No! No! No! Louis Gerstner refused the top job at IBM three times in the early 1990s. By the time he had left IBM in 2002, many more people were yelling "no" -- shareholders, customers, clients, employees and board members alike did not want Mr. Gerstner to go. But go he did. Louis Gerstner, former Chairman and CEO of IBM, saved IBM from its financial torment and steered the company, relying on his steely spine and might. A graduate of Dartmouth College, I would like to salute Mr. Gerstner for a job well -- no -- a job admirably done.
Before accepting the job at IBM, Mr. Gerstner worked at American Express and RJR Nabisco. Referred to as the "cookie monster" by some IBM employees who found out he worked at Nabisco, Mr. Gerstner found out that he was dealing with another monster -- also blue but not as furry. Big Blue, another name for IBM, had lost $16 billion and was on the path to extinction. One of the biggest problems was IBM's dying mainframe computer business. The other was that smaller companies continued to chip away at IBM's markets, specializing in niche fields. For instance, 20 companies started to make only monitors or only disk drives. IBM, on the other hand, continued to use the shotgun approach -- specialize in everything. IBM was simply too big. It needed to be segmented in order to compete with the smaller firms.
Gerstner used IBM's weakness -- size -- and made it IBM's chief strength. Instead of breaking up the company, he listened to the customers -- they did not want just another disk drive company or a company which made dissimilar pieces. They wanted an integrated, intuitive approach. Gerstner gave the customers what they wanted; Gerstner gave IBM what it needed.
I salute Mr. Gerstner for effectively dealing with one of the most tenuous parts of any organization: culture. "For every culture is an island. It communicates with other islands but it is only familiar with itself," wrote author Arthur Koestler. IBM was too familiar with itself: massive hierarchy, poor problem solving, white shirts, dark suits, titles, tenure. IBM was an island, Mr. Gerstner the bridge. In his book "Who Says Elephants Can't Dance?" Gerstner writes about corporate culture, "my deepest culture-change goal was to induce IBMers to believe in themselves again -- to believe that they had the ability to determine their own fate" Mr. Gerstner linked IBMers by opening up archipelagos of communication across all divisions of the company. Mr. Gerstner helped IBM achieve an open culture. IBM was open for business.
Mr. Gerstner maintained the new IBM culture by keeping a crisis mentality. Nobody wants to change unless you make them understand that they must. There has to be a crisis to convince employees that they must change. In the early 1990s, IBM was destined to fail, the biggest of all crises. In the late 1990s, IBM well on its way, Mr. Gerstner maintained a crisis mentality by never being satisfied with success. IBM is constantly improving, rarely resting on its laurels. Mr. Gerstner kept the paranoia alive.
Today IBM is a dynamic company, offering new solutions to ever-changing problems. If you want to run the largest database on the planet, talk to IBM. If you want to invest in a reliable company, look for the stock-ticker "IBM." If you want to have a good chuckle when you are watching TV, watch an IBM advertisement. The company Mr. Gerstner was asked to save can now save you.
I hope the new leadership at IBM learns from Mr. Gerstner's successes and failures. The new CEO ought to remember success is an unusual paint, hiding all the unsightliness. He ought to keep the paranoia alive.
Mr. Gerstner's tenure at IBM might be over, but his tenure as a teaching advocate endures. Mr. Gerstner created the Commission on Teaching to create policy recommendations for the government. At IBM, he created Reinventing Education, a program that offers technical assistance to schools in order to boost student success. Perhaps Mr. Gerstner's love of education can be explained by his constant pursuit of knowledge. He is interested in studying Chinese history and archaeology. Several people have recognized Mr. Gerstner's undying commitment to education. Queen Elizabeth II designated him as an honorary Knight of the British Empire in 2001 for his business and educational triumphs. Now that we're on the subject, I think the Tuck School of Business ought to give him some kind of award.
I salute Mr. Gerstner for seeing the invisible and doing the impossible. He came. He saw. He saved. Farewell, Lou.
