Who says elephants

cant
dance
Presented
by Thirumeninathan

grabbing hold
strategy
culture
lessons Learned
observations
legacy

evaluate
in a fish bowl
important decisions
hold the vision
reengineer
revive the brand
pay for
performance

. . . Grabbing

 IBM

Bad press
Too many competitors
Angry customers
Bureaucratic approach
Losing money and
negative cash flows

Lou Gerstner

. . . evaluate

Management consultancy
in McKinsey
Experience in highly
charged corporate
environments
Has experience as an IBM
customer
Proven change agent

 Symbolized American technology might and R & D prowess

Leader in the industry and too many customers had a stake in
survival
National treasure
many competitors in the hardware, software, middleware
markets watching every move

. . . in a fish bowl

 First Impressions
Immediate steps
CFO & HR hiring
Culture reset

. . . important decisions

 Stop the spin-offs

Change the economic model cut waste
Reengineer from milking the cow to
growing market share
Sell underproductive assets to raise cash

. . . important decisions

 Bringing the B back into

focus
Tough market minded
strategies for every
business instead of a
grand over-arching vision
More integrated solutions
(rather than less)
Improve customer
responsiveness, time to
market

. . . hold the vision

 Phase out Management

Council push power to
CEC / WMC
Build a new board
Employee
Communications
Creating a global
enterprise
Power bases and fiefdoms
Focus on global relationship

. . . reengineer

 Revitalize the brand

Centralize branding efforts
One agency for unified
messaging
Coherence in brand building
across geographies
more bang for the buck

Some successful
campaigns
Solutions for the small planet
eBusiness

. . . branding

 Old rewards common,

fixed rewards, internal
benchmarks, entitlement
New rewards variable
rewards, differentiation,
external benchmarks and
based on performance
Stock options as rewards
rather than aligning the
executives with share
holders.

. . . pay for performance

making the bets

services business
software business
research and
licensing
fallacies and
myths

. . . strategies

 Emerging trends
Services based
Network computing oriented
A post PC world

. . . making the bets

 The key to integration services

Building the organization

Ability to recommend competitors products

Lending the balance-sheet
Recruitment, training, compensation and HR processes
Negotiate profitable contracts, price skills, assess risks and walk
away from bad contracts and bad deals

. . . services business

OS/2 vs Windows
4000 software products
Reduction of 30 labs to 8
Consolidated 60 brands to 6
Focus on middleware (blue ocean)
Lotus acquisition

. . . software business

 Inability to convert inventions into products for the market

place
Licensing gives the capability to set standards
R & D expenses recouped with new revenue streams
Exiting businesses which does not make sense

DRAM business
Application software business partnership with Siebel
Telco IBM network AT & T
Challenges to exit the PC market

. . . research and licensing

 The fallacy that the best technology always wins a

bitter but vital lesson
OS/2

Myth of account control and the efforts to maintain it

Application software

. . . fallacies and myths

basic beliefs
culture of no
leading by
principles
IBMs moonshot

. . . culture

 Excellence in everything we do quest for perfection, led to

checks and balances, bureaucracy
Superior customer service became more administrative did
not look at what customers needed and their businesses needed
Respect for the individual reflected in the compensation and
evaluation system not in sync with the times
Dress code the why
Following basic beliefs as a ritual without understanding the why

. . . basic beliefs

Non-concurr management system

Soft request I did not agree with you
Dysfunctional bureaucracy and jockeying
IBM-isms
Presiders over process

. . . the culture of no

 More customer oriented rather than IBM focussed

More passionate about competition and loss of market
share, leadership position and downsizing
Customer satisfaction and shareholder value are the
driving factors
Sense of urgency
Senior leadership Group to focus on leadership and
change

. . . leading by principles

 Keeping the crisis as the focus of attention

Market place based mission
eBusiness the whole organization focussed on winning
customer mind share as the moonshot

. . . the moonshot

know and love your

business
all about execution
leadership is personal
and elephants can dance

. . . lessons learned

 Focus on core business

Growth through acquisition only when there is value for both
and not for acquiring new market position or new markets
Market intelligence wins wars
Good strategy long on details, allocate resources and zero
sum planning every few years to weed out (sunk costs /
survival of the fattest)

. . . know and love thy

business

 Inspection not expectation translation of strategy to

results
Solid processes to achieve key success factors for e.g.
product design
Feeling a high performance culture

. . . tis all about execution

 Prerequisites of the next CEO

High Energy
Strong bias for action
Strategic sense
Ability to motivate others
Strong team builder
Org culture which tends to ask for forgiveness rather than
permission destroys soon

. . . Leadership is personal

 Decentralization for faster decision making was meant for

another era
Org wide changes lead to turf battles and become costly affairs
Overheads are high without real value adds
Scale of economies

For true integration and clustering resources around the needs

of the customers shift power
Measure and reward the future not the past
Walk the talk

. . . and elephants can dance

the industry
corporations and the
community

. . . observations

 Industry
No common industry associations for IT hyper competitive
Annihilation of competitors, increasing returns and networking effect
Constant hunt for the next big wave

System
Too focused on short term gains
Board only of external directors
High taxation on speculative trading and bring back ownership based
economy

. . . the industry

 The media trolls, rumor mongers, biased ignore

Under promise and outperform talk to reporters with
an insightful story line on the industry
Analysts and the 90 day myopia
Beyond check book philanthropy engage in real
change

. . . corporations and the

community

. . . legacy

. . . Thank you!!!