When Blekko was acquired by IBM in 2015 we had an "Integration Executive" assigned to us who was responsible for all the 'detail work' of the integration (if you can imagine a project manager for an integration that would describe their job). He had joined IBM in the '80s. I found his perspective on the Gerstner years pretty fascinating.
I had interned at IBM in the late 70's (as a high school kid of all things) and decided it was more of a real estate company than a computer company :-). Up until Gerstner, IBM had a policy of acquiring and holding real estate as a hedge. Often reported on the books under "cash equivalents" because real estate had the property that it could usually be liquidated when required into cash. When we were acquired in 2015 that had changed, nearly all of the places I had worked in the 70's were no longer owned (or operated) by IBM.
Our exec said that those property holdings were the only thing that kept IBM alive between 1990 and 2000. They had to ruthlessly re-tool the entire business and that required a lot of up front cash without a product revenue stream to fund it. That was Gerstner's legacy for him, he used that asset to re-invent the company around consulting services, business automation, enterprise data processing, and business insights driven by processing billions of metrics.
And it turned out that a lot of companies needed to understand their business better, and automate it, to adapt to this new fangled thing called the Internet.
We both agreed that they would be unlikely to do that again as they had used up their 'secret weapon' already.
In his memoir, Gerstner described the turnaround as difficult and often wrenching for an IBM culture that had become insular and balkanized. After he arrived, over 100,000 employees were laid off from a company that had maintained a lifetime employment practice from its inception. Long allowed by their managers to believe that employment security had little reference to performance, thousands of IBM employees had grown lax, while the top-performing employees complained bitterly in attitude surveys. In the goal to create one common brand message for all IBM products and services around the world, under Gerstner's leadership the company consolidated its many advertising agencies down to just Ogilvy & Mather. Layoffs and other tough management measures continued in the first two years of his tenure, but the company was saved, and business success has continued to grow steadily since then.
Zero intention to speak badly of the deceased… Just an anecdote - I started at IBM in the early 2000s right out of college. At the time his immediate legacy was the divestiture of a big chunk of IBMs real estate. As a new IBMer that meant hot-desking if I went to the office and a very liberal work from home policy 20 years before its time. I love work from home but experienced first hand how hard it can be on young people. In my first professional job I maybe saw my bosses (yes plural because of org changes and the IBM matrix) twice a year.
I spent 9 months at IBM in 1999. At that time, Lou’s legacy had already been solidified. He saved IBM. While not everyone agreed with his decisions, there was a culture of both honesty to customers and innovation that permeated the company. In contrast, look what happened to HP without such great leadership. Once a shining light in Silicon Valley, it turned into a shell of its former self.
When Blekko was acquired by IBM in 2015 we had an "Integration Executive" assigned to us who was responsible for all the 'detail work' of the integration (if you can imagine a project manager for an integration that would describe their job). He had joined IBM in the '80s. I found his perspective on the Gerstner years pretty fascinating.
I had interned at IBM in the late 70's (as a high school kid of all things) and decided it was more of a real estate company than a computer company :-). Up until Gerstner, IBM had a policy of acquiring and holding real estate as a hedge. Often reported on the books under "cash equivalents" because real estate had the property that it could usually be liquidated when required into cash. When we were acquired in 2015 that had changed, nearly all of the places I had worked in the 70's were no longer owned (or operated) by IBM.
Our exec said that those property holdings were the only thing that kept IBM alive between 1990 and 2000. They had to ruthlessly re-tool the entire business and that required a lot of up front cash without a product revenue stream to fund it. That was Gerstner's legacy for him, he used that asset to re-invent the company around consulting services, business automation, enterprise data processing, and business insights driven by processing billions of metrics.
And it turned out that a lot of companies needed to understand their business better, and automate it, to adapt to this new fangled thing called the Internet.
We both agreed that they would be unlikely to do that again as they had used up their 'secret weapon' already.
In his memoir, Gerstner described the turnaround as difficult and often wrenching for an IBM culture that had become insular and balkanized. After he arrived, over 100,000 employees were laid off from a company that had maintained a lifetime employment practice from its inception. Long allowed by their managers to believe that employment security had little reference to performance, thousands of IBM employees had grown lax, while the top-performing employees complained bitterly in attitude surveys. In the goal to create one common brand message for all IBM products and services around the world, under Gerstner's leadership the company consolidated its many advertising agencies down to just Ogilvy & Mather. Layoffs and other tough management measures continued in the first two years of his tenure, but the company was saved, and business success has continued to grow steadily since then.
Zero intention to speak badly of the deceased… Just an anecdote - I started at IBM in the early 2000s right out of college. At the time his immediate legacy was the divestiture of a big chunk of IBMs real estate. As a new IBMer that meant hot-desking if I went to the office and a very liberal work from home policy 20 years before its time. I love work from home but experienced first hand how hard it can be on young people. In my first professional job I maybe saw my bosses (yes plural because of org changes and the IBM matrix) twice a year.
I spent 9 months at IBM in 1999. At that time, Lou’s legacy had already been solidified. He saved IBM. While not everyone agreed with his decisions, there was a culture of both honesty to customers and innovation that permeated the company. In contrast, look what happened to HP without such great leadership. Once a shining light in Silicon Valley, it turned into a shell of its former self.
"Where's the buy button?"
And IIRC, he had IBM invest in Linux around 1999. That paved the way for eventual acquisition of Red Hat (for good or bad) :)