An Wang: getting to the essentials

Nation's Business, Dec, 1987 by Karen Berney

An Wang: Getting To The Essentials

An Wang sits calmly sipping Chinese tea in his sparsely decorated office. Asked what inspired him to invent a machine that could manipulate type on a display screen, the precursor of the personal computer, he speaks not of a technical vision but of the plight of office workers.

"I felt secretarial work was real drudgery," he says. "If you made typing mistakes, you would have to retype the entire document. So why not put the information on a screen where it could be easily erased and edited?" He pauses. "It was really all about trying to make office workers more productive so they would get more enjoyment out of their jobs."

In an industry known for high-profile entrepreneurs, An Wang, the 67-year-old founder, CEO and chairman of Wang Laboratories, Inc., has managed to hold on to his privacy and modesty. He is reluctant to talk about himself and his accomplishments, and when he does, it is in sentences as uncluttered as his surroundings--he likes to get right to the point.

A popular in-house joke: When the "Doctor," as his employees affectionately refer to him--he holds a Ph.D. in applied physics from Harvard--gives a major speech, don't bother to sit down, because he is not going to keep you for more than five minutes.

But don't let his reticence fool you. It masks an aggressive and decisive businessman. Lately he has had to be. Over the past few years, the $2.8 billion, 30,000-employee, Lowell, Mass., computer giant that Wang launched with $500 in savings in 1951 has been taking a beating. Only recently has the firm shown signs of a recovery.

In the early 1980s, after a long period of breathtaking growth--between 30 and 40 percent a year--Wang Labs' star began to fade. Quite simply, the company did not foresee the personal-computer revolution. While its competitors were offering desktop machines that could both edit text and crunch numbers, Wang was still selling word processors that were only good for creating documents.

Then, just as the firm was readying a new computer line to meet the competition, a slump hit the industry, causing Wang to lose $109 million in the fourth quarter of 1985--its first red ink in more than 10 years.

What happened? "We had become a little complacent," reveals Wang in his autobiography, Lessons (Addison-Wesley, 1986). Indeed Wang appears to have missed the most important lesson of his career: He failed to sense a shifting market and diversify Wang's products in time to exploit new opportunities. As he writes: "Markets change, tastes change, so the companies and the individuals who choose to compete in those markets must change."

Wang believes in risk-taking and learning from mistakes--another of his Lessons. He went on the offensive. He had handed over the corporate reins to a five-member executive committee including himself for the previous two years. In 1985, he took sole control again, disbanded the committee and embarked on a brutal work schedule. For months on end he boarded plane after plane in a cross-country tour to rejuvenate the sagging confidence of customers and employees. And in what must be strong medicine for a man renowned for his generosity to employees --stock options, free country-club memberships and subsidies for tuition and child care are among the firm's many benefits--Wang has eliminated more than 2,600 jobs from the payroll since 1985.

The firm's seven regional centers were turned into autonomous profit-and-loss centers. Whereas the regional vice presidents had previously needed headquarters' stamp of approval on major business decisions, they now had the freedom to run their own shows. "Because we were growing so fast, we kept hiring more people and building up layers at the top that were not essential," Wang explains. The firm had become bureaucratic and slow to react.

Hard times persist at Wang Labs, but analysts believe the Doctor has put his brainchild back on track. Wang showed modest profits in the last two quarters of 1987 and reported stronger-than-expected earnings and revenue growth for its first quarter of 1988. With demand up and costs down, Wang should continue to rebound through next year, maintains George Elling, an industry analyst with Oppenheimer & Company, Inc., of New York.

In late 1986, Wang again withdrew from day-to-day management and, following a Chinese tradition, bequeathed the business to his eldest son, Frederick, Wang Labs' 37-year-old president. "He is the visionary, and I'm the implementer," says Fred Wang of the father-son team.

That vision, adds Fred Wang, springs from a sensitivity to the workers who use Wang products. "A lot of high-tech companies take their lead from engineers," he contends. "We take our lead from our users."

An Wang began to develop his feel for the user back in China. In 1942, at 22, Wang joined the Chinese Nationalist Army and designed a radio that soldiers could quickly learn to operate. Three years later he would be studying at Harvard University. With civil war convulsing his birthplace, he chose to stay in the United States after earning his doctorate in 1948.