Victor and all -
Posted this on the Yahoo thread and thought it might be of interest.
CPQ does not have an “antiquated pyramid hierarchy”. CPQ has a fairly flat hierarchy compared to many other large companies and is actually leaner and flatter than MSFT in that respect. The former DEC organization is an exception but I think that will change when integration is complete.
CPQ's current structure has only 2 steps between line product managers and EP. EP's direct reports (with the exception of staff functions) own a general product category (enterprise, desktop, consumer, services) or a geography (North America, Europe and Middle East, etc.)The next level down has specific product responsibility such as storage systems or servers.
The level below that has direct responsibility for individual products - these are the product managers. The product manager owns the product concept, marketing, manufacturing requirements, distribution planning. In order to remain agile, product managers have broad freedom to develop their products within parameters defined when the product concept is approved. They do not need the approval of anyone but their boss to make changes – this is referred to as "one over" control. The assumption is that those people closest to the business have the best idea of how to make their products successful.
So for example the product manager who owns the high end proliant products has only two people between him (or her) and EP, and only one of those people (the head of the server division) needs to approve the product development roadmap.
In contrast, at Microsoft, there are four levels of management above the product managers. The recent re-organization did not change this structure significantly. So for example the product manager responsible for embedded NT reports to the guy who owns NT development, who reports to the guy who owns enterprise products, who reports to the guy who owns all products, who reports to Gates. So MSFT has at least one more layer of management than CPQ, and in some cases two layers.
As far as open communication, CPQ has well defined escalation procedures which would allow anyone in the organization to go over his boss to get attention to a problem. This is done quite often on an informal basis, and there are periodic reviews which surface issues which might otherwise get overlooked. One forum is the strategic planning group which reviews all major programs and roadmaps to assure consistency across the company, and another is the portfolio review process which determines if resources are being devoted to corporate objectives in the right proportions.
With all of its problems, CPQ is still one of the best managed high-tech companies in the world. I am familiar with the way that HP and IBM are managed, and there is no comparison – CPQ is much more efficient. It was only a year ago that CPQ had the untouched record for revenue per employee at more than $1M. By way of comparison, IBM and HP were about a third of that number, and DELL was less than half. DELL has efficient management, but they are really comparable to one of CPQ's product groups both in size and structure.
Let's not throw the baby out with the bath. One of CPQ's great strengths is efficient management and great internal communication. The DEC acquisition, and the introduction of more than 50,000 people who had grown up in a very inefficient culture, has caused some disruption in that model, but CPQ will solve that problem.
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