- Paperback: 400 pages
- Publisher: Harper Paperbacks; Revised edition (September 19, 2000)
- Language: English
- ISBN-10: 0887309445
- ISBN-13: 978-0887309441
- Product Dimensions: 5.3 x 0.9 x 8 inches
- Shipping Weight: 11.2 ounces
- Average Customer Review: 26 customer reviews
- Amazon Best Sellers Rank: #4,522,802 in Books (See Top 100 in Books)
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IBM Redux: Lou Gerstner and the Business Turnaround of the Decade Paperback – September 19, 2000
Lou Gerstner, the man who flipped IBM's fortunes, has what a former colleague calls "a vertical vision of reality." That is, if things aren't moving upward, he's very unhappy. When he took over at IBM in 1993, they were moving downward at a frightening speed, and what he did to turn the company around will probably be studied in business schools in future generations. Until then, we have IBM Redux, by Doug Carr, a very entertaining and instructive look at Gerstner and the company he revived.
Carr, a former IBM speechwriter, possesses an insider's knowledge about the Gerstner years at IBM: the despair of watching the company sink into the tar pits of ever-deeper red ink; the ruthlessness of the early firings and other cost controls (one woman was downsized--"excessed" is the actual IBM euphemism--when she was eight and a half months pregnant and coming off a stellar performance review; another was given his termination papers while in a coma); the business decisions that led to the turnaround; and finally the elation of seeing the company reinvented as a nimble information-services provider.
This is far from a hagiography of Gerstner, however. Because Carr didn't have access to him, he relies on anecdotes from those who know Gerstner and have worked with him, and the result is a fascinating portrait of the CEO as a young man (one former high school football teammate recalls an errant pass from quarterback Gerstner that led to the teammate's career-ending knee injury); as a man in a hurry (the chapters on Gerstner's years at American Express and RJR Nabisco foreshadow his accomplishments at IBM); and finally as a seasoned businessman who succeeded in overhauling a company that few thought would survive intact. --Lou Schuler --This text refers to the Hardcover edition.
From Publishers Weekly
The joy of this book doesn't come from ground-breaking reporting. Rather, its appeal comes in the details: how Gerstner decided to forgo splashy graphics at a major computer show, as a way to stand out from all the hype; how desperately the advertising agency Ogilvy & Mather Worldwide needed to win the IBM account, once Gerstner and his new team were in place; and what it was like negotiating the purchase of Lotus. This is no small feat in writing about IBM, a company that is renowned for limiting access to reporters, and Garr's accomplishment is even more remarkable since Gerstner himself is known to keep an even closer eye on his public image than the IBM spin doctors do. Even so, Garr managed to talk to numerous present and former IBM employees, who give first-hand recollections and impressions of Gerstner in actionAmany of which are riveting. Garr is a former IBM speechwriterAa fact that cuts both ways, as he convincingly explainsAbut his reporting is evenhanded, and his eye for detail extraordinary. (Sept.)
Copyright 1999 Reed Business Information, Inc. --This text refers to the Hardcover edition.
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Top customer reviews
2 things about the pacing of the book struck me.
First, the sleeve and back cover gives you the impression that you are going to read about the mechanics of a Corporate Turnaround, but the book often "lowers" itself to pointing out how abrasive and unfriendly Gerstner and some of his Lieutenants were. In some cases, the point needed to be made (like when it came to cutting costs or letting managers go), but other times it just felt like an opportunity to rehash the point. We have to expect that turning a Fortune 500 company around requires more looking at the bottom line that making "friends" ...
Second, and this is minor, but the book bobs back and forth between past and present tense. Not present tense as in "today", but back and forth between "is" and "was". Most folks won't notice this, but I did and I found it to be a little distracting.
In all, if you can overlook the author's attempts to constantly remind you that Louis Gerstner did not have the affable personality of Jay Leno, it's a good/thorough read.
I believe this book gives a fairly accurate picture of Gerstner's character, but I don't believe it explains how he turned around IBM at all well. In this book, Jerome York, his CFO, gets almost as much credit for driving the drastic cuts and changes in management behaviour that were necessary to get Big Blue out of the red.
Besides mentioning the obvious tactic of cutting costs, Garr says very little about the financial trickery Gerstner used to manage IBM's recovery. In their first year, Gerstner and York ensured that as far as possible, all the write-offs were done. This meant that fiscal 1993 was an awful year for IBM's results, but it ensured that every subsequent year would look good by comparison. Garr makes no mention of this. In subsequent quarters, managers were given instructions to hide or reveal costs and revenues, in order to build a smooth performance and achieve a track record of meeting Wall Street expectations. Again Garr makes no mention of this.
Crucially, Garr makes on mention of Gerstner's insistence that, if his executives wanted to be on the best stock options plan, they had to buy two years' salary's worth of IBM shares. (Imagine being on £100K a year, and being told you had to buy £200k's worth of IBM stock.) My belief is that most executives had to borrow money to qualify. Suddenly they are paying hefty interest charges on the gamble that the IBM share price would grow dramatically. In my view, it was this scheme that drove the biggest wedge between executives and rank-and-file employees. The more that executives could screw down employee wages and other costs, the higher the likely IBM share price. Both Tom Watson and his son would have strongly disapproved of a scheme which caused such a divergence in interests. The company is still suffering from the effects of Gerstner's invention, but no doubt it improved the IBM share price in its first few years of operation.
If like me, you collect all books on IBM, then you'll already have this, and as I said, it contains some unique material. But it is very patchy -- very little mention of the Internet (but too much on the Network Computer), and almost nothing about services or Linux. The tense of the chapters varies -- from past historic to present and back again -- which seems to be less of a deliberate device and more an indication that Garr lifted articles he had already written for various magazines.
Most recent customer reviews
Doug Garr does a very good job detailing the man behind one of the most remarkable corporate turnarounds in history, certainly American...Read more