Some Solid Advice for IBM’s New Boss on Getting Started : Management: A sampling of California chief executives are asked to single out the first thing Louis Gerstner Jr. should do to right the foundering ship.
For Louis V. Gerstner Jr., the new chairman and chief executive of International Business Machines Corp., it must be hard to know where to start. He doesn’t have a whit of computer industry experience, so he won’t exactly be expounding new technical directions for the company on Day One.
He’s learned plenty about job-cutting at RJR Nabisco--fearful IBM employees have already dubbed him the Cookie Monster--but almost everyone agrees that slashing the payroll alone won’t make a dent in IBM’s problems.
Recognizing that a 79-year-old culture needs changing is one thing; actually changing it, in a company that still has more than 300,000 employees, is something else entirely. To help him along, The Times asked some California chief executives a question:
What would be the first thing you would do if you were in Gerstner’s shoes? Here are their answers.
Jerry Sanders, chairman and CEO, Advanced Micro Devices, a Sunnyvale computer chip maker that has itself rebounded from hard times:
The first thing I’d do is find the top 1% of the company’s engineers, the best and the brightest, based on their merit reviews, and get them all together to help develop a mission statement for IBM. Which products and which services will it offer? What kind of contribution can it make to the industry? What businesses should they get out of? It’s especially important for Gerstner to get the technology guys to help him. . . .
The second thing I’d do is get the top 1% of the managers together and point out to them that they are the best and the brightest and try to rebuild their self-confidence. Right now, you’ve got a big morale problem. I’d limit it to maybe 300 people, in a kind of a town hall meeting. He has to let them know that he’s 100% behind them.
IBM is so big, there’s no way one man can turn it around, so you have to get these two “one percent” groups together. I’d get to know them in a touchy-feely kind of way. He’s got a daunting challenge as an outsider, and he’s got to get a team together in a hurry.
Joseph J. Jacobs, chairman, Jacobs Engineering, an entrepreneurially rooted firm in Pasadena:
The first thing is to recognize that the company has gotten a fat head, that the old culture of IBM hasn’t been doing the job, and find the people inside who have been chafing under the bit of the bureaucracy and recognize how over-staffed the company is.
The company needs to be severely restructured--that’s a nice way of saying they need to fire a lot of people--and you have to identify the people who have been wanting to do that. They’re usually the discontents. . . . You have to bring them in as your allies. You need people within the company who recognize what’s superfluous, because it’s very hard for an outsider to come in and cut without cutting the nerves.
Scott McNealy, chairman and CEO, Sun Microsystems, a Mountain View computer workstation company whose products have helped bring about IBM’s troubles:
The good news is he won’t have to change the logo--it works just fine for International Biscuit Makers. I don’t give advice to competitors. It’s his job to figure it out.
My most serious suggestion is for them to adopt Solaris and SPARC (Sun’s software operating system and computer hardware design, respectively, and key competitors to a major IBM product line). I’ll cut him a deal. . . . I know I could charge him a lot less than it’ll cost him to develop alternatives.
Leonard Pieroni, chairman and CEO, Parsons Corp., a Pasadena engineering and contruction firm that restructured to tap new opportunities overseas and in environmental cleanup. IBM is a client:
After taking a deep breath, the word that comes to mind is “listen.” I’d get out very quickly into the organization and listen, hear the people who are actually charged with profit making responsibility.
He finds himself coming into an organization of tremendous size, with a lot of activities and downsizing already underway . . . and he has to resist the temptation to jump on the freight train that’s already heading in a certain direction. If he doesn’t listen, the tendency will be to be swept up by events.
He has to come out of this thing quickly with a new mission, a new vision of IBM, and communicate that to clients and employees. He can only get that by listening. One of his biggest challenges will be resisting the pressures of the media and the analysts and everyone else to “tell me what you’ve done, tell me what you’ve changed.” Those pressures will be immense, but he really has to focus on IBM’s people and its clients.
Gilman Louie, chairman, Spectrum Holobyte, a fast-growing Alameda computer game company at the frontier of new “virtual reality” technology:
What IBM really needs is a leader, someone who says, “This is who we are, this is what we stand for.” He should spend the first 60 days going out and looking (at operations) with his own eyes, seeing what the resources and assets are, what’s hot and what’s not. He won’t get it sitting in meetings or reading reports, where he’ll just hear what the middle managers want him to hear.
He has to figure out for himself where he wants to take the company, and any structures that get in the way of that should be removed. . . . From a divisional point of view, each group has to be able to run its own show. . . . As long as the company has no direction, the best and the brightest are going to leave first.
