9780060523794

Who Says Elephants Can't Dance?

by
  • ISBN13:

    9780060523794

  • ISBN10:

    0060523794

  • Format: Hardcover
  • Copyright: 2002-10-23
  • Publisher: HarperCollins Publications

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Summary

The CEO of IBM, who led the most successful corporate turnaround in American history, reveals how the company went from a teetering giant to one of today's most preeminent worldwide corporations.

Author Biography

Louis Gerstner, Jr., served as chairman and chief executive officer of IBM from April 1993 until March 2002, when he retired as CEO.

Table of Contents

Foreword
Introductionp. 1
Grabbing Hold
The Courtshipp. 9
The Announcementp. 18
Drinking from a Fire Hosep. 29
Out to the Fieldp. 41
Operation Bear Hugp. 49
Stop the Bleeding (and Hold the Vision)p. 56
Creating the Leadership Teamp. 73
Creating a Global Enterprisep. 83
Reviving the Brandp. 88
Resetting the Corporate Compensation Philosophyp. 93
Back on the Beachp. 103
Strategy
A Brief History of IBMp. 113
Making the Big Betsp. 121
Services - the Key to Integrationp. 128
Building the World's Already Biggest Software Businessp. 136
Opening the Company Storep. 146
Unstacking the Stack and Focusing the Portfoliop. 153
The Emergence of e-businessp. 165
Reflections on Strategyp. 176
Culture
On Corporate Culturep. 181
An Inside-Out Worldp. 189
Leading by Principlesp. 200
Lessons Learned
Focus - You Have to Know (and Love) Your Businessp. 219
Execution - Strategy Goes Only So Farp. 229
Leadership Is Personalp. 235
Elephants Can Dancep. 242
Observations
The Industryp. 255
The Systemp. 259
The Watchersp. 264
Corporations and the Communityp. 272
IBM - a Farewellp. 278
App. A: Employee Communicationsp. 285
The Future of e-businessp. 339
App. C: Financial Overviewp. 355
Indexp. 365
Table of Contents provided by Blackwell. All Rights Reserved.

Excerpts

Who Says Elephants Can't Dance?
Inside IBM's Historic Turnaround

Chapter One

The Courtship

On December 14, 1992, I had just returned from one of those always well-intentioned but rarely stimulating charity dinners that are part of a New York City CEO's life, including mine as CEO of RJR Nabisco. I had not been in my Fifth Avenue apartment more than five minutes when my phone rang with a call from the concierge desk downstairs. It was nearly 10 p.m. The concierge said, "Mr. Burke wants to see you as soon as possible this evening."

Startled at such a request so late at night in a building in which neighbors don't call neighbors, I asked which Mr. Burke, where is he now, and does he really want to see me face to face this evening?

The answers were: "Jim Burke. He lives upstairs in the building. And, yes, he wants very much to speak to you tonight."

I didn't know Jim Burke well, but I greatly admired his leadership at Johnson & Johnson, as well as at Partnership for a Drug-Free America. His handling of the Tylenol poisoning crisis years earlier had made him a business legend. I had no idea why he wanted to see me so urgently. When I called, he said he would come right down.

When he arrived he got straight to the point: "I've heard that you may go back to American Express as CEO, and I don't want you to do that because I may have a much bigger challenge for you." The reference to American Express was probably prompted by rumors that I was going to return to the company where I had worked for eleven years. In fact, in mid-November 1992, three members of the American Express board had met secretly with me at the Sky Club in New York City to ask that I come back. It's hard to say if I was surprised—Wall Street and the media were humming with speculation that then CEO Jim Robinson was under board pressure to step down. However, I told the three directors politely that I had no interest in returning to American Express. I had loved my tenure there, but I was not going back to fix mistakes I had fought so hard to avoid. (Robinson left two months later.)

I told Burke I wasn't returning to American Express. He told me that the top position at ibm might soon be open and he wanted me to consider taking the job. Needless to say, I was very surprised. While it was widely known and reported in the media that ibm was having serious problems, there had been no public signs of an impending change in CEOs. I told Burke that, given my lack of technical background, I couldn't conceive of running ibm. He said, "I'm glad you're not going back to American Express. And please, keep an open mind on IBM." That was it. He went back upstairs, and I went to bed thinking about our conversation.

The media drumbeat intensified in the following weeks. Business Week ran a story titled "IBM's Board Should Clean Out the Corner Office." Fortune published a story, "King John [Akers, the chairman and ceo] Wears an Uneasy Crown." It seemed that everyone had advice about what to do at ibm, and reading it, I was glad I wasn't there. The media, at least, appeared convinced that ibm's time had long passed.

The Search

On January 26, 1993, ibm announced that John Akers had decided to retire and that a search committee had been formed to consider outside and internal candidates. The committee was headed by Jim Burke. It didn't take long for him to call.

I gave Jim the same answer in January as I had in December: I wasn't qualified and I wasn't interested. He urged me, again: "Keep an open mind."

He and his committee then embarked on a rather public sweep of the top CEOs in America. Names like Jack Welch of General Electric, Larry Bossidy of Allied Signal, George Fisher of Motorola, and even Bill Gates of Microsoft surfaced fairly quickly in the press. So did the names of several IBM executives. The search committee also conducted a series of meetings with the heads of many technology companies, presumably seeking advice on who should lead their number one competitor! (Scott McNealy, CEO of Sun Microsystems, candidly told one reporter that IBM should hire "someone lousy.") In what was believed to be a first-of-its-kind transaction, the search committee hired two recruiting firms in order to get the services of the two leading recruiters—Tom Neff of Spencer Stuart Management Consultants N.V., and Gerry Roche of Heidrick & Struggles International, Inc.

In February I met with Burke and his fellow search committee member, Tom Murphy, then CEO of Cap Cities/abc. Jim made an emphatic, even passionate pitch that the board was not looking for a technologist, but rather a broad-based leader and change agent. In fact, Burke's message was consistent throughout the whole process. At the time the search committee was established, he said, "The committee members and I are totally open-minded about who the new person will be and where he or she will come from. What is critically important is the person must be a proven, effective leader—one who is skilled at generating and managing change."

Once again, I told Burke and Murphy that I really did not feel qualified for the position and that I did not want to proceed any further with the process. The discussion ended amicably and they went off, I presumed, to continue the wide sweep they were carrying out, simultaneously, with multiple candidates.

What the Experts Had to Say

I read what the press, Wall Street, and the Silicon Valley computer visionaries and pundits were saying about ibm at that time. All of it certainly fueled my skepticism and, I believe, that of many of the other candidates.

Who Says Elephants Can't Dance?
Inside IBM's Historic Turnaround
. Copyright © by Louis Gerstner. Reprinted by permission of HarperCollins Publishers, Inc. All rights reserved. Available now wherever books are sold.

Excerpted from Who Says Elephants Cant Dance: Inside IBM's Historic Turnaround by Louis V. Gerstner
All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.

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