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How IBM develops global leaders


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Read about some of the differentiators that made IBM #1 on Fortune Magazine's Top Companies for Leaders since 2009.

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How IBM develops global leaders

  1. 1. Michael Bazigos, PhD Strategy and Change Executive, IBM Talent12 May 2011 ay 0How IBM Develops Global LeadersMETRO Association of Applied PsychologistsNew York, NY This document is an incomplete representation of the presentation without the speaker’s accompanying comments. © 2011 IBM Corporation
  2. 2. How IBM Develops Global LeadersWe began as a small company in a different era, and have been inbusiness f 100 yearsb i for International Business Machines 1924 Tabulating Machine Corporation 18932 © 2011 IBM Corporation
  3. 3. How IBM Develops Global LeadersInsert slides re: changes from annual report 1970 1980 1990 20003 © 2011 IBM Corporation
  4. 4. How IBM Develops Global Leaders4 1992 Current © 2011 IBM Corporation
  5. 5. How IBM Develops Global LeadersYears ago, we saw change coming, and began changing the business mix g , g g, g g gto higher-value, more profitable technologies and market opportunities5 © 2011 IBM Corporation
  6. 6. How IBM Develops Global LeadersToday,Today we run a business model that delivers long-term valueand high performance Key objectives over the next five years: •G Growth markets approach 30% of geographic revenue th k t h f hi • Software becomes about half of segment profit • $100 b in free cash flow • $ b of capital returned to shareholders $70 • $20 b in spending on acquisitions * Excludes acquisition-related and nonoperating retirement-related charges. ** 2000 & 2001 exclude Enterprise Investments and not restated for stock-based compensation. Sum of external segment pre-tax income not equal to IBM pre-tax income.6 © 2011 IBM Corporation
  7. 7. How IBM Develops Global LeadersBusiness strategy GROWTH CLOUD BUSINESS SMARTER MARKETS COMPUTING ANALYTICS PLANET Approach 30% $7 billion in $16 billion in $10 billion in of geographic revenue by revenue by revenue by revenue by 2015 2015 2015 20157 © 2011 IBM Corporation
  8. 8. How IBM Develops Global LeadersWe became a globally integrated enterprise, improving productivity andcapturing new growth t i th8 © 2011 IBM Corporation
  9. 9. How IBM Develops Global LeadersMajor MarketsM j M k t vs. G Growth Markets th M k t Source: 2008 IBM Annual Report9 © 2011 IBM Corporation
  10. 10. How IBM Develops Global Leaders LEADERSHIP FOR GROWTH MARKETS10 © 2011 IBM Corporation
  11. 11. How IBM Develops Global Leaders20 countries for selected market expansion and growth Market Expansion IT Market Size & Growth IT as a % of GDP Macro-economic Russia Business Environment Political Environment Human Capital Physical Infrastructure Russia Economic Recovery Government Effectiveness Poland Czech Republic South Korea China Taiwan Mexico UAE Vietnam Saudi Arabia Philippines India Thailand Brazil Malaysia Singapore Australia Chile Indonesia South Africa1111 © 2011 IBM Corporation
  12. 12. How IBM Develops Global LeadersIBM is expanding into new markets and creating branches inestablished countries Market Expansion 2000 2010 2015 Countries with IBM offices ff 42 56 74 2000 2010 2015 Branch Offices Countries with 95 261 455 IBM offices 42 56 74 Branch Offices 95 261 455 Riga Warsaw P Prague Moscow Budapest Kiev Bucharest Zagreb Sofia Seoul Istanbul Lahore Beijing Tunis Busan Casablanca Islamabad Delhi Cairo Shanghai Monterrey Karachi Mumbai Guangzhou Mexico City Dubai D b i Hanoi Guadalajara Bangkok Barranquilla Caracas Bangalore Manila Medellin Valencia Cali Bogota Kuala Lumpur Quito Fortaleza Singapore Recife Jakarta Lima Brasilia Arequipa q p Salvador Northern Territory Antofagasta Belo Horizonte Rio de Janeiro Queensland Tucuman Sao Paulo Western Australia Cordoba Porto Alegre Johannesburg NSW Mendoza Montevideo Auckland Cape Town Durban ACT Santiago Victoria Buenos Aires Wellington Tasmania Christchurch1212 © 2011 IBM Corporation
  13. 13. How IBM Develops Global LeadersIBM has invested in growth markets in infrastructure & skills for longt thterm growthA Globally Integrated Enterprise Global Delivery Center Software & Hardware Lab Poland Russia Research Lab Innovation Center Czech Republic Slovakia Cloud Computing Center Hungary Romania Micro-financing Hub Turkey South Korea China Natural Resources Egypt Telecommunications Morocco Mexico Vietnam Rail India Health Philippines Energy Malaysia Brazil Singapore Finance Peru Retail Australia South Africa Argentina1313 © 2011 IBM Corporation
  14. 14. How IBM Develops Global Leaders IBM has become a globally integrated enterprise in order to capture the b t th best growth opportunities and improve profitability th t iti di fit bilit14 © 2011 IBM Corporation
  15. 15. How IBM Develops Global LeadersGlobal Enablement Teams Program links small teams of global executives to IBM country leaders and their teams in emerging economies  Deepen global mindsets  Enable competence in cultural adaptability  Better connect local country teams to the global company h l b l agenda  Consistent with our philosophy of l d f leaders d developing l d l i leaders, leaders developing themselves Khazakhstan15 © 2011 IBM Corporation
  16. 16. How IBM Develops Global LeadersEighteen countries have been commissioned across three waves WAVE 1 WAVE 2 WAVE 3 • Egypt • Chile • Argentina • K Kazakhstan kh t • C Czech R h Republic bli • C l bi Columbia • Mexico • Indonesia • Hungary • Nigeria • Malaysia • Philippines • Poland • Saudi Arabia • South Africa • Slovakia • Vietnam • Thailand16 © 2011 IBM Corporation
  17. 17. How IBM Develops Global LeadersProgram Results Positive reaction to program by both GET members and country leaders Increased knowledge and capability in: g p y – developing strategy and –executing strategy Country leader behavior change Business continuity during times of challenge and change17 © 2011 IBM Corporation
  18. 18. How IBM Develops Global LeadersCorporate Service Corps A global training ground to develop leaders in strategic emerging markets Short-term assignments that engage IBMers with communities, governments and non-governmental organizations Since July of 2008, we have sent more than 1,000 IBMers globally to 20 countries IBM clients launching or considering similar programs: Deere, Dow, Corning, FedEx, JP Morgan Chase, g, , g , Novartis, Pepsi US Agency for International Development (USAID) collaborating with IBM to help smaller companies create their own programs18 © 2011 IBM Corporation
  19. 19. How IBM Develops Global LeadersThe growth agenda has been infused throughout the talent managementprocess Topline organization redesign: Growth Market Unit (GMU) Deep dive reviews of leadership talent pipelines Chairman involvement in GMU leadership development Competency model revalidation (next section) University partnerships Assessment Centers: “Global Development Centers” Mobility assignments19 © 2011 IBM Corporation
  20. 20. How IBM Develops Global LeadersLinguistically diverse teams can either build incredible solutions... orconstruct a tower of babble t t t f b bbl Patented IBM translation technology at the League of Nations, Geneva, 193120 © 2011 IBM Corporation
  21. 21. How IBM Develops Global LeadersEnter n.Fluent…  Translates English to and from: – Arabic – Chinese (simplified and traditional) – French – German – Italian – Japanese – Korean – Portuguese g – Russian – Spanish  Crowdsources translation corrections to improve the software in real time  More secure than external providers  Next step: speech-to-speech translation (“MASTOR”) in beta21 © 2011 IBM Corporation
  22. 22. How IBM Develops Global Leaders COMPETENCIES22 © 2011 IBM Corporation
  23. 23. How IBM Develops Global LeadersThe IBM Leadership Framework23 © 2011 IBM Corporation
  24. 24. How IBM Develops Global LeadersIn 2010 IBM announced a new set of nine capabilities called “IBMers at ourBest”B t”  Embrace challenge  Partner for clients success  Collaborate globally  Act with a systemic perspective IBMers  Build mutual trust at our  Influence through expertise Best  Continuously transform  Communicate for impact  Help IBMers succeed24 © 2011 IBM Corporation
  25. 25. How IBM Develops Global LeadersAct with a systemic perspective IBMers are systems thinkers. We help our clients, our colleagues and the world understand and design the essential dimensions of any system – how it senses, maps and analyzes information, Thinking Systemically detects underlying patterns, and translates that knowledge into belief and Gathering data to identify root action. We help others see this end-to- causes end view, synthesizing information from many dimensions – whether the system Making timely and effective in question is technological economic technological, economic, decisions d i i societal, cultural or natural. This systemic view allows us to frame problems properly, and to take the right action in Acting decisively, taking risks the right way at the right time. It also lets time when appropriate pp p us anticipate the impact of our actions on others. Knowing all this, we act wisely while boldly taking the right risks.25 © 2011 IBM Corporation
  26. 26. How IBM Develops Global LeadersCompetencies Explain Most of What Matters to PerformanceRelative contribution of competencies to performance Factors Influencing Breakdown of the 56% Performance Ratings Competency Portion All underlying correlations statistically significant. Odds of a chance finding are less than 1 in 100.26 Data sources:Senior leaders’ 360-degree competency ratings (“Total Others”) and performance ratings by their manager © 2011 IBM Corporation
  27. 27. How IBM Develops Global LeadersDoes a 56% explanation matter? Compared to what? LINKAGE r % variance explained Smoking and lung cancer after 25 .08 08 < 1% years* Antihistamines and reduced nasal .11 1% discharge* Ibuprofen and pain reduction* .14 2% Height and weight of US adults* .44 19% SAT (verbal) and freshman GPA** .47 22% SAT (math) and freshman GPA GPA** .48 23% IBM Competencies and executive .75 56% performance * Hogan, R.T. (2011). Issues, controversies, and advancements in workplace assessment . Panel discussion at the 2011 Conference of I/O Psychologists, Session #193. ** © 2011 IBM Corporation
  28. 28. How IBM Develops Global LeadersIBMers at Our Best: Creating the Future of IBM Expertise + Capabilities + Leadership Job Role Expertise: Career Capabilities: Leadership Competencies: Combination f kill C bi i of skills The broader Th b d qualifications lifi i Behaviors unique to IBM B h i i IBMers and behaviors to grow and flourish in a that distinguish the required to perform a chosen career at IBM. company. specific job at IBM.28 © 2011 IBM Corporation
  29. 29. How IBM Develops Global Leaders SELECTING FOR GROWTH29 © 2011 IBM Corporation
  30. 30. How IBM Develops Global LeadersApproach  New scoring process was used to retro-score MD incumbents and place them into three categories – Recommend – Needs Development / Not at this time – Not recommended  Two assessments were then made – Comparison of utility gains for prediction of new selection method vs. “Acme” firm’s predictions – Revenue dollar utility of the incremental gain in selection accuracy30 © 2011 IBM Corporation
  31. 31. How IBM Develops Global LeadersPopulating the MD role with superstars begins with accurateidentification Identifying Superstar MDs 20% 15% History enue CAGR R suggests an multi-billion 10% 3-year gain for MDs 3-Year Reve 5% using the new, robust assessment 0% Not recommended Needs development / Recommended Not Recommended -5% Assessment Status31 © 2011 IBM Corporation
  32. 32. How IBM Develops Global LeadersOur stress test retro “selected” top 39%. Resulting success rate of 82% is in linewith (and exceeds) i d t b ith ( d d ) industry benchmarks when di i i ti at th 40% l h k h discriminating t the level.l 82% Benchmark IBMSource: “Business value of employee selection”, Wayne Cascio, 11/2009, NYC to METRO Applied Psychology Association32 © 2011 IBM Corporation
  33. 33. How IBM Develops Global LeadersExternal estimates of executive success rates90% 82%80% 70%70% 60% 61%60% 50%50%40% 33%30%20%10% 0% Peter Drucker Hogan, Hogan Old (BEI) MD Actual IBM MD assessment Jack & Suzy New IBM estimate (1985) ti t &K i Kaiser (I press) (In ) recommendations (2002 d ti (2002- (2002 - 2009) Welch W l h (2007) MD assessment t 2009) (2009)33 © 2011 IBM Corporation
  34. 34. How IBM Develops Global Leaders Questions? Q ti ?34 © 2011 IBM Corporation
  35. 35. How IBM Develops Global Leaders Michael N. Bazigos, PhD Connect with me on : http://www linkedin com/in/bazigos35 © 2011 IBM Corporation