IBM May Look Outside Now : Transitions: Chairman John F. Akers steps down, victim of an obsolete world view, analysts say.
“I missed your name,” said John F. Akers glacially when a reporter was impertinent enough to ask at an analysts meeting last month whether he had considered stepping down as chairman and chief executive officer of International Business Machines Corp.
After making a mental note of the offending questioner’s identity, the 58-year-old former Navy aviator responded through clenched teeth: “No, I have not given thought to stepping aside. I believe that the track that the IBM company is on in transforming our company is the right one.”
To David Wu, an analyst with S. G. Warburg & Co. and a former IBM salesman, the episode said a lot about the man who had led IBM for eight years--and the culture that bred him.
“He obviously wasn’t used to being asked tough questions,” Wu said Tuesday after IBM announced it had launched a search for Akers’ successor. “This was a man who came up when IBM was at the top of the heap.”
To be sure, as IBM steadily lost market share during Akers’ tenure, the increasingly embattled executive made the obligatory noises about the need for IBM to pay more attention to the needs of customers. Many outsiders believe he even meant it--that, for example, the board was the problem. They note that it took Akers two years to persuade reluctant directors to act on his 1990 proposal to decentralize the company.
But ultimately, said analyst Stephen C. Dube of the Sherwood Research Group, “Akers was a victim of the IBM-centric view of the world that prevailed” at the company’s corporate headquarters in Armonk, N.Y. That’s a world view in which IBM’s bread-and-butter mainframe computers dominated, a world made obsolete by the advent of increasingly powerful minicomputers and desktop computers.
IBM’s legendary insularity is one reason why many people are betting that IBM will likely pass over its 300,000 employees in the search for a successor to Akers.
“An American Express scenario won’t do,” said Philadelphia money manager Marvin Roffman, referring to the financial services company’s decision Monday to retain James D. Robinson III as chairman and to name his hand-picked president, Harvey Golub, as chief executive officer.
“IBM must demonstrate that there is a a whole new way of thinking at this company,” Roffman added.
Fleet-footed executives who have responded well to changing technologies are frequently mentioned as candidates for Akers’ post by Wall Street analysts and others. They include Apple Computer’s John Scully, Intel’s Andrew Grove, Hewlett-Packard’s David Hackborn and Sun Microsystem’s Scott McNealy.
None of these companies comes close to IBM in size, however. General Electric Chairman “Neutron” Jack Welch, famed for his cost-cutting ability and his determination to ditch lagging operations, is also frequently mentioned as an outsider candidate.
Even former IBM supersalesman and independent presidential candidate Ross Perot is an outside possibility. Saying IBM’s woes “break my heart,” he told CNN interviewer Larry King last week: “If there’s something I can do for IBM, well, I owe them that forever.”
Among insiders, two executives were recently elevated to the company’s management committee and are considered by some as candidates to succeed Akers. They are senior vice presidents Bob LaBant, 47, and Ned Lautenbach, 48. Both men, however, are closely associated with Akers and may not satisfy calls for dramatic change.
Some analysts believe that Akers was destined to fail almost no matter what he did. They note that he assumed the helm of IBM at a time when his predecessor, John Opel, was predicting the company would grow to $100 billion in annual revenues and would grow at least as fast as the data processing industry.
“Opel saddled him with plans to invest heavily in new plant and equipment,” noted John B. Jones, Jr., an analyst with Salomon Bros. “Opel stayed on the board after handing Akers the baton, and his influence--along with IBM’s 30 years history of success--may have kept Akers from making needed changes.
“Even if Akers had had perfect anticipatory skills--and he didn’t--he would have had a difficult time turning that company around,” Jones added.
Big Blue’s Stock: Still No Life in Sight?
Despite news that John Akers will step down as chief executive, IBM stock closed up just 12.5 cents to $49 Tuesday, though it traded as high as $53.25. With its dividend now cut in half, the stock’s long slide may not be over, some analysts say. Source: Knight-Ridder Tradecenter MAIN STORY: A1
