Values at IBM :

Making A Difference
SELUSI conference 2011

Ir. Mia Vanstraelen

Mia.vanstraelen@be.ibm.com
Oct 7th, 2011

Agenda

IBM at a glance

IBMs Values
Development of IBMs values

Impact on IBMs Business and the world

IBM at a glance
IBM is a values-based enterprise of individuals, who create and apply
technology to make the world work better.

Today, about 400,000 IBMers around the world

invent and integrate hardware, software and services
to help forward-thinking enterprises, institutions and
people everywhere succeed in building a smarter planet.

IBM Values
Dedication to every clients success

Innovation that matters for our company and

for the world
Trust and personal responsibility in all
relationships

Background: The IBM Perspective

IBMs top management has consistently mandated

commitment to values and the highest ethical standards
- Any great organization owes its resiliency, not to its
form of organization or its administrative skills, but to the
power of what we call beliefs and the appeal these beliefs
have for its people. T.J. Watson, Jr.
- Ethical behavior is good for business because it fosters
one of our greatest assets customer loyalty. L.V.
Gerstner
- Remember that a strong value system based on integrity
and accountability has always been at the core of IBMs
existence. We do not pay lip service to ethics; it is part of
our DNA. S.J. Palmisano

IBM has reinvented itself many times. But through it all, its DNA, its soul
remained intact. Thats because of something that was part of this
company since its inception.

IBMs most important innovation wasnt a technology or management system. Its

revolutionary idea was to define and run a company by a set of strongly held beliefs
beliefs that would transcend economic cycles, geopolitical shifts, and generations
of products, technologies, employees and leaders

IBMs most important

innovation was the IBMer

IBM Business Leadership Model

Leadership

Strategy

Execution

Marketplace
Insight

Strategic
Intent

Talent

Business
Design

Critical Tasks
Interdependencies

Innovation
Focus

Climate &
Culture

Market
Results

Formal
Organization

Gap

Performance
Opportunity

IBM Values
IBM Values are foundational to Strategy and Execution which are interdependent on,
and essential to, IBM Business Leadership.

Note: IBM's approach to strategic execution is adapted from Tushman, Michael L. & Charles A.
O'Reilly III. Winning through Innovation. Harvard Business School Press, Boston, MA. 1997.

In 2003, IBMers participated in

the first values Jam WW

Development of IBM Values

How IBM
has used Jams

IBM all
company Jams

IBM Transformation IBMs Approach to Transformation

IBMs Transformation Framework is guided by the IBM Strategy,

grounded in IBM Values and enabled by Transformation Platforms

Guided by the IBM

Strategy and grounded
in our Values

IBM Strategy

IBM Values
Transformation Framework
Business
Process
Excellence

Enable transformation
at the intersection of
business process,
technology and culture

Value-based
Culture

Information
Technology
Enablement

Transformation Platforms
Enable Growth
Capture higher value

Enable Productivity
Invest for growth

Enable Culture Change

Apply shared values

Drive productivity

Sustain our strength in

the global marketplace
by focusing on areas
that enable growth,
productivity, and
culture change

IBMers can find essential ingredients for growing their careers, and building
and sustaining a company of experts, in our three-tier Career Model

Expertise

Capabilities

Leadership

Job Role Expertise:

Career Capabilities:

IBM Competencies:

Develop deep skills and

expertise specific to a
particular job

Build a broad set of

capabilities to advance a
career

Demonstrate the
leadership that
distinguishes IBM-ers

Employees use a tool to

assess their skills and
close gaps between
current skill levels and
their targets

Employees use the Career

Framework to develop
client-valued capabilities,
document their progress,
and apply for progression
in the framework

Employees grow and

document their progress
in unique leadership
competencies and
behaviors, based on
IBMs values, that are
differentiators for IBM

Emotional Intelligence Competencies are

Aligned with IBMs existing competency work
Any measurable characteristic of a person that differentiates
level of performance in a given job, role, organization, or
culture

Skills
Knowledge
Social Role, Values
Self-Image
Trait
Motive

Necessary for
top performance
but not sufficient

Characteristic
s
that lead to
longer-term
success

Values and motivational characteristics vary by generation

Connecting with our people
Workaholics
Sceptical
A contract

Freedom

Title Recognition
Do it your way
You are needed

Source: FDU Magazine

As an IBMer you will find alignment between the Emotional Intelligence

Competencies and the IBM Values and Leadership Competencies

Managing Yourself

Empathy
Self Control
Self Confidence

Managing Your
Team

Developing Others
Holding People Accountable
Team Leadership

Managing the Work

Results Orientation
Initiative
Problem Solving

Managing
Collaboratively

Influencing Others
Fostering Teamwork

And employees develop competencies that reflect our

core IBM Values

How and when?

By using the IBM Competencies Learning

Suites to deepen their understanding of the
competencies

Leadership
Capabilities

By making sure to include competency

growth in their career development plan
IBM Competencies:

By using the Career Framework to

document their competency progression

By living our IBM values and demonstrating

leadership in all they do at IBM

Employees demonstrate
the leadership that
distinguishes IBM

IBM Transformation Underlying Platforms Enabling Culture Change

Defined common values and performance mgmt align employees with

the decisions and strategic priorities of the management teams
Established and periodically refreshed a core set of
leadership competencies for all IBMers
Transformational Leadership

Values-based Culture
Collaborative Innovation
Global IBMer

Defined a new Leadership Framework that

emphasizes business results and the employees
experience

Engaged employees globally in Values Jam to refresh

our Values
Enabled collaborative innovation by making intranet
sophisticated social networking platform

Impact

Established a global innovation agenda that spans

multiple dimensions (e.g., products, services, people)
IBMs Values are integral in our performance, recognition and talent management systems
Tens of thousands of IBM employees actively participate in advancing our Values-based culture via
collaborative technologies
Business Week named IBM one of Twenty Best Companies for Leadership
IBM Research #1 on the US patent list for 17 years

Business Resilience Services

Why a focus on Climate & Culture?

The Integral Linkage Research Model*

Leadership Practices

Conclusions from nine years of IBM Linkage Research:

IBMers attitudes measured by the Global Pulse
Survey
are leading indicators of future client satisfaction,
revenue growth, and market share

START here:

Walk the talk

Formal change project:

Integral approach

Fit for the Future

Employee development
Acknowledge fear

Business Performance

Employee Results

+ Sales Growth

Work climate

+ Market Share

Professional teamwork

+ Productivity

Employee satisfaction

+ Long term profitability

Employee retention
Customer Results
+ Responsive service
+ Product quality

Elapsed Time

Integral Linkage Research Model, 2005

Customer satisfaction
+ Customer retention

Elapsed time

Work Characteristics

Work characteristics

*Adapted from: (1) The Handbook of Organizational Culture & Climate, chapter 11, by J.W. Wiley & S.M. Brooks. (2) Peter M. Senge and Katrin H. Kufer, Communities of
Leaders or No Leadership at All, ABRIDGED for publication in Cutting Edge: Leadership 2000 by Barbara Kellerman, Larraine R.Matusak. (3) IBM Workforce Research
1997 2005. (4) BC&RS Fit for the Future project 2004 - 2005. (5) Richard Barret, A Whole Systems Approach to Cultural Transformation: Building a Values Driven
Organization, 2005 2006.

IBM Business Consulting Services

BC&RS Fit for the Future | Do not copy or email | IBM Confidential

2005 IBM Corporation

Obstacles to innovation

The IBM Global CEO Study 2006 reveals that 35% of CEOs see
an unsupportive culture and climate as a major obstacle for
innovation

Unsupportive culture and climate

Limited funding for investment
Government and other legal restrictions
Workforce issues arising internally
Process immaturity
Economic uncertainty
Inadequate enabling technologies
Inflexible physical and information technology
infrastructure
Insufficient access to necessary information and
data
Workforce issues arising externally
Other
0%

10%

20%

30%

40%

% of Respondents

For IBM Internal Use Only

59

Leadership competenties and managerial styles (skills and behaviour

of manager) influence up to 70% the climate in a team (Hay Consultants)

Copyright IBM Corporation 2006

Global Business Services

And Leadership Styles make a Difference

Coercive

Authoritative

Affiliative

Democratic

Pace-setting

Coaching

Leaders
Modus
Operandi

Demands
immediate
compliance

Mobilizes
people toward a
vision

Creates
harmony and
builds emotional
bonds

Forges
consensus
through
participation

Sets high
standards for
performance

Develops
people for the
future

In one
sentence

Do what I
tell you

Come with me

People come
first

What do you
think?

Do as I do,
now

Try this

Style
working

Crisis, kickstart
turnaround

When changes
require a new
vision, or clear
direction is
needed

To motivate
people during
stressful
circumstances

To get buy-in or
consensus or
input from
employees

To get quick
results from a
highly
motivated and
competent
team

To help an
employee
improve
performance or
develop LT
strengths

.34

-.25

.42

best

Overall
Impact on
Climate

- .26

.54

.46

Daniel Goleman: Harvard Business Review OnPoint Summer 2006

Daniel Goleman: Harvard Business Review OnPoint Summer 2006

16

September 2006

An integral look at Innovation

Copyright IBM Corporation 2006

The impact of climate on financial results, such as return on sales, revenue

growth, efficiency and profitability has a direct correlation with leadership styles
(next to market conditions and competitive dynamics) and a direct influence on the
bottom line (HBR OnPoint/Summer 2006) and accounts for nearly 1/3 of results.

IBM Solutions is Leading to Think and Act in New

Ways: Economically, Socially and Technically

Smarter
Roads

Smarter Oil
& Gas

Smarter
Food

Smarter
Healthcare

Smarter
Utilities

Smarter
Retail

Smarter
Telco

Smarter
Supply
Chains

Smarter
Public
Safety

Smarter
Money

Smarter
Transportation

Smarter
Cities

Our Values at Work outlines the meaning of Trust and

personal responsibility in all relationships
Trust and personal responsibility in all
relationships means:
IBMers actively build relationships with all
the constituencies of our business
including clients, partners, communities,
investors and fellow IBMers.
IBMers build trust by listening, following
through and keeping their word.
IBMers rely on our colleagues to do the right
thing.
IBMers preserve trust even when formal
relationships end.
Inside IBM, weve never been more matrixed, more global, more virtual, more
dependent on people who dont sit next to us and dont report to us. Nonetheless
(or, rather, especially), we must come through for our colleaguesor be clear
about why we cannot. Ambiguity, uncertainty and passing the buck are the
surest ways to kill both productivity and relationships

Sam Palmisano continues to articulate his expectations

for Trust and personal responsibility in all relationships
At IBM, we've set off down the path of empowering and enabling our people to make
decisions and to act. We have been working to lower the center of gravity' of the
company, as I put itthat is, to trust IBMers and push decision-making authority
out and downThis will require a whole new kind of humility for enterprises and their
leaders. And it will also require a new level of ownership and personal responsibility
among individuals. Both of those shifts will involve major culture change.
Sam Palmisano,
The Globally Integrated Enterprise
April 2007

"This shift of control and decision-making to the IBMer

represents a very new relationship between
enterprises and individuals and that involves a
certain degree of risk. Sharing power always does. But if
you trust your strategy, your capabilities and your
people and if you are confident that all are grounded
in a set of shared values then this is the kind of
innovation you pursue.
Sam Palmisano,
Letter to IBM Shareholders
March 2008

Back Up

IBM Strategy to optimize value for our clients

Focus on open technologies and high-value solutions

Deliver integration and innovation to clients

Become the premier Globally Integrated Enterprise

End of the crisis? ... Which is the next one ?

 3. Embed corporate values into all leadership initiatives.

Shared values are the underpinning of a corporate-wide culture. They help
unite employees across the globe, as well as enabling fast, independent
decision making consistent with the company's philosophy. As well as
embedding corporate values, be sure to establish the important role of the
leader as a global ambassador; one who not only communicates and
reinforces corporate values, but who embodies them in everyday behaviours
and decisions.

Growth through Trust Personal Responsability.

The modelCore Customer Business = IBM Business

IBM Value to customer

Overall Value of IBM

Our Journey

2004

2010

IBM Transformation Underlying Platforms Enabling Culture Change

Defined common values and performance mgmt align employees with

the decisions and strategic priorities of the management teams
Established and periodically refreshed a core set of
leadership competencies for all IBMers
Transformational Leadership

Values-based Culture
Collaborative Innovation
Global IBMer

Defined a new Leadership Framework that

emphasizes business results and the employees
experience

Engaged employees globally in Values Jam to refresh

our Values
Enabled collaborative innovation by making intranet
sophisticated social networking platform

Impact

Established a global innovation agenda that spans

multiple dimensions (e.g., products, services, people)
IBMs Values are integral in our performance, recognition and talent management systems
Tens of thousands of IBM employees actively participate in advancing our Values-based culture via
collaborative technologies
Business Week named IBM one of Twenty Best Companies for Leadership
IBM Research #1 on the US patent list for 17 years

Prise de conscience et
comprhension
Communications aux
employs
Kickoff meetings
Communications des
Executives
Programmes des
Partenaires dAffaires

Communications aux
actionnaires

w3.ibm.com/ibm/values

It Doesnt Happen Overnight It requires integrated,

incremental learning
Improving and sustaining Emotional Intelligence takes a concerted
effort over several months.

Individual
Development
In-house
Training

Minimal
results

Some
behavioral
results

Sustained
individual
performance
improvement

Integrated
Initiatives
with Coaching
and Measurement
Critical mass
for sustained
group
performance
improvement

Organizational
Interventions

Sustained
organizational
improvement

Emotional Intelligence as a pre-requisite

Daniel Goleman

Academic experts confirm the importance of Trust and personal

responsibility in all relationships, and the role of leaders in enabling it

The essential ingredient of collaborative effort is trust. High performance teams

are characterized by high mutual trust among members. Leaders succeed in
bringing about change because they are trusted by constituents to reflect their
values and aspirations. An organizational climate of trust enables employees to
surface their ideas and feelings, use each other as resources, and learn together.
Costigan

Key imperatives in building high-trust organizations and teams are:

- Achieving results Following though on business commitments
- Acting with integrity Behaving in a consistent manner
- Demonstrating concern Respecting the well-being of others Shaw

Trust is not something one changes with pronouncements or good intentions.

Seeking to improve trust directly, in fact, can result in higher levels of suspicion if
the process is not managed effectivelyTrust is the outcome of doing a number of
fundamental things right. Those who are successful at building trust usually
dont talk about it; they live it. Shaw

Discussion: How can strengthening the

Dimensions of Trust help enable achievement
of our business objectives?
The reality is that Trust is a hardedged economic driverbecause
Trust always affects two
outcomes: speed and cost. The
economics of trust are simple: When
trust goes down, speed goes down
and cost goes up When trust goes
up, speed goes up and cost goes
down If we have a low-trust
organization, we can rest assured
we are paying a tax. While these
taxes may not show up on the
income statement as trust taxes,
theyre still there, disguised as other
problems such as redundancy,
bureaucracy, politics,
disengagement, turnover, churn and
fraud. Covey

Character Trust
Competence Trust
Positional Trust
Organizational Trust

Actions you can take as an IBM leader to strengthen

Trust and personal responsibility in all relationships
Reflect on the leadership role you play in advancing the four dimensions of
trust and be a role model by ensuring your actions, decisions and behaviors
are consistent with this Value
Ensure your teams are clear on their roles, responsibilities and
accountabilities

In communications with your team, cite examples and acknowledge

situations and team members where this Value was demonstrated
Reach out to a leader in an organization where you and/or your team have a
strained relationship, to openly discuss issues and figure out a better way of
working together
Invest in the skills and capabilities of your team
Ensure that expectations with clients are set properly so they can be
delivered on
Engage your teams in a discussion to:
- Review the four dimensions of Trust and personal responsibility
- Identify inhibitors that get in the way of this Value
- Agree on actions you can take locally