FAWN ALVAREZ FAWN ALVAREZ
Around the same time that Mike Markkula began planning for Apple’s IPO, Fawn Alvarez was promoted to the job of manufacturing supervisor at ROLM, the pioneering telecommunications and military computer company. Her new position was still considered a production job, but it entitled her to a private cubicle near the manufacturing line for ROLM’s CBX telecommunications system. Alvarez loved having her own space, even if she did not have her own phone line like the engineers she worked with.
As supervisor, Alvarez was responsible for hiring, firing, and training the roughly one hundred women working on the assembly line. In addition, one of her most important responsibilities was implementing the changes on the line that the production engineers requested. There were around twenty production engineers in the telecommunications division where Alvarez worked. At least one change a day was requested, sometimes more. Perhaps a part needed to be substituted for a different one. Or the line needed to be reconfigured to build the version of the CBX system most in demand. Or maybe a brand-new assembly—a different power supply, for example—needed to be folded into production. Every day, Alvarez would receive copies of the change orders in the interoffice mail. For time-critical changes, an engineer would hand-deliver the order.
The change orders were typically a dozen pages long. Alvarez would scan through the boilerplate at the top, skimming over the signatures from various supervisors and department heads, to get to the change and what it meant for her. How many people would she need to assign to a new job? What did the new parts look like? Did the new build plan and drawings make it clear where to put the parts? Would she need to move tables? Could the changes be worked in without stopping the line, or did production need to stop temporarily?
Often Alvarez received a change order that she could not understand. “Impede the resistance of U4,” the change order might instruct. Or “Speed up the channel driver.” Alvarez would groan when she saw such language. It described the problem to be fixed, not the fix itself. She would have to get clarification—again. She would carry the sheaf of papers to the appropriate engineer’s office, push the pages across his desk, and ask, “What in the hell are you trying to say? I don’t know what you’re saying. These are not words any of us know. What do you want us to do?” The engineers, who were used to Alvarez’s direct approach, could always explain what needed to happen: swap out a chip, or sever a printed connection between components and wire in a new one. Meanwhile, Alvarez had to stand by and wait as the engineer rewrote the change order to explain the necessary steps. She found the experience, which happened at least a few times each week, very frustrating.
Looking back, Jeff Smith, a former ROLM production engineer, understands why. After forty years and many senior management jobs, Smith sees that back then, engineers wrote change orders “without regard for what the manufacturing process is. [It was] one department issuing edicts to another department without really understanding the effects of those edicts.”1
Alvarez complained enough that her boss, Bill Rea, finally told her that if she thought she could do a better job writing change orders than the engineers, she should do it. Get a draft order, ask her questions, and then rewrite the change order in a way that made sense to her, rather than waiting for the engineers to do it. If the engineers approved her version, Rea was fine with it. Alvarez soon found that Rea’s suggestion made work easier not just for her but also for the engineers, who could spend less time writing and rewriting change orders.
After a few weeks Alvarez told Rea that she no longer wanted to work as a manufacturing supervisor. She asked him to give her a different job, one that had not existed before. She wanted to write change orders full-time. Moreover, since this would be professional work, she wanted to move out of manufacturing and join the engineers in the production engineering group.
Rea, a fellow risk taker unafraid of upending convention—“At ROLM, the meek didn’t inherit the stock options,” Jeff Smith explains—was willing to try it. Rea pointed Alvarez to an office. She noted that it had a door, unlike her cubicle, and a phone with a dedicated number.
Twenty-two-year-old Fawn Alvarez had finally gotten her longed-for job behind a desk.
Some of the engineers who had thought Alvarez was cute and spunky when she questioned them from the other side of the production/professional divide now saw her as a potential threat. A woman who had never attended college was in the office next to theirs, doing a job—writing change orders—that they also did. Alvarez sensed that her very presence lowered their prestige.
Soon the engineers were giving Alvarez so many change orders to rewrite that she began to suspect a deliberate attempt to overwhelm her. She went back to Rea and proposed that she hire two women to work for her. She pointed out that the three women would be paid less than the engineers, and now the engineers would be freed up for other work.
Within weeks of the third woman hiring on, the engineers had stopped writing even the first drafts of their change orders. They instead gave the women only cursory notes. “When they saw that someone who didn’t go to college and was a girl could do it, none of the engineers wanted to do it anymore,” Alvarez recalls. From then on, the engineers approved the change orders but did not write them. She adds, “That was women’s work now.”2
As Alvarez began her new job behind a desk, ROLM was marking its tenth anniversary with the highest profits in its history ($11.3 million) and sales of $114 million, up 128 percent over the previous year. More than two thousand people worked for the company, five times the number three years earlier. The stock split twice in as many years.
The company’s phenomenal growth meant great wealth for the founders and for the executives and engineers with generous stock option packages. Moreover, the benefits filtered throughout the company. In January 1980, Alvarez’s mother, Vineta, who had been buying ROLM stock at the discounted rate for years—and who had been granted options on 2,000 shares—retired. She had not been allowed to buy stock at the 50-cents-per-share price that Ron Diehl had promised when he had recruited her away from Sylvania; shortly after hiring on, she had been told that state law forbade women to buy shares in companies not listed on a stock exchange.3 Nonetheless, without a high school degree, she had pulled herself and her daughters out of a financial situation so precarious that the girls had used to worry that their feet were growing, which meant having to buy new shoes they could not afford. Now, at age forty-three, Vineta Alvarez Holdridge felt she never had to work again.
Among the most memorable days of Fawn Alvarez’s two years writing change orders alongside the production engineers was the day she decided to leave. In her new job, she had begun paying attention to the other women at ROLM who worked in offices. She would see them walking along the campus’s manicured paths or eating in the cafeteria. One woman was particularly striking, always dressed in elegant suits and often wearing a hat. Alvarez noticed the hats first; they were felt or feathered, often brightly colored. She had never seen anything like them. They looked expensive, as did the suits the woman was wearing. Deciding that the beautiful woman must make real money at ROLM, Alvarez wanted to know how she did it.
“I just walked up to her one day, out of the blue, introduced myself, and asked her what she did,” Alvarez recalls. When the woman said that she worked in marketing, Alvarez thanked her and left. She was too embarrassed to ask what “marketing” was.
She went to the library and left with a book on business. After reading about the different organizations inside most companies (engineering, finance, manufacturing, sales, marketing, and so on), she decided that the only place where a woman could be guaranteed a good income was sales, where compensation was almost entirely a function of how much product was sold. In other areas, women could be paid less simply because they were women.
Now determined to jump into sales or marketing in as few steps as possible, Alvarez mapped out how ROLM was organized. Only one group interacted with production engineering, where she worked, and also with marketing and sales. A forecasting group translated sales and marketing forecasts (“We will sell X number of CBX phone systems with Y features”) into manufacturing forecasts (“We will need to buy Z number of components of this type or that”). If she could transfer into forecasting, it would be an easy move into sales and marketing as a next step.
In 1981, a year after her trip to the library, Alvarez joined the forecasting group. She enjoyed the work but soon discovered that she was suffering the very discrimination that she had feared would hold her down in any job other than sales. She overheard one of her coworkers bragging about his salary—and realized it was twice her own. She was enraged. Her work, which involved forecasting for very large CBX systems, was more complicated than his, and a mistake on her part would be far more costly.I
She complained to Bill Rea, who had earlier created her job writing engineering change orders. Rea, who had received a number of promotions and become a good friend of Alvarez’s, was now her boss’s boss. “I want to make what that guy does, plus one buck,” she told Rea. When he justified the discrepancy by saying that the coworker was married with children to support, Alvarez was furious. “Why should that matter?” she asked. “What matters is the work!” She got her raise.
By 1981, ROLM had added more than 400,000 square feet to the flagship Silicon Valley campus and purchased seventy acres of land nearby. The company sold two categories of products: CBX phone systems for businesses and ruggedized computers for the military. Most of the new space housed administrative and engineering employees. ROLM had shifted many assembly jobs like those Alvarez and her mother had once held to Colorado Springs, Colorado. Land for factories was cheaper there, and wages were lower. A strong military presence in the area also meant that trained assemblers were relatively easy to find.
Companies throughout the Valley were moving their manufacturing operations out of the area by the early 1980s. Intel had built plants in Oregon, Arizona, and New Mexico. National Semiconductor, where Apple’s first president, Mike Scott, had once been a manufacturing manager, was building in Washington and Arizona. Other companies assembled products in Asia, often in the Philippines, where wages could be as low as 13 cents per hour. Apple was building a plant in Cork, Ireland.
Jobs outside of manufacturing were leaving, as well. ROLM moved a team focused on product development and product marketing to Austin, Texas. “We thought moving was pretty much an imperative,” explains cofounder Bob Maxfield. “Like so many other companies, we were struggling with being able to bring in enough engineers and have them afford the cost of living.”4 Hewlett-Packard adopted a formal policy that all future growth would take place outside the Valley. A survey of sixty companies in Santa Clara County found that the firms expected to add 41 percent of their new jobs outside California.5
“There will be a change in the character of this area, from predominantly manufacturing-oriented to increasingly research-oriented, run by highly skilled professionals who can afford to live here,” Hewlett-Packard president John Young predicted in 1980. He worried about what he called “the consequent pressure on blue-collar workers, the poor, aged, and disadvantaged.”6 His concerns were prescient.
I. ROLM made CBX systems of various sizes. Alvarez was responsible for systems for up to four thousand phone extensions. The man she overheard forecast for systems up to 144 extensions, systems that contained many fewer parts whose costs the group needed to forecast. Alvarez says, “I was pissed, because I had to forecast 90 percent more crap than he did, and if I made a mistake of 5 percent, it would cost the company a lot of money, versus 5 percent on what he did. I was being taken advantage of.”