layoffs become a tool for solving factional disputes. "Deadwood" is redefined: the first definition becomes "people who are threatening to those with layoff power", and the second becomes "those people whom those with layoff power just plain don't like."
In the early nineties Ray would announce layoffs and justify them as happening because a quarter was soft and earnings weren't rising fast enough. This was hardly a life-threatening crisis to the Novell community, so factionalism was given a great boost. This changed workplace priorities: in the early nineties at Novell, time and attention devoted to getting protected from layoffs was time and attention well spent.
In sum, watching what happened within Novell was important to survival at Novell, so the company watched itself a lot.
The silver lining in the layoffsWhile the layoffs were traumatic for anyone that got caught up in them at Novell, they did have on beneficial side effect: a lot of good people with a lot of good ideas found themselves hitting the pavement in Provo. The "Novell Alums" started a whole bunch of new companies that became the core of Utah's Silicon Valley. |
When Ray was being "company doctor" and laying people off, he was -- taking a term from my essays on politics -- being a ruthless leader. Ruthless leaders thrive on crisis and percieved threats. When he was laying people off in times of plenty with no appearant crisis, he was stepping over the line of what is appropriate behavior for a ruthless leader, and he lost support. He could do this for a while, but with each layoff without crisis, he was making enemies in the company, and those enemies would do their best to stop the terror of more layoffs in the future.
These periodic layoffs strengthened the powerful, experienced faction leaders who did not owe him much loyalty, and he lost the naive young people whom he had "made" and were loyal to him. Finally, in the mid-nineties an all-too-familiar theme in Ray's business career happened again, he lost control of the company.
So, in the end, it seems that Ray needed Craig and Judith as much as they needed him. Novell of the eighties truly was a "magic moment" in the history of business, and when it shattered, everyone had to move on.
When Ray left, as when Craig and Judith left, his legacy had to be dismantled. The vision of out-Microsofting Microsoft was abandoned, and the acquisitions of his final three years were dismembered. With Ray's departure, Novell became totally immersed in the flow of "professional ideas", and has not produced any "history making" since then.