(Who
Says Elephants Can't Dance, by Louis V. Gerstner, Harper Business, 2002)
Anyone who manages to bring Big Blue back from the brink
of oblivion and drive it to a position of IT industry leadership in nine years
must have done something right. It's therefore no surprise that the memoir of
outgoing IBM chief Lou Gerstner arrived in bookstores last month with a good deal
of fanfare. However great a CEO Gerstner may have been,
let's establish one thing right away: he is not a good writer. Admittedly, he
offers some interesting and occasionally humorous insights into IBM's insular
culture, complete with tales of meetings that looked and functioned more like
UN sessions (with hordes of advisors lining the walls), fulltime staff managing
the company's art collection and secretaries who were required to re-set the clocks
every morning. But for the most part, Who Says Elephants Can't Dance is a laundry
list of accomplishments from Gerstner's tenure presented in dry, matter-of-fact
prose, and it pointedly avoids touching on the company's setbacks. It
also fails to acknowledge any of the valid criticisms leveled at IBM or his leadership
in particular, so don't expect any comment on how mighty IBM allowed upstart Dell
to dominate the PC business on Gerstner's watch. You won't hear any reflections
on how he let Cisco eat the lunch of IBM's once-promising network division. Nor
should you expect any insight into how Oracle made off with IBM's brilliant IT
innovation, the relational database. And Gerstner absolutely, positively won't
address critics who argue that IBM's stock price really was propped up by clever
financial engineering tactics like share buy-back programs and overly aggressive
assumptions about pension funds. These issues were conveniently glossed over in
a few sentences, if they weren't ignored altogether. Selective
memory and poor prose notwithstanding, Gerstner's memoir does offer a compelling
account of how the ultimate IT outsider, recruited from RJR Nabisco, "traded cookie
chips for computer ship" (as one IBM employee gleefully put it). Along the way,
he managed to rebuild the insular, sclerotic, senile and hemorrhaging IBM from
the outside in. Under his guidance, IBM became a customer-driven company with
a clear voice in the marketplace. The book suggests three
ways in which this was accomplished. 1. Aligning the organization
around customers Gerstner reorganized the company completely,
shifting the focus from product groups and geographic organizations into customer
segments. He put the heads of the customer units on top of the organizational
charts, in charge of power and perks. Gerstner describes how he stopped creating
P&L statements for geographic units: "Many of our geographic leaders went ballistic…
'Sorry,' I said, 'you no longer manage a business. You now serve as a critical
support function to our integrated worldwide customer organization.'" Gerstner
has little patience for leaders who talk a good game about customer centricity
but delegate its execution. True leaders involve themselves in every step of the
implementation and align rewards, authority and titles with customers. IBM is
still a complex four-way matrix of customer, geography, process/function and products,
but the customer axis takes precedence over the other three. 2.
Listen to the customer and speak to them with a single voice Who
would have thought that the same person who, at the onset of his CEO tenure, uttered
these now-infamous words - "the last thing IBM needs is a vision" - would later
guide IBM through the Internet boom and bust with an amazingly clear and coherent
vision of "e-business"? One of Gerstner's most noteworthy successes was getting
IBM to articulate its vision with a single voice in a cluttered and confused marketplace.
He notes that unified messaging allowed customers to see benefits that were not
being articulated by IBM's competitors: "The concept of e-business galvanized
our workforce and created a coherent context for hundreds of products and services…
[it] reestablished IBM's leadership in the industry." The message was integrated
across hundreds of executive speeches and was the centerpiece of the company's
advertising, which was developed by a single global ad agency (Ogilvy). IBM
not only spoke with a single voice, it integrated its listening. Big Blue barely
listened to customers at all before Gerstner's arrival. The few customer surveys
that were done were rigged by the sales force, which had selected their best and
favorite customers to be interviewed. These sham surveys were executed not to
drive productive change, but to justify existing business practices. Today, a
small number of comprehensive surveys are conducted by third-party vendors who
are responsible for independently selecting the customers, and findings are incorporated
into processes as benchmarks for improvements. 3. Offer customer
solutions instead of boxes and software Anyone who has worked
close to an IT company can relate to Gerstner's description of IBM's obsession,
upon his arrival in 1993, with chip speeds, software versions and other technical
considerations. Perhaps Gerstner's single greatest accomplishment was that he
turned what was essentially a one-trick pony, a System/360 mainframe manufacturer,
into a company that solves problems for customers by integrating computer systems.
Unfortunately, Who Says Elephants Can't Dance is short on reflections about how
this colossal transformation from a hardware and software maker to a service,
consulting and outsourcing powerhouse was effected. While
much has been made of the Gerstner's lack of IT background, he points out that
he brought something more important with him when he parachuted in as CEO: experience
as an IT buyer. Gerstner had dealt with IBM for many years from the client side
as an American Express executive and CEO of RJR Nabisco. While the finer points
of relational databases, memory chips and disk speed were lost on Gerstner, he
understood the business imperatives of IBM's customers. What IBM needed was not
another technogeek, but an executive how would understand how to solve the complex
information processing needs of today's and tomorrow's client executives. His
lessons on turning the company outside-in, reconceiving the business from the
customer's perspective, is a valuable one for companies of any industry.
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