Since coming into the 21st Century, IBM has evolved, and its strategy has changed. Evolution, though, isn’t always an advance, and change isn’t always for the better. The Iowa Board of Regents and UI’s faculty, staff, students and community must understand what IBM was, and what it has become to ask the tough but necessary questions of their new president.
IBM’s 21st Century culture is about compliance, not change. ...
Tom Watson Sr. had laid the foundation for this culture of change by building a mutualistic ecosystem of customers, employees, shareholders and society. This does not describe the 21st Century IBM. It is less productive, more risk adverse and maniacally focused on rewarding a single investor to the detriment of all other investors. Shareholders may invest their money in its stock, but customers invest money and time in purchasing and implementing its products, employees invest time supporting its customers, and societies maintain critical infrastructures and provide tax abatements in exchange for jobs. ...
IBM is a financially run organization, and it takes whatever financial action is necessary to ensure rising profits expressed as earnings per share. Any imperative other than improving profit margins pales in comparison. Those individuals that stray from this narrow path, trying to do the right thing by investing in people, processes or products, will be pulled back to earth by the long arm of finance. IBM Finance owns the plan and it has one—and only one—strategy: shareholder-first and -only.
With any large organization, an investment in the wrong strategy takes years to reveal itself. IBM’s commitment, not once but twice, to earnings-per-share roadmaps—five year shareholder-only focused roadmaps ending in 2010 and 2015—was a short-sighted investment in stock. It is the reason that IBM fell behind in one of the newest implementations of technology in the 21st Century: the cloud. ...
Because of IBM’s investment in paper, it no longer invests in its people. It treats its valuable knowledge worker as though he or she were an interchangeable, expendable resource. IBM Finance through human resources continually moves workloads worldwide to keep expenses under control. The individual IBMer is subject to continuous, mind-numbing resource actions—IBM terminology for layoffs. Employees are under the constant threat of unemployment—not because of poor performance, but because they are at the wrong place at the wrong time. As a result one out of every two employees would not recommend IBM to a friend. In an unusual twist, IBM’s leadership rather than addressing the problem removed all mention of employee satisfaction from its Corporate Responsibility Report—an interesting approach for a “responsibility” report. Surely the Iowa Board of Regents desires more than 50 percent of its graduating students to recommend an Iowa university education.
Selected comments about this article posted on LinkedIn follow:
When a corporation becomes as highly centralized as IBM is today, makes all decisions based on financial, short-term criteria, replaces turn-around leadership with jettison-now management, and has a financial rather than a win-the-market strategy, sooner or later it creates an environment that is hostile to developing great leadership.
Ginni has been nothing if "at war" with her sales force since she took over. Her comments and investment decisions show a complete disregard for understanding what a "balanced investment" means when bringing new technology to the market. As I point out in my article, IBM's revenue per employee has been gradually declining for over 15 years.
I recently did a press interview with a reporter that had written an article on a few headline wins for Watson Analytics. I told her that IBM needs to sell 1000's of Watsons to be successful, not a few headliners. It can't do that without a trained, educated, focused and motivated sales force. It can't do that without trained, educated, focused and motivated technical-sales force supporting them in the field.
It takes a team and the complete avoidance of "us and them" mentalities that can only be overcome when the complete focus is on service to the customer, product wins and successful product implementations. People talk because they aren't empowered to THINK and ACT like we were in the 20th Century. Bill Simmon's book is an example of an empowered IBMer in action. He is an example of one person making a significant difference that lead to the overall success of IBM. He could not do what he did in the '60s for the mainframe in today's IBM for Watson Analytics.
Ginni and her executives are pretty much on their own in this respect. They have isolated themselves behind a curtain of silence and quelling of dissent.
Consequently, management secrecy is rife. When I first joined IBM in the eighties we would get a frank and open assessment of where the numbers were at monthly branch meetings. We all knew the organisation's targets and how we were tracking against them. Now all we receive is generalised percentages accompanied by spin to make them look as good as possible. There seems to be a belief that employees are so naive they'll be fooled into thinking things are good while we experience 14 straight quarters of declining revenue!
We used to lead in technology but I cannot recall a time when IBM came out with a hardware solution no one else had. Remember the day of IBM universities that taught you how to sell a solution. Now we can't even get calls returned from the few reps we know. IBM should architect the AS/400 or ISeries to be the back-end enterprise server for APPLE. NOW that would be a game changer and I think it could be done.
A couple of years ago Ogilvy did a great piece of work for us to help define the IBM brand and what we could do to enhance it. They analysed IBM's brand against a number of factors and compared it to Interbrand's other most valuable brands.
A key finding was that customers primarily experience the IBM brand through their interactions with IBMers; not through our products, not through our services, not through our financial security. The individual IBMer IS the brand.
This work gave rise to the advertising campaign, "I'm an IBMer and that's what I'm working on." Obviously, the corporation had embraced a strategy to improve employee morale and to bring back the pride people felt in being an IBMer.
Or had it?
As you quite rightly point out in your main post, revenue per employee and sales productivity have continued to slide. There has been no perceptible increase in employee morale; in fact it was around the same time as this finding that the 100% Club was reduced to a congratulatory email. Resource actions continue apace, and as you also pointed out one out of every two employees would not recommend IBM to a friend. The company has stopped even assessing employee morale through Pulse surveys. The PBC process, already diminished from the world standard PPC&E structure, has been effectively killed off. Employee performance ratings are handed out on a quota basis.
In short, IBM's 'leadership' team is actually eroding the IBM brand. And then they wonder why our results are poor!
Big Blue said in its latest 10-Q filing that for the past two months, the financial watchdog has been looking into its accounting practices.
"In August 2015, IBM learned that the SEC is conducting an investigation relating to revenue recognition with respect to the accounting treatment of certain transactions in the US, UK, and Ireland," IBM admitted in the filing. ...
A Big Blue spokesperson said the enterprise IT giant was confident the investigation would not be a major issue going forward. "IBM has a rigorous and disciplined process for the preparation of its financial statements and the reporting of revenue," the IT giant said in a statement to the media on Tuesday.
Peter Roe, analyst at TechMarketView, noted: "This marks another move by IBM to increase the predictive power of its services, and the company will be looking to combine the weather forecasting unit with its Watson operation to build an 'insights' business." Roe commented that the logical thing would be for IBM to roll the Weather Channel into its Watson division and its just-announced Cognitive Business Practice. He said the acquisition could be used for the Agricultural sector.
Selected reader comments follow:
Pros: Good experience, very challenging environment, a lot of resources, and learning opportunities. A lot of free time.
Cons: No one cares whether you show up or work from home. IBM does nothing to support interns and treats undergraduates like mid-level professionals, who already have a family, car, and do not need extra support. My social skills were stunted after this internship since I barely got to talk to anyone. Advice: This isn't Google, Apple, or Microsoft. Do not expect to do more than work. This will not be fun but it will be challenging. Be prepared to see the worst and kind-of-okay in people. Also I cried about 3 times during my summer there.
Advice to Management: Provide more support for undergrads. Supplement the internship experience. I did not relocate across the country to just watch Netflix every weekend.
Pros: Global Business Services was very organized and structured. Managers are easy to talk to and it's easy to go to different projects once you are on the bench (as long as you have a good manager and keep in contact with him/her). Travel varies by sector. I worked in the government sector, so travel was limited unless I had to visit an installation, base or other military division. Pay was decent for the area that I lived in. Ginny seems to be righting the ship. Work-life balance in private section is great. Good brand reputation.
Cons: Sometimes you get placed on boring projects and it's hard to get off. Work can be boring at times. Upward mobility depends on the projects you work on and who you know within IBM.
Advice to Management: Allow people to move between public and private sectors in order to fully utilize talent. Bring back educational reimbursement.
Pros: Work from home, which is typical of most consulting jobs.
Cons: There is a long list...where shall i start. Lacks leadership and direction. Too much bureaucracy and an insane unreasonable obsession with outdated processes — some of which are Excel-based (can't believe I work in a major IT company).
Extremely political. It doesn't matter whether you generate a higher billing rate for your work as long as you hit 150% utilization even if your rate is at the bottom.
The company finds every possible way to snatch away the tiny perks of traveling despite the sacrifice consultants do.
While consultants and those working on ground, who bring real money to the company keep getting ignored, senior management, which is mostly overhead keeps getting paid millions in bonuses and incentives.
If you don't have a godfather or a godmother in the company then god help you. Of course your godfather or godmother needs to be a strong politician within the company...I can just go on and on.
Advice to Management: Wake up and do some real work! Learn to appreciate true talent.
Pros: Great place to build a career, a lot of opportunities to switch jobs. Global presence, you can switch work locations. Opportunity to work from home office.
Cons: Yearly review process was brutal, management would get together and fight it out on which employee was eligible for what. (I heard that this has changed starting this year, 2015, it was a source of many sleepless nights) Met a lot of managers that had no idea what was going on, did not understand technology and seemed to be a lot more interested in their own careers then moving the company forward.
Advice to Management: Company talked a lot about values to customers. Internally the company works like a medieval kingdom; each department tries to get hold of a limited number of resources. Somewhere along the lines it was forgotten that all departments were part of a single company.
Advice to Management: Stop focusing on short-term operational management goals and take a look at the bigger picture — both in terms of the marketplace, and internally — how can we be smarter.
Pros: I have reinvented my career 3 times without ever leaving the company. I am around highly skilled, highly motivated people that have the abilities to drive the future of technology. IBM is involved in every aspect of technology.
Cons: The size and bureaucracy can kill productivity at times. Any organization this large tends to be loaded with A types that have conflicting personalities and power politics can be a problem at times.
Advice to Management: Continue to streamline the bureaucratic overhead, work to continue to drive IBM Values home to every employee, and work to correct the view of the protected class of execs vs everyday employees that can be treated as commodities at times.
Pros: All depends on division and people you work with. Global Services is fine if you are young, don't mind traveling all the time, and want something big to put on your resume. Your career won't be long there unless you stay billable, which doesn't allow you to take the vacation you earn. So there is a tipping point; if you take your alloted vacation, you can't make the 98% billable target and will be an underperformer.
Cons: Most jobs shifting to India, actually most of the company resides outside the US at this point. Current executive management is pretty inept as reflected in the stock price over the time she has been in charge, but there is little movement to address this situation. The sole priority at the company, despite all the mission statements and values documents, is the shareholder value. So take everything with a grain of salt. As an individual you are of little value. Also disregard any promises of bonuses. They either never make their numbers (not in 18 years) or if there is any money it is divided up not by your work but by a comparison of your work to people you have nothing to do with. Real number are 2% or less on a good year.
Advice to Management: Too big a nut for me to crack, but a change in executive management is certainly called for.
http://www.endicottalliance.org/thedisintegrationofemploymentinIBM.htm To all Alliance supporters, send and share the above link to the article "The disintegration of employment in IBM" far and wide. Put it on your FaceBook page; send it to newspapers; send it with comments to your political reps and send it to your co-workers. Help break the secrecy of IBM job cuts. Put some pressure on IBM. -Alliance-
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