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Summary: A CEO's Account of an "Historic Turnaround"
Review: At the outset, it is important to understand that this volume is not an autobiography; rather, in response to apparently substantial curiosity, Gerstner offers his explanation of how he and his associates achieved what he calls "IBM's historic turnaround." In process, he also explains how and why he became CEO, what his initial assumptions about the company were, to what extent they proved wrong (and why), and finally, what he had learned by the time he resigned as CEO after guiding IBM from April 1993 until March 2002. Having carefully observed Gerstner during the infrequent interviews to which he reluctantly agreed, the book seems to have been written by him without assistance except stenographic. The style and tone as well as the observations are clearly his. This is important. More often than not, a book bearing the name of a CEO as its author has been rigorously edited and thoroughly sanitized by one or more "manuscript doctors" before publication. Not so with this one.Its title was perhaps suggested by that of a book written by Rosabeth Moss Kanter (When Giants Learn to Dance, 1989) and implies that it may be unlikely but is nonetheless possible for an organization as large and as cumbersome as IBM once was to become "quick on its feet" again. Soon after becoming CEO, Gerstner realized that IBM's culture -- not its core strategies -- prevented it from being able to "dance." As Gerstner observes, "[IBM's] decades-long run of uninterrupted success ties in with the other closely related, and vitally important, aspect of IBM's recent history. This is about its corporate culture -- specifically, the kind of culture that arises in an environment without intense competitive pressure or threats." By the time Gerstner had become CEO, the company and its people had lost touch with external realities. It was widely believed that what was happening in the marketplace was essentially irrelevant to the success of the company. "IBM's dominant position had created a self-contained, self-sustaining world for the company. IBM had ridden one horse, and ridden it well. But that horse could carry it only so far before it broke down. This was the corporate culture which Gerstner encountered as he assumed his duties, a culture the product of two predominant forces: the runaway success of the System/360, and, the impact of the antitrust suit filed against IBM by the United States Department of Justice on January 31, 1969, the final day of the Lyndon B. Johnson administration. "For thirteen years IBM lived under the specter of a federally mandated breakup." It would be a mistake to assume that most of the credit for what was accomplished at IBM during Gerstner's tenure as CEO should be given to him. He dedicated this book to "the thousands of IBMers who never gave up on their company, their colleagues, and themselves. They are the real heroes of the reinvention of IBM." This book explains how that was accomplished, a transformation whose objective was to re-establish "the high-performance cultured that animated IBM under both Watsons." Having relinquished his duties as CEO to Sam Palmisano, Gerstner suggests that his successor has an opportunity to make connections to IBM's past which Gerstner had not. "His challenge will be to make them without going backward; to know that the centrifugal forces that drove IBm to be inward-looking and self-absorbed still lie powerful in the company. Continuing to drive change while building on the best (and [in italics] only the best) of the past is the ultimate description of the job of Chief Executive Officer, International Business Machines Corporation." It is probably too early to take full measure of Gerstner's performance in that position. However, now having his own account of those critically important years in IBM's history, we can at least appreciate the nature and extent of what he and his associates experienced...and what together they eventually accomplished. Those who share my high regard for this book are urged to check out Kevin Maney's The Maverick and the Machine: Thomas Watson, Sr. and the Making of IBM as well as Thomas Watson, Jr. and Peter Petre's Father, Son & Co: My Life at IBM and Beyond.
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Summary: Louis's IBM Story
Review: I enjoyed the first half of the book a lot. The first couple chapters are very interesting. You can see the story of IBM in the early 90' from Louis's eyes. The author did a good job to summary IBM's problems and environments at that time. They are common problems in many large companies. However, the second half chapters are not interesting any more. The author just repeted many common or general business management best pratices. Not too many new.
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Summary: I ARE GREAT AND WONDERFUL!
Review: As a 35 year IBMer, I survived the Cookie Monster years. I found this book very shallow and self-serving. It may have been written to justify to the author, in his own mind, why he destroyed what was once the best corporation in the world. He glosses over the 100,000 people he laid off and never even addressed the rape of the pension plan. Forutnately, I didn't buy this book, it was a gift so no more of my money went into his pocket.
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Summary: Fairy Tales from Versailles
Review: For those of us who survived King Louis XVI's entire reign as IBM CEO, the image of our unbeloved monarch as some sort of brilliant savior is painfully laughable. It's true that Gerstner instituted a few much-needed reforms during his first couple of years: do-nothing employees ("retired on the job") could no longer coast their way along. The number of habitual slackers was small, however, and they were pushed out the door quickly. Those of us who remained were promised great things for our hard work and loyalty. So what we did we get as our reward? In 1999, in the midst of a booming stock market when IBM was rolling in money, Gerstner gutted our pension plan. His forcible conversion to a cash-balance plan would have cost many older employees half of their pensions. Luckily, the uproar was so great that Big Lou soon relented and magnanimously allowed employees over 40 to keep what they had been promised for decades. Those under 40 were out of luck: by most estimates, they lost "only" a quarter to a third of their pensions. A previously unthinkable IBM employees' union was formed in response to this atrocity. (Gerstner does not even bother to discuss the pension issue in his book. On July 31, 2003, a federal judge ruled that IBM's alterations to its pension plan illegally discriminated against older workers.) More back-stabbing was to follow. Retired employees who were promised free medical coverage for life are now required to pay a big chunk of their pension for health insurance -- and this in the face of only one tiny cost-of-living adjustment in a decade. It was around the time of the pension massacre that the last vestiges of trust and open communication between employees and executives disappeared. "Respect for the individual" had been replaced by "Respect for the size of Lou's bank account." The annual opinion survey was gone -- in pre-Gerstner days, it had been taken quite seriously -- and open discussion of difficulties and complaints had all but evaporated. As late as 1997, we received a candid memo from our division president apologizing for the horrendous problems associated with Lotus Notes (another of Lou's unadmitted disasters). By the end of the 1990s, the best we could expect were bland management-speak memos whose content was about as perceptive and inspiring as Marie Antoinette's comments on peasants. Instead of candor and respect, we were offered Gerstneresque pearls such as the worthless "Win - Execute - Team" garbage that even our line management found hard to discuss without laughter. ("What's the latest name for our annual list of accomplishments? Personal Business Commitments? No, that was last year. Oh right, now it's called WET. Whatever." Muffled guffaws.) In short, Louis V. Gerstner's "turnaround" changed IBM from one of the best companies on the planet into Animal Farm. "All animals are equal but ... oh, why bother. Just hand over any remaining benefits we forgot to take away."
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Summary: a reader
Review: I worked for IBM in Israel for 8 years, 1984 until 1992. The full employment policy was used as an excuse for lower salaries, as we were guaranteed employment as long as we wanted it. When I confronted HR with the fact that I am being sold an insurance policy that IBM can't possibly maintain in a competitive market I was branded a troublemaker and all my chances of promotion were eliminated. Managers were the people that made the least number of mistakes, 'we are IBM, we can't make any mistakes' was the leading concept. All this culture was there for Lou Gerstner to change. My friends at IBM tell me that he had done a tremendous job at that, and this book is a great description of what he did and how he did it. For those with internal IBM knowledge it is a hilarious reminder of the old IBM, for those without, it is an invaluable lesson on business.
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Summary: Another ex-IBMer
Review: My first job after college was with IBM - during the boom of the S/360 computer introduction. These were glorious times with IBM. I left IBM eventually (for reasons not negative to IBM) but have always had a special fondness for the company. Even though IBM's internally focused management style ultimately got them into trouble, it spawned a workplace that treated the individual with the utmost respect which all of those who once worked for IBM could not help but appreciate. This book was a simply written and accurate depiction that covered the latter years of T.J Watson Jr.'s era through to today and the viability that the entrenched 1960's IBM culture had in the 1990's. The story is a facinating one and worth reading since I believe it is a 20th century story unique unto itself. For any of you who are IBM history buffs, two other books that I found very interesting fill in some of the detail around the 1970 and 1980 time period of IBM when Microsoft and Intel were taking market share. They both lay the groundwork for what Gerstner describes in his book:
1. Big Blue, the Unmaking of IBM
2. Hard Drive, Bill Gates and the Making of the Microsoft Empire Clearly Gerstner could not have seen every turnaround action he initiated through to conclusion. Many of these will take years. But I for one wish IBM the very best in the future and thank Lou for taking on this mission.
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Summary: I worked for IBM during the big crash
Review: Gerstner accurately describes what IBM was like back then. Employees believed they had a right to play around and still get paid. They were owed a lifetime job. Managers were frightened to death of actually disciplining anyone. Personnel dept would make your life miserable. Plus you would become known as someone who can't manage effectively. Fire someone?, forget it. First thing I learned when I made manager was never fire anybody. Just wait till you can unload them on someone else. IBM socialism meant that the sales offices constantly played around with quotas. So you never got really hurt, and you never really made big money. So why put out the effort? You weren't going to get fired. The [...] labs could care less what the market needed. They would play around with stuff until they had perfected it that last 1%. The fact that it would come out 6 months late and 20% overpriced never bothered them. Sales reps didn't sell what made a profit, they sold what had the most sales points attached. I don't think this is a great book but it is interesting and easy to read. And it is absolutely true that IBM needed someone to shake it violently by the collar to make it pay attention to the crisis. All the other reviwers whining about the changes remind me of all the people I knew at IBM who were in denial...."if we just wait a little longer... everything will be all right". Like it or not someone had to radically change the Company we all loved. Even though I lucked out and took the first buyout, I wish I still worked there. There is something about being an IBMer.
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Summary: May be I like this book since I am no IBMer!
Review: I am glad I read the book before reading the reviews on this site since my perceptions of Gerstner's narration did not get coloured by some of the writings on this site! It is also possible that being a non-IBMer, I may have taken many of the pronouncements in the book on a face value as compared to the guys who probably had a personal and possibly more insightful encounter with Gersten's leadership style from within the organization. Anyway, all said and done, I must confess that the book and its contents have impressed me a great deal. Some of the key impressions I walked away with after reading the book are: a. Lou is a no nonsense leader, somewhat like his other famous contemporary CEO - Jack Welch. A total focus on execution and very little tolerance for usual organisational BS!
b. But, unlike Jack, Lou does not come across as a guy full of himself! The fact that Lou starts with a broad disclaimer that this book is no autobiography but simply his account of what happened at IBM in last decade tells you a lot about the difference in two personalities.
c. Although it is obvious that both men were looking at e-business from rather different perspectives (one as a technology provider and other a user of technology), it is probably not coincidental that both of them were amongst the greatest proponents of e-business and recognised a huge opportunity in leveraging e-business for their respective businesses.
d. Till the end, Lou remained faithful to the initial pronouncements he made immediately after joining IBM about "vision". The book is short on "CEO Vision stuff" but full of illustrations on his obsession with execution and painstaking but vital details required for successful organisational transformation. The section that left the greatest impression on me was chapter 26 - where Lou debates about lessons learnt from "centralization vs. decentralization". Having seen many CEOs struggle with the critical issue of trying to create a "synergistic/integrated" strategy, Gerstner's candid but insightful observations on this vital issue were indeed insightful. For someone who has been visibly successful in driving a synergistic/integrated strategy for a mammoth organization like IBM, it was pleasantly surprising to see Lou caution other business leaders from blindly adopting the "synergy/integration" mantra! Hope such warnings from a veteran who has been there, do not fall on deaf ears. Business acumen and the guts to step back and take a fresh look at critical issues rather that blindly following the prevailing "industry trends" and "analyst wisdom" is what make an extraordinary leader stand out in the crowd. By going against the prevailing wisdom that downsizing the organization by spinning off smaller size nimble entities is the only "viable" approach for IBM, Gerstner not only managed to successfully preserve IBM as a US "national treasure" but forcefully demonstrated that for those who dare...there is always a better way forward! Judging by other reviews on this web site, some of my above observations may look rather oversimplified and naïve to the guys who had the misfortune of being on the receiving end of Gerstner's brash style. However, as they say - the proof of the pudding is in eating! Seeing an "integrated IBM" of today with robust financials and a dominant industry position is any day a much better proposition than attempting a hypothetical "what if" analysis about a disparate group of "baby-IBMs" that may have resulted from the break-up of IBM a decade ago!
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Summary: Inside the IBM Revolution
Review: A kingdom grows and prospers by conquering new lands. For years it stands virtually unchallenged. Things change. It loses battles to new competitors, and shrinks. Their aristocracy seeks a winning strategy from a new general. Forces are withdrawn from areas not worth contesting to reinforce areas where the battle is critical. Having accomplished his mission, the general retires. The kingdom is now in better shape for having shed their colonies. THINK of an overloaded lifeboat (Boston case in 1850s). The first mate reduces the number of passengers, allowing most to survive. The blame should be on the situation, not the correction. (My condolences for those thrown overboard.) Or pick your own parable. This is written for a general audience, but not everyone will benefit from the contents. I think a lot of stories were left out. This easily read book shows Gerstner would make a good journalist. Gerstner's first and basic decision was to reduce the cost to mainframe customers. They used CMOS transistors (like in home computers) for a lower cost, and IBM renewed its emphasis on customers. This reversed the decline in mainframes and saved the company. The loss of billions required drastic cuts, not just in a bloated administration, but in surplus productive employees. Expenses would have to drop faster than the decline in gross profits (p.63). Page 59 says "competitors in the computer industry, unlike any other industry I know, try to create unique standards that they own". This is the result of Anti-Trust Laws that allow you to put a generic tire on a Chevy or Ford. Page 64 tells of the fiefdoms of multiple accounting systems, and the need to update and simplify them. Didn't General Motors go thru this same trial around 1982? Page 66 tells of the sale of "unproductive assets". Page 72 mentions the interaction between ability and morale or reputation. Gerstner's proudest accomplishment is that his successor and the heads of all major business units are longtime IBM veterans. This happens when a company brings in outside consultants to do what is needed, and then leave. Page 257 mentions the "wild pronouncements" like "the paperless office" (people want tangibles, and read in may places), or "dot-com universe" (people want social interaction). Did these originate as customer demands? Chapter 28 underlines the problem of a corporation. High-level managers who get rich through fraud or embezzlement is not new; read the history books for similar events from the 1870s to 1930s. Today's dot-coms are like yesteryear's railroads. Was the media flaunting the "new economy" a few years ago? Doesn't the business side of the media always control the editorial side? Gerstner mentions the role of "investment bankers" (p.260); they have been the most powerful members of our ruling class since the 18th century. Pages 261-3 list some common sense cures. A company controlled by its owners is better than a corporation run by hirelings. Page 271 explains the difference between "cash flow" and "revenue". Chapter 30 asks about the corporation and the community. Before the 1860s no corporation could be chartered unless it served a public purpose (canals, waterworks, railroads). Corporate contributions may be a vestige of this tradition. Preventing companies from incorporating unless they served a public purpose would answer this question.
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Summary: Gertsner tries to Justify why he ravaged a 85 Year old Compa
Review: This book puts in perspective what Gertsner did while at IBM. His callous disregard for employees and the lives of long hard working employees is obvious as he describes "How he made the Elephant dance". Sure, IBM was in trouble in the early 90's but IBM wasn't the only one, every company gets in trouble at some point. When the corporations realized that the PC was not going to replace mainframes, the turnaround was easy to implement and IBM was postured well when large capacity mainframes were required and necessary for the Fortune 500 to do reliable business. Was it necessary to throw out the principles that built IBM over 85 years into one of the most admired companies in the world? I think not, and now it is questionable of whether IBM will ever come back, to what it was before, a Great Company to work for and for the world community. Not mentioned in this book was that Gertsner walked away with $630,000,000 Million in net worth, gleaned in part from "creative accounting". His successor at American Express was one of four who determined his compensation, of which he has more than 600,000 stock options left to be exercised now that he has left IBM. This is a good book, about a man who has an ego as "Big as an Elephant" who did absolutely nothing to make IBM a better Corporation for the global economy. He just made money for himself and lots of it and this book is a sad attempt to justify his methods.
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