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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!!!