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Who Says Elephants Can't Dance? Inside IBM's Historic Turnaround
In 1990, IBM had its most profitable year ever. By 1993, the computer industry had changed so rapidly the company was on its way to losing $16 billion and IBM was on a watch list for extinction -- victimized by its own lumbering size, an insular corporate culture, and the PC era IBM had itself helped invent. Then Lou Gerstner was brought in to run IBM. Almost everyone watching the rapid demise of this American icon presumed Gerstner had joined IBM to preside over its continued dissolution into a confederation of autonomous business units. This strategy, well underway when he arrived, would have effectively eliminated the corporation that had invented many of the industry's most important technologies. Instead, Gerstner took hold of the company and demanded the managers work together to re-establish IBM's mission as a customer-focused provider of computing solutions. Moving ahead of his critics, Gerstner made the hold decision to keep the company together, slash prices on his core product to keep the company competitive, and almost defiantly announced, "The last thing IBM needs right now is a vision." Who Says Elephants Can't Dance? tells the story of IBM's competitive and cultural transformation. In his own words, Gerstner offers a blow-by-blow account of his arrival at the company and his campaign to rebuild the leadership team and give the workforce a renewed sense of purpose. In the process, Gerstner defined a strategy for the computing giant and remade the ossified culture bred by the company's own success. The first-hand story of an extraordinary turnaround, a unique case study in managing a crisis, and a thoughtful reflection on the computer industry and the principles of leadership, Who Says Elephants Can't Dance? sums up Lou Gerstner's historic business achievement. Taking readers deep into the world of IBM's CEO, Gerstner recounts the high-level meetings and explains the pressure-filled, no-turning-back decisions that had to be made. He also offers his hard-won conclusions about the essence of what makes a great company run. In the history of modern business, many companies have gone from being industry leaders to the verge of extinction. Through the heroic efforts of a new management team, some of those companies have even succeeded in resuscitating themselves and living on in the shadow of their former stature. But only one company has been at the pinnacle of an industry, fallen to near collapse, and then, beyond anyone's expectations, returned to set the agenda. That company is IBM. Lou Gerstener, Jr., served as chairman and chief executive officer of IBM from April 1993 to March 2002, when he retired as CEO. He remained chairman of the board through the end of 2002. Before joining IBM, Mr. Gerstner served for four years as chairman and CEO of RJR Nabisco, Inc. This was preceded by an eleven-year career at the American Express Company, where he was president of the parent company and chairman and CEO of its largest subsidiary. Prior to that, Mr. Gerstner was a director of the management consulting firm of McKinsey & Co., Inc. He received a bachelor's degree in engineering from Dartmouth College and an MBA from Harvard Business School.
384 pages, Hardcover
First published January 1, 2002
447 people are currently reading
9061 people want to read
About the author
Louis V. Gerstner Jr.
3 books35 followersLouis V. Gerstner Jr. was chairman of the board and chief executive officer of IBM from April 1993 until 2002 when he retired as CEO in March and chairman in December. He is largely credited with turning around IBM's fortunes.
He was formerly CEO of RJR Nabisco, and also held senior positions at American Express and McKinsey & Company. He is a graduate of Chaminade High School, Dartmouth College and holds an MBA from the Harvard Business School.
In January 2003, he assumed the position of chairman of The Carlyle Group, a global private equity firm located in Washington, DC. He retired from that position in October 2008 and remains a senior advisor to The Carlyle Group.
He was formerly CEO of RJR Nabisco, and also held senior positions at American Express and McKinsey & Company. He is a graduate of Chaminade High School, Dartmouth College and holds an MBA from the Harvard Business School.
In January 2003, he assumed the position of chairman of The Carlyle Group, a global private equity firm located in Washington, DC. He retired from that position in October 2008 and remains a senior advisor to The Carlyle Group.
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August 5, 2013
Below are key excerpts that I found particularly insightful in this book, detailing the turnaround that Louis Gerstner engineered at IBM in the 1990s:
1- "Thus began a lifelong process of trying to build organizations that allows for hierarchy but at he same time bring people together for problem solving, regardless of where they are positioned within the organization."
2- "I went on to summarize my management philosophy and practice: I manage by principle, not procedure. The marketplace dictates everything we should do. I'm a big believer in quality, strong competitive strategies and plans, teamwork, payoff for performance, and ethical responsibility. I look for people who work to solve problems and help colleagues. I sack politicians. I am heavily involved in strategy; the rest is yours to implement. Just keep me informed in an informal way. Don't hide bad information—1 hate surprises. Don't try to blow things by me. Solve problems laterally; don't keep bringing them up the line. Move fast. If we make mistakes, let them be because we are too fast rather than too slow. Hierarchy means very little to me. Let's put together in meetings the people who can help solve a problem, regardless of position. Reduce committees and meetings to a minimum. No committee decision making. Let's have lots of candid, straightforward communications. I don't completely understand the technology. I'll need to learn it. but don't expect me to master it. The unit leaders must be the translators into business terms for me."
3- "After all the customer and employee and industry meetings, as well as weekend and air travel reflection, I was indeed ready to make four critical decisions: Keep the company together. Change our fundamental economic model. Reengineer how we did business. Sell underproductive assets in order to raise cash."
4- "I've had a lot of experience turning around troubled companies, and one of the first things I learned was that whatever hard or painful things you have to do, do them quickly and make sure everyone knows what you are doing and why."
5- "The sine qua non of any successful corporate transformation is public acknowledgment of the existence of a crisis. If e So there must be a crisis, and it is the job of the CEO to define and communicate that crisis, its magnitude, its severity, and its impact. Just as important, the CEO must also be able to communicate how to end the crisis—the new strategy, the new company model, the new culture. All of this takes enormous commitment from the CEO to communicate, communicate, and communicate some more."
6- "What drives IBM's unique complexity is twofold. First, every institution and almost every individual is an actual or potential customer of IBM. In The second complexity factor is the rate and pace of the underlying technology."
7- "All of our efforts to save IBM—through right-sizing i and reengineering and creating strategy and boosting morale and all the rest—would have been for naught if, while we were hard at work on the other things, the IBM brand fell apart. I have always believed a successful company must have a customer/market•lace orientation and a strong marketing organization. That's why my second step in creating a global enterprise had to be to fix and focus IBM's marketing efforts."
8- "We made four major changes to our compensation system...This was all about pay for performance, not loyalty or tenure. It was all about differentiation: Differentiate our overall pay based on the marketplace; differentiate our increases based on individual performance and pay in the marketplace; differentiate our bonuses based business performance and individual contributions; and differentiate our stock-option awards based on the critical skills of the individual and our risk of loss to competition."
9- "I wanted IBMers to think and act like long-term shareholders to feel the pressure from the marketplace to deploy assets and forge strategies that create competitive advantage. The market, over time, represents a brutally honest evaluator of relative performance, and what I needed was a strong incentive for IBMers to look at their company from the outside in."
10- "The skills required in managing services processes are very 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 and developing technologies. We understood cost of goods and inventory turns and manufacturing. But a human-intensive services business is entirely different. In services you don't make a product and then sell it. You sell a capability. You sell knowledge. You create it at the same time you deliver it. The business model is different. The economics are entirely different."
11- "My point is that all of the assets that the company needed to succeed were in place. But in every case—hardware, technology, software, even services—all of these capabilities were part of a business model that had fallen wildly out of step with marketplace realities...The implications of this kind of leap to a company's economic model can be devastating. In IBM's case it meant the collapse of gross profit margins and the attendant changes we had to engineer to lower our cost structure without compromising our effectiveness. Yet the hardest part of these decisions was neither the technological nor economic transformations required. It was changing the culture—the mindset and instincts of hundreds of thousands of people who had grown up in an undeniably successful company, but one that had tor decades been immune to normal competitive and economic forces. The challenge was making that workforce live, compete, and win in the real world. It was like taking a lion raised for all of its life in captivity and suddenly teaching it to survive in the jungle."
12- "You've probably found, as I have, that most companies say their cultures are about the same things—outstanding customer service. excellence, teamwork, shareholder value, responsible corporate behavior, and integrity. But, of course, these kinds of values don't necessarily translate into the same kind of behavior in all companies—how people actually go about their work, how they interact with one another, what motivates them. That's because, as with national cultures. most of the really important rules aren't written down anywhere."
13- "In comparison, changing the attitude and behavior of hundreds of thousands of people is very, very hard to accomplish. Business schools don't teach you how to do it. You can't lead the revolution from the splendid isolation of corporate headquarters. You can't simply give a couple of speeches or write a new credo for the company and declare that the new culture has taken hold. You can't mandate it, :an't engineer it. What you can do is create the conditions for transformation. You can provide incentives. You can define the marketplace realities and goals. But then you have to trust. In fact, in the end, management doesn't change culture. Management invites the workforce itself to change the culture."
14- "Thee work-a-day world of business isn't about fads or miracles. There are fundamentals that characterize successful enterprises anc successful executives. They are focused. They are superb at execution. They abound with personal leadership."
15- "At the end of the day a successful, focused enterprise is one that has developed a deep understanding of its customers' needs, its competitive environment, and its economic realities. This comprehensive analysis must then form the basis for specific strategies :hat are translated into day-to-day execution."
16- "Earlier in this section I mentioned that in every industry it is possible to identify the five or six key success factors that drive leadership performance. The best companies in an industry build processes that allow them to outperform their competitors vis-a-vis these success factors."
17- "This next generation of leaders—in both the public and private sectors—will have to expand its thinking around a set of economic, political, and social considerations. These leaders will be: Much more able to deal with the relentless, discontinuous change that this technology is creating. Much more global in outlook and practice. Much more able to strike an appropriate balance between the instinct for cultural preservation and the promise of regional or global cooperation. Much more able to embrace the fact that the world is moving to a model in which the "default" in every endeavor will be openness and integration, not isolation."
1- "Thus began a lifelong process of trying to build organizations that allows for hierarchy but at he same time bring people together for problem solving, regardless of where they are positioned within the organization."
2- "I went on to summarize my management philosophy and practice: I manage by principle, not procedure. The marketplace dictates everything we should do. I'm a big believer in quality, strong competitive strategies and plans, teamwork, payoff for performance, and ethical responsibility. I look for people who work to solve problems and help colleagues. I sack politicians. I am heavily involved in strategy; the rest is yours to implement. Just keep me informed in an informal way. Don't hide bad information—1 hate surprises. Don't try to blow things by me. Solve problems laterally; don't keep bringing them up the line. Move fast. If we make mistakes, let them be because we are too fast rather than too slow. Hierarchy means very little to me. Let's put together in meetings the people who can help solve a problem, regardless of position. Reduce committees and meetings to a minimum. No committee decision making. Let's have lots of candid, straightforward communications. I don't completely understand the technology. I'll need to learn it. but don't expect me to master it. The unit leaders must be the translators into business terms for me."
3- "After all the customer and employee and industry meetings, as well as weekend and air travel reflection, I was indeed ready to make four critical decisions: Keep the company together. Change our fundamental economic model. Reengineer how we did business. Sell underproductive assets in order to raise cash."
4- "I've had a lot of experience turning around troubled companies, and one of the first things I learned was that whatever hard or painful things you have to do, do them quickly and make sure everyone knows what you are doing and why."
5- "The sine qua non of any successful corporate transformation is public acknowledgment of the existence of a crisis. If e So there must be a crisis, and it is the job of the CEO to define and communicate that crisis, its magnitude, its severity, and its impact. Just as important, the CEO must also be able to communicate how to end the crisis—the new strategy, the new company model, the new culture. All of this takes enormous commitment from the CEO to communicate, communicate, and communicate some more."
6- "What drives IBM's unique complexity is twofold. First, every institution and almost every individual is an actual or potential customer of IBM. In The second complexity factor is the rate and pace of the underlying technology."
7- "All of our efforts to save IBM—through right-sizing i and reengineering and creating strategy and boosting morale and all the rest—would have been for naught if, while we were hard at work on the other things, the IBM brand fell apart. I have always believed a successful company must have a customer/market•lace orientation and a strong marketing organization. That's why my second step in creating a global enterprise had to be to fix and focus IBM's marketing efforts."
8- "We made four major changes to our compensation system...This was all about pay for performance, not loyalty or tenure. It was all about differentiation: Differentiate our overall pay based on the marketplace; differentiate our increases based on individual performance and pay in the marketplace; differentiate our bonuses based business performance and individual contributions; and differentiate our stock-option awards based on the critical skills of the individual and our risk of loss to competition."
9- "I wanted IBMers to think and act like long-term shareholders to feel the pressure from the marketplace to deploy assets and forge strategies that create competitive advantage. The market, over time, represents a brutally honest evaluator of relative performance, and what I needed was a strong incentive for IBMers to look at their company from the outside in."
10- "The skills required in managing services processes are very 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 and developing technologies. We understood cost of goods and inventory turns and manufacturing. But a human-intensive services business is entirely different. In services you don't make a product and then sell it. You sell a capability. You sell knowledge. You create it at the same time you deliver it. The business model is different. The economics are entirely different."
11- "My point is that all of the assets that the company needed to succeed were in place. But in every case—hardware, technology, software, even services—all of these capabilities were part of a business model that had fallen wildly out of step with marketplace realities...The implications of this kind of leap to a company's economic model can be devastating. In IBM's case it meant the collapse of gross profit margins and the attendant changes we had to engineer to lower our cost structure without compromising our effectiveness. Yet the hardest part of these decisions was neither the technological nor economic transformations required. It was changing the culture—the mindset and instincts of hundreds of thousands of people who had grown up in an undeniably successful company, but one that had tor decades been immune to normal competitive and economic forces. The challenge was making that workforce live, compete, and win in the real world. It was like taking a lion raised for all of its life in captivity and suddenly teaching it to survive in the jungle."
12- "You've probably found, as I have, that most companies say their cultures are about the same things—outstanding customer service. excellence, teamwork, shareholder value, responsible corporate behavior, and integrity. But, of course, these kinds of values don't necessarily translate into the same kind of behavior in all companies—how people actually go about their work, how they interact with one another, what motivates them. That's because, as with national cultures. most of the really important rules aren't written down anywhere."
13- "In comparison, changing the attitude and behavior of hundreds of thousands of people is very, very hard to accomplish. Business schools don't teach you how to do it. You can't lead the revolution from the splendid isolation of corporate headquarters. You can't simply give a couple of speeches or write a new credo for the company and declare that the new culture has taken hold. You can't mandate it, :an't engineer it. What you can do is create the conditions for transformation. You can provide incentives. You can define the marketplace realities and goals. But then you have to trust. In fact, in the end, management doesn't change culture. Management invites the workforce itself to change the culture."
14- "Thee work-a-day world of business isn't about fads or miracles. There are fundamentals that characterize successful enterprises anc successful executives. They are focused. They are superb at execution. They abound with personal leadership."
15- "At the end of the day a successful, focused enterprise is one that has developed a deep understanding of its customers' needs, its competitive environment, and its economic realities. This comprehensive analysis must then form the basis for specific strategies :hat are translated into day-to-day execution."
16- "Earlier in this section I mentioned that in every industry it is possible to identify the five or six key success factors that drive leadership performance. The best companies in an industry build processes that allow them to outperform their competitors vis-a-vis these success factors."
17- "This next generation of leaders—in both the public and private sectors—will have to expand its thinking around a set of economic, political, and social considerations. These leaders will be: Much more able to deal with the relentless, discontinuous change that this technology is creating. Much more global in outlook and practice. Much more able to strike an appropriate balance between the instinct for cultural preservation and the promise of regional or global cooperation. Much more able to embrace the fact that the world is moving to a model in which the "default" in every endeavor will be openness and integration, not isolation."
January 26, 2016
I don't usually read business books. If I do, I never read them on a Sunday!
"Who says Elephants Can't dance?" is unpretentious, witty and honest all at once. The fact that Lou does not consider himself a technologist helps. He explains the underpinnings of the IT industry and IBM lucidly.
This razor sharp focus on competition, execution & change management are compelling. However, the most important leadership trait that exudes is his ability to understand "what drives people". He says, "People don't do what you expect but what you inspect." Revamping the compensation philosophy and overhauling culture change of a company as big as IBM is no mean feat.
The Appendix elucidating the many letters he wrote to IBMers drives the importance for communication in times of change and otherwise.
Excerpt: "Employees in any institution frequently complain and rightly so: " Why do I have to hear news about my company on TV or the radio before I hear it from the company?"..required to break news first to the shareholders through the media. However I have always made it a point to make sure our employees hear the news literally seconds later. " No doubt he was able to build credibility with stakeholders both internal and external.
This book taught me "small things make a big difference!".
"Who says Elephants Can't dance?" is unpretentious, witty and honest all at once. The fact that Lou does not consider himself a technologist helps. He explains the underpinnings of the IT industry and IBM lucidly.
This razor sharp focus on competition, execution & change management are compelling. However, the most important leadership trait that exudes is his ability to understand "what drives people". He says, "People don't do what you expect but what you inspect." Revamping the compensation philosophy and overhauling culture change of a company as big as IBM is no mean feat.
The Appendix elucidating the many letters he wrote to IBMers drives the importance for communication in times of change and otherwise.
Excerpt: "Employees in any institution frequently complain and rightly so: " Why do I have to hear news about my company on TV or the radio before I hear it from the company?"..required to break news first to the shareholders through the media. However I have always made it a point to make sure our employees hear the news literally seconds later. " No doubt he was able to build credibility with stakeholders both internal and external.
This book taught me "small things make a big difference!".
February 5, 2014
It is nice to think a person can come into a failing giant such as IBM and turn it around with common sense and a gamble or two. However, I found Gerstner overly self-indulgent. He takes credit for everything! Even though he notes Dennie's importance in the recovery, he phrases it as "I got lucky in meeting Dennie" rather than "Dennie saved the company." Also, I thought it petty of him to publish some of the emails his employees had written him--to point out their lack of tact. Let's remember they were going through a difficult, emotional time, and that they were not necessarily skilled in communications.
There are a few lessons to be learned, and I think Gerstner's leadership strength is admirable. For those reasons, this book might be of interest to some. Otherwise, I put this in the category of airport books that promise you the keys to success... And consider this: how many CEOs have said "I owe everything I know to a book I picked up at the airport"?
There are a few lessons to be learned, and I think Gerstner's leadership strength is admirable. For those reasons, this book might be of interest to some. Otherwise, I put this in the category of airport books that promise you the keys to success... And consider this: how many CEOs have said "I owe everything I know to a book I picked up at the airport"?
May 13, 2019
I don't fancy business books as much. This book wasn't even my pick, it was a friend's. I don't know what force made me pick it. I couldn't keep the book down after I read the first page. It was a book that I needed, wanted to read, experience through someone as senior to tell me what it takes to make a historic turnaround.
The turmoils and tornadoes that seek you on your journey to make things happen are nothing but bricks of the pillars of a brilliant change. This book inspired me, kept me grounded, filled me with gratitude and lot more emotions that were completely new to me.
Thank you Louis for this book!
The turmoils and tornadoes that seek you on your journey to make things happen are nothing but bricks of the pillars of a brilliant change. This book inspired me, kept me grounded, filled me with gratitude and lot more emotions that were completely new to me.
Thank you Louis for this book!
January 14, 2012
آقای گرستنر در سال 1993 شرکت آی بی ام را که به دلیل تغییرات بنیادین صنعت کامپیوتر رو به افول بود را تحویل گرفت و در سال 2002 این شرکت را در اوج تحویل داد
منتقدی نوشته بود که آی بی ام فیل است و عدم انعطاف طبیعی آن شرکت را به سمت مرگش خواهد برد. گرستنر در کمتر از 10 سال فیل را متحول کرد و در جواب این انتقاد کتابی با این نام نوشت
یکی از بهترین کتاب های مدیریتی که موردکاوی قدرتمندی را به خواننده عرضه می کند
منتقدی نوشته بود که آی بی ام فیل است و عدم انعطاف طبیعی آن شرکت را به سمت مرگش خواهد برد. گرستنر در کمتر از 10 سال فیل را متحول کرد و در جواب این انتقاد کتابی با این نام نوشت
یکی از بهترین کتاب های مدیریتی که موردکاوی قدرتمندی را به خواننده عرضه می کند
July 20, 2020
Truth be told, I don't have much use for C-level executives. Most of what I see about them involves obscene levels of compensation, on an annual basis, personal secretaries and use of expensive corporate assets, like company planes. The company can be laying off middle-class people like me, but the executives pocket obscene amounts of money, vacation at their beach houses and generally live a very disconnected life from the rest of us. They're the counter-example to the notion that the USA has a classless society.
Fine. Maybe reading a book about an arguably-successful CEO will change my opinion.
A ship, even a good one with a fine crew, needs a captain. Someone who can look the situation over and make a binding decision. Anyone familiar with Star Trek knows that Spock and Scotty and Riker are all capable people. But imagine how situations would've been different without the "barge in and take command" behavior of James Kirk or the wise, patient leadership of Jean-Luc Picard. These captains take charge and, for better or worse, suffer the consequences of the choices THEY make.
So maybe IBM needed a Kirk after too many years of having a Picard in charge.
Honestly, I don't think either of those fictional leaders would've known what to do with IBM of the early 90s. Are we SURE this is Planet Earth? Because it sounds a LOT like some kind of alien world.
Here's an organization so completely hamstrung with bureaucracy and obsession with titles you'd think it was an 18th Century royal court in some obscure European nation. People who've been promoted to a certain level refusing to do certain roles because it was beneath their title. People taking titles with them to new roles where, arguably, they "outranked" the people they were reporting to. People who don't delegate their responsibilities (because doing so would diminish their prestige) and have armies of assistants who actually do all the work while the leader just "presides," usually not even needing to give their official "yea" or "nay."
Where, if someone attempts to champion some new initiative, it requires sign-off from multiple tiers of leaders, frequently in multiple different fiefdoms. And failure, by any one of them, to provide approval in a timely manner can stop the whole thing in its tracks.
This organization is having their a** handed to them by the market, but these people worked long and hard to achieve this position, so they're going to hang onto it.
Until someone else gets put in charge and proceeds to shake up the kingdom. And, to his credit, Lou Gerstner did exactly that.
He saw the rise of e-business. Indeed, they were the main organization championing that concept. He also saw the dot-com bubble. At its core, too many people seemed to think the "e-" stood for "easy." We put up a website and people send us money, even though we don't really do any work. We have an IPO and give ourselves massive numbers of shares. Other people bid up the value of those shares, we cash out and go on a permanent vacation. Easy.
At its core, e-business is just business over a different medium. And real business is hard work.
He correctly calls out investment bankers as the people who "organized the the party and supplied the booze" for the fiasco that was the dot-com bubble. The investors supplied (and promptly lost) the money and the tech entrepreneurs supplied the talent and the reputations. The investment banks ended up with all the money. Everyone else lost pretty much everything. Sound familiar?
Apparently, where C-level executives are concerned, a great leader is someone who recognizes BS and has the ability to put a stop to it. They get people and an organization to stop wasting time and money and do what they need to do. The path he put IBM on has served it rather well: services are where the money is. His successors have continued down that path to the present day.
Probably the biggest single mistake he made was handing out large quantities of corporate shares to top-level management, making that a significant fraction of their compensation. He wanted to "align the interests" of management with those of the shareholders. The result is that management has been doing whatever they can to keep boosting the values of the shares, even if what they're doing is unsustainable.
They're laying off their experienced people and offshoring so much of the work that it's nearly impossible to find anyone to talk to about getting your contracted services fixed and working properly. These are the people where the "rubber meets the road."
They're spinning yarns about how unproven fields will be profitable. Their cloud offerings, in which they've invested HEAVILY, simply ain't gettin' it done but they keep indicating that will be their savior. Maybe next quarter. Or the one after that. Or ....
Yes, he made some necessary changes. Improvements needed to become the default course, rather than resistance to same. Complacency needed to be stomped. Expenses needed to be trimmed. But he needed to remember that capital (shareholders) is not the friend of labor (the people who actually do the work). Putting management on the side of the former (and against the latter) means they will have fewer and and fewer people to manage. While it is possible to have too many employees, it's possible to have too few, as well.
When there's not enough rubber hitting the road, you lose traction and either stop or go off the road. Modern-day IBM is doing a combination of both.
Sounds like they need another guy like this to come along and seriously alter their course again.
Fine. Maybe reading a book about an arguably-successful CEO will change my opinion.
A ship, even a good one with a fine crew, needs a captain. Someone who can look the situation over and make a binding decision. Anyone familiar with Star Trek knows that Spock and Scotty and Riker are all capable people. But imagine how situations would've been different without the "barge in and take command" behavior of James Kirk or the wise, patient leadership of Jean-Luc Picard. These captains take charge and, for better or worse, suffer the consequences of the choices THEY make.
So maybe IBM needed a Kirk after too many years of having a Picard in charge.
Honestly, I don't think either of those fictional leaders would've known what to do with IBM of the early 90s. Are we SURE this is Planet Earth? Because it sounds a LOT like some kind of alien world.
Here's an organization so completely hamstrung with bureaucracy and obsession with titles you'd think it was an 18th Century royal court in some obscure European nation. People who've been promoted to a certain level refusing to do certain roles because it was beneath their title. People taking titles with them to new roles where, arguably, they "outranked" the people they were reporting to. People who don't delegate their responsibilities (because doing so would diminish their prestige) and have armies of assistants who actually do all the work while the leader just "presides," usually not even needing to give their official "yea" or "nay."
Where, if someone attempts to champion some new initiative, it requires sign-off from multiple tiers of leaders, frequently in multiple different fiefdoms. And failure, by any one of them, to provide approval in a timely manner can stop the whole thing in its tracks.
This organization is having their a** handed to them by the market, but these people worked long and hard to achieve this position, so they're going to hang onto it.
Until someone else gets put in charge and proceeds to shake up the kingdom. And, to his credit, Lou Gerstner did exactly that.
He saw the rise of e-business. Indeed, they were the main organization championing that concept. He also saw the dot-com bubble. At its core, too many people seemed to think the "e-" stood for "easy." We put up a website and people send us money, even though we don't really do any work. We have an IPO and give ourselves massive numbers of shares. Other people bid up the value of those shares, we cash out and go on a permanent vacation. Easy.
At its core, e-business is just business over a different medium. And real business is hard work.
He correctly calls out investment bankers as the people who "organized the the party and supplied the booze" for the fiasco that was the dot-com bubble. The investors supplied (and promptly lost) the money and the tech entrepreneurs supplied the talent and the reputations. The investment banks ended up with all the money. Everyone else lost pretty much everything. Sound familiar?
Apparently, where C-level executives are concerned, a great leader is someone who recognizes BS and has the ability to put a stop to it. They get people and an organization to stop wasting time and money and do what they need to do. The path he put IBM on has served it rather well: services are where the money is. His successors have continued down that path to the present day.
Probably the biggest single mistake he made was handing out large quantities of corporate shares to top-level management, making that a significant fraction of their compensation. He wanted to "align the interests" of management with those of the shareholders. The result is that management has been doing whatever they can to keep boosting the values of the shares, even if what they're doing is unsustainable.
They're laying off their experienced people and offshoring so much of the work that it's nearly impossible to find anyone to talk to about getting your contracted services fixed and working properly. These are the people where the "rubber meets the road."
They're spinning yarns about how unproven fields will be profitable. Their cloud offerings, in which they've invested HEAVILY, simply ain't gettin' it done but they keep indicating that will be their savior. Maybe next quarter. Or the one after that. Or ....
Yes, he made some necessary changes. Improvements needed to become the default course, rather than resistance to same. Complacency needed to be stomped. Expenses needed to be trimmed. But he needed to remember that capital (shareholders) is not the friend of labor (the people who actually do the work). Putting management on the side of the former (and against the latter) means they will have fewer and and fewer people to manage. While it is possible to have too many employees, it's possible to have too few, as well.
When there's not enough rubber hitting the road, you lose traction and either stop or go off the road. Modern-day IBM is doing a combination of both.
Sounds like they need another guy like this to come along and seriously alter their course again.
November 15, 2021
(The English review is placed beneath the Russian one)
Когда я впервые прочитал эту книгу, то, как и многие другие читатели, поставил ей положительную оценку. Сейчас я уже не помню, чем тогда руководствовался, оценивая книгу настолько высоко. Однако спустя несколько лет я решил перечитать эту книгу, ибо кроме одного момента, совершенно не помнил содержания книги. Сначала я решил послушать аудиокнигу на английском. Опыт оказался не очень удачным, ибо слушая аудиокнигу, я постоянно отвлекался от текста, а это явный признак того, что книга скучная. Что примечательно при этом, что с того самого первого дня когда я впервые прочёл книгу, я очень хорошо запомнил только первую её часть, т.е. когда автор описывает крайне бюрократизированную корпорацию, в которой все сотрудники ходят в костюмах и в которой сотруднику никогда не предложат ничего кроме минеральной воды. Т.е. перед нами типичная транснациональная забюрократизированная корпорация, в которой сотрудники выполняют свои роли/задачи не по той причине, что они важны, а потому, что много лет назад кто-то установил такие правила. С тех пор они и не пересматривались. Поэтому Apple в своей знаменитой рекламе очень точно описала дух корпорации IBM. В этой первой части книги, автор довольно интересно и подробно описывает данную корпоративную проблему, с которой сталкивались многие корпорации. И именно это я запомнил, когда читал книгу впервые. Однако дальше, т.е. все оставшиеся 5 глав книги, автор крайне поверхностно и тот в точь как эта старая забюрократизированная IBM, что существовала до его прихода, начинает описывать всё остальное, что происходило в IBM уже во время его (автора) правления в качестве CEO. Насколько интересно было читать о проблемах IBM, настолько же скучно было читать о путях реформирования IBM автором этой самой книги. Описание, которое приводит автор, настолько формализованные, настолько блеклые и, следовательно, настолько скучные, что после того как я прослушал на английском всю книгу, я решил перечитать – 3 раз! – на русском, ибо не мог поверить, что книга настолько скучна. Я, было, подумал, что может это следствие резкого временного ухудшения моего английского? Я не стал в третий раз читать всю книгу целиком, а решил прочитать хотя бы только вторую главу, т.е. ту, что шла сразу после той единственной интересной главы, которая запомнилась мне как в первый, так и во второй раз. Итог: нет, я правильно всё понял, когда слушал книгу на английском, ибо книга реально скучная и не интересная. Автор пишет о тех изменениях, что он проводил в компании IBM, но делает это невероятно скучно. Он взял такой стиль, который часто можно встретить на официальных собраниях акционеров, т.е. что-то типа «вот наши гениальные идеи и вот к каким блестящим результатам мы пришли».
Честно сказать, я не знаю, кому может понравиться эта книга и почему она вообще кому-то понравилась. Ибо убери название корпорации – IBM – и поставь вместо него какую-нибудь неизвестную фирму, и никто не будет читать такую книгу. Т.е. весь успех этой книги, с моей точки зрения, держится на известном имени автора, на его позиции CEO и на том, что в книге описывается корпорация IBM. Книга незаслуженно, с моей точки зрения, получила положительную оценку, ибо в ней нет ничего, кроме сжатого и сухого отчёта о проделанной работе. Да, для корпоративного мира такой отчёт является нормой. Но для человека, который далёк и от корпоративного мира (т.е. транснациональных корпораций) и от компьютерного, книга не даст никаких интересных открытий. В ней нет просто ничего. Ничего нельзя взять из книги за исключением намерения максимально эффективно обслуживать своих клиентов. Единственное о чём интересно говорит автор, это призыв к клиентоориентированному подходу. Для многих людей даже конца XX века это уже не было откровением, а уж для XXI и подавно.
Что касается всего остального упомянутого в книге, то всё это преподнесено просто невероятно поверхностно. Понять процессы, что были внедрены в компанию или изменены в то время в корпорации IBM, просто невозможно. Всё же, одно дело управлять корпорацией и совсем другое, быть хорошим писателем. Думаю, автору стоило бы взять в соавторы человека, который как раз и специализируется на написании подобных книг. Мы же получили, типичный корпоративный отчёт.
When I first read this book, I, like many other readers, gave it a positive rating. Now I don't remember what motivated me to rate the book so highly at the time. However, several years later, I decided to reread the book because, except for one point, I had absolutely no recollection of the book's content. First, I decided to listen to the audiobook in English. The experience was not very good because listening to the audiobook, I was constantly distracted from the text, which is a clear sign that the book is boring. What is remarkable is that from the very first day I read the book, I remembered only the first part, i.e., when the author describes an extremely bureaucratic corporation in which all employees wear suits and in which the employee is never offered anything but mineral water. In other words, this is a typical transnational, bureaucratized corporation in which employees fulfill their roles/tasks not because they are important but because someone set those rules years ago. They haven't been revised since. That's why Apple, in its famous commercial, very accurately described the spirit of IBM Corporation. In the first part of the book, the author describes interestingly and in detail the problem that many corporations have faced. And that is what I remembered when I first read the book. But then, i.e., all the remaining 5 chapters of the book, the author very superficially and exactly as this old bureaucratized IBM that existed before his arrival, describes everything else that happened in IBM already during his (author's) reign as CEO. As interesting as it was to read about IBM's problems, it was equally boring to read about the ways in which the author of this very book reformed IBM. The descriptions the author gives are so formalized, so faded, and therefore so boring, that after listening to the whole book in English, I decided to reread - for the 3rd time! - in Russian, because I couldn't believe that the book was so boring. I was thinking that maybe it was a consequence of the sudden temporary degradation of my English? I did not read the whole book for the third time but decided to read at least the second chapter, i.e., the one that came right after the only interesting chapter that I remembered both the first and the second time. Bottom line: no, I got it right when I listened to the book in English because the book is really boring and not interesting. The author writes about the changes he has made at IBM, but it is incredibly boring. He took a style that you often see at formal shareholder meetings, i.e., something like "here are our brilliant ideas, and here are the brilliant results we came up with."
Frankly, I don't know who would like this book or why anyone would like it at all. Because take away the name of the corporation, IBM, and put some unknown firm in its place, and no one would read such a book. That is, from my point of view, the whole success of this book rests on the author's famous name, on his position as CEO, and on the fact that IBM is described in the book. The book has undeservedly, in my view, received a favorable rating because there is nothing in it but a brief and dry report on the work done. Yes, for the corporate world such a report is the norm. But for someone who is far away from both the corporate world, i.e., multinational corporations and the computer world, the book will not provide any interesting insights. There is simply nothing in it. Nothing can be taken from the book except the intention of serving one's customers as efficiently as possible. The only interesting thing the author talks about is the call for a customer-centered approach. For many people, even at the end of the 20th century, this was no longer a revelation, let alone in the 21st century.
As for everything else mentioned in the book, it is all incredibly superficially presented. It is impossible to understand the processes that were put in place or changed at that time at IBM Corporation. Still, it is one thing to run a corporation and quite another to be a good writer. I think the author should have taken someone who specializes in writing books like this as a co-author. What we got was a typical corporate report.
Когда я впервые прочитал эту книгу, то, как и многие другие читатели, поставил ей положительную оценку. Сейчас я уже не помню, чем тогда руководствовался, оценивая книгу настолько высоко. Однако спустя несколько лет я решил перечитать эту книгу, ибо кроме одного момента, совершенно не помнил содержания книги. Сначала я решил послушать аудиокнигу на английском. Опыт оказался не очень удачным, ибо слушая аудиокнигу, я постоянно отвлекался от текста, а это явный признак того, что книга скучная. Что примечательно при этом, что с того самого первого дня когда я впервые прочёл книгу, я очень хорошо запомнил только первую её часть, т.е. когда автор описывает крайне бюрократизированную корпорацию, в которой все сотрудники ходят в костюмах и в которой сотруднику никогда не предложат ничего кроме минеральной воды. Т.е. перед нами типичная транснациональная забюрократизированная корпорация, в которой сотрудники выполняют свои роли/задачи не по той причине, что они важны, а потому, что много лет назад кто-то установил такие правила. С тех пор они и не пересматривались. Поэтому Apple в своей знаменитой рекламе очень точно описала дух корпорации IBM. В этой первой части книги, автор довольно интересно и подробно описывает данную корпоративную проблему, с которой сталкивались многие корпорации. И именно это я запомнил, когда читал книгу впервые. Однако дальше, т.е. все оставшиеся 5 глав книги, автор крайне поверхностно и тот в точь как эта старая забюрократизированная IBM, что существовала до его прихода, начинает описывать всё остальное, что происходило в IBM уже во время его (автора) правления в качестве CEO. Насколько интересно было читать о проблемах IBM, настолько же скучно было читать о путях реформирования IBM автором этой самой книги. Описание, которое приводит автор, настолько формализованные, настолько блеклые и, следовательно, настолько скучные, что после того как я прослушал на английском всю книгу, я решил перечитать – 3 раз! – на русском, ибо не мог поверить, что книга настолько скучна. Я, было, подумал, что может это следствие резкого временного ухудшения моего английского? Я не стал в третий раз читать всю книгу целиком, а решил прочитать хотя бы только вторую главу, т.е. ту, что шла сразу после той единственной интересной главы, которая запомнилась мне как в первый, так и во второй раз. Итог: нет, я правильно всё понял, когда слушал книгу на английском, ибо книга реально скучная и не интересная. Автор пишет о тех изменениях, что он проводил в компании IBM, но делает это невероятно скучно. Он взял такой стиль, который часто можно встретить на официальных собраниях акционеров, т.е. что-то типа «вот наши гениальные идеи и вот к каким блестящим результатам мы пришли».
Честно сказать, я не знаю, кому может понравиться эта книга и почему она вообще кому-то понравилась. Ибо убери название корпорации – IBM – и поставь вместо него какую-нибудь неизвестную фирму, и никто не будет читать такую книгу. Т.е. весь успех этой книги, с моей точки зрения, держится на известном имени автора, на его позиции CEO и на том, что в книге описывается корпорация IBM. Книга незаслуженно, с моей точки зрения, получила положительную оценку, ибо в ней нет ничего, кроме сжатого и сухого отчёта о проделанной работе. Да, для корпоративного мира такой отчёт является нормой. Но для человека, который далёк и от корпоративного мира (т.е. транснациональных корпораций) и от компьютерного, книга не даст никаких интересных открытий. В ней нет просто ничего. Ничего нельзя взять из книги за исключением намерения максимально эффективно обслуживать своих клиентов. Единственное о чём интересно говорит автор, это призыв к клиентоориентированному подходу. Для многих людей даже конца XX века это уже не было откровением, а уж для XXI и подавно.
Что касается всего остального упомянутого в книге, то всё это преподнесено просто невероятно поверхностно. Понять процессы, что были внедрены в компанию или изменены в то время в корпорации IBM, просто невозможно. Всё же, одно дело управлять корпорацией и совсем другое, быть хорошим писателем. Думаю, автору стоило бы взять в соавторы человека, который как раз и специализируется на написании подобных книг. Мы же получили, типичный корпоративный отчёт.
When I first read this book, I, like many other readers, gave it a positive rating. Now I don't remember what motivated me to rate the book so highly at the time. However, several years later, I decided to reread the book because, except for one point, I had absolutely no recollection of the book's content. First, I decided to listen to the audiobook in English. The experience was not very good because listening to the audiobook, I was constantly distracted from the text, which is a clear sign that the book is boring. What is remarkable is that from the very first day I read the book, I remembered only the first part, i.e., when the author describes an extremely bureaucratic corporation in which all employees wear suits and in which the employee is never offered anything but mineral water. In other words, this is a typical transnational, bureaucratized corporation in which employees fulfill their roles/tasks not because they are important but because someone set those rules years ago. They haven't been revised since. That's why Apple, in its famous commercial, very accurately described the spirit of IBM Corporation. In the first part of the book, the author describes interestingly and in detail the problem that many corporations have faced. And that is what I remembered when I first read the book. But then, i.e., all the remaining 5 chapters of the book, the author very superficially and exactly as this old bureaucratized IBM that existed before his arrival, describes everything else that happened in IBM already during his (author's) reign as CEO. As interesting as it was to read about IBM's problems, it was equally boring to read about the ways in which the author of this very book reformed IBM. The descriptions the author gives are so formalized, so faded, and therefore so boring, that after listening to the whole book in English, I decided to reread - for the 3rd time! - in Russian, because I couldn't believe that the book was so boring. I was thinking that maybe it was a consequence of the sudden temporary degradation of my English? I did not read the whole book for the third time but decided to read at least the second chapter, i.e., the one that came right after the only interesting chapter that I remembered both the first and the second time. Bottom line: no, I got it right when I listened to the book in English because the book is really boring and not interesting. The author writes about the changes he has made at IBM, but it is incredibly boring. He took a style that you often see at formal shareholder meetings, i.e., something like "here are our brilliant ideas, and here are the brilliant results we came up with."
Frankly, I don't know who would like this book or why anyone would like it at all. Because take away the name of the corporation, IBM, and put some unknown firm in its place, and no one would read such a book. That is, from my point of view, the whole success of this book rests on the author's famous name, on his position as CEO, and on the fact that IBM is described in the book. The book has undeservedly, in my view, received a favorable rating because there is nothing in it but a brief and dry report on the work done. Yes, for the corporate world such a report is the norm. But for someone who is far away from both the corporate world, i.e., multinational corporations and the computer world, the book will not provide any interesting insights. There is simply nothing in it. Nothing can be taken from the book except the intention of serving one's customers as efficiently as possible. The only interesting thing the author talks about is the call for a customer-centered approach. For many people, even at the end of the 20th century, this was no longer a revelation, let alone in the 21st century.
As for everything else mentioned in the book, it is all incredibly superficially presented. It is impossible to understand the processes that were put in place or changed at that time at IBM Corporation. Still, it is one thing to run a corporation and quite another to be a good writer. I think the author should have taken someone who specializes in writing books like this as a co-author. What we got was a typical corporate report.
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August 12, 2016کتاب ( چه کسی میگوید فیلها نمیتوانند برقصند؟) که با عنوان (رقص فیلها) به فارسی برگردانده شده است جزو کتابهاییست که بیش از 13 سال از چاپ اول آن میگذرد و هر چند مباحثی که در آن مطرح میشود مباحث و تحلیلهای روز نیستند، ولی در بازار نشر کتاب ایران که کتاب خوب "مورد کاوی" بسیار کم چاپ میشود و بسیار بازار نشر پر هرج و مرجی است، جزو کتابهاییست که هنوز خواندنش به مدیران میانی به بالا توصیه میشود
داستان از افول شرکت (آی بی ام) شروع میشود که در برههای از زمان(اوایل دهه 90)، تمام توجه و تمرکز خود را بر روی (مین فریمها) برد در صورتی که مشتریان و بازار تشنهی (کامپیوترهای خانگی) و یا همان
PC
بود که دو شرکت (اینتل) و (مایکروسافت) به تولید این کامپیوترها میپرداختند و و شرکت (آی بی ام) به صورت غیر منطقی به تولید و عرصهی همان (مین فریمها) ادامه میداد
کتاب از پیشنهاد دادن مدیر عاملی به (گشنر) شروع میشود و اقداماتی که یک مدیر در طول یک دهه انجام میدهد تا بتواند این شرکت را که بقدری غیر منعطف و سنگین شده بود که یک منتقد آن را به فیل تشبیه میکند نجات دهد و به یک شرکت سودآور تبدیل کند
هم اکنون، در عالم مدیریت و استراتژی، اشتباه مطلق شرکت (نوکیا) را بر پایبندی بر سیستمعامل (سیمبین) و عدم پذیرش (اندروید) و همچنین عدم تطابق محصولات خود با بازار را مشابه اشتباه تاریخی (آی بیام) میدانند با این تفاوت که از آی بی ام (لنوو) پا بر جا ماند ولی از (نوکیا) حتی در سری گوشیهای جدید (مایکروسافت)، نام نیز حذف خواهد شد
در کل همانطور که عرض کردم برای دانشجویان مدیریت اجرایی و مدیران میانی به بالا خواندن این کتاب را توصیه میکنند
داستان از افول شرکت (آی بی ام) شروع میشود که در برههای از زمان(اوایل دهه 90)، تمام توجه و تمرکز خود را بر روی (مین فریمها) برد در صورتی که مشتریان و بازار تشنهی (کامپیوترهای خانگی) و یا همان
PC
بود که دو شرکت (اینتل) و (مایکروسافت) به تولید این کامپیوترها میپرداختند و و شرکت (آی بی ام) به صورت غیر منطقی به تولید و عرصهی همان (مین فریمها) ادامه میداد
کتاب از پیشنهاد دادن مدیر عاملی به (گشنر) شروع میشود و اقداماتی که یک مدیر در طول یک دهه انجام میدهد تا بتواند این شرکت را که بقدری غیر منعطف و سنگین شده بود که یک منتقد آن را به فیل تشبیه میکند نجات دهد و به یک شرکت سودآور تبدیل کند
هم اکنون، در عالم مدیریت و استراتژی، اشتباه مطلق شرکت (نوکیا) را بر پایبندی بر سیستمعامل (سیمبین) و عدم پذیرش (اندروید) و همچنین عدم تطابق محصولات خود با بازار را مشابه اشتباه تاریخی (آی بیام) میدانند با این تفاوت که از آی بی ام (لنوو) پا بر جا ماند ولی از (نوکیا) حتی در سری گوشیهای جدید (مایکروسافت)، نام نیز حذف خواهد شد
در کل همانطور که عرض کردم برای دانشجویان مدیریت اجرایی و مدیران میانی به بالا خواندن این کتاب را توصیه میکنند
April 28, 2012
Absolutely brilliant story and insight from a non-tech executive turning around the world's biggest tech company - despite all odds.
May 28, 2022
One of the initial business bios i had read, it offers a great insight into the workings of a labyrinthine organization with many moving parts
June 11, 2021
IBM. The only time I thought about this company growing up was when the TV would air their Smarter Planet advertisements. I found them very cool, but never really understood what IBM did anyways.
Lou and his story of turning around IBM is a lucid exposition of how culture and people are critical to an organization's survival and renewal. Books like these restore my faith in my job, and the impact it can create.
The stories are simple yet powerful and I personally found Lou Gerstner's style very unassuming and rolled up sleeves-ish. Jeez, who signs up to be the CEO of a colossus like IBM - a ship that seems to be sinking into the Deep Blue - without even being a Technology guy?
The answer is simple - a very gutsy guy. For someone who is in IT, this book felt like reading a history book on IT - and IBM truly has been a shaper of this history.
Also, did I mention that I heard this book in audiobook format? I think this format is no longer the pariah that I had for so long deemed it to be.
What I liked: The anecdotes (all of them), all the moments where Lou talks about the incredulous practices he saw in his initial days at IBM, and the gentle humour that he brings into his recollection.
What I didn't like: Maybe a bit longish, would have not minded skipping the last few chapters AT ALL. By then, I was too invested in IBM to care about musings about the industry and its future.
Lou and his story of turning around IBM is a lucid exposition of how culture and people are critical to an organization's survival and renewal. Books like these restore my faith in my job, and the impact it can create.
The stories are simple yet powerful and I personally found Lou Gerstner's style very unassuming and rolled up sleeves-ish. Jeez, who signs up to be the CEO of a colossus like IBM - a ship that seems to be sinking into the Deep Blue - without even being a Technology guy?
The answer is simple - a very gutsy guy. For someone who is in IT, this book felt like reading a history book on IT - and IBM truly has been a shaper of this history.
Also, did I mention that I heard this book in audiobook format? I think this format is no longer the pariah that I had for so long deemed it to be.
What I liked: The anecdotes (all of them), all the moments where Lou talks about the incredulous practices he saw in his initial days at IBM, and the gentle humour that he brings into his recollection.
What I didn't like: Maybe a bit longish, would have not minded skipping the last few chapters AT ALL. By then, I was too invested in IBM to care about musings about the industry and its future.
December 29, 2023
A few favorite points from this engaging firsthand account of a business transformation by Mr. Gerstner:
“In the end, an organization is nothing more than the collective capacity of its people to create value.”
“What you can do [to change the culture] is create the conditions for transformation. You can provide incentives. You can define the marketplace, realities and goals. But then you have to trust. In fact, in the end, management doesn’t change culture. Management invites the workforce itself to change the culture.”
“In most industries, five or six success factors that drive performance can be identified. For example, everyone knows that product selection, brand image, and real estate costs are critical in the retailing industry. It is difficult, if not impossible, to redefine what it takes to be successful in that industry.”
“The best leaders create high-performance cultures. They set demanding goals, measure results, and hold people accountable. They are change agents, constantly driving their institutions to adapt and advance faster than their competitors do.”
“In the end, an organization is nothing more than the collective capacity of its people to create value.”
“What you can do [to change the culture] is create the conditions for transformation. You can provide incentives. You can define the marketplace, realities and goals. But then you have to trust. In fact, in the end, management doesn’t change culture. Management invites the workforce itself to change the culture.”
“In most industries, five or six success factors that drive performance can be identified. For example, everyone knows that product selection, brand image, and real estate costs are critical in the retailing industry. It is difficult, if not impossible, to redefine what it takes to be successful in that industry.”
“The best leaders create high-performance cultures. They set demanding goals, measure results, and hold people accountable. They are change agents, constantly driving their institutions to adapt and advance faster than their competitors do.”
May 19, 2021
Great insights and lessons from a top business leader who orchestrated one of the greatest corporate turnarounds in recent memory. This a must-read for anyone with or planning a career in business, government, or social enterprise. It is written in a clear, concise, and easy-going style that reflects Lou's genuine and honest perspectives on the nine years he spent leading IBM from the brink of collapse to the successful global organization it became under his stewardship.
Given the inherent scope, depth and profound value, I am putting this on my list of re-read books.
Given the inherent scope, depth and profound value, I am putting this on my list of re-read books.
November 11, 2018
Lou does a great job of explaining how age old incumbents can take some tips from the IBM turnaround. An interesting and gripping read that shall be highly relatable to anyone working in slow moving elephants
June 10, 2020
While there are great ideas as well as an amazing example how to turn business around and adapt to the new market rules with such a huge operation, today I find some of the ideas outdated and not too relevant in the fast changing online world.
May 6, 2021
The most practical business book I’ve read. Very readable and easy to digest. Interesting man & interesting organisation. I’ll aim to re-read in 18months.
June 19, 2024
Effective execution is built on three attributes of an institution: world-class process, strategic clarity, and a high-performance culture.
October 18, 2017
Just read this book. You must read this to understand what a truly visionary person Lou is. Also, this is a great read for any managers.
December 12, 2020
A very un-business book-like business book. Gerstner just simply gives the facts and the honest story of IBM's transformation. There is no jargon, no grandeur, and no big words. I highly recommend reading this book. In addition, it was funny to think while reading the book that today, IBM is again in need of a radical transformation.
June 8, 2015
I was interested in following IBM after Warren Buffett bought the stock aggressively. This book recounts the turnaround episode after Louis Gerstner joined as CEO in 1993 to save IBM from the brink of collapse. What brought a once mighty company to the brink of collapse? Warren Buffett mentioned the ABCs of corporate decay, which are arrogance, bureaucracy and complacency. You could certainly see all 3 traits of corporate cancer metastasize within IBM in the early 1990s. Louis Gertnser's analysis of what brought about the cultural malaise at IBM was instructive - how did tens of thousands of employees at a once dominant and powerful firm grow soft, risk averse and slow? (1) Marketing myopia and being trapped by the legacy success of System/360; and (2) the impact of an antitrust suit filed by the US Department of Justice against IBM in 1969.
Gerstner's recount of his frantic 1st year as CEO as he raced to stop the cash haemorrhage at IBM was exciting. It was as if the reader was observing the turnaround of IBM from the cockpit of the CEO as Louis Gerstner tried to pilot the giant corporation away from a fatal crash. Part 2 of the book was on setting the strategic direction of IBM for the next decade of Gertner's term as CEO: keeping IBM intact; pushing services and setting the agenda for e-business. In Part 3 of his book, Gerstner shares his perspective on the most important and challenging aspect of the turnaround - the cultural transformation at IBM under his leadership.
'Who Says Elephants Can't Dance?' provides useful insights on corporate turnarounds and one learns from the playbook of a legendary CEO. I enjoyed it along with Iacocca's autobiography on saving Chrysler from the brink of bankruptcy. Post script 2015, IBM finds itself in need of another strategic turnaround. It is still an open question whether current CEO Ginni Rometty can galvanise the organization and help it ride the new tech wave in cloud computing, Big Data and artificial intelligence.
http://www.forbes.com/2002/11/11/cx_l...
Gerstner's recount of his frantic 1st year as CEO as he raced to stop the cash haemorrhage at IBM was exciting. It was as if the reader was observing the turnaround of IBM from the cockpit of the CEO as Louis Gerstner tried to pilot the giant corporation away from a fatal crash. Part 2 of the book was on setting the strategic direction of IBM for the next decade of Gertner's term as CEO: keeping IBM intact; pushing services and setting the agenda for e-business. In Part 3 of his book, Gerstner shares his perspective on the most important and challenging aspect of the turnaround - the cultural transformation at IBM under his leadership.
'Who Says Elephants Can't Dance?' provides useful insights on corporate turnarounds and one learns from the playbook of a legendary CEO. I enjoyed it along with Iacocca's autobiography on saving Chrysler from the brink of bankruptcy. Post script 2015, IBM finds itself in need of another strategic turnaround. It is still an open question whether current CEO Ginni Rometty can galvanise the organization and help it ride the new tech wave in cloud computing, Big Data and artificial intelligence.
http://www.forbes.com/2002/11/11/cx_l...
February 9, 2020
Basically it is a book, that shows how IBM revived itself from a loss making comping and to a profitable one.
The book talks about how Louis Gerstner (the author himself) changed the way of doing business for IBM by partnering with its competitors, building strategies that talks about cutting down costs of its products in a tactful manner, winning as a global team and not restricting success to a particular geography, the new marketing plan that came up with "IBM for smarter planet" ad campaign, etc that worked in the favor of the company.
Its a treat!
The book talks about how Louis Gerstner (the author himself) changed the way of doing business for IBM by partnering with its competitors, building strategies that talks about cutting down costs of its products in a tactful manner, winning as a global team and not restricting success to a particular geography, the new marketing plan that came up with "IBM for smarter planet" ad campaign, etc that worked in the favor of the company.
Its a treat!
This entire review has been hidden because of spoilers.
March 30, 2025
This book chronicles the seemingly forever IBM effort of turnaround (I say that because as of I’m writing this, it appears that the public image of IBM is once again a company in decline and turmoil).
The book has multiple themes, and I think I would only dwell on IBM's Mainframe business. The author’s overseeing/creation of IBM’s Middleware business (think of Middleware as a translator between different applications), while interesting, didn’t really persuade me that it has a monopoly-like competitive advantage, unlike its Mainframe business.
First of all - what is a Mainframe? Mainframe was - and still is - IBM’s bread and butter. I realized that the best way to describe Mainframe, since Mainframe is not for consumers (so it would be rather hard for an average consumer to wrap their head around the concept of Mainframe), is to use an analogy: think of Mainframe as trains. When trains first came to the scene, it was all the outrage - it did, in fact, revolutionized transit. Gone were the days when movement of people and goods were on stagecoaches. Plagued with poor road conditions, bandits and unpredictable weather, stagecoaches were vastly inferior to railroads.
Fast forward to the early 1900s, Henry Ford introduced the revolutionary Ford Model T, which changed everything for most people. For the first time in forever, cars can be owned by a household. Road condition, alongside with the popularity of Model T, improved. Then came next - the crowd now predicted the demise of the railroad: the idea is simple, if cars can be this good today already, why do people need trains?
Yet, fundamentally the above argument is invalid. Because in totality, rails and cars serve two different markets: rail serves a market where mass transit is needed. Instead of carrying just a few passengers like passenger cars, rails aim to carry hundreds of passengers in one setting. The passengers themselves need not to worry about the ever increasing traffic or parking at the destination. Whereas a person driving a car would. With ever increasing passengers, railroads can increase rail frequency, enlarge train platforms, make trains run faster or use double (or even triple) decker trains to move people. Something that passenger cars can’t - because they were never meant to do that in the first place.
That was the issue that plagued IBM when the author first became the CEO. The author wrote that most of CIOs who use IBM Mainframes complained bitterly that:
In essence, Mainframe computers are the trains and desktop PCs are the passenger cars. The “PC bigots” wants to make the argument that we don’t need trains anymore because passenger cars are so new and so revolutionary. Yet the bigots forget a very simple thing: new doesn’t mean better. New simply means, well, new. PCs can’t replace Mainframe for a simple reason that they serve 2 completely different purposes.
As I’m writing this, the Mainframe crowd - and IBM once again is not defending Mainframe’s position - is facing the issue of the argument that cloud could replace Mainframe. Any CIOs who are technically savvy enough to understand what Mainframe does will see the absurdity of using cloud to run what Mainframe does today: think of Cloud as, say, passenger cars with Tesla’s autonomous driving technology. The “PC bigots” of yesterday are now predicting train’s demise because passenger cars can drive themselves: if cars can drive themselves now, why would we need trains?
The reasoning? Once again, new doesn’t mean better. New just means new. Autonomous cars can’t replace trains because at the end of the day, cars still serve a different purpose than what trains can do. Even when cars can drive themselves, they still can’t carry hundreds of passengers in one single train run. They still are hungry for massive amounts of parking spaces at the destination (unlike a train that only needs a train station that can be used by hundreds of people at any given point). Cars still face heavy traffic during rush hours. While it’s important to point out the merit of autonomous driving technology (in this case, the merit of Cloud computing), it’s also important to point out that such technology serves a completely different market than the railroad market.
Yet - somewhere along the way, even IBM themselves forget that they’re serving a different market than the passenger car market. Seeing themselves losing to the PC crowd, IBM muscled their way into the PC market with hardware branded under PowerPC and software branded under OS/2. The net result? Huge amounts of money wasted on either projects and as of I’m writing today, neither projects ever gained significant market shares.
That’s where the author came in. Admitting that he is not a technologist, yet he was indeed in a position to understand IBM’s strength: afterall, he worked for American Express and RJR Nabisco prior, both companies used IBM’s Mainframe. He understood IBM - as well as Mainframe’s strength. His immediate action was to dramatically cut down Mainframe’s price (because IBM was losing market share to their Japanese counterparts painfully), and sold off many of IBM’s non-core assets (including $32 million worth of art collections!?). He gradually consolidated and restructured IBM’s pathwork like departments into a more unified company and left the company to IBM insiders towards the end - because he doesn’t believe giving jobs to outsiders (like him) does IBM any good in the future.
There are actually a lot more I want to write about this book (needless to say I think this is a brilliant book that describes IBM’s product and issues brilliantly, many of the issues the author described are still apparent today): of how bureaucratic IBM has, and still is. Of how lost of focus IBM has become - and still is - simply because the dominant position they were - and still is in - due to their dominant market position in the business machine field. As I’m writing this review today, IBM just announced one of the numerous job cuts it has announced in the past few years, while shipping most of the consulting jobs overseas. It’d be really interesting to see how the company will fare in the future. Especially that the problem plague the company yesterday is essentially the same problem facing the company today, inside and out.
The book has multiple themes, and I think I would only dwell on IBM's Mainframe business. The author’s overseeing/creation of IBM’s Middleware business (think of Middleware as a translator between different applications), while interesting, didn’t really persuade me that it has a monopoly-like competitive advantage, unlike its Mainframe business.
First of all - what is a Mainframe? Mainframe was - and still is - IBM’s bread and butter. I realized that the best way to describe Mainframe, since Mainframe is not for consumers (so it would be rather hard for an average consumer to wrap their head around the concept of Mainframe), is to use an analogy: think of Mainframe as trains. When trains first came to the scene, it was all the outrage - it did, in fact, revolutionized transit. Gone were the days when movement of people and goods were on stagecoaches. Plagued with poor road conditions, bandits and unpredictable weather, stagecoaches were vastly inferior to railroads.
Fast forward to the early 1900s, Henry Ford introduced the revolutionary Ford Model T, which changed everything for most people. For the first time in forever, cars can be owned by a household. Road condition, alongside with the popularity of Model T, improved. Then came next - the crowd now predicted the demise of the railroad: the idea is simple, if cars can be this good today already, why do people need trains?
Yet, fundamentally the above argument is invalid. Because in totality, rails and cars serve two different markets: rail serves a market where mass transit is needed. Instead of carrying just a few passengers like passenger cars, rails aim to carry hundreds of passengers in one setting. The passengers themselves need not to worry about the ever increasing traffic or parking at the destination. Whereas a person driving a car would. With ever increasing passengers, railroads can increase rail frequency, enlarge train platforms, make trains run faster or use double (or even triple) decker trains to move people. Something that passenger cars can’t - because they were never meant to do that in the first place.
That was the issue that plagued IBM when the author first became the CEO. The author wrote that most of CIOs who use IBM Mainframes complained bitterly that:
... The PC bigots had convinced the media that the world’s great IT infrastructure - the black offices that ran banks, airlines, utilities, and the like - could somehow be moved to desktop computers. These CIOs knew this line of thinking wasn’t true, and they were angry at IBM not defending their position.
In essence, Mainframe computers are the trains and desktop PCs are the passenger cars. The “PC bigots” wants to make the argument that we don’t need trains anymore because passenger cars are so new and so revolutionary. Yet the bigots forget a very simple thing: new doesn’t mean better. New simply means, well, new. PCs can’t replace Mainframe for a simple reason that they serve 2 completely different purposes.
As I’m writing this, the Mainframe crowd - and IBM once again is not defending Mainframe’s position - is facing the issue of the argument that cloud could replace Mainframe. Any CIOs who are technically savvy enough to understand what Mainframe does will see the absurdity of using cloud to run what Mainframe does today: think of Cloud as, say, passenger cars with Tesla’s autonomous driving technology. The “PC bigots” of yesterday are now predicting train’s demise because passenger cars can drive themselves: if cars can drive themselves now, why would we need trains?
The reasoning? Once again, new doesn’t mean better. New just means new. Autonomous cars can’t replace trains because at the end of the day, cars still serve a different purpose than what trains can do. Even when cars can drive themselves, they still can’t carry hundreds of passengers in one single train run. They still are hungry for massive amounts of parking spaces at the destination (unlike a train that only needs a train station that can be used by hundreds of people at any given point). Cars still face heavy traffic during rush hours. While it’s important to point out the merit of autonomous driving technology (in this case, the merit of Cloud computing), it’s also important to point out that such technology serves a completely different market than the railroad market.
Yet - somewhere along the way, even IBM themselves forget that they’re serving a different market than the passenger car market. Seeing themselves losing to the PC crowd, IBM muscled their way into the PC market with hardware branded under PowerPC and software branded under OS/2. The net result? Huge amounts of money wasted on either projects and as of I’m writing today, neither projects ever gained significant market shares.
That’s where the author came in. Admitting that he is not a technologist, yet he was indeed in a position to understand IBM’s strength: afterall, he worked for American Express and RJR Nabisco prior, both companies used IBM’s Mainframe. He understood IBM - as well as Mainframe’s strength. His immediate action was to dramatically cut down Mainframe’s price (because IBM was losing market share to their Japanese counterparts painfully), and sold off many of IBM’s non-core assets (including $32 million worth of art collections!?). He gradually consolidated and restructured IBM’s pathwork like departments into a more unified company and left the company to IBM insiders towards the end - because he doesn’t believe giving jobs to outsiders (like him) does IBM any good in the future.
There are actually a lot more I want to write about this book (needless to say I think this is a brilliant book that describes IBM’s product and issues brilliantly, many of the issues the author described are still apparent today): of how bureaucratic IBM has, and still is. Of how lost of focus IBM has become - and still is - simply because the dominant position they were - and still is in - due to their dominant market position in the business machine field. As I’m writing this review today, IBM just announced one of the numerous job cuts it has announced in the past few years, while shipping most of the consulting jobs overseas. It’d be really interesting to see how the company will fare in the future. Especially that the problem plague the company yesterday is essentially the same problem facing the company today, inside and out.
May 16, 2016
شرکت های بسیاری بوده اند که در طول تاریخ تا مرحله سقوط و فروپاشی پیش رفته اند. برخی از آنها با کوشش تیم های مدیریتی نوین به طرز معجزه آسایی از نابودی نجات یافته اند . آی بی ام یکی از همین شرکت هاست .
در سال ١٩٩٠ شرکت آی بی ا م با ٣ میلیارد دلار سود خالص بالاترین سود خود را به دست آورد ولی همین شرکت در سال ١٩٩٣ با از دست دادن ١٦ میلیارد دلار در معرض نابودی قرار گرفت . مدیری لایق به نام لوئیس گرستنر در رأس این شرکت قرار گرفت و آن را از سقوط نجات داد و متحول کر د . در این کتاب او داستان این تحول را از زبان خود، و با بیانی ساده و روان تشریح می کند.
او می نویسد :« در طول زندگی حرفه ای خود با عقاید تعصب آمیز زیادی از قبیل کوچک زیباست و بزرگ بد است روبرو بوده ام. در عرف عمومی جامعه چنین جا افتاده است که شرکت های بزرگ کُند، بوروکراتیک، غیرپاسخگو و غیرمؤثر هستند و شرکت های کوچک سریع پاسخگو و مؤثر می باشند. این مطالب کاملاً بی معنی هستند من تا به حال شرکت کوچکی را ندیده ام که تمایل نداشته باشد به یک شرکت بزرگ تبدیل شود و یا شرکت کوچکی را ندیده ام که در تحقیق و بازاریابی به بودجه رقبای بزرگتر از خودش حسادت نکند. بزرگی و حجم بالا اهمیت زیادی دارد، اندازه بزرگ می تواند یک اهرم کمکی تلقی شود . گستردگی و عمق زیاد اجازه سرمایه گذاری بیشتر، ریسک بزرگ تر و صبر زیادتر برای رسیدن به نتایج نهایی را می دهد.
سؤال این نیست که آیا یک فیل می تواند بر یک مورچه غالب شود یا خیر، بلکه سؤال این است که آیا یک فیل خاص، می تواند برقصد یا خیر، اگر فیل بتواند برقصد، مورچه ها باید اطاق رقص را ترک کنند.
متن خلاصه کتاب را از اینجا دانلود کنید
http://safaeinejad.ir/1387/09/25
در سال ١٩٩٠ شرکت آی بی ا م با ٣ میلیارد دلار سود خالص بالاترین سود خود را به دست آورد ولی همین شرکت در سال ١٩٩٣ با از دست دادن ١٦ میلیارد دلار در معرض نابودی قرار گرفت . مدیری لایق به نام لوئیس گرستنر در رأس این شرکت قرار گرفت و آن را از سقوط نجات داد و متحول کر د . در این کتاب او داستان این تحول را از زبان خود، و با بیانی ساده و روان تشریح می کند.
او می نویسد :« در طول زندگی حرفه ای خود با عقاید تعصب آمیز زیادی از قبیل کوچک زیباست و بزرگ بد است روبرو بوده ام. در عرف عمومی جامعه چنین جا افتاده است که شرکت های بزرگ کُند، بوروکراتیک، غیرپاسخگو و غیرمؤثر هستند و شرکت های کوچک سریع پاسخگو و مؤثر می باشند. این مطالب کاملاً بی معنی هستند من تا به حال شرکت کوچکی را ندیده ام که تمایل نداشته باشد به یک شرکت بزرگ تبدیل شود و یا شرکت کوچکی را ندیده ام که در تحقیق و بازاریابی به بودجه رقبای بزرگتر از خودش حسادت نکند. بزرگی و حجم بالا اهمیت زیادی دارد، اندازه بزرگ می تواند یک اهرم کمکی تلقی شود . گستردگی و عمق زیاد اجازه سرمایه گذاری بیشتر، ریسک بزرگ تر و صبر زیادتر برای رسیدن به نتایج نهایی را می دهد.
سؤال این نیست که آیا یک فیل می تواند بر یک مورچه غالب شود یا خیر، بلکه سؤال این است که آیا یک فیل خاص، می تواند برقصد یا خیر، اگر فیل بتواند برقصد، مورچه ها باید اطاق رقص را ترک کنند.
متن خلاصه کتاب را از اینجا دانلود کنید
http://safaeinejad.ir/1387/09/25
January 19, 2020
Great insights into a huge turnaround of one of the largest companies in the world. A fascinating read if you're in the mood for it. Personally, there are some market changes that have been going on in the past few years within Buffer's market, and so I found it very interesting to read about some much larger scale market changes and necessary action to turn a company around from a clear decline.
I particularly enjoyed reading about the strategy decisions, the approach convert that into execution, and the cultural adjustments needed to make it all successful. Some of the history of IBM was interesting, though some of it felt a bit dense to get through. Similarly, I wasn't as interested in the author's personal history, though some of it is context for his approach to leading IBM.
One thing that bugged me a little, is that there's a lot of military jargon used in the context of business throughout the book, and a lot of zero sum mentality, of winning by others losing.
Some of the highlights for me, in the form of quotes I highlighted:
"Move fast. If we make mistakes, let them be because we are too fast rather than too slow."
"I’ve had a lot of experience turning around troubled companies, and one of the first things I learned was that whatever hard or painful things you have to do, do them quickly and make sure everyone knows what you are doing and why."
"Fixing IBM was all about execution. We had to stop looking for people to blame, stop tweaking the internal structure and systems. I wanted no excuses. I wanted no long-term projects that people could wait for that would somehow produce a magic turnaround. I wanted—IBM needed—an enormous sense of urgency."
"So the truly unique challenge of my first few months at IBM was to reject the knee-jerk responses that would have destroyed the company, and to focus on day-to-day execution, stabilizing the company while we sought growth strategies that would build on our unique position in the industry."
"In the past, IBM was both the employer and the scorekeeper in the game. I needed my new colleagues to accept the fact that external forces—the stock market, competition, the changing demands of customers—had to drive our agenda, not the wishes and whims of our team."
"For the first time in my career, I was in a position to make a different kind of mark, to help something truly important live and thrive. I wasn’t going to walk away from that."
"This is about the bone-jarringly difficult task of forcing the organization to limit its ambition and focus on markets that made strategic and economic sense."
"For investors as well as customers, the lesson was: no shortcuts. I think for a lot of people, the “e” in e-business came to stand for “easy.” Easy money. Easy success. Easy life. When you strip it down to bare metal, e-business is just business. And real business is serious work."
"I came to see, in my time at IBM, that culture isn’t just one aspect of the game—it is the game. In the end, an organization is nothing more than the collective capacity of its people to create value. Vision, strategy, marketing, financial management—any management system, in fact—can set you on the right path and can carry you for a while. But no enterprise—whether in business, government, education, health care, or any area of human endeavor—will succeed over the long haul if those elements aren’t part of its DNA."
"you can quickly figure out, sometimes within hours of being in a place, what the culture encourages and discourages, rewards and punishes. Is it a culture that rewards individual achievement or team play? Does it value risk taking or consensus building?"
"What you can do is create the conditions for transformation. You can provide incentives. You can define the marketplace realities and goals. But then you have to trust. In fact, in the end, management doesn’t change culture. Management invites the workforce itself to change the culture."
"To someone arriving at IBM from the outside, there was a kind of hothouse quality to the place. It was like an isolated tropical ecosystem that had been cut off from the world for too long. As a result, it had spawned some fairly exotic life-forms that were to be found nowhere else. And because IBM was so deeply inbred and ingrown, so preoccupied with its own rules and conflicts, it had lost its robustness. It had become extremely vulnerable to attack from the outside."
"The fact is, in most cases a company has a set of competitive advantages in its base business. It may be hard—very hard—to redirect or reenergize an existing enterprise. Believe me, it’s a lot easier than throwing that enterprise over the fence into a totally new environment and succeeding. Age-old common sense: Stick to your knitting; dance with the partner who brought you. History shows that truly great and successful companies go through constant and sometimes difficult self-renewal of the base business. They don’t jump into new pools where they have no sense of the depth or temperature of the water."
"acquisitions that fit within an existing strategy have the most likely probability of success. Those that represent attempts to buy new positions in new marketplaces or that involve smashing together two very similar companies are fraught with risk."
"Vision statements can create a sense of confidence—a sense of comfort—that is truly dangerous. Vision statements are for the most part aspirational, and they play a role in creating commitment and excitement among an institution’s employees. But in and of themselves they are useless in terms of pointing out how the institution is going to turn an aspirational goal into a reality."
"good strategies are long on detail and short on vision."
"too often the executive does not understand that people do what you inspect, not what you expect"
"Execution is the tough, difficult, daily grind of making sure the machine moves forward meter by meter, kilometer by kilometer, milestone by milestone. Accountability must be demanded, and when it is not met, changes must be made quickly. Managers must be asked to report on their performance and explain their successes and failures. Most important, no credit can be given for predicting rain—only for building arks."
I particularly enjoyed reading about the strategy decisions, the approach convert that into execution, and the cultural adjustments needed to make it all successful. Some of the history of IBM was interesting, though some of it felt a bit dense to get through. Similarly, I wasn't as interested in the author's personal history, though some of it is context for his approach to leading IBM.
One thing that bugged me a little, is that there's a lot of military jargon used in the context of business throughout the book, and a lot of zero sum mentality, of winning by others losing.
Some of the highlights for me, in the form of quotes I highlighted:
"Move fast. If we make mistakes, let them be because we are too fast rather than too slow."
"I’ve had a lot of experience turning around troubled companies, and one of the first things I learned was that whatever hard or painful things you have to do, do them quickly and make sure everyone knows what you are doing and why."
"Fixing IBM was all about execution. We had to stop looking for people to blame, stop tweaking the internal structure and systems. I wanted no excuses. I wanted no long-term projects that people could wait for that would somehow produce a magic turnaround. I wanted—IBM needed—an enormous sense of urgency."
"So the truly unique challenge of my first few months at IBM was to reject the knee-jerk responses that would have destroyed the company, and to focus on day-to-day execution, stabilizing the company while we sought growth strategies that would build on our unique position in the industry."
"In the past, IBM was both the employer and the scorekeeper in the game. I needed my new colleagues to accept the fact that external forces—the stock market, competition, the changing demands of customers—had to drive our agenda, not the wishes and whims of our team."
"For the first time in my career, I was in a position to make a different kind of mark, to help something truly important live and thrive. I wasn’t going to walk away from that."
"This is about the bone-jarringly difficult task of forcing the organization to limit its ambition and focus on markets that made strategic and economic sense."
"For investors as well as customers, the lesson was: no shortcuts. I think for a lot of people, the “e” in e-business came to stand for “easy.” Easy money. Easy success. Easy life. When you strip it down to bare metal, e-business is just business. And real business is serious work."
"I came to see, in my time at IBM, that culture isn’t just one aspect of the game—it is the game. In the end, an organization is nothing more than the collective capacity of its people to create value. Vision, strategy, marketing, financial management—any management system, in fact—can set you on the right path and can carry you for a while. But no enterprise—whether in business, government, education, health care, or any area of human endeavor—will succeed over the long haul if those elements aren’t part of its DNA."
"you can quickly figure out, sometimes within hours of being in a place, what the culture encourages and discourages, rewards and punishes. Is it a culture that rewards individual achievement or team play? Does it value risk taking or consensus building?"
"What you can do is create the conditions for transformation. You can provide incentives. You can define the marketplace realities and goals. But then you have to trust. In fact, in the end, management doesn’t change culture. Management invites the workforce itself to change the culture."
"To someone arriving at IBM from the outside, there was a kind of hothouse quality to the place. It was like an isolated tropical ecosystem that had been cut off from the world for too long. As a result, it had spawned some fairly exotic life-forms that were to be found nowhere else. And because IBM was so deeply inbred and ingrown, so preoccupied with its own rules and conflicts, it had lost its robustness. It had become extremely vulnerable to attack from the outside."
"The fact is, in most cases a company has a set of competitive advantages in its base business. It may be hard—very hard—to redirect or reenergize an existing enterprise. Believe me, it’s a lot easier than throwing that enterprise over the fence into a totally new environment and succeeding. Age-old common sense: Stick to your knitting; dance with the partner who brought you. History shows that truly great and successful companies go through constant and sometimes difficult self-renewal of the base business. They don’t jump into new pools where they have no sense of the depth or temperature of the water."
"acquisitions that fit within an existing strategy have the most likely probability of success. Those that represent attempts to buy new positions in new marketplaces or that involve smashing together two very similar companies are fraught with risk."
"Vision statements can create a sense of confidence—a sense of comfort—that is truly dangerous. Vision statements are for the most part aspirational, and they play a role in creating commitment and excitement among an institution’s employees. But in and of themselves they are useless in terms of pointing out how the institution is going to turn an aspirational goal into a reality."
"good strategies are long on detail and short on vision."
"too often the executive does not understand that people do what you inspect, not what you expect"
"Execution is the tough, difficult, daily grind of making sure the machine moves forward meter by meter, kilometer by kilometer, milestone by milestone. Accountability must be demanded, and when it is not met, changes must be made quickly. Managers must be asked to report on their performance and explain their successes and failures. Most important, no credit can be given for predicting rain—only for building arks."
February 13, 2018
Always thought this would be a bore, but it's so enriching.
Intg experiences of a guy who was heading Amex's business and then RJR Nabisco - who then comes to a bumbling behemoth called IBM.
And it's interesting to note that IBM had lost so much of its soul and purpose, and this guy put the ship together. No doubt that the IT boom would have aided it, but it was strongly losing out to new players when it shouldnt have been
Great stuff about organisation structure, proxy taking over agility, a cultural rot, a leadership vacuum, about focusing on a few pieces and missing the boat on a few others. About centralisation as a powerful tool against decentralisaton.
Compensation, incentives, accountability - there were a lot of things that needed to be fixed ; and its great to read how he led this turnaround.
And the title is perfect, because IBM was then and is still quite an elephant; and everybody believed that its too big to move gracefully. :)
A well deserved classic on turning around an organisation.
Intg experiences of a guy who was heading Amex's business and then RJR Nabisco - who then comes to a bumbling behemoth called IBM.
And it's interesting to note that IBM had lost so much of its soul and purpose, and this guy put the ship together. No doubt that the IT boom would have aided it, but it was strongly losing out to new players when it shouldnt have been
Great stuff about organisation structure, proxy taking over agility, a cultural rot, a leadership vacuum, about focusing on a few pieces and missing the boat on a few others. About centralisation as a powerful tool against decentralisaton.
Compensation, incentives, accountability - there were a lot of things that needed to be fixed ; and its great to read how he led this turnaround.
And the title is perfect, because IBM was then and is still quite an elephant; and everybody believed that its too big to move gracefully. :)
A well deserved classic on turning around an organisation.
April 30, 2012
I have worked hands-on daily with IBM hardware, software and services for well over a decade, some of which overlapping with Lou Gerstner's period as CEO of the company, so I picked this up expecting not to learn much I hadn't already known about IBM. I was entirely wrong. This is a really engaging and honest account of the turnaround of a company that was literally falling apart as it failed to adapt to the changing world in which it was operating. The clarity of purpose which Gerstner, as a 'non IT person', brought to the company and it's strategic direction shines throughout. The book could be accused of being one-sided, but the performance of IBM during Gerstner's time at the helm is so remarkable that some element of victors writing the history is understandable. The insight into 'bet the company' decisions and simple management strategies applied to the giant organisation that is IBM is really fascinating. Great read, highly recommended.
June 21, 2020
I worked at IBM for 37 years, including the Lou Gerstner era and it's very obvious that he stood head and shoulders above his predecessors and those who followed him. A great strategist and leader whose only substantial mistake was in the choice of successor. A fascinating read where almost all the lessons apply today as much as they did all those years ago.
June 21, 2018
I was looking to be inspired for an upcoming job search, I love corporate biographies and have a soft spot for IBM. Sadly while Louis was a pretty good CEO and has some good insight the book it pretty dull and quite outdated at this point.
February 6, 2017
When a leader has a vision, knows how to communicate it and surround themselves with a great time to bring into life then great things happen like this case. Great practical advice for every CEO.
May 22, 2019
Probably the greatest corporate turnaround of all time. Has an appropriate blend of depth and breadth. I sourced much excellent material from this book in my writing of How to Think Strategically.
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