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Company: International Business Machine.
Author: Louis Genstner, Jr.
Tenure: April 1993 to March 2002.
Graduation: Dartmouth College & HBS.
RJR Nabisco Inc: Chairman & CEO (4 years).
American Express: Chairman & CEO ( 11 years).
Also worked for Mckinsey & Company.
Change brought by Louis Gerstner.
Verge of extinction.
Rapid changing Computer Industry.
Management Team and not breaking down.
Power and Influence.
One of the most impressive turnaround stories in
Section 1: Four Critical Decisions.
Section 2: Two Big Bets on the Future.
Section 3: Setting the Strategy of the Business.
Section 4: Changing corporate culture at IBM.
Section 5: Key Lessons Learned.
Largest corporate loss of $16 billion.
Outsider for the industry.
Thoughtful and not quick decisions.
3,00,000 people on payroll worldwide.
‘State of Art’ research labs.
Establishing semi conductor industry, hardware, software, sales and
With UNIX operating system arriving in 1990’s, it suddenly became
possible for companies to start making parts of an overall solution.
Their aspirations were couched in terms of a “Client/Server”
relationship – where the client was the desktop PC and the server was
At around the same time, the PC makers also started suggesting that
since they were now being used on the desktops, it was logical to use
PCs in the back-office systems as well.
Two Big Bets on the Future
Highest software selling company.
1993: Development on O/S 2 which failed.
Consolidation of software development business under one single manager.
Focus on developing “Middleware Software System” rather than developing
Setting the Strategy for Business
Open Company’s own technology store(1994):
More research than commercialization.
Ability to set new standards and protocol.
Open up new revenue system.
More device, more demand for IBM products.
Unstack the stack and focus IBM initiatives:
Harness the emergence of e-business:
E-Business “Integrating Glue”.
Rewriting to internet enable software's.
New services of “Website Hosting”
Three Basic Belief’s By Thompson Watson Sr.:
Excellence in what we do.
Superior customer service.
Respect your individual.
Changing the corporate culture
Eight Basic Principles Introduced by Garnster:
Market place as driving force.
Commitment to quality.
Customer satisfaction and shareholder value.
Minimum bureaucracy maximum productivity.
Never loose sight of our strategic vision.
We always work as a team.
Sensitive to needs of employees and communities.
WIN EXECUTE TEAM
Successful leaders and organizations have lots of good leadership
available to them.
Tough minded but fair
Section 4: Key Lessons Learned
Successful leaders and great business execute well:
World class process are required.
Strategic clarity is needed.
High performance culture allows thing done faster.
People respect what you inspect and not what you expect.
Successful leaders and business are focused: