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COLLECTION Identifier: MSS:6592 1940-2011 O474

Kenneth H. Olsen collection

Overview

The Kenneth H. Olsen collection documents the work of computer engineer, entrepreneur, and co-founder of Digital Equipment Corporation and President of the company from 1957-1992.

Dates

  • 1940-2011

Creator

Conditions Governing Access

Collection is open for research. Materials stored onsite. Please contact specialcollectionsref@hbs.edu for more information regarding access procedures.

Restricted material has been identified and separated. Note that box and folder lists of restricted material have been redacted.

Digital use copies have not been made for audiovisual material in this collection. Collection restrictions, copyright limitations, or technical complications may hinder Special Collections' ability to provide access to audiovisual content. For further information please contact Special Collections.

Extent

84 linear feet (85 boxes, 36 cartons, 24 volumes)
48.9 Gigabytes (3 digitized video files)
This collection documents the life and career of Kenneth H. Olsen as computer engineer, entrepreneur, and business leader.

The Kenneth H. Olsen Collection contains materials dating from the 1940s until Olsen’s death in 2011. The bulk of the material dates from the late 1950s to early 1990s, coinciding with Olsen’s 35 years as president of Digital Equipment Corporation (DEC). Records in this collection related to DEC provide a broad overview of the history of the company and Olsen’s role as co-founder and president from 1957 to 1992. Correspondence files document Olsen’s internal communications within DEC and with outside business and government figures, and dates from 1976 to 1992. Speech and presentation files include speeches by Olsen and supporting documents on topics related to DEC, the computer industry, and business leadership to both internal and external audiences from the 1960s to the 1990s. The collection includes records from the 1950s to 1990s that document the private equity firm American Research and Development (ARD) that provided the initial funding for DEC in 1957, and ARD’s founder Georges Doriot who was a lifelong professional advisor and personal friend of Olsen. Biographical materials from the 1940s to 2011 include records of Olsen’s education, early professional experience at the MIT Lincoln Laboratory, appointments calendars, professional activities outside of DEC, and personal papers related to his family and religious faith.

The materials include correspondence, memoranda, founding documents of DEC, board of director records for DEC and ARD, annual reports for DEC and ARD, administrative records, personnel records, product design records, technical drawings, schematics, photographs, DEC publications (brochures and manuals), newspaper and magazine clippings, speeches, presentations, class notes and handouts, yearbooks, undergraduate and graduate theses, diplomas, awards, calendars, notebooks, published books, and audio and visual recordings.

For additional detail, there are scope & content notes describing the contents of many individual folders.

Biographical / Historical

Kenneth Harry “Ken” Olsen was a computer engineer and entrepreneur who transformed the computer industry as the co-founder and president of Digital Equipment Corporation (DEC). Born February 20, 1926 in Bridgeport, Connecticut, Olsen grew up in the neighboring town of Stratford. Olsen took an early interest in electronics as a teenager by fixing radios in the basement and setting up a transmitter with his younger brother Stan.

After graduating from Stratford High School in 1944, Olsen enlisted in the Navy and completed a prestigious 11-month training course in Elementary Electricity and Radio Materiel at the U.S. Naval Training School. Olsen was aboard a troop ship on the Pacific Ocean when Japan’s surrender ended the war, but served as a radio technician aboard several ships operating in China and Korea in the ensuing year. After mustering out of the Navy in 1946, Olsen enrolled at the Massachusetts Institute of Technology (M.I.T), where he studied electrical engineering. Olsen wrote his undergraduate thesis, “An Automatic Resonator for High-Frequency Heating Generators,” and received his B.S. degree in 1950. He continued at M.I.T. for his graduate studies in electronics, submitting his thesis “A Magnetic Matrix Switch and Its Incorporation into a Coincident-Current Memory” and earning a M.S. degree in Electrical Engineering in 1952.

Simultaneous with his graduate education, Olsen began his first professional experience working at the MIT Lincoln Laboratory at Hanscom Air Force Base in Lexington, Massachusetts in 1950. Olsen joined the Whirlwind I computer project under the leadership of Jay Forrester. Project Whirlwind began in 1947 with the goal of supporting air defense networks and pioneered real-time interactivity with users, a graphic display, and the use of magnetic-core memory. Between 1952 and 1953, Olsen was granted permission to build the Memory Test Computer (MTC) based on ideas he had proposed in his M.S. thesis. As a result of the success of the MTC project, Olsen was asked to oversee the engineering development in 1955 of the TX-0 (Transistorized Experimental computer zero) which was a version of the Whirlwind computer with vacuum tubes replaced by transistors, making the TX-0 smaller and faster. Olsen’s team moved on to working on a TX-1 computer, but when this proved too complex, it was redesigned as the smaller TX-2 computer. The TX-2 computer was still under development when Olsen left the Lincoln Lab in 1957 to found his own company.

Olsen partnered with his Lincoln Lab colleague Harlan Anderson to form a company that would manufacture and sell computers with the interactive computing features they had developed for the TX-0 and TX-2. They approached the American Research and Development Corporation (ARD) in 1957 with business plans to fund the Digital Computer Corporation, and received an investment of $70,000 in equity and approximately $2 million in loans. Founded in 1946 by renowned Harvard Business School professor General Georges Doriot, ARD was the first publicly funded venture capital firm in the United States and one of the first two venture capital firms along with J.H. Whitney & Company. ARD focused on investing in businesses started by servicemen returning from World War II with a particular interest in new technologies.

Doriot, known as “the father of venture capitalism,” took a personal interest in the companies ARD invested in beyond simply funding them, referring to the companies as his “children” and mentoring the company’s leaders through the difficult early years of business. Because several computer companies had failed in the 1950s, Doriot advised Olsen and Anderson to change the name of the company to Digital Equipment Corporation so that name would not include the word “computer” and potentially scare off investors. Doriot’s faith in DEC would pay off, as the company became and early and significant venture capital success story. At DEC’s initial public offering in 1968, ARD’s initial investment would be valued at over $38 million, a return of over 500 times on the investment. Doriot would continue to be key advisor to Olsen and the pair formed a lifelong friendship. Olsen would also later serve on the ARD Board of Directors from 1966 to 1976.

With seed money in hand, Olsen and Anderson hired Olsen’s brother Stan as the first DEC employee and began operating out of an 8,680 square foot space they leased in a former woolen mill along the Assabet River in Maynard, Massachusetts. The Civil War-era mill would serve as the headquarters of DEC for the next 35 years. Olsen and Anderson’s initial plan focused on establishing the company’s financial footing before manufacturing computers, so the first DEC products shipped in 1958 were logic modules sold to other computer companies. When DEC showed a profit in its first year, Doriot commented "I'm sorry to see this - no one has ever succeeded this soon and survived."

Olsen and Anderson began the next phase of their plan in 1959, producing DEC’s first computer. Continuing to follow Doriot’s advice, they did not use the term “computer” to describe their machine, but instead called it the Programmed Data Processor-1 (PDP-1). DEC’s vision for the PDP-1 and ensuing products was to replicate for business the user experience provided at MIT and the Lincoln Labs. Users could interact with a computer directly through a keyboard and monitor in real time. This contrasted with the IBM mainframe model where the computer was kept behind glass and users had to submit a punch card to a technician, who delivered their results much later. BBN Technologies in Cambridge, Massachusetts tested the PDP-1 prototype at Olsen’s request, and then purchased the first PDP-1 produced in November 1960.

Harlan Anderson left in 1965, leaving Olsen as the sole leader and President of DEC. Olsen decided to reorganize DEC along a product line structure. A senior executive was placed in charge of shepherding a product through each stage of its lifecycle – development, manufacturing, and sales. The product line manager would advocate for the resources needed for their product before an Operations Committee made up of Olsen and the vice presidents of Products, Manufacturing, and Sales. DEC employees would not work in a corporate hierarchical structure, but would instead report to managers in both the product lines and traditional functional areas. This organizational structure received widespread praise and emulation in the business community and became known as “matrix management,” although Olsen preferred not to use that term.

According to The Ultimate Entrepreneur by Glenn Rifkin and George Harrar, this management structure encouraged an egalitarian and participatory environment at DEC that allowed many employees to feel they had buy-in and creative freedom. Olsen also introduced the idea of “Woods Meetings” where a small group of DEC employees would meet for a full day at an offsite location (usually Olsen’s backwoods cabin at Heald Pond in Maine) to discuss a single topic of significance. Because Olsen believed that retaining employees benefitted DEC in the long run, the company refrained from laying off employees during economic downturns (there were no layoffs at DEC until 1988). DEC also avoided firing employees for failing at their jobs, instead retraining them for positions more suitable to their talents. Olsen also received praise for paying the full salaries for DEC employees who were unable to work for a week due to historic blizzard of February 1978. Rifkin and Harrar cite all of these factors for DEC’s employee loyalty and unusually low turnover for the computer industry.

DEC introduced a new computer in 1965, a smaller, faster, and less expensive machine called the PDP-8. The PDP-8 was the first machine called a “minicomputer” since it was the same size as a household refrigerator compared with room-sized mainframe computers. The PDP-8 achieved great commercial success and created a new minicomputer sector of the computer industry that DEC would dominate for the next 25 years. DEC introduced the PDP-11 in 1970 which included the innovative Unibus that made it not only easy to plug in peripheral devices, but was also able to network with other machines. In 1975, the company released DECnet, a suite of networking protocols that put DEC in the vanguard of computer networking into the 1980s.

Despite DECs success at introducing smaller and more interactive computers to the market, Olsen and the company were caught off guard in the late 1970s by the introduction of the microcomputer, or “personal computer.” Olsen saw home computers as the province of hobbyists and video game players, and wanted to focus DEC on computing for the commercial market. Since businesspeople could gain desktop access to a powerful minicomputer like the PDP-11 through time-sharing, Olsen did not foresee the adoption of the personal computer by business users. DEC engineers and senior executive prevailed despite Olsen’s misgivings about entering the personal computer market, and DEC debuted its Pro and Rainbow models in 1982. While the personal computers were elegantly engineered to meet Olsen’s desire to produce a higher quality product than the competitors’ models, DEC was late to the market. It could not compete with existing personal computers on price, nor were the DEC models compatible with existing software. This resulted in the first major failure in the company’s history. DEC celebrated its 25th anniversary with the Town of Maynard hosting a large celebration on April 19, 1983. Rifkin and Harrar note that behind the scenes the company was in turmoil with prominent executives and engineers leaving the company and poor earnings due to the failed entry into the PC market. Olsen reorganized the company in 1983, ending the product line structure, and rallying the company behind the motto “One Company, One Strategy, One Message.” He also decided the company should refocus their efforts on the minicomputer industry, especially building on the VAX (virtual address extension) architecture that DEC developed in the mid-1970s to replace PDP. The VAX 8600 line introduced in October 1984 proved to be one of DEC’s most successful minicomputers and headlined a major turnaround for the company. DEC also worked with Xerox and Intel to promote Ethernet as the standard technology for networking in the 1980s.

In 1986, Olsen instituted an annual single-company trade show called DECWorld (as well as a European variation known as DECVille). DECWorld ’87 proved to be so popular that Olsen leased the Queen Elizabeth II and Oceanic cruise ships to provide the necessary hoteling space for attendees berthed adjacent to the show at Boston’s World Trade Center. In the mid-1980s, DEC competed head to head with IBM for the first time and grew to be the second largest computer company. Olsen featured on the cover of the October 27, 1987 issue of Fortune magazine under the headline “America’s Most Successful Entrepreneur.”

Another economic downturn in the late 1980s hit the computer industry hard, particularly the minicomputer sector. Improvements in personal computers also meant that there was no longer a market for low-end minicomputers. DEC’s own entries into the personal computer market continued to lag behind its competitors. And efforts to retain the high-end minicomputer market hit roadblocks when the VAX 9000 was introduced two years late in 1991 and suffered many problems. That year DEC reported its first losses in company history. The New York Times’ obituary for Olsen noted that criticism grew within DEC at this time to his increasingly top-down management approach and his resistance to industry trends. In June 1992, the DEC Board of Directors forced Olsen to resign and replaced him with Robert Palmer as the company’s president. DEC was acquired by Compaq in 1998.

Beyond his responsibilities at DEC, Olsen also served on the board of directors for the Polaroid Corporation and the Ford Motor Company in the 1970s and 1980s. Olsen was also a life member of the MIT Corporation – his alma mater’s board of trustees – beginning in 1971. Along with longtime DEC engineer Gordon Bell, Olsen worked to preserve computer history, starting with the Whirlwind computer and DEC’s own machines. In 1975 the first exhibits of the Digital Computer Museum were displayed in the DEC lobby. A fully-dedicated facility, now called The Computer Museum, opened in 1984 on Museum Wharf in Boston. The Computer Museum ceased operations in 1999 but its collection was incorporated into what would become the Computer History Museum which opened in Mountain View, California in 2002. Olsen also founded a technology start-up called Advanced Modular Solutions, Inc. in 1995 and served as the company’s chair until it ceased operations in 1999.

Olsen was dedicated to his Christian faith, which also informed his business principles. He worshipped at the Park Street Church in Boston where he was a deacon and in the 1950s and 1960s he was the director of religious education for youth. In the early 1970s, Olsen created the Stratford Foundation which dedicated 2% of DEC stock annually to support Christian philanthropies. One of the beneficiaries was Gordon College, a Christian college in Wenham, Massachusetts where Olsen also served on the Board of Directors beginning in 1961. The Ken Olsen Science Center at Gordon College, funded by the Stratford Foundation, was dedicated in 2008.

Olsen married Eeva-Liisa Aulikki Olsen in 1950 and they remained together until her death in 2009. They had three children: Glenn, Ava, and James. Ken Olsen died February 6, 2011 in Indianapolis, Indiana.

Arrangement

There are 7 series in the collection: Series I – Digital Equipment Corporation (DEC) records, 1951-2011; Series II – Correspondence files, 1976-1992; Series III – Speech and presentation files, 1957-2000; Series IV – Materials related to American Research and Development and Georges F. Doriot, 1952-1991; Series V – Biographical materials, 1940-2011; Series VI - Audiovisual matierials, 1951-2010; and Series VII - Digital Equipment Corporation (DEC) publications, 1960-2011.

Physical Location

MANU

Immediate Source of Acquisition

The Kenneth H. Olsen Collection is on permanent loan from Gordon College. The permanent deposit agreement was signed November 16, 2018.

Processing Information

Processed: July 2019 By: Liam Sullivan
Link to catalog
Author
Baker Library
Description rules
dacs
Language of description
English
EAD ID
bak00767

Repository Details

Part of the Baker Library Special Collections, Harvard Business School, Harvard University Repository

Baker Library Special Collections holds unique resources that focus on the evolution of business and industry, as well as the records of the Harvard Business School, documenting the institution's development over the last century. These rich and varied collections support research in a diverse range of fields such as business, economic, social and cultural history as well as the history of science and technology.

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