(FORTUNE Magazine) – THINGS ARE HOT at Tandem Computers these days, largely because of Chief Executive Jimmy Treybig, a pioneer of Silicon Valley-cool management. After a four-year slump, Tandem's earnings have risen 80% so far this year and the company is hurtling toward a record billion dollars in revenues for 1987. Ask the head man why, and he will credit anything but himself -- Tandem's computers that keep running even if some components fail, dedicated employees, the technology called parallel processing. But Tandem really owes its turnaround to its boss's turnaround. Three years ago, as Treybig's grip on the company began to slip, this big-picture strategizer, this friendly, one-of- the-boys manager, forced himself to adopt a whole new style. He began grappling with details and holding his executives more accountable. It was a painful process. ''I used to be a cheerleader,'' he says. ''Now I'm a manager.'' From the outside Treybig looks much the same. He is still slightly rumpled and stocky. At 46 his hair is grayer, but it continues to explode from the side of his head in a curly frizz. His eyeglasses still refuse to perch properly on the bridge of his nose, preferring to park themselves crazily at the other end. His shirttails remain as rebellious as ever. And the man who bestowed so much stock on employees that he once described Tandem as a ''socialist'' company seems to worry about his employees' welfare as much as ever. He is tired, though, of discussing the beer parties Tandem throws every Friday afternoon for employees. The idea behind these ''unstructured communications'' was for people from different departments to mingle and discuss ideas. But they quickly became a symbol of a new management style supposedly evolving in Silicon Valley as corporate anthropologists spread their fame far beyond Tandem's Cupertino headquarters. Mind you, Treybig is not tired of attending the gatherings -- he loves a cold beer and interesting conversation as much as anybody. ''But that's all anybody outside the company ever cared about,'' he complains. Treybig was a marketing manager at Hewlett-Packard 15 years ago when he came up with the idea for Tandem. On his rounds for H-P he often ran into bank managers, newspaper editors, and stock exchange executives who worried that they would be in big trouble if their computers ''crashed'' for a few hours or, worse, wiped out data. Treybig says that Hewlett-Packard showed no interest in building a computer that would run even if some of its components failed. So he quit and spent 18 months tinkering with the concept. In 1974 he started Tandem to build a computer with several identical processors working in parallel, like toll booths across a highway. If one processor failed, data could be shunted to the others. The unorthodox way of managing that Treybig came up with for Tandem soon overshadowed his nifty engineering. The company had 11 vice presidents but no organization chart. Treybig refused to install time clocks and did not hold regular meetings with subordinates. Instead he delivered stem-winding motivational speeches in tents erected in the company's parking lots, and concocted an elaborate diagram to show every employee how his or her contribution affected the whole company. ''One time he called me and didn't recognize my secretary's voice,'' recalls Carol Hubler, a division manager. ''As soon as he heard she was new, he ran down two flights of stairs to introduce himself.'' Adds venture capitalist William Davidow, an early board member: ''He used to manage through inspiration. It was a holistic approach. He thought everyone would do the right thing if they appreciated the company's goals and their place in the organization. It took him a while to learn that people would abuse that.'' It was precisely Treybig's confusion of motivation with management that got his company in trouble. In December 1982, Tandem's auditors forced the company to restate results for the fiscal year that ended in September, revising sales downward from $336 million to $312 million. Net income changed from $37.3 million to $29.9 million. The Securities and Exchange Commission began an investigation and eventually charged Tandem with fraud. The SEC said that Tandem employees, feeling pressure from managers to boost quarterly sales growth, sometimes recorded sales of computers that hadn't yet been shipped to customers. ALTHOUGH Tandem denied the charges and the SEC settled the case without assessing fines or penalites, the allegations shook Treybig. He says the restatement hurt him even more than the divorce he was going through: ''When people talk about fraud, you have a sense of shame.'' Tandem went into a + prolonged slump. Earnings stagnated at about $30 million a year, despite increasing revenues. Then in the spring of 1984, as the whole computer industry sagged, Tandem's earnings plunged 80%. ''I was driving to work one day,'' says Treybig, ''and I knew I was failing.'' Management by inspiration was over; management by perspiration was in. Treybig canceled plans for a vacation and assembled his vice presidents one July morning in 1984. ''There was a fundamental change,'' says Patricia Becker, director of marketing support. ''Suddenly every part of the company was exposed to incredible scrutiny.'' Treybig, an avowed meeting-hater, plunged into them. ''It used to be you could stand up at a meeting once a year and state your goals, and nobody ever came along and asked if you met them,'' says Becker. ''Now there are weekly staff meetings and quarterly staff reviews. If you don't make your goal, you'd better have an explanation.'' The man who used to manage by consensus became authoritative, putting an end to what one senior manager called ''anarchy'' among executives. Says Stephen Schmidt, vice president for operations: ''It used to be hard to get a resolution on certain things. A strong individual could go to the mat and the consensus process couldn't change it. Jim went from being reluctant to order people to do things, to being willing.'' No one imagines that Treybig enjoys all these changes. ''Ask Jim if he likes sitting through an operating review, and he'll say no,'' says chief operating officer Robert Marshall. ''He'd rather be brainstorming with customers about new products.'' Clashes with executives seem painful for him. ''He doesn't like to criticize,'' says Gerald Peterson, Tandem's vice president for marketing. ''It's not uncommon for him to deliver a blistering critique and then say, 'But I'm not being critical.' '' Observes chief financial officer David Rynne: ''He has more difficulty with poor performance than most senior managers. He is personally disappointed. He hopes every person can grow into the job. If they don't, he can be frustrated and angry.'' Treybig himself says simply: ''It's not hard to be tough. It's just not much fun.'' PLAYING THE TOUGH GUY has helped Treybig solve some knotty problems. After concluding that five groups were working on essentially the same project, he reassigned dozens of employees. He cut expenses and increased productivity to match flattening revenues. Salaried workers had to put in 10% overtime without pay, new hiring stopped, all travel required a vice president's approval, and salary increases were frozen for six months. Tandem even installed devices to turn off the lights in company buildings automatically. The necessity to cut costs tends to induce a little humility. Years of fast growth had made Tandem -- and Treybig -- arrogant. ''We had a problem with Tandem service a few years ago and complained to Treybig,'' recalls Richard Leyh, executive vice president of Securities Industry Automation Corp., the computer arm of the New York and American stock exchanges. ''He was defensive and arrogant.'' These days, says Leyh, Treybig has mellowed. ''When we gave an order to a competitor a while ago, he was here in person, asking, 'Where did we go wrong?' '' Although it sometimes seems that way, Tandem is not Treybig's whole life. He occasionally leaves work early to be with his son when he's home from college, or flies off to see his two teenage daughters, who live in Texas. More often he turns on his ham radio, a hobby he picked up from his father, a Texaco geophysicist who raised his family in Bellaire, Texas. Once or twice a year Treybig and a few friends go to a remote island for two weeks of broadcasting on an obscure frequency, bouncing signals off the moon to see how far around the world they can communicate. Even when they're battling scorpions and crabs, as they did on a Caribbean island last year, the trips mean a lot to Treybig. ''I like to know I can do more than manage people,'' he says. ''I get away and feel pride in what I can do as an individual.'' AS FOR COMMUNICATING with the folks at Tandem, Treybig keeps looking for ways to accomplish what he once thought could be done just with a Budweiser and a Friday afternoon. With 6,200 employees in 130 offices around the world, he says, ''it's all very structured. I spend a lot of time working on systems that allow the communication.'' Nearly everyone has an electronic mail terminal, used for anything from announcing the birth of kittens to surveying workers' job satisfaction. Major offices have satellite dishes to catch live TV feeds from Tandem's in-house broadcasting facilities. Treybig periodically visits Tandem offices for lengthy question-and-answer sessions with employees, who may quiz him on new products or complain about the inadequacy of shower facilities for joggers. To be sure, Treybig preserves some aspects of his former, laid-back managerial approach. He occasionally gets out of his chair, wanders down a hall, and plops in somebody's office. He still makes his appointment calendar available to all employees, who scribble in their names for a session with the boss. And watch out: When Tandem finally hits $1 billion in sales, its founder's dream for more than a decade, Jimmy Treybig plans to throw the beeriest, foot-stompingest party ever held in Silicon Valley.

CHART: INVESTOR'S SNAPSHOT TANDEM COMPUTERS

SALES (LATEST FOUR QUARTERS) $901.8 MILLION CHANGE FROM YEAR EARLIER UP 36% NET PROFIT $89.2 MILLION* CHANGE UP 137% RETURN ON COMMON STOCKHOLDER'S EQUITY 14% FIVE-YEAR AVERAGE 11% RECENT SHARE PRICE $67.50 PRICE/EARNINGS MULTIPLE 35 TOTAL RETURN TO INVESTORS (12 MONTHS TO 4/24) 114% PRINCIPAL MARKET NYSE