How G. H. Hoxie Put Management In Context

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First released in July 1982 -- a good half-year before Lotus Development Corp.'s 1-2-3 -- Context MBA was the first integrated management-planning program to hit the microcomputer desktop market. Since then it has undergone steady revisions in its IBM Personal Computer version and has been adapted as well to Hewlett-Packard's new Series 200 Model 16, which uses the Motorola-68000 chip. (Like 1-2-3, MBA has not been written for an Apple personal computer, although both trace roots to that humble machine.) Context Management Systems has sold 4,000 of the programs ($695 for the IBM PC version, $795 for the HP version) in its first nine months, most to the large-corporation market. It expects to have 20,000 to 30,000 signed license agreements -- the bulk from large companies such as United Technologies, which has put in for 1,100 -- by the end of this year, says 44-year-old G. H. Hoxie, Context's president and co-founder (with Brian P. Fischer, 29). MBA is slated for yet another updating this summer, when it will be barely one year old. The newest release will further enhance communications, add more graphs and built-in financial functions, generally double capabilities, and essentially be "self-running," says Hoxie.

At least in part, Context's revisionary policies reflect nervous reaction to what Hoxie terms the "baloney" served up by Apple Computer Inc and VisiCorp. Hoxie compares MBA more with Apple's Lisa and the Xerox Star than with Lotus's 1-2-3, which he generously dismisses as a "very, very refined spreadsheet -- the last of the first generation." Hoxie objects to promotions about how easy it is to learn the other programs Powerful and often complicated in its commands, MBA takes a fairly long time to master. "Twenty minutes to learn Lisa, 20 minutes to learn VisiON -- it's really a bunch of hype. You can water a program down so it does five things and five things only and it's as easy to use as an automatic teller machine, and that's all there is -- or there's going to be some learning required, it's going to take some effort." But once users learn MBA, Hoxie doesn't intend to have to retrain them every year. Context is aiming to upgrade its product by some 10% semiannually so that new versions won't be disruptive. Over a couple of years, there will be a 100% advance in what they are using, Hoxie calculates somewhat loosely. "Our 1982 product will be a very different animal from our 1984 product."

Hoxie worked for IBM for five years in a large-computer environment where, "no matter how hard we tried, our management information systems turned out to be operating information systems. They had little impact on what a manager needed." He started breeding ideas for MBA after being involved with an extensive management-productivity study performed by the consulting firm of Booz-Allen & Hamilton, of which he was a partner. The basis for the study cropped up in 1973 Management information systems "aren't quite making it," Hoxie argued, "so let's try it from a different perspective." That perspective was the then-embryonic electronic office, but, again, no real impact on managers was forthcoming. "The electronic office turned out to be just word-processing for a secretary tucked down the hall somewhere," remembers Hoxie. Thus thwarted, Booz-Allen undertook a multiclient, multimillion-dollar survey of what managers actually did -- a rather costly search to pin down the essentials that computer whizzes had apparently been fabricating. But Software Arts Inc. beat them to it: Midway through the study, VisiCalc was announced.

Hoxie was quick to sense the revolution. "I owe a debt of gratitude to VisiCalc," he admits. "We were working on an assignment for Stanford University, performing a financial forecast for them, and we couldn't get it done on a mainframe. I'd already spent $25,000 in timesharing charges. We did it in one night on an Apple." As often comes from an evening's excitement, that was the start of something big.

Armed with an electronic spreadsheet, Hoxie took an assignment from a kitchen cabinetmaker who was having problems. "They had huge inventories," relates Hoxie. "We modeled the business on the Apple with VisiCalc, and we showed it to the manager. With that little model, he could see the link between planting a tree, harvesting it, cutting it up into parts for the cabinet, painting it, shipping it -- the whole thing was related: value added, cost added, and so on. Before, he might have seen fragments of it, but this was the first time he could see the whole thing together. He could switch it here, and see the effect everywhere else. He suddenly got a better understanding of what he could do. Right then and there he made a commitment, he decided he was going to cut the inventory by two-thirds. The thing that really blew my mind is that in all my consulting work I had never had such an immediate effect on a manager. That was the real explosion point. These guys went berserk. They immediately started doing things. As a consultant presenting pretty reports and graphs, we were lucky if we could get clients barely to move."

Meanwhile back at the consulting firm, through Booz-Allen's still-ongoing productivity study, Hoxie intuited that managers required the reassurance of a set of several capabilities before they would begin to use a business model. "You could put a word processor on a manager's desk, but that isn't enough to get him to use it. Or you could install a communications terminal so he can tap the company database, but that isn't enough, either. It looked like you had to add four or five or six things so that he would use it often enough to be comfortable keeping it in his office." With what has proved to be understated optimism, Hoxie concluded, "Gee, there's a real opportunity here." In 1980, Context was founded.

Hoxie decided that the key to understanding what managers really did was to realize that if things were going well a good manager did essentially nothing. The manager's job really begins in adversity -- when the production line breaks down or a new product is late. Then the manager tries to get things back on track, and, says Hoxie, "that's creative work. He's a vacuum cleaner for all kinds of information What's going on? What can I figure out? He throws a whole bunch of information in, and he creates a solution to it and gets it moving. That's what a manager does. The thing that really hit us is that managers are exception handlers."

With that dawning came Hoxie's perception that large-business decision-making accoutrements often were as much impediments as they were aids. One of the strengths of Context's output (right now MBA is its only product) is that its own management has come from large corporate environments and can anticipate the way through bottlenecks. "If a manager relies on his company's MIS [management information system] department to program the solution for him, it would be years before he got it. Go into a MIS shop and you'll find a seven-year backup," Hoxie complains. "If he wants to take data from accounts receivable and add it to his accounts-payable report for a cash flow projection, MIS will ask, 'How many of you will use it?' and the manager will have to respond, 'Just me.' So he has to be able to confront the situation using a tool on his own desk, and that's what we're building. There are a lot of software products that are engineered by someone who wanted to build something in a day, but no one has told them, 'We need it.' It just really hit us. It all came together. With MBA, any manager can simply dial up those things, and he's got the answer right there."