At The New York Times DealBook conference Tuesday, Rometty told CNBC's Andrew Ross Sorkin the decline has been caused in part simply by being a global company. The other major factor is IBM has been divesting, a lot.
"In my tenure, I've divested $8 billion of businesses," Rometty said. "The point was, they weren't about the future of where we were going." ...
Rometty told Sorkin that IBM is working its way to that higher value. She said the company's 50 percent gross profit margins are up 80 basis points already.
"Tech is littered with areas that you could have high growth and make no money in, and that just has never been us," Rometty added. "It's been about the enterprise and what we do, and where we bring value to the client, and where in fact it brings value to shareholders here."
Unfortunately, IBM is now a centralized, financially autocratic hierarchy.
It does its financial thing right: it slows labor costs by manipulating performance appraisals to suppress raises; it reduces labor costs by relocating workloads worldwide; and it eliminates labor costs through on-going, continuous resource actions (layoffs). Through these actions it generates tremendous cash flow. This obscures the fact that it is no longer an effective organization or that it no longer does the right things: customers wait too long on critical product updates, one out of two employees would not recommend it as a place to work, it invests in paper instead of people, processes and products, and during this century one out of every three shareholders has abandoned the stock. It meets few of the expectations of its customers, employees, shareholders or society. These actions are generating ill will.
Pros: The company still has some of the best benefits in the industry. Opportunities still exist and it is what you make of them.
Cons: Culture has been in decline for the past decade. No improvements in the culture can be seen on the horizon as the company continues to shift jobs to India. Damage has been done in India with layoff's in a country where they are trying to shift jobs too. They cannot hire enough skilled people and those that they do have, leave for better paid jobs.
Advice to Management: Unfortunately the company is so large as a multinational company, it is having a difficult time realizing what it could be if it where a global company. For instance, its Cloud division is segmented and one part has no idea what the other part is doing. It has no management of a complete end-to-end service in Cloud. So it suffers in implementations. No one is watching the end-to-end and upper management continues to operate as if it were 5 years ago.
IBM attempts at Agile miss the mark as no one is watching how it fits into the big picture. How can it when it operates as a multinational company instead of a global one?
Pros: Great co-workers, team environment, and chance for exposure in other areas of IT.
Cons: When I joined IBM in late 1990's the average tenure was 35 years...now I would say 2 years is a veteran. Also, it appears that the goal is to ship all IT work overseas. Really sad for all the folks who worked so hard and all the customers that supported IBM for so many years. I guess that is what progress has become.
Advice to Management: The stock market is sending a signal to management and the stockholders... better listen before it is too late.
Pros: Can't really think of any other than we could work from home anytime we wanted (beneficial with school age kids).
Cons: Where do I start? Portions of my former employer's IT area were outsourced to IBM and we were "encouraged" to apply for the same work there (after hearing that IBM didn't want any of us but were forced to take us by our former employer). We got a 1% increase in our salary and for the 3 years I worked there there was no other salary increase.
Our portion of the business was managed out of India and other than attempting to bully us (seems the only way they know how to get their point across is to yell) they only cared about SLAs and were you making sure support tickets did not fall out of compliance.
There was no opportunity for growth and once they could move our work functions to India they did that (we were only guaranteed employment for 2 years).
Advice to Management: Stop thinking that 3 people working in India can do the same work as one person with vast knowledge of the client working onsite with the client every day.
Pros: A large, truly corporate, profit minded company. Good experience for 3-5 years, then leave as you will fall behind in technology and salary.
Advice to Management: Go back to training managers to be managers (people and project ) as opposed to the management mess that has been there for the last 10 years.
Pros: Good work/life balance, good pay and benefits; generally challenging work with some good co-workers. Few young people, however.
Cons: Management is totally political. Company is too large and there is too much competition for power/budget leading to a lack of communication and too much infighting.
Many key "implementers" (the real 'talent'), are billed on an hourly basis to clients and have absolutely no time to share their knowledge; far too many managers protect their turf and staff may literally be held back from changing positions.
True Leadership is hard to find; most are "playing the game."
Too many employees are aging, old, outdated, and just show up for their cheese until they can go home. Real innovators seldom stay as they get tired of being surrounded by drones — and again, real talent is too busy for anything but taping things together to get our products to work at the customer's site.
Most employees there really want to do well, but need real management and support; instead they get too much management and tons of politics that have little to do with their job.
Advice to Management: Cull the political middle management that offers nothing but lots of talk. Keep the truly talented developers and consultants, even keep a few extra to help build up your support staff. Keep key support staff. Many acquisitions over the years has swelled middle management; few of whom are true leaders. Quit buying back your own stock at its highs and wasting millions $$$ in the process.
Pros: Good people to work with, IT systems are solid, senior management is approachable, ability to work remotely, salary is good (but not great).
Cons: Benefits are slipping, especially 401K matching only at year end. Similar with bonuses. Traditional HW/SW sales dropping and newer cloud/analytics businesses not filling the gap fast enough. (Sellers are not stepping up).
Advice to Management: Focus your resource actions on sellers not pulling their weight; still too much good 'ol boy protection. Return 401k matching to pay periods (not year end) consistent with all other companies.
Pros: Interesting job assignments with challenging tasks. The fellow employees are also super friendly and helpful.
Cons: Being so new in this area there is lack in the access to equipment and personnel resource that you expect to find at a company of this size. There is no one to talk to about health and benefits locally and they lack a IT department to handle Office materials. You have to provide your own equipment beyond the provided ThinkPad laptop.
Advice to Management: Build out the infrastructure for you employees before you grow. Its important that people are not left scratching their heads or being force to a vague website when they have questions about business and HR concerns. The facility manager should not be the only one with all the answers.
Pros: Great learning experiences in dealing with all sorts of people from various business and social cultures. Usually very flexible work/life balance. Learn to operate and achieve success in a highly matrixed and political corporation.
Cons: Remuneration is not where it should be. For the last 7 of my 15 years there the salary reviews and increases were almost a pointless exercise, and gradually fell well behind the market averages. Some red tape is outdated and limits efficiency. The right people/teams aren't often rewarded and recognised, but rather a "who you know" system.
Advice to Management: As much as strategic direction comes from the top to help drive the business, those on the ground have great experiences that should be heard at the top to create a stronger balance.
Pros: Great people. Pretty flexible with PTO If in the right situation. Senior leaders don't view age as a inhibitor of role readiness. IBM investing in the right growth initiatives.
Cons: Many great roles are a byproduct of timing/luck as opposed to aptitude. Unsure if this is more of an indictment of the consulting/"on-the-bench" culture. A lot of PMs view the CbD program almost as plebe year, having them do the grunt "pay your dues" work rather than understanding the end goal of the program is to groom these resources into executive positions.
Advice to Management: If the program is meant to be a true rotational program, make it rotational. Expose employees to a plethora of different experiences and responsibilities, rather than pigeonholing them for the sake of the bottom line. Also, if you view this as an "executive accelerator program" treat it as such. Project Managers should understand CbDers career goals. Put them in leadership positions if deemed ready, or if there aren't any growth opportunities available, let them seek out opportunities that will advance their career and let them KT that role to another resource.
You cannot become a leader behind a computer screen. This would require all PMs understanding the end-goal of the rotational program,which is difficult considering IBM's size. This being said, I got extremely lucky to be put on a project with great people, and opportunities to learn and, quite honestly, fail.
I learned invaluable lessons while in this rotational program that have made me a better person and employee. A lot of my complaints are with how the program is communicated/perceived by most leadership.
Pros: Good: There are many IBM divisions and groups that there are many different career opportunities to keep resources interested. IBM culture embraces employees who have good ideas and are willing to take ownership to implement their ideas.
Cons: Bad: Over the last few years changes have been made that make it appear that the company doesn't care about their employees; little or no bonus after requiring massive amounts of overtime; 401K company match changed from being paid with each pay period to being paid 12/31 IF you have not left the company or they did not lay you off before that date. Ugly: Currently a lot of the US staff fears for their jobs and the morale is not good.
Advice to Management: None
Advice to Management:
Advice to Management:
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-
The 4Q deal pipe worldwide is virtually empty. Product teams aren't being given money to fix even serious bugs. The pool for raises and bonuses is now empty going forward, so nobody can expect those. Everyone is being asked to "do less with more" aka do the work of those who are gone.
I'm sure there are a great many who have their new jobs with other companies lined up for Jan 1 and will say sayonara on Dec 15 when they quality for the 401k match. That will leave the company short, and make things even worse. BUT - it will also give those who are left some power.
Join the Alliance and give it more strength. Wall St is starting to pick up on the employee morale problem, thanks to the press releases put out by the Alliance. They are our voice, please help them. Something major has to happen to this company soon, so let's organize so that those who are left have a voice to prevent this massive executive abuse of power and workers from happening again. It's only a few bucks a month. Don't sit around and wait for the big cut in January. If you get axed then, you can cancel if you feel you need to. Many stay on just to spite IBM. Please join those of us who have proudly joined. -ReadTheTeaLeaves-
There was no Q/A after, and no replay or recording made available of the announcement. GDP is changing too. Quarterly instead of yearly, with all the "ifs" attached as always. Hope everybody filled out the IBMer Engagement Pulse survey and let them know how you feel about this wonderful company. Not that it matters to them, but its enjoyable to fill out anyway. -GTS - going to s____-
This is a pilot that they are pushing on the GTS organization only, effective 1/01/16. Very likely they will roll it out to everyone.
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