Lou Gerstner took over as CEO of IBM in 1993 during a time of crisis for the company. Rather than breaking up IBM as suggested, Gerstner made four critical decisions: 1) Keeping the company together, 2) Changing IBM's economic model, 3) Reengineering how IBM did business, and 4) Selling nonproductive assets. Gerstner publicly announced these decisions, focusing on restoring profitability, winning customer premises battles, being competitive in client/server technology, providing full service, and improving customer responsiveness.
The document summarizes IBM's leadership and changes under three CEOs from the early 1990s to present:
1) Louis Gerstner transformed IBM's organizational structure in the 1990s from mechanistic to organic and customer-centric, removed bureaucracy, centralized product development, and focused on market trends over internal rules.
2) Under Sam Palmisano from 2004-2011, IBM decentralized power and had thousands of leaders work collaboratively globally. ValuesJam encouraged independent thought among employees.
3) Virginia Rometty since 2011 has enhanced growth markets, bolstered services, and outsourced jobs to India, while acquiring Green Hat for $20 billion with no change in strategy.
IBM was founded in 1911 and emerged as a superpower by the 1950s, but faced structural problems in the early 1990s that led to $16 billion in losses. Lou Gerstner was hired in 1993 to rescue IBM. He took several steps, including layoffs of 40,000-50,000 employees, cost reductions of $6.8 billion through expense cuts and selling non-core businesses. Gerstner also restored line manager accountability, reorganized IBM into one global organization, refined sales processes, and focused on services as hardware stagnated. These strategies secured IBM's core competencies, provided an outside perspective to address real problems, and dismantled a collegial culture, driving financial results. However,
Who Says Elephant Can't Dance - Book SummaryAnant Lodha
Louis Gerstner Jr. was CEO of IBM from 1993 to 2002 and led one of the most successful business turnarounds in history, saving IBM from the verge of extinction. When he joined, IBM was losing $16 billion annually and its future was uncertain as the computer industry rapidly changed. Through critical decisions like consolidating software development and betting on middleware, setting a strategic vision to focus on e-business, and changing IBM's culture, Gerstner was able to turn IBM profitable again and increase revenue and stock price over his tenure.
IBM faced a crisis in the early 1990s as demand for mainframes decreased and the company struggled with bureaucracy and weak marketing. Louis Gerstner was hired as CEO in 1993 to lead a turnaround. He launched structural changes that empowered line executives and held them accountable for results. IBM shifted to a customer-centric approach and unified marketing strategy under the single brand of "IBM". The company focused on the growing market for network-centric computing while maintaining revenues from mainframes. These changes stabilized IBM's business and positioned it for renewed growth.
1) IBM faced significant problems in the late 1980s and early 1990s as it failed to adapt to changes in the computing industry. Its outdated business model focused on mainframe computers rather than more practical applications for PCs.
2) In 1993, Louis Gerstner was hired as CEO to turn IBM around. He diagnosed extensive issues requiring radical transformation.
3) Gerstner implemented change using John Kotter's 8-step model, creating urgency, building a team to guide transformation, establishing a new vision, removing obstacles, planning short-term wins, sustaining change through cultural shifts. This successful change management restored IBM's competitiveness.
This document provides background information on IBM and its former CEO Louis Gerstner. It details IBM's struggles in the early 1990s when Gerstner joined as CEO, and describes his turnaround strategy which included cost cutting, streamlining products, investing in new technologies like Java, and restructuring the company's marketing and workforce. It also provides an overview of IBM's current market position and strategy under current CEO Ginni Rometty, focusing on cloud, data, and digital engagement.
The document discusses organizational structures and control systems for international business. It describes centralized vs decentralized structures and covers functional, divisional, product-based, and matrix structures. It also discusses global business planning, organizing, information, and control systems. The key aspects are integrating international business operations and choosing an organizational structure that implements strategy and balances centralized vs decentralized decision-making.
IBM has transformed from focusing on technology like mainframes in the 1960s to providing IT solutions and customization today. Key transitions include launching the IBM PC in the 1980s, reorganizing into a client-centered model in the 1990s, and acquiring businesses to expand offerings in the 2000s. Continuous leadership and an innovative culture have helped IBM adapt to changes in the external environment through both episodic and continuous organizational changes. This has allowed IBM to remain a leader in its field over several decades.
The document summarizes IBM's leadership and changes under three CEOs from the early 1990s to present:
1) Louis Gerstner transformed IBM's organizational structure in the 1990s from mechanistic to organic and customer-centric, removed bureaucracy, centralized product development, and focused on market trends over internal rules.
2) Under Sam Palmisano from 2004-2011, IBM decentralized power and had thousands of leaders work collaboratively globally. ValuesJam encouraged independent thought among employees.
3) Virginia Rometty since 2011 has enhanced growth markets, bolstered services, and outsourced jobs to India, while acquiring Green Hat for $20 billion with no change in strategy.
IBM was founded in 1911 and emerged as a superpower by the 1950s, but faced structural problems in the early 1990s that led to $16 billion in losses. Lou Gerstner was hired in 1993 to rescue IBM. He took several steps, including layoffs of 40,000-50,000 employees, cost reductions of $6.8 billion through expense cuts and selling non-core businesses. Gerstner also restored line manager accountability, reorganized IBM into one global organization, refined sales processes, and focused on services as hardware stagnated. These strategies secured IBM's core competencies, provided an outside perspective to address real problems, and dismantled a collegial culture, driving financial results. However,
Who Says Elephant Can't Dance - Book SummaryAnant Lodha
Louis Gerstner Jr. was CEO of IBM from 1993 to 2002 and led one of the most successful business turnarounds in history, saving IBM from the verge of extinction. When he joined, IBM was losing $16 billion annually and its future was uncertain as the computer industry rapidly changed. Through critical decisions like consolidating software development and betting on middleware, setting a strategic vision to focus on e-business, and changing IBM's culture, Gerstner was able to turn IBM profitable again and increase revenue and stock price over his tenure.
IBM faced a crisis in the early 1990s as demand for mainframes decreased and the company struggled with bureaucracy and weak marketing. Louis Gerstner was hired as CEO in 1993 to lead a turnaround. He launched structural changes that empowered line executives and held them accountable for results. IBM shifted to a customer-centric approach and unified marketing strategy under the single brand of "IBM". The company focused on the growing market for network-centric computing while maintaining revenues from mainframes. These changes stabilized IBM's business and positioned it for renewed growth.
1) IBM faced significant problems in the late 1980s and early 1990s as it failed to adapt to changes in the computing industry. Its outdated business model focused on mainframe computers rather than more practical applications for PCs.
2) In 1993, Louis Gerstner was hired as CEO to turn IBM around. He diagnosed extensive issues requiring radical transformation.
3) Gerstner implemented change using John Kotter's 8-step model, creating urgency, building a team to guide transformation, establishing a new vision, removing obstacles, planning short-term wins, sustaining change through cultural shifts. This successful change management restored IBM's competitiveness.
This document provides background information on IBM and its former CEO Louis Gerstner. It details IBM's struggles in the early 1990s when Gerstner joined as CEO, and describes his turnaround strategy which included cost cutting, streamlining products, investing in new technologies like Java, and restructuring the company's marketing and workforce. It also provides an overview of IBM's current market position and strategy under current CEO Ginni Rometty, focusing on cloud, data, and digital engagement.
The document discusses organizational structures and control systems for international business. It describes centralized vs decentralized structures and covers functional, divisional, product-based, and matrix structures. It also discusses global business planning, organizing, information, and control systems. The key aspects are integrating international business operations and choosing an organizational structure that implements strategy and balances centralized vs decentralized decision-making.
IBM has transformed from focusing on technology like mainframes in the 1960s to providing IT solutions and customization today. Key transitions include launching the IBM PC in the 1980s, reorganizing into a client-centered model in the 1990s, and acquiring businesses to expand offerings in the 2000s. Continuous leadership and an innovative culture have helped IBM adapt to changes in the external environment through both episodic and continuous organizational changes. This has allowed IBM to remain a leader in its field over several decades.
The document summarizes HP's acquisition of Compaq in 2002. It provides background on both companies and reasons for the merger, including achieving economies of scale, strengthening their business and product portfolio, and realizing estimated $2.5 billion in annual cost savings. However, there were also risks such as integration challenges and negative impact on stock prices. Five years after the merger, shareholder returns increased 46% and HP became the leader in various markets like servers and printers. The merger ultimately accomplished the goals of providing critical mass and ensuring long-term success in the transitioning industry.
Philips underwent many structural changes throughout its history in response to changing market conditions and leadership priorities. The latest changes under CEO Boonstra in the 1990s aimed to increase shareholder value by refocusing on core businesses, improving processes, and increasing profitability. However, Philips still faced challenges like intense competition in consumer electronics from Japan and later China, difficulty achieving consistent profits in North America, and ensuring smooth transitions during periods of restructuring and shift in strategies. Future success would require identifying core competencies, analyzing business portfolios, and balancing regional and global priorities through continued organizational evolution.
Michael dell ,history of michael dell,buisness ideas of michael dell,dell tod...Eminent VJ
Michael Dell founded Dell Inc. in 1984 out of his dorm room at the University of Texas, selling computers out of his dorm room. He grew the company significantly, becoming the youngest CEO of a Fortune 500 company at age 27. Dell pioneered a direct-to-customer sales model that eliminated retailers, cutting costs and allowing lower prices than competitors. Today, Dell Inc. employs over 103,000 people worldwide and is one of the largest technology companies, focusing on PCs, servers, and other technology products and services. Michael Dell remains actively involved as CEO, focusing on customer satisfaction and an efficient business model.
Michael Dell founded Dell Inc. in 1984 out of his dorm room at the University of Texas at Austin. He began by selling IBM-compatible personal computers directly to customers, using a build-to-order model. This allowed Dell to eliminate costs associated with inventory and retailers. By 1996, Dell was the largest PC manufacturer in the world. Dell focused on serving business customers and individual consumers while pursuing an acquisition strategy in the late 1990s and 2000s. Michael Dell remains actively involved as CEO, overseeing Dell's continued innovation and global expansion.
Acer went through several changes in course over the years in response to shifting market conditions. In the late 1990s, Acer lost US market share to competitors like Dell and implemented a "21 and 21" strategy to decentralize operations. In the early 2000s, Acer again restructured by splitting into different brands and focusing on more profitable regions and products, including introducing early tablet PCs. Acer's founder emphasized empowered and decentralized decision making. Acer continues reshaping strategies to adapt to a changing global business environment while gaining a strong foothold in computers and exploring new product categories.
Michael Dell founded Dell Computer Corporation in 1984 at age 19 after starting his first business venture selling computer parts at age 12. He grew Dell into the #1 personal computer company in the US and largest worldwide PC market share by focusing on direct sales and customization. Dell demonstrated visionary leadership through internal drive and ability to learn from mistakes. He stepped down as CEO in 2004 but remained as chairman. Dell received several awards for his entrepreneurship and established a philanthropic foundation with his wife.
The document discusses the proposed merger between HP and Compaq in the early 2000s. It describes both the pros and cons of the merger from HP's perspective, including gaining Compaq's large storage and server businesses but also risks of exposing HP's core printing business. It also outlines challenges faced after the merger, such as a steep drop in HP's stock price and market share. The document performs a SWOT analysis of the merger and considers potential solutions for building strong management after integrating the two large companies.
BIMStorm: Transforming the way we do Business v6 pdfMike Bordenaro
This document summarizes and promotes the benefits of BIMStorm, a business process for transforming the building industry using building information modeling (BIM). BIMStorm is highlighted as a proven, repeatable process that can increase productivity and reduce costs over time. It also promotes the services of BIM Education Co-op, a BIMStorm agent that can create a building census to help organizations launch BIMStorm processes and realize significant cost savings.
Dell is the world's leading computer systems company. They design, build and customize products and services to satisfy customer requirements across business and consumer markets. Dell has experienced significant growth over the past 18 years, growing revenue from less than $1 billion in 1992 to over $31 billion in 2002. Dell commands 15% of the worldwide PC market and has over 35,000 employees. Dell attributes its success to its unique low-cost business model, direct sales approach, and collaborative R&D.
The merger between HP and Compaq in 2002 was one of the largest in IT history at $25 billion. While management argued it would improve innovation, leadership, and financial benefits through scale, critics argued the integration risks were substantial and HP's strategic position may not improve. After the merger completed, HP struggled for years to integrate the companies and realize the projected synergies.
This document provides an overview of International Business Machines Corporation (IBM). It discusses IBM's products and services which include analytics, software, and hardware. It outlines IBM's financial goals and history dating back to 1911. The document also describes IBM's shift towards cloud computing, competition from other companies, strategies around prediction and adaptation, current popular products involving Twitter data analytics, and a prediction that IBM may need restructuring going forward.
This document discusses operations management at Dell. It covers 1) Dell's operational functions including supply chain management, 2) Dell's strategic operational management including their operation strategies, 3) Organization of Dell's operation processes including factors affecting product design, and 4) Planning and controlling Dell's operations including capacity planning and quality control. The key points are that Dell focuses on just-in-time procurement, customizing products to customer specifications, and using various strategies to reduce costs and improve quality.
The document discusses how the role of Lean Six Sigma is shifting in an age of increased turbulence and unpredictability. While Lean Six Sigma has helped many companies achieve great success and savings, it did not adequately prepare them for the economic downturn. The world is changing more rapidly but few companies are adapting their strategies to keep up. Going forward, companies will need to view their business as a portfolio of processes and use tools like Lean Six Sigma to design agile, adaptable processes in order to survive unpredictable conditions. Lean Six Sigma practitioners will need to help companies apply these principles and tools more broadly to gain benefits beyond low-hanging fruit.
The document discusses Xerox's decision to outsource its information management functions. It provides background on Xerox, including its history and declining financial performance. It describes problems that were identified with Xerox's in-house information management operations through a consulting firm review. The IM 2000 project was launched to address these problems through reengineering and potentially outsourcing some functions. Key drivers for considering outsourcing included changing industry dynamics and an inability to change quickly enough internally. Porter's five forces model is also referenced to discuss the basis for competition and competitive advantage.
IBM is a global company with approximately 400,000 employees worldwide. It utilizes multicultural and virtual teams to remain competitive in a global marketplace. These teams leverage differences to drive innovation while working across borders. IBM provides resources like language training, global mentoring, and virtual workspaces to help diverse employees collaborate effectively. Using technology, virtual teams can work independently of location and facilitate global projects. This allows IBM to gain flexibility while reducing costs and accessing a wider talent pool.
The document discusses BMC software, stating that 98% of the Forbes Global 100 trust their software. It also says that leading analyst firms place BMC 12 months ahead of their primary competitors in software.
The document discusses Cisco's strategy to externalize APIs and services. It notes that partners drive a large percentage of Cisco's business but that the traditional partner experience needs to be improved. Cisco aims to serve more partners by extending its reach through externalized business services and APIs. This will allow partners to have customized experiences at lower costs. The document outlines Cisco's progression from XML gateways to an API management platform to securely manage APIs and address cross-cutting concerns like authentication, authorization, and analytics for partners.
- IBM was struggling with bad press, losing money, angry customers, and too many competitors. Lou Gerstner was hired as CEO to turn the company around.
- Gerstner implemented immediate changes like hiring a new CFO and focusing the culture. He cut waste, reengineered processes, and sold unproductive assets to raise cash.
- Over time, Gerstner shifted IBM's focus to services, software, and licensing through acquisitions and divestitures. He changed compensation to focus on performance and led the company with principles of customer orientation and urgency.
This document provides an overview and demonstration of the MicroStrategy Reporting Suite tool for data visualization and analytics. It discusses key features of the tool such as the design environment, centralized metadata builder, web interface, analytic engine, and security features. It then demonstrates creating a sample retail store project with dimensions such as customer, time, and products, and facts such as sales, costs and inventory levels. Finally, it outlines the steps to create reports with the tool, including connecting to a data source, designing objects and hierarchies, and building reports with attributes, metrics, graphs and prompts.
There are four categories of business dashboards that provide different benefits:
1. Traditional performance summary dashboards present summary information and alerts in tables and graphs.
2. Traditional metrics dashboards display metrics and compare actual to goals to track progress toward goals.
3. Dynamic content dashboards allow interactive analysis and embed workflows to assist decision making.
4. Dynamic visualization dashboards display more data using advanced visualizations to improve decision making.
Effective dashboards mirror the user's workflow, allow drilling into data, and can be shared and used offline.
Oldest branch of engineering, next to Military engineering. All engineering works other than for military purposes were grouped in to Civil Engineering. Mechanical, Electrical, Electronics & present day Information technology followed it.
A professional engineering discipline that deals with the analysis, design, construction and maintenance of infrastructural facilities such as buildings, bridges, dams, roads etc.
Civil Engineering is everywhere. Civil Engineering is a composite of many specific disciplines that include structural engineering, water engineering, waste material management and engineering, foundation engineering etc. among many.
The document summarizes HP's acquisition of Compaq in 2002. It provides background on both companies and reasons for the merger, including achieving economies of scale, strengthening their business and product portfolio, and realizing estimated $2.5 billion in annual cost savings. However, there were also risks such as integration challenges and negative impact on stock prices. Five years after the merger, shareholder returns increased 46% and HP became the leader in various markets like servers and printers. The merger ultimately accomplished the goals of providing critical mass and ensuring long-term success in the transitioning industry.
Philips underwent many structural changes throughout its history in response to changing market conditions and leadership priorities. The latest changes under CEO Boonstra in the 1990s aimed to increase shareholder value by refocusing on core businesses, improving processes, and increasing profitability. However, Philips still faced challenges like intense competition in consumer electronics from Japan and later China, difficulty achieving consistent profits in North America, and ensuring smooth transitions during periods of restructuring and shift in strategies. Future success would require identifying core competencies, analyzing business portfolios, and balancing regional and global priorities through continued organizational evolution.
Michael dell ,history of michael dell,buisness ideas of michael dell,dell tod...Eminent VJ
Michael Dell founded Dell Inc. in 1984 out of his dorm room at the University of Texas, selling computers out of his dorm room. He grew the company significantly, becoming the youngest CEO of a Fortune 500 company at age 27. Dell pioneered a direct-to-customer sales model that eliminated retailers, cutting costs and allowing lower prices than competitors. Today, Dell Inc. employs over 103,000 people worldwide and is one of the largest technology companies, focusing on PCs, servers, and other technology products and services. Michael Dell remains actively involved as CEO, focusing on customer satisfaction and an efficient business model.
Michael Dell founded Dell Inc. in 1984 out of his dorm room at the University of Texas at Austin. He began by selling IBM-compatible personal computers directly to customers, using a build-to-order model. This allowed Dell to eliminate costs associated with inventory and retailers. By 1996, Dell was the largest PC manufacturer in the world. Dell focused on serving business customers and individual consumers while pursuing an acquisition strategy in the late 1990s and 2000s. Michael Dell remains actively involved as CEO, overseeing Dell's continued innovation and global expansion.
Acer went through several changes in course over the years in response to shifting market conditions. In the late 1990s, Acer lost US market share to competitors like Dell and implemented a "21 and 21" strategy to decentralize operations. In the early 2000s, Acer again restructured by splitting into different brands and focusing on more profitable regions and products, including introducing early tablet PCs. Acer's founder emphasized empowered and decentralized decision making. Acer continues reshaping strategies to adapt to a changing global business environment while gaining a strong foothold in computers and exploring new product categories.
Michael Dell founded Dell Computer Corporation in 1984 at age 19 after starting his first business venture selling computer parts at age 12. He grew Dell into the #1 personal computer company in the US and largest worldwide PC market share by focusing on direct sales and customization. Dell demonstrated visionary leadership through internal drive and ability to learn from mistakes. He stepped down as CEO in 2004 but remained as chairman. Dell received several awards for his entrepreneurship and established a philanthropic foundation with his wife.
The document discusses the proposed merger between HP and Compaq in the early 2000s. It describes both the pros and cons of the merger from HP's perspective, including gaining Compaq's large storage and server businesses but also risks of exposing HP's core printing business. It also outlines challenges faced after the merger, such as a steep drop in HP's stock price and market share. The document performs a SWOT analysis of the merger and considers potential solutions for building strong management after integrating the two large companies.
BIMStorm: Transforming the way we do Business v6 pdfMike Bordenaro
This document summarizes and promotes the benefits of BIMStorm, a business process for transforming the building industry using building information modeling (BIM). BIMStorm is highlighted as a proven, repeatable process that can increase productivity and reduce costs over time. It also promotes the services of BIM Education Co-op, a BIMStorm agent that can create a building census to help organizations launch BIMStorm processes and realize significant cost savings.
Dell is the world's leading computer systems company. They design, build and customize products and services to satisfy customer requirements across business and consumer markets. Dell has experienced significant growth over the past 18 years, growing revenue from less than $1 billion in 1992 to over $31 billion in 2002. Dell commands 15% of the worldwide PC market and has over 35,000 employees. Dell attributes its success to its unique low-cost business model, direct sales approach, and collaborative R&D.
The merger between HP and Compaq in 2002 was one of the largest in IT history at $25 billion. While management argued it would improve innovation, leadership, and financial benefits through scale, critics argued the integration risks were substantial and HP's strategic position may not improve. After the merger completed, HP struggled for years to integrate the companies and realize the projected synergies.
This document provides an overview of International Business Machines Corporation (IBM). It discusses IBM's products and services which include analytics, software, and hardware. It outlines IBM's financial goals and history dating back to 1911. The document also describes IBM's shift towards cloud computing, competition from other companies, strategies around prediction and adaptation, current popular products involving Twitter data analytics, and a prediction that IBM may need restructuring going forward.
This document discusses operations management at Dell. It covers 1) Dell's operational functions including supply chain management, 2) Dell's strategic operational management including their operation strategies, 3) Organization of Dell's operation processes including factors affecting product design, and 4) Planning and controlling Dell's operations including capacity planning and quality control. The key points are that Dell focuses on just-in-time procurement, customizing products to customer specifications, and using various strategies to reduce costs and improve quality.
The document discusses how the role of Lean Six Sigma is shifting in an age of increased turbulence and unpredictability. While Lean Six Sigma has helped many companies achieve great success and savings, it did not adequately prepare them for the economic downturn. The world is changing more rapidly but few companies are adapting their strategies to keep up. Going forward, companies will need to view their business as a portfolio of processes and use tools like Lean Six Sigma to design agile, adaptable processes in order to survive unpredictable conditions. Lean Six Sigma practitioners will need to help companies apply these principles and tools more broadly to gain benefits beyond low-hanging fruit.
The document discusses Xerox's decision to outsource its information management functions. It provides background on Xerox, including its history and declining financial performance. It describes problems that were identified with Xerox's in-house information management operations through a consulting firm review. The IM 2000 project was launched to address these problems through reengineering and potentially outsourcing some functions. Key drivers for considering outsourcing included changing industry dynamics and an inability to change quickly enough internally. Porter's five forces model is also referenced to discuss the basis for competition and competitive advantage.
IBM is a global company with approximately 400,000 employees worldwide. It utilizes multicultural and virtual teams to remain competitive in a global marketplace. These teams leverage differences to drive innovation while working across borders. IBM provides resources like language training, global mentoring, and virtual workspaces to help diverse employees collaborate effectively. Using technology, virtual teams can work independently of location and facilitate global projects. This allows IBM to gain flexibility while reducing costs and accessing a wider talent pool.
The document discusses BMC software, stating that 98% of the Forbes Global 100 trust their software. It also says that leading analyst firms place BMC 12 months ahead of their primary competitors in software.
The document discusses Cisco's strategy to externalize APIs and services. It notes that partners drive a large percentage of Cisco's business but that the traditional partner experience needs to be improved. Cisco aims to serve more partners by extending its reach through externalized business services and APIs. This will allow partners to have customized experiences at lower costs. The document outlines Cisco's progression from XML gateways to an API management platform to securely manage APIs and address cross-cutting concerns like authentication, authorization, and analytics for partners.
- IBM was struggling with bad press, losing money, angry customers, and too many competitors. Lou Gerstner was hired as CEO to turn the company around.
- Gerstner implemented immediate changes like hiring a new CFO and focusing the culture. He cut waste, reengineered processes, and sold unproductive assets to raise cash.
- Over time, Gerstner shifted IBM's focus to services, software, and licensing through acquisitions and divestitures. He changed compensation to focus on performance and led the company with principles of customer orientation and urgency.
This document provides an overview and demonstration of the MicroStrategy Reporting Suite tool for data visualization and analytics. It discusses key features of the tool such as the design environment, centralized metadata builder, web interface, analytic engine, and security features. It then demonstrates creating a sample retail store project with dimensions such as customer, time, and products, and facts such as sales, costs and inventory levels. Finally, it outlines the steps to create reports with the tool, including connecting to a data source, designing objects and hierarchies, and building reports with attributes, metrics, graphs and prompts.
There are four categories of business dashboards that provide different benefits:
1. Traditional performance summary dashboards present summary information and alerts in tables and graphs.
2. Traditional metrics dashboards display metrics and compare actual to goals to track progress toward goals.
3. Dynamic content dashboards allow interactive analysis and embed workflows to assist decision making.
4. Dynamic visualization dashboards display more data using advanced visualizations to improve decision making.
Effective dashboards mirror the user's workflow, allow drilling into data, and can be shared and used offline.
Oldest branch of engineering, next to Military engineering. All engineering works other than for military purposes were grouped in to Civil Engineering. Mechanical, Electrical, Electronics & present day Information technology followed it.
A professional engineering discipline that deals with the analysis, design, construction and maintenance of infrastructural facilities such as buildings, bridges, dams, roads etc.
Civil Engineering is everywhere. Civil Engineering is a composite of many specific disciplines that include structural engineering, water engineering, waste material management and engineering, foundation engineering etc. among many.
The document discusses agile transformation and cultural change using a lean approach to change management. It describes how organizational culture is like a memeplex that defends against foreign ideas like agility. It advocates using lean change management principles like minimal viable change to introduce agile practices and influence culture. The document recommends establishing a change coalition and change agents to drive transformation through initiatives like creating an inspiring vision, improving feedback, and measuring employee happiness. The overall approach presented is to transform culture, not just adopt practices, by focusing on people and why change is needed.
Flevy.com - Finance and Valuation BasicsDavid Tracy
This is a partial preview of the document found here:
https://flevy.com/browse/business-document/finance-valuation-basics-106
Description:
This document explains the basics of financial analysis. It explains financial statements, financial ratios/comparables, and capital markets. This training presentation has been adopted from the ones used at global consulting firms.
IBM hired Louis Gerstner as CEO in 1993 to turn the company around. Gerstner stabilized IBM by cutting costs, selling off unprofitable business units, and focusing on services and software. Under Gerstner's leadership, IBM transitioned from manufacturing computers to providing consulting services and prioritized high-margin businesses like middleware. These strategic changes helped IBM become profitable again and regain its position as a leading technology company.
Business Analytics Forum 2012 TM1 in MacquarieAmendra Pratap
Presentation by Amendra Pratap on how TM1 was taken from zero to enterprise wide in 2 years. This was at the Melbourne Business Analytics conference March 2012
George W. Buckley is the Chairman, President and CEO of 3M Company. The document provides an overview of 3M's 2008 outlook meeting, including discussions of the company's strategic focus on accelerating growth, premium returns and enhanced shareholder value. It summarizes 3M's financial performance in 2007, operational excellence initiatives, and outlook for double-digit earnings growth in 2008.
Strategic Management Issues for Starting a Fabless Chip CompanySteve Szirom
The document discusses strategic management issues for starting a fabless chip company. It covers topics such as startup issues, business models, external environment, internal environment, objectives, strategies, tactics and implementation, and an integrated marketing communications program. The document provides an overview of various business models in the semiconductor industry and considerations for starting a fabless chip company.
1. IBM was founded in 1911 and has grown to become a global technology company known for innovation. It transitioned from mechanical tabulating equipment to software and services.
2. In the 1990s and 2000s, IBM divested parts of its business and acquired Lenovo's PC business. This allowed IBM to focus on higher-margin consulting and technology services while Lenovo became a top PC brand.
3. IBM faces competition from other technology giants but maintains competitive advantages through its focus on innovation, integrated solutions, and expertise in areas like cloud computing, analytics and smarter planet initiatives.
1. IBM was founded in 1911 and has grown to become a global technology company known for innovation. It transitioned from mechanical tabulating equipment to software and services.
2. In the 1990s and 2000s, IBM divested parts of its business and acquired Lenovo's PC business. This allowed IBM to focus on higher-margin consulting and technology services while Lenovo became a top PC brand.
3. IBM faces competition from other technology giants but maintains competitive advantages through its focus on innovation, integrated solutions, and expertise in areas like cloud computing, analytics and smarter planet initiatives.
Red Giant Syndrome - How to turn around a tech juggernaut on the verge of imp...Jump Associates
We all know huge tech companies suffering from Red Giant Syndrome: Yahoo!, Research In Motion, AOL, Nokia. Companies, once dominant in their markets, that continue to sell a huge number of products and services yet are losing consumers and customers at an alarming rate. Barring radical change, each is bound to collapse within a few years.
We call this situation Red Giant Syndrome. The term, borrowed from astronomy, originally refers to when a star exhausts the supply of hydrogen that has sustained it for millions of years and begins gobble up any bits of matter it can convert into fuel to sustain its existence. Consequently, they grow to hundreds of times their original volume while dramatically dropping in density. Over time, this imbalance leads to collapse.
But it doesn't have to be that way. IBM and Apple - both once "Red Giants" - successfully came back from the verge of implosion. How did they do it? We explain the 3 critical steps in this Slideshare. To read the accompanying article, head over to Forbes. http://blogs.forbes.com/jump/
Design by: Laura Polkus, http://www.laurapolkus.com
The document discusses how businesses need to adapt to succeed in today's complex and changing economic environment. It recommends that companies focus on value, exploit opportunities, and act with speed. Additionally, it emphasizes that business partners need to team up and capitalize on hot opportunities like green IT and social networking through ecosystem development. Finally, it provides steps for business partners to get started in establishing leadership, making hard decisions, developing a roadmap, and communicating their plans.
The document provides an overview of 3M Company's performance in 2007 and outlook for 2008 from the perspective of George Buckley, Chairman and CEO. Some key points:
- 3M overcame challenges like the sale of its pharmaceutical business but still delivered double-digit earnings growth in 2007.
- The company has a diverse portfolio of businesses that provides stability. It focuses on innovation, international expansion, and operational excellence.
- 3M expects to continue investing in growth while maintaining strong margins and returns through actions like acquisitions, supply chain optimization, and productivity gains.
Strategy & Leadership Vol 38, Issue 3 Ibm Transformationrtawse
IBM underwent a major transformation from 2000 to 2010 to adapt to changing market conditions. It broke down internal barriers, globally integrated operations, and drove efficiency. IBM focused on higher value segments, made strategic acquisitions and investments, and aggressively cut costs. As a result, IBM was able to consistently deliver strong financial performance while its peers struggled, increasing its share value by 15% during the financial crisis when others lost 30%. IBM's transformation provides lessons for other large companies on how to adapt while delivering results.
The board meeting agenda covered Digby's past performance, strategy, competitive advantages, competitor analysis, and management review. Over the past eight years, Digby achieved market leadership in the high-end segment through TQM focus on R&D cycle time, second product development, and exiting lower segments. Competitor analysis showed Baldwin and Erie posed threats that Digby responded to quickly. Management recommendations were to invest more in early TQM, sales/promotion, and product development to improve future performance.
Provocative selling is presented as an alternative to traditional selling approaches. It involves identifying problems customers are not addressing and using provocative statements to convince them of the urgent need to implement a solution. The document outlines four steps to provocative selling: 1) identifying a resonant problem, 2) developing a provocative viewpoint, 3) presenting to a decision-maker, and 4) providing a solution. It provides case studies and contrasts provocative selling with solution selling. The goal is to disturb the customer's status quo and convince them an alternative is necessary.
1) The document discusses valuation techniques for mergers and acquisitions (M&A), focusing on synergies.
2) Synergies are cost savings and revenue increases that can be realized by combining two companies.
3) The value created by a deal is the difference between the price paid and the value of the acquired business including synergies.
Louis Gerstner arrived at IBM in 1993 to turn the struggling company around. He made two key decisions - to reverse the plan to break up IBM and shift the company away from being a PC maker. Under Gerstner's leadership, IBM underwent a successful turnaround through strategies like focusing on individual business units, prioritizing customers, reengineering processes, and selling non-core assets. Gerstner's strong leadership and strategic focus on customers are credited with saving IBM. However, changes to employee benefits were unpopular. Overall, Gerstner successfully changed IBM's direction and restored profitability through decisive strategic moves.
Kiwibank: From Startup to Enterprise in 7 yearsVincent Kwon
Kiwibank was established in 2002 with a low startup budget and leveraged existing infrastructure from NZ Post. It initially used IBM p-Series and x-Series systems running Microsoft applications and SQL databases. Over 7 years it grew strongly through acquisitions and developing its brand, becoming successful with many customers and products. It continues upgrading its infrastructure and adopting new technologies to support further growth as an enterprise.
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2. IBM's cognitive capabilities could identify supply chain gaps and opportunities for greater visibility, with a pilot program beginning in December 2016 and global implementation from 2018-2017.
3. IBM is well-suited for the project due to its industry-leading cognitive abilities, global support network, and supply chain consulting expertise.
This document discusses the creation of a new organization called Global Trade Solutions (GTS) to address challenges with the bank's existing fragmented trading systems and solutions. GTS would consolidate trading applications across divisions under one organization to develop integrated, global solutions. This would help reduce costs and complexity while enabling growth. The objectives are to organize trading IT staff under GTS, define an architecture to support long-term sustainability, identify core applications to invest in, and eventually expand GTS to other regions. The document was produced by Kaushik Pramanik on October 1, 2009.
This document provides an outline for forecasting revenues and costs for a business. It discusses developing a strategic vision that includes understanding customers, making realistic assumptions, and getting started with forecasts. Key areas for forecasting revenues include product sales, pricing, geographical expansion, new products, partnerships, and other income sources. Key areas for forecasting costs include cost of sales, operating expenses like marketing, IT, personnel, and taxes. It also covers forecasting the balance sheet, working capital, and capital expenditures.
This article discusses the need for profitability management. It notes that while revenue is relatively easy to attribute, indirect costs are more difficult to allocate to divisions, units, or departments. Profitability management is important for linking financial and operational processes so managers understand the financial impact of decisions. It allows for increased financial control and predictable results. The article argues profitability management is more relevant today due to increasing indirect costs, global competition, and the need for strategic cost management.
Bill Campbell, chairman of Intuit and mentor to many Silicon Valley companies, believes that innovation starts with product-focused engineers leading development. He discusses how companies like Google strive to invent new products and services, while others like Apple focus on perfecting technology to create seamless consumer experiences. Campbell has seen both breakthrough innovations and failed startups over his career. He emphasizes the importance of founding teams that care about building durable companies with lasting value through intellectual property and competitive advantages.
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The prominent trial lawyer Julian Mantle collapsed in the middle of a packed courtroom from an apparent medical emergency. The narrator, who witnessed the event, was shocked to see the usually well-composed Mantle reduced to a helpless state on the floor. Though Mantle's condition was concerning, the narrator hoped he would recover, believing it was too early for such a successful man to die in this way.
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1. WHO SAYS
ELEPHANTS CAN’T
DANCE?
Inside IBM’s Historic Turnaround
LOUIS GERSTNER
LOUIS GERSTNER was chairman and CEO of International Business Machines Corporation (IBM) from April
1993 until March 2002. Before joining IBM, Mr. Gerstner (a graduate of Dartmouth College and Harvard
Business School) served for four years as chairman and CEO of RJR Nabisco, Inc. and eleven years as
chairman and CEO of the American Express Travel Related Services Group. Prior to that, Mr. Gerstner
worked for McKinsey & Company, a management consulting firm.
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2. Who Says Elephants Can’t Dance? - Page 1
MAIN IDEA
In nine years as the chairman and CEO of International Business Machine Corporation (IBM), Lou Gerstner brought about a dramatic
change in the company’s fortunes. When he took charge, IBM was on the verge of extinction as the victim of rapid changes in the
computer industry. However, instead of breaking up IBM as most analysts were suggesting, Gerstner and his management team
turned the company around and restored it to a position of a position of power and influence within the industry. By any metric of
success, this must rank as one of the most impressive turnaround stories in business history.
April 1, 1993 – Lou Gerstner appointed as chairman and CEO of IBM ––––––––––––– IBM – Year Ended Dec 31, 1993
Section 1 – Four Critical Decisions Revenue $62.7 billion
Œ To keep the company together rather than break it up. Income Loss of $8.1 billion
• To change and update IBM’s economic model. Earnings Per Share -$3.55
Ž To reengineer how IBM did business in general.
Stock Price $12.72
• To sell IBM’s nonproductive assets.
1995 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– IBM – Year Ended Dec 31, 1995
Section 2 – Two Big Bets on the Future Revenue $71.9 billion
Income $4.2 billion
Direction of the Company Direction of the Industry
The services side of the Networks would replace Earnings Per Share $1.76
business will grow the standalone computer
Stock Price $22.84
appreciably in the future. as the prevailing choice.
1997 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– IBM – Year Ended Dec 31, 1997
Revenue $78.5 billion
Section 3 – Setting the Strategy of the Business
Income $6.1 billion
Œ Expand the world’s largest software business.
Earnings Per Share $3.00
• Open the company’s technology store.
Ž Unstack the stack and focus IBM’s initiatives. Stock Price $52.31
• Harness the emergence of e-business.
1999 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– IBM – Year Ended Dec 31, 1999
Revenue $87.5 billion
Section 4 – Changing the Corporate Culture at IBM
Income $7.7 billion
Earnings Per Share $4.12
Corporate Corporate
Culture Performance Stock Price $107.87
March 2002 – Lou Gerstner steps down as CEO of IBM –––––––––––––––––––––– IBM – Year Ended Dec 31, 2001
Revenue $85.9 billion
Section 5 – Key Lessons Learned
Income $7.7 billion
Three fundamentals of Earnings Per Share $4.35
They They They
success for enterprises
and executives Focus Execute Lead Stock Price $120.96
3. Who Says Elephants Can’t Dance? - Page 2
Section 1. Four Critical Decisions • To sell IBM’s nonproductive assets.
To raise cash for working capital, Gerstner sold assets and
slashed IBM’s dividend payout to shareholders. The
company sold undeveloped land and buildings, including the
Four Critical Decisions corporate headquarters. IBM also slashed its corporate jet
Œ To keep the company together rather than break it up. fleet and sold its collection of fine art.
Lou Gerstner went public with many of these measures at a
• To change and update IBM’s economic model. press conference on July 27, 1993:
Ž To reengineer how IBM did business.
“There’s been a lot of speculation as to when I’m going to deliver
• To sell IBM’s nonproductive assets. a vision of IBM, and what I’d like to say to all of you is that the last
thing IBM needs right now is a vision. What IBM needs right now
is a series of very tough-minded, market-driven, highly effective
When Lou Gerstner was appointed chairman and CEO of IBM as
strategies for each of its businesses – strategies that deliver
of April 1, 1993, he was under no illusions he faced a world-class
performance in the marketplace and shareholder value. And
challenge. Not only was he the first outsider ever to run the
that’s what we’re working on. Now the number-one priority is to
computer industry giant, he was also taking the helm at a time of
restore the company to profitability. The second priority for the
crisis. IBM was well on its way to announcing one of the biggest
company is to win the battle for the customer’s premises. Third,
losses in corporate history – $16 billion – and most industry
in the marketplace, we are moving to more aggressive in the
commentators questioned whether the company could continue
client/server arena. Fourth, we are going to continue to be, in
to exist in its current format. The general consensus was that
fact, the only full-service provider in the industry. And lastly,
IBM would need to be restructured or broken up into smaller
we’re doing a lot of things that I would just call ’customer
operating units.
responsiveness’ – just being more attentive to the customer,
Rather than feeling pressured into making quick decisions, faster cycle time, faster delivery time and a higher quality of
Gerstner took the first three months or so simply learning about service.”
what IBM did. The sheer scale of the company’s operations was – Lou Gerstner
impressive. There were around 300,000 people on the payroll
worldwide. IBM had geographic units and product divisions The initial reaction to this announcement was mixed, with most
which were huge businesses in their own right, each with people assuming Gerstner was simply planning on downsizing
multi-billion-dollar turnovers. The company’s research labs were the company rather than making any more fundamental
state-of-the-art, with several cutting edge technologies under changes. Away from the public glaze, however, Gerstner
development, each costing many hundreds of millions of dollars backed up this new approach by making some other tough
to develop. decisions like:
By the end of July 1993, Lou Gerstner made four key decisions: n Continuing to reinvest in the mainframe – when most people
were assuming the mainframe era was well past.
Œ To keep the company together rather than break it up.
When IBM had first started, it had sold a complete integrated n Remaining in the semiconductor business – by investing
package to its customers – the computer, the software, around $1 billion in the next-generation CMOS technology.
service and support bundled together. The personal n Protecting the R&D budget – allowing IBM to continue
computer market, however, was far more competitive. Firms developing cutting edge technologies.
specialized on just one segment of the market, leaving
n Turning IBM into a market-driven company – whereas in the
customers to integrate everything as required. Gerstner
past most IBM people were more concerned about internal
decided IBM would not go down that path, but would remain
processes rather than marketplace developments.
a systems integrator focusing on delivering complete
solutions to customers rather than becoming one more disk n Reducing the size of the board of directors – making it more
drive company, PC company or operating system company. accountable and more manageable.
He saw IBM’s size and breadth as a competitive advantage. n Breaking down IBM’s geographic fiefdoms – and organizing
the company around global industry teams instead.
• To change and update IBM’s fundamental economic model.
In 1993, IBM’s revenues and profits were dependent on n Reviving the IBM brand – by consolidating all IBM’s
mainframe computer sales. That was acceptable, but IBM’s advertising relationships to be managed by a single
expenses were much higher than those of its competitors. advertising agency.
For example, for every $1 of revenue, IBM’s expenses were n Resetting IBM’s corporate compensation approach –
42-cents whereas its competitors were 31-cents. That meant replacing salaries and benefits with stock ownership
they could cut prices and still be profitable while IBM could opportunities and the chance to earn bonuses based on
not. To address this, Gerstner launched a massive program IBM’s corporate performance.
to reduce expenses. Among other things, that meant firing
35,000 people and eliminating some of the mor obvious “Fixing IBM was all about execution. We had to stop looking for
excesses that had crept into IBM’s business practices. people to blame, stop tweaking the internal structure and
systems. I wanted no excuses. I wanted no long-term projects
Ž To reengineer how IBM did business.
that people could wait for that would somehow produce a magic
IBM’s legacy internal business systems were, by 1993,
cumbersome, expensive and less efficient that they should turnaround. I wanted – IBM needed – an enormous sense of
have been. Gerstner moved quickly to upgrade IBM’s own urgency.”
inventory systems, accounting systems, product fulfillment – Lou Gerstner
systems, supply chains and internal processes.
4. Who Says Elephants Can’t Dance? - Page 3
“The skills required in managing services processes are very
Section 2. Two Big Bets on the Future different from those that drive successful product companies.
We had no experience building a labor-based business inside an
asset-intensive company. We were expert at managing factories
Two Big Bets on the Future and developing technologies. We understood cost of goods and
inventory turns and manufacturing. But a human-intensive
Direction of the Company Direction of the Industry services business is entirely different. In services, you don’t
make a product and then sell it. You sell a capability. You sell
The services side of the Networks would replace
knowledge. You create it at the same time as you deliver it. The
business will grow the standalone computer
business model is different. The economics are entirely different.
appreciably in the future. as the prevailing choice.
We had to bet that we could build the recruitment, training,
compensation and HR processes to bring in 1,000 or more
people a month – even though we’d never attempted anything
“If I were to reduce the story of IBM’s transformation over the remotely close to that. We had to learn how to be disciplined –
past decade to the bare essentials, the saga would pivot on two hot to negotiate profitable contracts, price our skills, assess risk,
big bets: one on the industry’s direction, and the one on IBM’s and walk away from bad contracts and bad deals. The bet you’re
own strategy.” really making is on your own commitment to invest both the
– Louis Gerstner years and the capital, then build the experience and discipline it
takes to succeed.”
IBM had really been built around the runaway success of the
– Lou Gerstner
System/360 mainframe computer family. To make that strategy
work, IBM had launched into a whole new set of businesses,
each of which had become multi-billion-dollar enterprises in their
• The direction of the industry.
In 1994, the Internet was being talked about as “the
own right. Therefore, IBM was, by the 1990s, already well information superhighway”. Since it had not yet reached
established in the semiconductor industry, hardware, software, mainstream consciousness, there was loads of debate
sales and support. And the company was used to dominating its within the IT industry as to whether stand-alone computers
industry. would dominate mainframes, or vice-versa. IBM decided
When the UNIX operating system arrived in the early 1990s, it computers networked together would replace the
suddenly became possible for companies to start making parts stand-alone computer as the best way to do data processing.
of an overall solution rather than needing to do everything With the arrival of the Internet, this may not seem like a risky
themselves. That meant companies like Sun, Hewlett-Packard, bet but in the context of the early-1990s, IBM was taking a
Silicon Graphics and Digital could now start attacking IBM’s huge bet. The company was saying that rather than building
mainframe computing franchise. At around the same time, the proprietary technologies with “choke points” which made all
PC makers also started suggesting that since they were now other products incompatible, IBM would build open products
being used on the desktops, it was logical to use PCs in the that would operate with the products developed by
back-office systems as well. Their aspirations were couched in competitors. And not only would PCs join the network but so
terms of a “client/server” relationship – where the client was the too would many other intelligent computing devices. IBM
desktop PC and the server was another computer which stored was betting the influx of additions to the network would
enormous amounts of data and did all the number crunching. generate a corresponding increase in computing workloads
Most of IBM’s customers decided the PC-model would work and which would translate into more demand for big computers.
threw in their lot with the PC makers. IBM under Gerstner’s
“There were further implications of a networked world. The PC
leadership, however, chartered a very different course.
would be pushed off center stage. Very fast, high-bandwidth
Specifically, IBM made two far-reaching bets on its future:
networks would allow many of the PC’s functions to be
Œ The direction of the company. performed by larger systems inside companies and the networks
IBM believed that customers would grow tired of trying to itself. The difficult task of managing all that free-flowing digital
integrate parts of their computer systems provided by information certainly was not going to be done on desktop
different suppliers. With that in mind, IBM was betting that computers. Those workloads would have to be handled by
ultimately, the information technology industry would be large-scale systems – meaning huge demand for computing
services-led rather than technology-led. Under that infrastructure products, in addition to networking gear. Finally,
perspective, the companies that could capture the greatest this new landscape would change who made the technology
amount of value would be those that offered complete decisions. The decision makers would once again be chief
end-to-end solutions which would be carefully integrated into technology officers and senior business leaders – people IBM
the processes of a business enterprise rather than provided knew and understood. All of this wasn’t so neat, tidy and clear to
bits and pieces on an ad-hoc basis. us at the time. But there were indications that the world of
For this services business to work, however, IBM had to be computing was indeed shifting in ways that, at least in theory,
able to recommend a competitor’s product if that genuinely played to IBM’s traditional strengths and assets. We would have
met the needs of the customer better than an IBM product. to do an enormous amount of work and take significant risks –
Developing that kind of mentality within an insular company from continuing to open up all our products, to building the
like IBM was a major challenge, but if that could be done, it services business. But even the chance that the game might be
would be a major benefit. Ultimately, however, the success thrown open to a new set of leaders was powerfully motivating.
of this strategy was impressive. In 1992, services generated We were going to take our fate into our own hands. We were
$7.4 billion for IBM. By 2001, revenues from services had going to play offense.”
risen to more than $30 billion. – Lou Gerstner
5. Who Says Elephants Can’t Dance? - Page 4
Section 3. Setting the Strategy of the Business • Open the company’s technology store.
IBM has always had a world-class Research Division. Until
1994, however, the only company which had access to the
products developed was IBM itself. Lou Gerstner changed all
Setting the Strategy of the Business that. Beginning in April 1994, IBM Research started selling
Œ Expand the world’s largest software business. its technology to competitors.
This move, although counterintuitive at first glance, was the
• Open the company’s technology store. right strategy because:
Ž Unstack the stack and focus IBM’s initiatives. n IBM Research turned out more products than IBM itself
• Harness the emergence of e-business. could commercialize. Thus, unless the extra technology
was sold, a great asset was being underutilized.
n By selling technology, IBM would increase its ability to set
Once IBM had made a decision as to which direction the
new standards and protocols.
company should move and how the industry would develop,
there were follow-up decisions which also needed to be made: n Selling technology would allow IBM to recoup
investments and open up a new revenue stream.
Œ Expand the world’s largest software business.
In 1993, IBM sold more software than any other company, n The more digital devices which got sold, the more
including Microsoft. All of this software, of course, was demand there would be for more computing power in the
IBM-specific and was usually sold as an add-on for IBM underlying network – which IBM could fill.
mainframe systems. Despite that success, IBM never n By selling technology to others, IBM would be positioned
thought of itself as a software developer. Instead, software to benefit from the growth of businesses outside the
was considered as something the company needed to do in computer industry – like game consoles for example.
order to sell its hardware. To get started, IBM began licensing its technology to third
In addition, IBM was also trying to unwind some of the parties. (By 2001, licensing alone would generate $1.5 billion
mistakes of the 1980s by developing a new PC operating in additional revenue for IBM.) The company also started
system called OS/2. This was a futile attempt to wrestle selling technology components and custom-designed
control of the PC operating system back from Microsoft. It microelectronics to third parties, such as Sony and Nintendo.
was entirely unsuccessful in the marketplace and it was
draining tens of millions of dollars from IBM and absorbing Ž Unstack the stack and focus IBM’s initiatives
Historically, IBM had attempted to make everything its
huge chunks of management time and attention. Lou mainframe customers needed – from the processors and
Gerstner moved quickly to end IBM’s attempt to develop a displays through to the software and support services
new operating system for PCs declaring that as being needed. That was fine during the mainframe era but it
“yesterday’s war” and of little consequence in the generated loads of enemies who were specializing in
client/server era of the future. specialized segments of the industry. Therefore, Gerstner
To focus and grow IBM’s software business, the company: decided IBM would be better off partnering with these people
n Consolidated all software development programs under rather than trying to compete against them.
the control of a single manager who would decide which For example, IBM had developed a data network in the
products to develop and which products to discontinue. 1970s and 1980s which allowed it to transfer data around the
(IBM had 4,000 software products being developed in globe. This was sold to AT&T for $5 billion, meaning that IBM
thirty different labs and marketed under sixty different could serve all the telecommunications companies rather
brand names prior to this rationalization effort). than compete against them. Similarly, IBM moved its PC
n Focused on developing “middleware” – databases, sales business to a third parties and direct sales channels.
systems management software and transaction IBM also divested its hard disk manufacturing business and
management software – rather than attempting to take on its memory chip business.
the operating system developers (like Microsoft) or the By doing this:
application developers (like SAP, PeopleSoft and JD n IBM cuts its losses – since its was no longer going
Edwards). By focusing on this niche, IBM was able to head-to-head against entrepreneurial companies who
grow its own software business very strongly. were focused on one small part of the industry
n Made some bold acquisitions – notably of Lotus exclusively.
Development Corporation for $3.2 billion. This acquisition n IBM could spend more time focusing on what customers
enabled IBM to acquire a product called Notes which is a wanted and less time worrying about developing better
key strategic component in enterprise-wide collaboration technology and hoping the customer would become
efforts. IBM also acquired Tivoli Systems for its interested.
distributed systems management software.
n IBM could partner with more companies and act as an
As a result of these efforts, IBM’s Software Group has impartial integrator for its customers.
experienced exceptional growth and is now one of the most
n IBM freed up resources which could be invested in those
powerful software companies in the world being number one
or number two in every segment of the market it competes in. areas where the company already had a strong
The IBM Software Group had revenues of $13 billion in 2001 competitive advantage or an opportunity to take a leading
role – like in storage systems, self-directing computers,
(second only to Microsoft) and contributed pre-tax profits of
$3 billion to IBM. bioinformatics and nanotechnology.
6. Who Says Elephants Can’t Dance? - Page 5
• Harness the emergence of e-business. Section 4. Changing the Corporate Culture at IBM
The arrival of the Internet meshed nicely with IBM’s bet that
networked computers would replace the preference for
standalone machines. It also tied in nicely with the concept of
“convergence” – that telecommunications, computing and Changing the Corporate Culture at IBM
consumer electronics would ultimately merge a number of
different industries. It was also significant that in an Internet
economy, the middleware which IBM specialized in was vital Corporate
Corporate Corporate
Corporate
Culture
Culture Performance
Performance
because it meshed everything together and became the
“integrating glue” as it were.
With this in mind, IBM:
n Rewrote all its software to incorporate Internet access.
n Started building a new services business providing Web “I came to see, in my time at IBM, that culture isn’t just one aspect
site hosting. of the game – it is the game. In the end, an organization is
nothing more than the collective capacity of its people to create
n Set up a new internal group to evangelize the Internet and
value. Vision, strategy, marketing, financial management – any
to encourage all IBM business units to reorient around the
use of the Internet. management system, in fact – can set you on the right path and
can carry you for a while. But no enterprise – whether in
n Started mentioning the concepts of e-business in keynote business, government, education, health care, or any area of
speeches and other presentations given by senior human endeavor – will succeed over the long haul if those
managers. (IBM executives first used the term elements aren’t part of its DNA.”
“e-business” during an analysts briefing in November – Lou Gerstner
1996. It didn’t get an overly enthusiastic reception as
nobody had any idea what the term meant). “I have a theory about how culture emerges and evolves in large
Despite all its enthusiasm for the promises of worldwide institutions: Successful institutions almost always develop
digital communications, IBM never bought into the dot-com strong cultures that reinforce those elements that make the
mania of the late 1990s. Instead, IBM concentrated on the institution great. They reflect the environment from which they
underlying promise of what was a once-in-a-generation emerged. When that environment shifts, it is very hard for a
opportunity to do things faster and more efficiently. It was culture to change. In fact, it becomes an enormous impediment
also seen as the chance to push the envelop and reengineer to the institution’s ability to adapt. This is doubly true when a
entire businesses. company is the creation of a visionary leader. A company’s initial
culture is usually determined by its founder’s mindset – the
“To date IBM has invested more than $5 billion in e-business person’s values, beliefs, preferences, and also idiosyncrasies.
marketing and communications. That’s a lot of money, but the It’s been said every institution is nothing more, but the extended
returns paid to our brand and our market positioning are shadow of one person. In IBM’s case, that was Thomas J.
incalculable. I consider the e-business campaign to be one of the Watson, Sr.”
finest jobs of brand positioning I’ve seen in my entire career.” – Lou Gerstner
– Lou Gerstner
In the early days of IBM, Thomas Watson Sr. systematically and
“What were the real lessons, after all the meteoric ascents and deliberately built the company around three basic beliefs:
equally rapid flameouts of the dot-come era? For customers, I 1. Excellence in everything we do.
think the overriding lesson was that those who didn’t get 2. Superior customer service.
distracted and were willing to do the hard work had a 3. Respect for the individual.
once-in-a-lifetime opportunity – not just to do things better and For many years, these institutionalized beliefs propelled IBM to
faster, but to do things that, in fact, they’d never been able to do the forefront of its industry. Everything about the company – from
before. For investors as well as customers, the lesson was: no its compensation scheme to its well-known dress code – flowed
shortcuts. I think for a lot of people, the ‘e’ in e-business came to from these beliefs and almost took on a life of their own. (When
stand for ‘easy’. Easy money. Easy success. Easy life. When Gerstner abolished IBM’s dress code of dark suits and white
you strip it down to bare metal, e-business is just business. And shirts in 1995, this generated an enormous amount of media
real business is serious work. For IBM the lesson was about attention and comment). The only problem was that over the
rediscovering something we’d lost. We found our voice, our years, as customer preferences changed and evolved, IBM’s
confidence, and our ability once again to drive the industry culture did not evolve in sync. Instead, a kind of corporate rigor
agenda. Our messaging allowed our customers to see benefits mortis set in. There were also some unintended consequences
and value that was not being articulated by our competitors. The which were becoming more apparent:
concept of e-business galvanized our workforce and created a
coherent context for our hundreds of products and services. The n “Excellence in everything we do” had become an obsession
with perfection which meant every decision had to be
vast new challenges of networked computing reenergized IBM
checked and approved by a vast bureaucratic machine.
research and triggered a new golden age of technical
achievement for the company. Most important, the investment n “Superior customer service” had come to mean IBM thought it
did what we wanted to do at the outset – reestablish IBM’s could dictate what customers needed rather than paying
leadership in the industry.” attention to their changing needs.
– Lou Gerstner n “Respect for the individual” had spawned a culture of
entitlement where the employees didn’t feel obligated to earn
respect through their performance.
7. Who Says Elephants Can’t Dance? - Page 6
“Changing the attitude and behavior of hundreds of thousands of who exemplified and embraced the new culture. That sent the
people is very, very hard to accomplish. Business schools don’t message to all the up-and-comers within IBM that the path to the
teach you how to do it. You can’t lead the revolution from the top now wound through a different route than that which was
splendid isolation of corporate headquarters. You can’t simply used previously.
give a few speeches or write a new credo for the company and All these initiatives generated some interest, but most IBM
declare that the new culture has taken hold. You can’t mandate employees started to view the new culture as an intellectual
it, can’t engineer it. What you can do is create the conditions for rather than a practical exercise. It became clear the eight
the transformation. You can provide incentives. You can define principles were too many for them to keep in mind. Therefore,
marketplace realities and goals. But then you have to trust. In the new culture was reduced down to three words:
fact, in the end, management doesn’t change culture.
Management invites the workforce itself to change the culture.” Win – Execute – Team
– Lou Gerstner
This began as a mantra that people could use to specify what the
To start the process moving and to encourage IBM staff to use
new IBM stood for and then eventually this became part of the
their initiative more rather than waiting for their boss to tell them
company’s performance management system. Every year, each
what to do, Gerstner and his management team decreed there
IBM employee would list all the actions they were committed to
would be few rule books, codes or books of procedures. In their
taking to fulfill the three commitments. Their merit pay and
place were put eight basic principles which defined the priorities
variable pay would then be determined by how well they
of the new IBM:
performed against those commitments.
1. The marketplace is the driving force for everything we do.
To further encourage action, Gerstner also instilled a sense of
Instead of trying to specify how the world should work,
urgency. In just the same way as Thomas Watson had bet the
success as a company for IBM comes solely from helping
company’s future on the development of the System/360,
customers themselves succeed. Nothing else matters.
Gerstner declared that e-business was of equal importance.
2. We are a technology company with a commitment to quality.
Great technology has always been IBM’s strength. IBM will “We infused e-business into everything – not just our
succeed if it channels this strength into developing products advertising, product planning, research agendas, and customer
customers actually want and need. meetings, but throughout our communications and operations –
from my e-mails, broadcasts, and town hall visits to the way in
3. We measure success by customer satisfaction and
which we measured our internal transformation. It provided a
shareholder value.
powerful context for all of our businesses. It gave us both a
No company is a success unless it has satisfied customers
marketplace-based mission and a new ground for our own
and increasing shareholder value. Everything else is only a
behaviors and operating practices – in other words, culture.
stepping stone to these two key objectives.
Most important, it was outward facing. We were no longer
4. We operate as an entrepreneurial organization – with focused on turning ourselves around. We were focused on
minimum bureaucracy and a focus on productivity. setting the industry agenda again. We shifted the internal
Entrepreneurs take risks, accept innovation readily and discussion from ‘What do we want to be?’ to ‘What do we want to
pursue growth by expanding their markets. Those are do?’”
exactly the kind of traits IBM staff should possess. – Lou Gerstner
5. We never lose sight of our strategic vision.
What IBM does is important. Everyone in the organization “Why principles? Because I believe all high-performance
needs to feel engaged, to know where their skills and companies are led and managed by principles, not by
competencies fit in. processes. Decisions need to be made by leaders who
understand the key drivers of success in the enterprise and then
6. We think and act with a sense of urgency at all times. apply those principles to any given situation with practical
Most often, it’s better to be fast rather than insightful. wisdom, skill and a sense of relevancy to the current
Planning and analysis are worthwhile but never at the environment.”
expense of getting the job done right away. Generate some – Lou Gerstner
“constructive impatience”.
7. We always work as a team. “Building on decades of experience, knowledge, maturity and
Teamwork which is focused on delivering value to the character, IBM over the past ten years has begun to develop the
customer will be applauded and rewarded within IBM. Turf ability to handle a high level of internal complexity and even
wars and bureaucracy will not. apparent contradiction. Rather than hiding from conflict or
suppressing it, we’re learning how to manage it, even benefit
8. We are sensitive to the needs of our employees and the
from it. Sustaining that balance will be tough, but I am optimistic.
needs of the communities in which we operate.
The marketplace we’re now living in – the most dynamic,
IBM genuinely wants its people to have the resources and competitive, global economy in recorded history – will help. As
the room they need to be able to grow personally. In a similar
long as IBMers remain focused outward, the world will keep
vein, IBM also wants the communities within which we do them on their toes. As I write this the battle is not over. IBM has,
business to become a little better thanks to our efforts. in effect, undergone vast cultural change. The ‘new blue’ – tied to
As well as these eight principles, Gerstner also formed a Senior our e-business strategy and focused on the market’s most
Leadership Group who were to focus the attention of the promising growth opportunities – is beginning to take off. IBMers
company’s employees on the need for leadership and change. are energized, motivated and stimulated as they haven’t been in
He also started talking about what changes were needed with a long time.”
the senior management of the company. And, most importantly, – Lou Gerstner
the company started promoting and rewarding those executives
8. Who Says Elephants Can’t Dance? - Page 7
Section 5. Key Lessons Learned • Successful leaders and great businesses execute well.
In most industries, there are usually only five or six factors
which drive success. Great companies execute on those
factors better than their competitors. That is, they get the job
Key Lessons Learned done better than everyone else. Generally speaking, the
market leaders out-execute their competitors day-in and
day-out rather than coming up with anything new and
Three fundamentals of
They They They startling.
success for enterprises
Focus Execute Lead With that in mind, effective execution is built around four
and executives
basic attributes:
n People respect what you inspect much more than what
you expect – meaning unless you actually demand
The three key lessons which emerged from Lou Gerstner’s IBM accountability and make changes when the results do not
experience are: eventuate, things will slide rather than getting done. This
Œ Successful leaders and successful businesses are focused. is one of those situations where more credit should be
In business, there is always a temptation to try something given for building arks than for predicting rain.
new, especially when the economic conditions get tough in n World-class processes are required – because if you’re
your own specific field. Invariably, however, all that ends up trying to go up against a best-in-class competitor with
doing is sinking the company into an even deeper hole antiquated processes, there can be only one outcome.
because its focus strays from what it does best. It is always The great companies have superb processes in the areas
difficult to develop world-class competencies in a second that count the most.
area of business.
n Strategic clarity is needed – as conflicting goals only
Closely akin to this “the grass is greener on the other side of cause confusion, not achievement. Great companies
the fence” phenomena is acquisition fever. Most executives spell things out so clearly what needs to be done to
would rather try and grow their way out of trouble rather than execute well is crystal-clear. By communicating clear
make the hard decisions needed to fix their traditional strategies and values well, you can then allow people the
businesses. freedom they need to make good decisions which will be
The bottom line, however, is that any business enterprise consistent with those values.
which succeeds does so on the basis of a deep n A high-performance culture allows everyone to do the
understanding of its customer needs and the economic right things faster and more often – by removing all the
realities involved in meeting those needs. Truly great impediments to action that may exist elsewhere. When
companies have a clear view of the five or six critical things you succeed in creating this type of culture, everyone
they must do to succeed. They also know how to allocate takes quality personally. Mediocrity is not tolerated.
resources effectively. Transferring those skills to another line Everyone is committed to doing whatever it takes to excel.
of business is not as simple as it may appear at first glance.
“Execution – getting the task done, making it happen – is the
Therefore, the best companies always have and always will
most unappreciated skill of an effective business leader.”
“stick to their knitting”. They remain tightly and obsessively
– Lou Gerstner
focused on what they know best and resist the temptation to
dilute their focus by moving off into additional fields of “Execution is really the critical part of a successful strategy.
business. Getting it done, getting it done right, getting it done better than
the next person is far more important than dreaming up new
“Good strategies are long on detail and short on vision. They lay
visions of the future.”
out multi-year plans in great qualitative detail: the market
– Lou Gerstner
segments the company will pursue, market share numbers that
must be achieved, expense levels that must be managed, and “Execution is all about translating strategies into action
resources that must be applied. These plans are then reviewed programs and measuring their results. It’s detailed, it’s
regularly, and become, in a sense, the driving force behind complicated, and it requires a deep understanding of where the
everything the company does.” institution is today and how far it is from where it needs to go.
– Lou Gerstner Proper execution involves building measurable targets and
holding people accountable for them. But, most of all, it usually
“Vision statements can create a sense of confidence – a sense
requires that the organization do something different, value
of comfort – that is truly dangerous. Vision statements are for the
something more than it has in the past, acquire skills it doesn’t
most part aspirational, and they play a role in creating
have, and move more quickly and effectively in day-to-day
commitment and excitement among an institution’s employees.
relationships with customers, suppliers and distributors. All of
But in and of themselves, they are useless in terms of pointing
this spells change, and companies don’t like to change because
out how the institution is going to turn an aspirational goal into a
individuals don’t like to change.”
reality. Good strategies start with massive amounts of qualitative
– Lou Gerstner
analysis – hard, difficult analysis that is blended with wisdom,
insight and risk taking.” “If you want to out-execute your competitors, you must
– Lou Gerstner communicate clear strategies and values, reinforce those
values and allow people the freedom to act.”
– Lou Gerstner