The Los Angeles Times from Los Angeles, California • 46

6 Part I larch 28 1083 LOCI AncleleCt 67ittlet1 ROLM: How Santa Clara Firm Sold High Tech to Japan '81 DATSUN 280 TURBO ZX (Ser 03251) EST SEW Need reliable party to make reasonable monthly pymts No old contracts to assume or back pymts due Call Mr Cummins Sun Datsun (213) 943-7191 thought of before" The Ito lin team in Japan quickly kindled the Nippon Telephone testers Off for an extended lunch and put Ill II emergency call to California The call reached Schwarz at home late in the evening and he hurriedly tried to pull loget her as many experts as he could Some had to be taken out Of night classes at Stanford 14sor- one top telecommunications expert w'hose phone was ironically out of order Schwarz persuaded the local police to drive to the man's house When I he Nippon Telephone testers came hack from I unch the problem was solved The Japanese Rohn team went out to celehrate Schwarz and the Santa Clara group went home to lied The next morning in an executive meet mg with Rohn President Ken Schwarz put in a call to Japan to get the Rolm team's report on the previous days success I lowever after a night of celebrating everybody in Japan was too smashed to make a presentation "I've kept a recording of that conversation for my scrapbook" Schwarz laughs On March 2 5 1982 Rolm became the first company to receive "type" approval for digital PBX systems in Japan MA A RAPID EXPANSION ontali HAS STARTED tmi -I Will it continue? Get the outlook for business activity in the US and California in 1983 and beyond at the UCLA FORECAST CONFERENCE Thursday afternoon March 31 1983 at Schoenberg Hall UCLA For program and reservations call (213) 825-1623 or 206-8642 FEE: $6000 the world's leading digital PBX firms it also helped Nippon Telephone develop those new digital specifications "So we had a pretty good idea what the dtgual specs would be There were no surprises" Schwarz says lowever there were still some problems One was to persuade Nippon Telephone to accept a "black box" approach focusing On what came out of the PI1X into the intercoil nection not how the l'13X worked This was critical because i fundamental change in the l'13X itself might make the vv hole project economically unfeasible for When the specifications were first published in Japan in September 1981 (eight weeks later in English) Rohn was pleased to find that Nippon Telephone had indeed opted for the "black box" approach Trade Secrets at Issue A second problem was that Nippon Telephone wanted to know about the structure of the software used in the Rolm digital PBX key to Rolm's competitiveness "We weren't prepared to give it to them" Schwarz says But at the same time he didn't want to risk their anger by saying no So Schwarz tried a different tack: Ile pointed out to Nippon Telephone that the Australian telecommunications system one of the most admired in the world had never felt the need to ask for such information It worked the Japanese withdrew their questions In the nine months between the announcement of the Nippon Telephone-US agreement and the publication of the digital specifications Rolm worked feverishly Not only did the firm's employees prepare 2000 pages of documentation based on the old electromechanical specifications but more important and according to Schwarz the key to Rolm's success when they finished each section of the documentation Rolm's negotiators showed it to their peers at Nippon Telephone for their comments Thus by September Rolm knew that all its basic documentation would be approved Schwarz and his people heaved a collective sigh of relief when the digital specifications appeared and confirmed their only dealt With 10 of the M4 ATTENTION SMALL MEDIUM SIZE COMPANIES Does your business need new capital increased sales? 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A 1982 EIT Deduction ates ii or esstune Celtificate accounts stilled In penalty for ear ly fedemption Rates ind yields quoted ate on an drillthil This IS a funded offer to California residents only sluvERTAG0 I When should you buy? cALLIFort FREE BROCHURE EMI xE4 MtIA PITERNA 0 Kateni tote I CALL ro NEE mum TOL FREE Oriou ma MIK CA os Al000loolCo 907206012131 49344551-100-121-4480 4-100-112-1341 Continued from First Page Telephone exectitl ye as straighttorward as any he had dealt vithin the Far was no sign of sat le rade barriers being quiet ly erected to stop Rolm Nevertheless Schwarz says the task wasn't easy For example the material did contain a Weal of informa tion about Nippon Telephone's markets distribution systems and equipment it also v'as in Japanese and needed to be translated The next year Schwarz says "was the fun part" of I he negotiations mainly because they weren't yet weighed down with details Schwarz made half a dozen trips to Japan These trips had two objectives: to put together an effective distribution network in expectation of eventual success and to continue to convince Nippon Telephone of the value of digital equipment By the end of the year the distribution network was in place and ready with Sumitomo Corp as Rolm's trading partner and Omron Tateisi Electronics Co handling sales and service The negotiations with Nippon Telephone were also moving smoothly if imperceptibly forward Most of the time Schwarz says these meetings took place in the evening over dinner at an old-fashioned restaurant at which both sides carefully tested the waters through great tact and carefully orchestrated ceremony Hours of Preparation "The Japanese executive puts in a 51 2-to-6-day workweek with 12-hour days So a workday often ends with a dinner meeting lasting until 11 at night" And these dinner meetings require as much preparation as one during the day Schwarz adds He says he often spent two hours beforehand carefully whittling down his thoughts to a few key questions He knew that the gentlemen sitting across the table would have made the same preparations During these early meetings the Japanese questions revolved around Rolm and the American telecommunications industry Schwarz's questions tried to ferret out what the eventual Nippon Telephone digital specifications would be "To the Japanese change comes in small degrees" Schwarz says "You need to set up everything long beforehand so on D-Day all the aspects come together harmoniously" Harmony was also central to the dinners themselves Geishas between 70 and rigor mortis" Schwarz says) served the food and provided music Seating was carefully arranged so that Schwarz sat directly across from the highest-ranking member of the Nippon Telephone contingent The initial sake toast was made by this toast if his presence was entirely ceremonial many and with feeling if "you're OK" Schwarz was then expected to wash out his sake glass in a bowl of strong tea in the middle of the table and then present it with great deference to the toaster At this point the other members of the contingent were allowed to speak in order of heirarchy By the middle of the meal many conversations would be going at once and Schwarz would be able to pick out the person he wanted to talk to and conduct an in-depth conversation The evening usually ended with singing Manners Are Important Yet despite all this ceremony Schwarz is convinced that the average American businessman can succeed quite well at these meetings with certain preparations regarding the business discussions (learn their names and make sure no one loses face when you discuss a problem and standard polite American table manners "Of course" he adds "if you're dealing with a US-educated Japanese executive you can throw all the ceremony right out the window because what he wants to know is who's going to be in Alabama's football lineup next year" By November 1980 it became increasingly apparent that Nippon Telephone would soon be signing an agreement with the US government to allow the interconnection of US-made equipment (it was signed Dec 27 1980) In preparation Schwarz went to Nippon Telephone and asked how Rolm could implement the agreement "That's when the real work started" Schwarz remembers On Jan 3 1981 Bill Crowley an expert on Japan was hired to direct the firm's Japanese operations "And everything welt into high gear" Schwarz says Despite the fact that Nippon Telephone had as yet released no digital specifications Rolm went ahead with its initial documentation and translation based on the Nippon Telephone electromechanical specifications Rolm was betting that the new specs would be close enough to the old ones that only a few additions and corrections would need to be made Rolm was hedging its bets in another way As one of IRSTU 1ED I RI LOA Li SALE! 3928 Wilshire Blvd Los ttngeles 21374804121 'Our 30th ea Product Had to Be Tested By Dec 15 the entire documentation was ready for submission The date was crucial because Rolm wanted to finish before Crowley's wife had a baby due Dec 18 But an error in the material forced the documentation team to go back and make some changes So the documentation wasn't ready until Christmas Day (Fortunately mother and baby obliged by waiting until Dec 29) But documentation approval was only the initial step According' to the agreement Rolm had to produce a testable working product within three months Hardware and software changes were required in Rolm's existing product so teams from both these disciplines set to work In the final weeks before the presentation some employees worked 24 hours a day The presentation was made at Omron's facility in Japan in early March 1981 The Nippon Telephone approval process takes two days A staff of five technicians from Nippon Telephone arrived and with great ceremony put on white gloves absolutely blew us away" Schwarz says) Things went well the first day Minor problems were quickly solved via long-distance calls to a waiting team of experts at the Santa Clara headquarters But on the second day "things got sticky" Schwarz says "The oesters came up with something no one had even ART Morrow micro Decision with free Software 2 disk drives $1549 (WHILE THEY LAST) Apple III with everything $2100 Franklin Ace 1000 1200 CALL Kaypro II with extensive free Software $1795 IBM with hard disk CALL Brother printers Epson FX80 CALL Plotters Monitors ITN printers diskettes etc CALL Low Sensible Prices Micro Computer Systems 714541-4685 714848-5050 NEWSPAPER DESIGNER The Los Angeles Times is seeking an experienced newspaper designer Heshe should have a newspaper or print media background and be capable of conceptualizing and producing innovative graphics and layouts for use with editorial matter OMMEME1 EN This position offers: superior compensation and benefits I recognition and visibility fascinating and challenging work environment association with an industry leader Please send resume and non-returnable examples of work (copies tearsheets etc) to Newspaper Designer Los Angeles Times Times Mirror Square Los Angeles CA 90053 Selected applicants will be contacted later for interview and portfolios LooKE10 SolDCAS R9kUE0 NIAlruc COS Ange lee Citnee An Equal Opportunity employer PAY TV: Chapter 7 Eb5dD Continued from Second Page The young subscription television industry has fallen on hard times recently because of competition from rival pay TV systems such as cable and the recession's effect on household entertainment budgets In 1982 the subscription TV industry's growth stalled after having grown 65 the previous year An industry consultant found that about 7 of subscription TV customers were disconnecting their service monthly during 1982 About two dozen cities have subscription TV service but only five systems claim profitability Subscription TV systems deliver their programming by scrambling a conventional broadcast signal which restricts their offering to one channel per signal 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