A lot of competitive market forces conspired to bring Wang Laboratories, one of the world's largest computer companies, to the brink of financial disaster in 1989. A new book by journalist Charles C. Kenney, Riding the Runaway Horse, shows that top-heavy management failed to respond with vision to a rapidly changing marketplace. But Kenney's book, excerpted on the following pages, places much of the blame on the hubris of the man they called "the Doctor" and his insistence on naming his son, Fred Wang, president of the company.
The Chinese-born inventor-entrepreneur dearly wanted his two sons, first Fred and then the younger Courtney, to succeed him at the head of the huge enterprise based in Lowell, Massachusetts. Board members felt that Fred Wang lacked the experience, judgment and heft to lead the company. So did the more charismatic nonfamily executive, John Cunningham, whom Fred replaced as president in 1986.
Kenney's book suggests that the son obediently followed his father's plan, but that more radical action was needed to rescue Wang Labs. With the company deeply in debt, An Wang was forced in 1989 to fire his son.
Fred went on to attend the John F. Kennedy School of Government at Harvard, planning a new career in public service. By then his father was ill with esophogeal cancer and was forced to accept a nonfamily turn-around specialist, Rick Miller, as CEO. Miller took drastic steps, laying off more than half the firm's 30,000 employees. Meanwhile, the 71 year-old founder lay dying in a Boston hospital. Kenney's book recounts the entrepreneur's last days. The Editors
An Wang was not a man who had ever lost sleep worrying. He had weathered an extraordinary array of hardships a war and devastation in China, the loss of half his family, the emigration to a new world with a strange culture and a language that he never quite mastered. He had survived business turbulence and a near catastrophe. He had survived the terrible pain of firing his own son, of living to see not the realization but the shattering of his dream.
But his time had come, and he set about tying up loose ends in his life. One loose end was his unexpressed affection for his children. By trying to run his company primarily for the benefit of his family, Wang had harmed both the company and the family. And although his family's interests came first at Wang Laboratories, he had never sought to excel as a father. Through the years there had been many missed Little League games and weekends when other boarding-school students saw their fathers but the Wang children did not. When Fred was growing up, he recalls, his father was "working most of the time."
For his offspring, An Wang's work produced a fortune. The Doctor, as he was called, established two trusts, one for his children, a second for his grandchildren. The first trust, established in the mid-1950s, eventually grew to contain a substantial amount of Wang stock. Alt one point, that trust alone had been worth more than $500 million.
But for all the money, the Wang children had encountered difficulties in life. Fred suffered the humiliation of being blamed publicly for the company's decline. Courtney still harbored ambitions to run the company, consistent with his father's original dream. But now the notion seemed preposterous. Courtney was a 33-year-old branch manager in the Dallas office and hardly a major player.
Of course, the family could, through its control of the board of directors, place Courtney in charge. But that would require unanimity on the part of the familyand it was not at all clear that Fred would support moving his brother up. Such a move would also mean the loss of Rick Miller, for Miller's contract stipulated that he would never be subordinate to anyone at Wang Labs other than Dr. Wang. Besides, the board and the family were quite happy with the progress Miller had made with the company.
And Wang's youngest child, Juliette, had had some difficulties that caused her parents pain. When she was barely into her 20s, she phoned her parents one night to say she had eloped. That she was marrying someone who was not Chinese crushed Lorraine Wang. That she was doing so without even a traditional wedding was more distressing.
More troublesome was a financial problem into which Juliette and her husband, Mark Coombs, blundered. In the winter of 1984, they received a cold call from a stockbroker. Soon thereafter, according to press reports, they started an account with the broker with $13.5 million worth of Wang Labs stock. Within a few years, they had lost $2 million; they sued the broker, charging his firm had engaged in highly speculative ventures without their knowledge. In August 1988, Juliette's husband, who bad worked closely with the broker, was found dead of carbon monoxide poisoning in a car.
For Juliette, and perhaps for Fred and Courtney as well, there was a feeling that An Wang had withheld himself from his children. His life story was a remarkable one, yet he had never shared much of it with them. Fred learned about his father's experiences in China only as An Wang sat and shared some of his past with a ghostwriter. He never told his children that he had been married once before he met their mother. He made no real effort to pass along Chinese culture or traditions to his children. And, sadly, Juliette says, "he never really communicated to us that he loved us."
In the final days of his life, in the hospital, he did try to convey his feelings. "He wrote in big letters 'I love you' and underlined it a bunch of times and put exclamation points after it," says Juliette. "And he would hold it up and show us."
He was immensely strong, but he was, after all, only human. Surely he was frightened, though he did not show it. In the final days, his doctors said it would be all right for him to go home, but that seemed somewhat impractical, and he felt more comfortable in the hospital, where the doctors were nearby.
Near the end, Juliette read him Dylan Thomas's poem "Do Not Go Gentle Into That Good Night." She said that it was "one of the few things he really enjoyed" during his last days, this poem that urged him to "Rage, rage against the dying of the light."
But his rage was insufficient. The predawn hours of Saturday, March 24, 1990, were cold and wet with sleet. At 5:41 a.m., while it was still dark, An Wang lay in his room at the Massachusetts General Hospital, where he died alone.
THROUGHOUT THE WORLD, he was variously described in obituaries as the shy, bow-tied entrepreneur who held 40 patents and 23 honorary degrees; one of America's wealthiest men, who had given away tens of millions of dollars to charities; and a recipient of the Presidential Medal of Liberty.
Many of the stories briefly recapped his life: born the son of a schoolteacher in Shanghai, earned his Ph.D. at Harvard, worked at the Harvard Computation Laboratory and contributed to the invention of magnetic core memory, started his own company, invented one of the first electronic calculators, pioneered a word processing system that rocketed Wang into the ranks of the world's most successful computer companies. He was described as a man who started with nothing and built Wang Laboratories into a worldwide empire with more than 30,000 employees and revenues in excess of $3 billion.
The memorial service was set for Tuesday, March 27, at Memorial Church in Harvard Yard. Bundled in winter coats, the men and women walked solemnly through Harvard Yard and into the magnificent church.
Just as the service began, with the company's most senior people in attendance, rank-and-file employees began gathering outside the towers at Wang headquarters in Lowell. That morning, two customer service representatives, Gail Taylor and Patrick Wisler, had invited people to join them for a moment of silence outside during the lunch hour. It started with Taylor and Wisler, small groups, and then larger groups and whole waves of people until, finally, there were hundreds of employees, many weeping openly. They stood and formed a human chain so long it encircled the towers. At 1:00 p.m., they bowed their heads in silent tribute to An Wang.
At the memorial service, Juliette spoke first and read John Donne's "Death Be Not Proud." She finished with a Stephen Spender poem which, she said, "has a lot to do with what he's done with his life."Courtney Wang, a slight man with slicked-back hair, was introduced next. "I'm not sure any of us are ever really prepared for the loss of a true friend," be said. "For me, this was not only a true friend, but a very dear father to the world, a great man. One thing I think all of us have in common today is that we're all very fortunate, very thankful, very grateful for having been part of his life." The formal eulogy was given by Governor Dukakis, who said, in part: "Each of us has heroes, and Dr. Wang was one of mine. More than a friend, more than a colleague, he was the personification of the American dream. Not merely a success by anyone's standard, but a man whose genius and generosity made it possible for others to reach their dreams."
And, finally, Fred Wang rose to speak.
"My family and I would like to thank all of you for coming and joining with us today, and showing your respect to our Dad," said Fred. "Although he was not one for pomp and circumstance, I'm sure he would appreciate this sharing in the celebration of his life. Over the past few weeks, the family was able to spend quite a bit of time with him while he was still in the hospital. While we were keeping company with him, he would jot us little notes. And some of them include his thoughts and ideas on success. I know he would want to share those with all of you today.
"First, he said, 'Don't dwell on the past, but look to the future.' I'm sure that for you employees here he intends for you to continue the turn-around and bring the company to the greatness that it has the full potential to achieve.
"Second, he said he always depended on education. His father, my grandfather, was a teacher, and he grew up in this educational atmosphere. In 1946, when he arrived here in America, he was one of a group of people who were to start up the new business leadership in China. But instead of applying to a number of business establishments to get a year or so of experience, he applied to graduate school to Harvard, in fact. And he has continued to donate to the educational and cultural institutions where he had a chance to spend his time.
"Third, he told me, 'Always be humble. Acknowledge your weaknesses and learn from them. Don't only listen to yes men, but heed the critics.' Finally, he wrote, 'I always tried to do my very best. Sum this up by saying the world does not need us, but we need the world. If you practice these keys, then you will be great and worthy.'
"We love you, Dad, and we'll miss you greatly."
It was a touching scene, especially so for those few Wang executives with a genuine fondness for Fred, who wondered whether Fred hadn't misread his father's message a bit, whether the message that Fred had thought was intended for the company "Don't dwell on the past, but look to the future" was actually an intensely personal message for his oldest son.
In the final days of his life, how he would be remembered was very much on An Wang's mind. When Rick Miller received the final communication from the Doctor, Miller learned how passionately Wang cared about not being forgotten in death.
The two sheets of paper arrived on Rick Miller's desk wrapped tightly in white surgical tape. One sheet was blank, evidently meant as a shield to prying eyes. The other contained the note:
"Rick: You are my Godsend to take over WLI at the most critical time and you almost finished the first phase of financing part and [have taken] a long step on the expense restructure and sales revenue side.
Keep up good work. WLI need you and Wang Family need you.
I mentioned to you that I wonder if you can finish my work and build WLI like Ford, Du Pont, who can paint their immigrant's name on one of the major industrial company in USA. With our Stock Structure Junk Bond or not, you might do it.
In 1991, Wang Labs was still a proprietary minicomputer company in a world where open standards were the trend and where minicomputers were fast becoming dinosaurs. (George Colony of Forrester Research in Cambridge referred to minis as "flapping Terodactyls.")
Not long after the Doctor died, Miller began quietly considering various options, including merging with another company, seeking a minority investor, selling parts of the company, or forging a strategic alliance of some sort. Miller wanted to move Wang away from manufacturing and selling hardware toward selling software and advising customers on total computing solutions to their business problems.
During the second week of April 1991, Rick Miller called IBM chairman John Akers and asked for a meeting. By early May, the two men agreed that they had something serious to talk about. To determine whether a relationship would make sense, each man formed a team of executives and the two groups met for formal discussions. At Wang Laboratories, the senior management team worked feverishly for six weeks, struggling with negotiations.
A deal was struck. IBM would invest an immediate $25 million in cash in Wang Laboratories and would make an additional $75 million available. In return, Wang would sell its customers IBM equipment. Though it was not explicitly part of the agreement, there was also a possibility that Wang would make its potentially valuable imaging technology available to IBM.
The most immediate advantage to IBM was that it would now have the worldwide Wang sales force selling its products. Over the longer term, IBM would gain by having Wang office software systems run on IBM computers.
For Wang, the immediate benefit was IBM's cash, but a far more important advantage was the IBM name. There had long been fear among Wang customers and potential customers that a company in Wang's precarious financial position might one day sink. Its customers would then be abandoned. But customers knew IBM wasn't going to just disappear, and Wang's alliance with IBM gave Wang renewed credibility.
Whether the deal will eventually save Wang Laboratories will not be determined for years. But in the Wang-IBM affiliation, there is a rich irony. IBM was the company that had enraged An Wang during the early 1950s, when the company bought his core memory patent. Though he emerged from the deal with $400,000 a fortune at the time he was left embittered by the way he was treated by IBM, particularly in the word processing market. Who would have thought that this company, for which An Wang had so little respect and which, in his greatest delusion, he planned one day to overtake, might now be the salvation of Wang Laboratories?
Charles C. Kenney is an editor of The Boston Globe. Excerpted from Riding the Runaway Horse: The Rise and Decline of Wang Laboratories. Copyright (© 1992 Charles C. Kenney. Reprinted by permission of Little Brown and Co.