Customer Reviews

IBM Redux: Lou Gerstner and the Business Turnaround of the Decade

5 star:		(7)
4 star:		(6)
3 star:		(4)
2 star:		(1)
1 star:		(5)

 

 

It's a good read for drama, a good intro to IBM if you know little or nothing about the company, a very detailed, balanced, and probably accurate profile of Gerstner. Writing a business bio about a tech company no doubt forces an author into some tough choices as to how much detail about the technology to leave in or leave out, but Garr does a good job at providing a non-techies view of the industry.

From a business-acumen point of view, however, it lacks. Some of the questions, such as "Why doesn't IBM sell off its unprofitable PC division?" are handled in a rather simplistic manner. A good MBA will tell you there are plenty of reasons to keep "unprofitable" business units around for cash-flow reasons; and that it can be dangerous to sell these off.

This is a good quick read for anyone in the high tech backbone business. Big blue remains the world's largest high tech company, but acts more like any other blue chip. Regardless of your opinion on the company, it's presence deserves attention.

The book follows Gerstner from his McKinsey & Co. days through 1998 IBM. It seemed as much a story about Gerstner as it was about IBM's recovery. My own opinion is that the book tends to leave material unfinished. For example, there is a lot of drama and personality play in a large section devoted to the Lotus acquisition. However, the writer doesn't explain how the acquisition benefited IBM in terms of its turn-around.

In summary, it's an entertaining read but I was left with the feeling that it's a Gerstner book more than it is the story of "the turn-around of the decade."

In comparison, I thought "From Worst to First" by Continental Airlines' CEO Bethune was far more focused on what has to be done to reverse a company's fortunes than was this book.

There's a lot of fascinating stuff here, but you almost have to read between the lines to get there. I agree with the other reviewer who says that it's more like a Gerstner biography than properly a look at the turnaround itself-- more interesting to me would have been less personality and more a look at how a pure business methodology approach (a la McKinsey) replaced the former technical focus and how that impacted the company. While it was amusing to get a feel of the personalities, it was often distracting when trying to read for a real case study.

My interest in this book was generated by "Father, Son & Co: My Life at IBM and Beyond " - Thomas Watson Jr.

Despite the rapid growth and technological strengths, IBM loses customer focus and arrogance becomes a common trait among its employees. A customer in a Far Eastern country needs to wait for over 2 months to receive a quotation for an AS/400. Not hard to guess what follows.

One of America's most admired companies, IBM starts slipping, losing over $ 16 billion in just 4 consecutive years by 1993. There was no problem about revenues. IBM was making $ 64 billion attracting most of the money spent on Information Technology. But it was spending $ 69 billion to earn it. At $ 26 billion in debt, a figure that is more than what most developing countries owed the rest of the world, it needed a miracle. It needed Lou.

A man, who was inducted from an industry that had no relevance to computing, rescues big Blue from near bankruptcy. The only thing in common between biscuits and computers is that they almost have the same shelf life. The success of both businesses requires the understanding of customer needs, speed of product introduction, inventory management and cost control. Lou Gerstner from RJR Nabisco steps in to clean up the mess at IBM- and he does this with passion and not with compassion.

Harvard educated, with extensive experience at McKinsey, American Express and RJR Nabisco, Lou brings in his own team, who again have no exposure to the computer industry. The "Cookie man hires chicken man" - Lou hires Bruce Herreld from Boston Chicken to fill in the position of Chief strategist for example. Key to the surgical operation in cost control is Jerome York from the automobile industry. And this list grows on similar lines.

Lou has his own share of blues. He would not like to remember the fiasco at Atlanta with IBM's promise of "bullet proof reliability". " If self -parody were an Olympic sport, IBM would have medaled" said Fortune Magazine. Lou's wrath against this leading business magazine is another story by itself.

There is a clear shift in the strategic direction at IBM in the recent past. Its departure from proprietary system architecture to embrace open technologies. From competition to "co-opetition". PC business is its "Vietnam". IBM realizes this and signs up with Dell to supply components in this segment. It embraces Linux and Java and quickly positions itself as e-business solution provider. Lou is again driving from basics. Biscuits and computers have so much in common- ask the customer, under-promise and over-deliver.

I know many of the players described in the book and even some of the events. It is loaded with IBM jargon, and I'm surprised that people outside the company find it readable. Some of his throwaways are dead wrong -- for example, that the advantage that CMOS mainframes have over bi-polar is that they are program compatible with Unix machines. No wonder he was let go as a speechwriter for the Server Group!

My recommendation is borrow this book from the library.

When I first finished reading this book, I found that something was missing. I realized that the book is very basic and doesn't treat the fact in a business way. This is the kind of book that I do not recommend as an always reading. The writter of course is very capable, as he has already proven but it surely does not concern of writting a book. It makes me shamed that Amazon.com recommends a book like this.

I'm a confirmed Mac-azoid, but Garr's IBM take fascinates me. As an editor of an entertainment world journal, I'm more interested in the movie business than the computer business, even business in general. Garr's work, however, is an attempt to get inside the mind of a mogul -- the same kind of driven individual who can move big things ... corporations, aircraft carriers, movie studios. How do their accomplishments track in their bowels and bellies, and how will they show up in the entrails of history. Garr is an able paleontologist who took me on a trip.

Intelligently written in a style not usually achieved so comfortably by writers of business or biographies. I was drawn in by the first paragraph and never disappointed. It's not often you find a page-turner on the business shelves. It should be moved to the front of the store.

As both an IBM employee & one very interested in the workings of this unique company, I enjoyed reading 2 just-released books in the past 2 weeks, Robert Slater's Saving IBM and Garr's. Slater's was the business case version of IBM. Garr's was the real scoop behind the workings of not just Gerstner but his many lieutenants, both long-time IBM employees and outsiders. Although I was somewhat embarrassed by some of the stories, including the FUMU's, I still enjoyed the book. I was disappointed in the lack of coverage with IBM Global Services.

An account of how Gerstner and Jerome York saved IBM from it's financial woes and architected the turnaround. It appears, the turnaround was entirely by way of cost cutting measures. Gerstner did make the "elephant dance", full credits...at the same time when one looks at IBM today, I don't know what to make of it. Doug Carr does provide a fairly good account of what happened then, though I would have preferred the emphasis to be more on the issues revolving around the turnaround itself (analysis of the plus/minus of the actions) and not the personalities.