The document summarizes key concepts from "The IBM Way" by Buck Rodgers. It discusses IBM's core values and commitments established by Thomas Watson Sr.: respecting individuals, giving best customer service, and pursuing excellence. It also covers IBM's focus on leadership, treating every employee as responsible for sales, managing for the future, selling solutions not just products, emphasis on service, and focus on employee welfare. The document provides an in-depth look into IBM's culture and business philosophy that has led to its long-term success.

1. THE IBM WAY – BUCK RODGERS
A book review by
Ajit Sridharan
Alpha – 43
MMS I
Jamnalal Bajaj Institute of Management Studies

2. About the Author
‘The IBM Way’ is written by Buck Rodgers, the ex-CEO of IBM, who spent over 40 years
in the company. Buck Rodgers is a respected management consultant, an advisor to
several companies and also a visiting faculty at some of the leading Business schools in
the USA.
Under Buck Rodgers, IBM grew from being a $10 billion company to a $50 billion
company. He has been instrumental in introducing a lot of innovative marketing
concepts and motivating employees at IBM. Buck Rodgers fine tuned the wonderful
culture of IBM and turned it into a totally customer-oriented and customer-driven
company. In fact, under his leadership, IBM was rated ‘America’s most admired
company’.
This book talks in great detail about the organization, culture, values, people and
philosophy that go into making one of the largest and most successful organizations in
the world. It talks of how IBM behaves behind closed doors, what goes into the decision
making, what it deems important and how it prioritises activities, why lakhs of IBM
employees never had a union and why students recruited from colleges never leave
IBM. It provides a great perspective into building an excellent customer oriented
organization. Let us now turn to various concepts introduced by the author.
1. The Beliefs and Commitments of IBM
IBM was founded in 1914 by Thomas J. Watson, Sr. Like any successful entrepreneur,
he wanted his company to be financially successful, but he also wanted it to reflect
some of his personal values. These values became the foundation for the company and
anyone who worked in the company.
IBM conscientiously drives home these philosophical messages at meetings and in
internal publications. The management also demonstrates, by personal deeds, what
these beliefs mean. The three important commitments made by Thomas J. Watson, Sr.
are:
a.) The individual must be respected:
Tom Watson wanted his people to feel good about themselves and their work. No one
could be paid enough money to be compensated for being made uncomfortable and
unhappy by his supervisors. IBM tries to let every person know that he/she can make a
difference. For instance, there are no titles on any doors or desks, no bathrooms for
‘executive use only’, no reserved parking spaces and no executive dining room. The
author quotes his personal experience where Tom Watson allowed him to skip a crucial
training program to be with his pregnant wife and later also sent flowers to the hospital
where the wife delivered a child.
b.) The customer must be given the best possible service:
IBM is a totally customer-oriented company. Every operation and every job description is
related to providing the best possible service to customers, prospects and vendors. Any
complaint by a customer is responded to, if not resolved, within twenty-four hours of its

3. receipt. When a customer requests a service call, the response is frequently within an
hour. Also, understanding that quality of service depends upon the training of its
employees, the hours logged in the classroom by every IBM employee exceed those
spent in any major university.
c.) Excellence and superior performance must be pursued:
Watson’s third mandate is excellence – the pursuit of all tasks with the idea that they
can be accomplished in a superior fashion. IBM ensures excellence by picking the best
students from the best colleges, imparting the best education and training and creating
a highly competitive environment that nurtures excellence.
IBM believes that the principles of an organization are sacrosanct. No matter what the
nature or size of its business, a company needs certain bedrock beliefs to serve as a
guiding force. Paying attention to detail, doing things right the first time, practicing good
human relations and being market driven separate the leading organizations from the
rest.
2. Leadership
A leader must promote an atmosphere of healthy competition among his subordinates,
without being insecure about his own position. The most successful leaders feel good
about themselves, are people-oriented, like to assume responsibility and solve problems.
Good leaders delegate responsibility and provide subordinates with freedom to make
decisions, knowing that responsibility and accountability go along with leadership. At
times, people are required to implement decisions taken by superiors, which they do not
necessarily agree with. It is important that once a decision is made, a leader must follow
it as if it were his own and must not be apologetic about it to his subordinates.
Prioritising work is another crucial aspect of a leader’s qualities. He cannot spend
inordinate time on tasks that add very little value to the organization. He also needs to
have integrity, be perceived as a genuine person who keeps his word under all
circumstances. Balancing professional and private life is important because anything
done in excess is exhausting and tired people cannot be most efficient. So, people need
to find ways to express themselves outside their work, perhaps through music, art, or
social work. While a leader is always there to give advice, he is also unafraid to
approach others when he needs advice. He has no compunctions about approaching
juniors or peers if they can help. Keeping in mind that people like to be given credit for
significant contributions and at the same time, people feel humiliated if criticized in front
of colleagues or juniors, a good leader always praises in public and criticizes in private.
3. Every employee is responsible for sales
A company may deal in goods or services. However, it is not merely the sales force that
is responsible for sales. Long lasting relationships with customers are what every
organization strives for. For a customer, every employee of a company, from the
salesperson, to the development team, to the receptionist, to the CEO, is merely a
representative of the company. Recognizing this, good companies create a totally sales-
oriented environment, where every employee understands that the customer is
responsible for his pay cheque, and so every job is oriented towards providing the best

4. possible service and the highest customer satisfaction. At IBM, it is mandatory for every
employee, at some time, to accompany salespersons in order to understand customer
needs. It is also important that employees who go that extra distance to make a
customer feel special should be appreciated and rewarded. A company could also have
periodic reviews of all its major accounts, and schedule meetings with clients to discuss
short-term and long-term action plans.
The success of a sales force depends to a large extent on the amount of office support it
receives. The training imparted by IBM to its sales force is very rigorous and it follows a
pattern where classroom sessions are followed by real-life practice in terms of assisting
sales representatives, followed by further classroom sessions to consolidate their
learning. After training on the products and communication techniques, trainees make
their first presentation to veteran salesmen, who provide them with constructive
criticism to sharpen their skills. A customer does not judge a salesman on what he
knows, but rather by his communication of what he knows. The best salesmen must be
part of the training process because not only do they understand selling techniques;
they have the best marketing acumen and keenest perceptions. In addition, IBM also
involves customers in its training sessions. This provides trainees with a first hand
experience of what customers look for in a salesman. The top management of IBM is
also very conscious about keeping in touch with the sales force and with customers. It is
also important for an organization to communicate changes, policies and information
quickly to all the employees. It is very frustrating for a sales representative to hear
information from a customer about his company, which he is not aware of. It is vital for
all levels of management to have some form of one-to-one communication with its sales
force. This keeps the sales force motivated, while providing first hand information on
happenings in the market. A manager must not have too many people reporting to him.
It makes it impossible for him to maintain discipline and recognition. Also, it is most
frustrating to work for a manager who does not have adequate time for his staff. An
open-door culture, wherein every employee can freely express himself to his manager as
well as higher levels of authority is very desirable. The employee knows that someone
other than his manager is aware of his accomplishments.
IBM believes that anyone who stops learning goes backward. Hence, there is continuous
training and learning that takes place. Each week, the company announces on an
average ten new products plus new programs, so the marketing people must deal with a
continuous flow of information. Training is undergone at every stage, after every
promotion. Promising people are made assistants to high-ranking executives, so that
they get a tremendous amount of exposure, which enables them to assume managerial
responsibilities pretty early in their careers. Future managers are also sent to attend
educational programs at institutes like London School of Economics, MIT’s and
Stanford’s Sloan Program etc.
4. Managing the future
The best organizations always plan ahead of their times, trying to understand unfulfilled
needs of customers and trying to innovate products to satisfy those needs. While one
must be aware of his short-term targets, a successful manager keeps an eye on the
future and tries to relate today’s tasks with long-term objectives. Often, Marketing

5. managers fall into the trap of being too concerned about yearly profits and in the effort
to enhance the bottom line, they may pursue marketing programs that are detrimental
in the long-term. Short-term marketing only achieves erosion in the market share in the
long run.
Every business, no matter how well organized, does face unexpected external factors
over which it has no control, e.g., government policies, market slowdowns etc. When a
strategic plan is developed, the management needs to look as far into the future as
possible and build as many safeguards as possible. Of course, it is impossible to build
safeguards for factors that cannot be predicted. But, it is important to have people who
are sensitive to environmental changes and can react quickly in unexpected
circumstances. Threats can also be internal to an organization. A company needs to look
out for signs of trouble, such as changes in employee attitudes, motivation and
performance. When developing products, a company would do well to involve customers
through the development phases. Interaction with customers provides valuable insights,
which may prevent products from failing. Sometimes, businesses suffer from ‘business
myopia’. This could be due to a company losing focus from its core competence or a
company getting complacent and resting on past glories. Pioneering is challenging and
requires a lot of resolve to implement. People often say “if it ain’t broke, don’t fix it”, but
companies with vision continue to come up with revolutionary products even when older
products are doing well in the market. This requires an understanding of changing
values, changing needs and an understanding of the ‘pulse’ of the market. Sometimes,
companies have to undergo radical changes, such as change in operating style, change
in the distribution channels and change in policies. These become requisites for survival
and many good companies have undergone massive changes, without ever
compromising on the core values or principles that were the foundation of the company.
5. Sell solutions, not products
Customers do not buy products, rather, they buy solutions to needs or problems. A
company must therefore focus on providing solutions rather than push its products. In
order to do this, the sales force needs to be knowledgeable about the customer’s
business and trends emerging in that business, besides being thoroughly knowledgeable
about the company’s solutions. Only thorough knowledge of the customer’s needs would
help in designing appropriate solutions. Customers usually appreciate it when a sales
person shows interest and knowledge of their company. A company must also stand by
its customer after selling the solution by efficient and prompt service. IBM trains its sales
persons by conducting role-plays where a sales representative acts as a customer. This
way, the sales persons realize the difference in perceptions as a buyer and as a seller
and are able to relate more easily with customers’ needs. The best salesmen are usually
those who listen to customers, help them verbalize their problem and work together
with them in developing a solution. Sometimes, when a customer is unable to visualize
the gains from the solution, it is a good idea to demonstrate the solution at work in an
existing customer’s business. There is nothing better than having a satisfied customer
talking about how the solution improved productivity and increased savings. In addition
to offering quality products, it is essential that a company provide value-added services.
Quality should only be the tip of the iceberg. It is important to make a customer feel
that signing a contract is the beginning of a long-term relationship. Also, it is not enough

6. if a company has the capability to provide tremendous value added services. It is also
vital that this capability is communicated to the customer. When competing brands offer
products of similar quality, it is often value addition that sways the decision in favour of
one brand.
In this age of supermarkets, we often miss the simple human touch, which a traditional
grocery provided. This being the case, companies that can provide that human touch
are the ones that are patronized. It costs much more to gain a new customer than to
retain a loyal customer. Very often, little things are responsible for a lost customer, such
as not returning a telephone call, being late for an appointment or failing to say ‘thank
you’. It is often the little things that make excellent companies – doing a thousand
things one percent better rather than doing one thing a thousand times better. No
matter how big or small a customer is it is imperative that he be treated with the same
consideration and respect as the biggest customer. There are times when a company
might have to go out of its way and put in an extra effort for a customer. It might even
cost a lot of money, but these are investments that pay off many times over in the long
run. A company that stays in touch with customers is not surprised by sudden problems
and it is important to maintain contact with a customer even between two successive
sales. Customers repose their faith in companies that show genuine concern, and that
are available when problems surface.
6. Everybody wants service, but most do not want to give it
Selling and servicing, though different in meaning, are inseparable as far as a marketing
function is concerned. The most reliable contributor in building a solid sales-base is top
class service. Providing convenience is almost expected of a company in this day and
age, but convenience alone is not sufficient. To elucidate, a customer may not have to
leave his armchair in order to get a product delivered to his home. But, it wouldn’t be
too convenient for a customer if the product came in hundreds of pieces with
assembling instructions loosely translated from Chinese. This is where customer friendly
service, and being available when a customer is in need make a huge difference. While
it does cost to service a customer, a company must treat it as an investment for the
future. All it takes is a strong resolution on the part of the company. Service has got to
be a part of the product development process, from the very inception. This can be
achieved by following an interlock process, wherein engineering, manufacturing,
marketing and servicing are integrated.
Preventive maintenance programs are another way of showing reliability and concern for
the customer. Sometimes, it pays to perform regular check-ups at customer sites, even
when there are no complaints, as these could avert major disasters and severe
downtime for a customer. All said and done, however, it is the top management that
has to drive the culture of caring for the customer and putting the customer first,
always. If the management is apathetic towards customers, it cannot expect its
representatives to be any different. Good service is like the water drop principle. Every
act, no matter how insignificant it may seem, is tremendously important.

7. 7. Employee Welfare
Having invested vast amounts of money in recruiting and training a highly skilled
workforce, it would be foolish if the potential of this workforce is wasted because the
compensation package promises more than it delivers. The money paid to an employee
must be fair to him, as well as to the company. A good pay package must:
- make the employee feel secure
- include strong incentives and motivation
- reward deserving employees
The appraisal system must be absolutely fair and an employee must be given total
freedom to express his ideas, grievances and suggestions. Employees could be rewarded
if good ideas prove to be profitable when implemented.
A company starts off because of an original idea, a dream and a willingness to take
risks. This spirit needs to be retained even when a company grows. Often,
entrepreneurs lose their sense of adventure once their business reaches a respectable
stage. At this stage, people focus more on minimizing risks, rather than capitalizing on
opportunities. That is why risk-takers are important not only at the top, but, at all levels
in an organization. Besides, good people need room to develop. The most talented
employees need to find and express their own voice. Their growth is stunted if they are
strictly supervised. The best managers quickly step aside once they delegate tasks to
their best workers. In order to grow, people need exposure to the various aspects of a
business, be it in line roles or staff roles. That is why the best companies follow a job
rotation policy where every employee spends time in all functions in the organization.
In addition to the performers, a company does need its share of cynics and critics. Such
people often point out flaws in existing systems, even though they may not provide
solutions to these issues. In fact they should be encouraged to express their opinions,
as these might lead to better products and services.
8. In Conclusion
To summarize, an organization needs to essentially be customer driven and customer
focused. It must provide the best quality products and the best possible service to its
customers, both before and after a sale. It must recognize that the customer is the most
important part of the business. Besides, it also needs to care for the welfare of its own
employees, impart continuous training and encourage continuous learning. Finally, a
company needs to have a set of values, which it adheres to under all circumstances and
which forms the basis of its existence.