IBM Redux

by Garr, Doug

• ISBN13: 9780887309441
• ISBN10: 0887309445
• Edition: Revised
• Format: Paperback
• Copyright: 2000-08-31
• Publisher: HarperCollins Publications

Summary

An inside look at one of the greatest business stories of our day: Lou Gerstner's dramatic transformation of IBM from a dying company into a nimble giant When Lou Gerstner took the helm at IBM in 1993, the company was headed toward bankruptcy. Six years later Big Blue was back and better than ever: its stock at an all-time high; its coffers filled with cash; and its market capitalization a healthy $169 billion. How did Gerstner do it? With unprecedented access to current and former IBM employees, and drawing upon more than 150 interviews and hundreds of pages of documents, journalist Doug Garr offers the first in-depth took at the IBM miracle and the man who made it happen. From the complete overhaul of the company's image and culture to the takeover of Lotus and the development of network technology, Garr vividly illustrates Gerstner's operating methods, management philosophy, and vision. Fastpaced and fascinating, IB14 Redux provides rare insight into the world of information services and offers prescient advice on what IBM and its competitors need to do to keep on thriving in the twenty-first century.

Author Biography

Doug Garr, a former IBM speechwriter, is a business and technology journalist whose magazine credits include New York, Business Week, Popular Science, Harper's Bazaar, and GQ. He is the author of Woz: The Prodigal Son of Silicon Valley. He lives in New York City.

Table of Contents

Introduction	ix
A Brand Guy in the Information Age	1	(18)
Would Anyone Want This Job?	19	(14)
A New Man in Armonk	33	(22)
First Months, First Moves	55	(22)
A Vertical Vision of Reality	77	(18)
The Making of a CEO	95	(22)
Seismic Shakes in Big Blue's Culture	117	(22)
Two Camels in Front of a Pizza Hut	139	(22)
That Strange, Elusive PC Company	161	(26)
At War with the Evil Empire	187	(20)
Gerstner Grabs for Groupware	207	(26)
A Shifting Wind in Armonk	233	(20)
New Images in the House That Lou Built	253	(24)
Leadership-At Home and Abroad	277	(14)
Network Computers and Big Blue's Servers	291	(14)
A Loss Leader Even Lou Can Live With	305	(16)
There's No Place to Hide	321	(24)
Full Disclosure	345	(8)
Notes	353	(12)
Bibliography	365	(4)
Index	369

Excerpts

Chapter One

A Brand Guy in the Information Age

Las Vegas- November 1995

The cab drivers are busy but unhappy because Las Vegas Boulevard is jammed and morning traffic is crawling. The best craps dealers are calling in sick because the tips are lousy. Casino pit bosses are griping that the gambling tables are slow, the way they are every year at this time. When the computer crowd shows up just before Thanksgiving, a lot of the natives would rather just take the week off. What flows into town is net worth, not cash. The digerati, you see, even the wealthy ones, just don't gamble very much, at least in casinos. Bill Gates plays $25 blackjack. These conventioneers aren't typical tourists; they're geeks and suits who know the odds to the hundredth when they roll the dice. They like action, but they're not stupid. They know they can't beat the house. The people who live in Las Vegas have not yet figured out that the people who earn their living in the world of high technology are high rollers at heart; they shoot craps when they wake up every morning.

The city's biggest convention means fat receipts for the hotels. They are booked solid a year in advance, and the food and the inflated room rentals will make more money than the gambling tables will, an aberration that continues to baffle local economists.

This is the annual worldwide confab of the makers and purveyors of microchips and related wares, hard, soft, middle, and otherwise. COMDEX, the Computer Dealers Exposition, where a couple of hundred thousand digital savants converge at the Convention Center. Hundreds of high-tech companies, from one-horse outfits to multinationals, clamor for attention. In hotel conference rooms and trailers in the parking lots outside the exhibit hall, the industry's power brokers meet and cut deals, carve up territories, make alliances, plot against Sun or Oracle or Dell or Compaq-or even IBM, the company everyone loved to hate until a couple of years ago. Before Microsoft was on the verge of becoming like IBM.

On the Strip at the Aladdin Hotel Theater, up onstage is Lou Gerstner, the fifty-three-year-old chairman and CEO of IBM. He's about to give the keynote address that traditionally opens the show, the biggest single draw of the four-day event. The video feed will be piped into the ballrooms of several other hotels. Unless you're hopelessly hungover or closing the deal of a lifetime, you're tuned into this speech.

The "Voice of God," convention lingo for the words from an anonymous technician at the mixing console, introduces the speaker.

Gerstner is not a casual guy. He doesn't go onstage in khakis and a sweater. He is wearing a perfectly pressed dark suit, white shirt, beige print tie. His suit coat is buttoned, and it will remain that way until he sits on a stool. His style differs from most other industry luminaries, who try to outdo one another at COMDEX with elaborately staged theatrics. The stage is sparse. There is a simple background of vertical brown and white and gray panels, with downlights illuminating them. No pyrotechnics, no multimedia for this CEO. No giant company logo either. Gerstner is larger than life only on the projection screens on either side of the stage. Just the stool and a glass of water off to the side on a modern, stylized group of rectangular pedestals. This simple approach is deliberate. After considerable discussion and debate, it was suggested that one way to distinguish Gerstner from the technology clutter was to send him out there without any fanfare, without the usual gizmos or props.

This is Gerstner's most visible public appearance since he took the reins of the failing computer company two and a half years earlier. He has meticulously avoided high-profile events like these, mainly because he feels uncomfortable in front of a crowd of technology devotees. His most visible industry peers and rivals, Andy Grove of Intel, Bill Gates of Microsoft, Scott McNealy of Sun Microsystems, and Larry Ellison of Oracle, are guys who like working under the hood, getting their clothes full of the grease of computing. Gates and Grove are technology lifers, pure wonks within their own firms, at ease among the eccentrics, the engineers and scientists and programmers. McNealy, who would stimulate a good deal of the Internet's growth with the Java programming language, is outspoken on any topic, especially when prodded about his dislike for Microsoft's monopolistic tendencies and strong-arm marketing tactics. Ellison, the often flamboyant purveyor of large system database software, is a Silicon Valley original and something of a loose cannon-his highly controversial personal life rivals Ted Turner in his worst bad-boy moments.

All four of those CEOs have an intimacy with technology, and a certain healthy disdain-but not disregard-for IBM, a company that is squarely in recovery but which they still think of as well past its innovative prime. They respect Big Blue but they do not fear it. They haven't been afraid of it in years, ever since the monolith began to melt. Even Gerstner, a man with a considerable appetite for achievement, admits that IBM will never be an omnipotent presence again. He is hoping for something less: consistent growth and profitability and a leadership role in the burgeoning networked world.

No, Lou Gerstner never looks under the hood. He doesn't speak the language of the digerati, and he's never going to learn it. Therefore, he is something of an outsider. He isn't a CEO who hangs out with the design guys and listens to their rhapsodies on processor speeds, memory capacity, bandwidth, and applets.

He hates that stuff, and he makes no secret about it. And you couldn't measure his contempt for any twenty-eight-year-old T-shirt-clad Silicon Valley multimillionaire whose motto is "Failure is cool."

(Continues...)

Excerpted from IBM Redux by Doug Garr Copyright © 2003 by Doug Garr
Excerpted by permission. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.