on January 12, 2013
I understand Peter Greulich, where he comes from and what he is trying to accomplish.
Pretty well familiar with the IBM history I am somehow surprised that IBMers today should not know Thomas Watson Sr., and Thomas Watson Jr. However, I agree that most IBMers do not know the history of the corporation. It has very deep roots and is spread across more than hundred books, hundreds of articles, excellent IBM websites, IBM Annual Reports and plenty of other sources. There is no single source which allows IBMers to walk through the unique and fascinating IBM history. IBM is a lively role model for many business and technology management disciplines.
My original copy of "Men-Minutes-Money" by Thomas J. Watson is a marvel in my library with more than 120 books covering IBM, IBM competition and IT History. "Men-Minutes-Money (886 pages) was published in 1934, a collection of excerpts from talks and messages delivered and written at various times between January 25-30, 1915 and December 22nd, 1933 closing with "Let us push on." I discovered this book in 1984 in the IBM Education Center La Hulpe library, Belgium. In 2007 I acquired a used copy, studied it and considered it - 73 years after its publication - a "fountain of wisdom."
I agree with Peter Greulich "We will need more Chief Executive Officers like him in the twenty-first century" even if I know that we cannot compare the times of both Watsons with our times today given the fact that people are to a certain extent a product of their specific times and environments.
"The World's Greatest Salesman" by Peter E. Greulich has 311 pages, 23 pages written by the author; on 37 pages he highlights and comments the subsequent set of Watson Sr.'s messages to his audiences. Thus 253 pages are carefully selected and sorted original Watson Sr. talks and messages. Greulich was very successful in picking specific Watson Sr. messages to convey them into the present. I enjoyed reading them again; however changing Watson's "IBM" into Greulich's version "THE IBM" to differentiate the old from the new IBM disturbed me a little bit.
Watson Sr. earned the title "The World's Greatest Salesman" in the "New York Times" obituary dated June 20, 1956. Watson Sr. often considered himself "a salesman" and referred to his roots with John H. Patterson, the founder of NCR. Watson Sr. made IBM Salesmen feel great and he made them great. IBM Salesmen felt great and respected when they performed well, top performers even more.
Richard S. Tedlow covered Thomas Watson Sr. in his fascinating book "Giants of Enterprise", seven business innovators and the empires they built (Andrew Carnegie, George Eastman, Henry Ford, Thomas Watson Sr., Charles Revson, Sam Walton and Robert Noyce). In his book "The Watson Dynasty" in Chapter 10 headlined "The Watson Way" he characterized Watson Sr. as the longest of the long-term thinkers. Watson Sr.'s performance overall and especially during the time of the Great Depression was outstanding and unique. His son, Thomas Watson Jr. was equally important to IBM and the IBM Way.
My comments on the final chapter "An IBM Caretaker's Conclusion" are the following:
Peter Greulich discusses Lou Gerstner as CEO expressed in his book "Who Says Elephants Can' Dance".
He adds: "These discussions have needed, first, a historical viewpoint provided by this book."
My comment: Greulich's book is not an IBM historical viewpoint; it is a selection of messages provided almost 80 years ago.
The IBM historical viewpoint is much more complex than Greulich's book.
We should never forget that the success of IBM has always been produced by generations of hundreds of thousands IBMers with their families who were proud of being with IBM, who sacrificed a lot to contribute, who gained tangible and intangible benefits being with this company. Time and again, starting with the almost forgotten man Arthur K. Watson, we encounter IBMers in IBM's history who considered themselves not being appropriately rewarded or respected. Arthur K. Watson's performance and contributions are described in [...]. The pressure on IBM's workforce was culminating during the downsizing from 405.000 to 301.000 employees during the Akers term and further down to 220.000 year end 1994 during the Gerstner term, an incredible reduction by 185.000 IBM employees within less than a decade. IBM made huge investments in separation allowances to support these dramatic reductions. However, we must not forget that companies like Wang Laboratories, Digital Equipment and eventually Compaq disappeared or were acquired.
Lou Gerstner wrote to all IBM employees on April 6, 1993, six days after his start: "I can only assure you that I will do everything I can to get this painful period behind us as quickly as possible, so that we can begin looking to our future and to building our business. I want you to know that I do not believe that those who are leaving IBM are in any way less important, less qualified, or that they made fewer contributions than others. Rather, we ALL owe those who are leaving an enormous debt of gratitude and appreciation for their contributions to IBM." Gerstner kept his promise; with his team he brought IBM back into a leading and respected position; when he left year end 2001 IBM was back to a workforce of 320.000 employees. I know, with a different geographical mix - the key business drivers can be studied in Thomas Friedman's book "The World is Flat."
Today the IBM workforce comprises more than 430.000 women and men.
Greulich: "IBMers continue to endure the effects of what many consider the watershed event of Lou Gerstner's tenure. On July 1, 1999, IBM eliminated its pension and health care plans...Finally, because of the outcry, IBM modified its original plans ... There is no win-win relationship. The furor continues worldwide."
I think it is very important that IBM sticks to its commitments to employees already retired at the time of a plan change (no ex-post deteriorations! Fairness and improvements are always welcome.
However, a company should be able to change pension plans if defined as "subject to change" - e.g. from "benefit pension" to "contribution pension" - in a fair and reasonable way - e.g. splitting between the existing workforce with a minimum time of service and newcomers - to maintain its competitiveness.
GM went into chapter 11, partly because of pension plans. What is the advantage for the active workforce and retirees if the company goes bankrupt?
What would have happened with the IBM pension plans if John Akers had been successful with his plans to split IBM into more than 10 baby blues? Nobody knows if they would have survived. Look at IBM's business and portfolio mix of today and what happened or happens to the commodity providers? If they disappear, pension plans disappear, totally!
Greulich and we all should never forget it was Louis V. Gerstner who kept Greulich's "THE IBM" together!!!
In Europe, with the strong involvement of works councils, pension plan changes for the active workforce were made; I am pretty sure that IBM is adhering to labor laws in each country where IBM operates. American conditions are different from conditions in other geographies.
In "Making the World Work Better" we find the following statements:
Sam Palmisano of Gerstner: "Without him, I don't think we would have survived. We needed somebody with that tough mind and analytical skill." For further details I refer to Gerstner's excellent book "Who Says Elephants can't dance".
Gerstner of Palmisano: "What Sam has done is the hardest thing to do - to take a successful platform and continually evolve it; Sam took a successful company and made it far more successful."
"IBMers like to think that the work they do is important to the world. There is the ethic of progress guiding how we think," said James Cortada, a member of the IBM Institute for Business Value and the author of dozens of books and articles on the history and management of information technologies.
Peter Greulich closes his book with a preview of his next book "A View from Beneath the Dancing Elephant". I am very curious to get his book and study it; it has not yet appeared. I fully understand his motivation; at the same time I also try to understand business realities. In business you can never stick with the past, this would be wishful thinking.
Both Watsons knew this, Gerstner knew it, he learned the importance of Leadership with Business Culture in IBM - see his statement "I came to see, in my time at IBM, that culture isn't just one aspect of the game - it is the game" (Page 182). Palmisano knew it too, he grew in IBM and did not come from the outside; he orchestrated the implementation of the new IBM Values, not top down but in jam sessions involving 50.000 IBMers from all over the world, a unique step in Business Culture Development. Finally the new IBM Values can be considered as children of the old Basic Beliefs. Important is not what is written down or placarded on walls, important is how the values are adhered to, and this is the daily job of active executives, managers and the whole workforce.
Retirees should be careful judging the contemporary IBM from the outside.
I still trust in "IBM ever onwards" towards the next centennial, however it needs to be done day by day, fulfilling requirements of very demanding IBM customers and the markets overall in a very competitive environment. IBM today is not anymore dominating the industry, it is part of it, and tries to be in future oriented leading positions.
The famous proverbs "It is difficult to make predictions, especially about the future" and "The best way to predict the future is to create it" apply. I am positive.