Bookcase: Acronym for an Elephant

Who Says Elephants Can’t Dance?
By: Louis V Gerstner Jr
Publisher: Harper Business, Harper Collins Publishers
Price: $39.95

Negative versions of the IBM acronym abound including “Inferior But Marketable”, created no doubt by envious competitors. But, says recently retired CEO Louis Gerstner in his recently published book Who Says Elephants Can’t Dance?, marketing was not strong and generally accepted competence in IBM. As he and many other observers have pointed out, IBM was not customer driven and his experience of that reality stemmed back to his days as an IBM customer when he was CEO of American Express.

Gerstner was obviously well-educated and talented student and graduate with strong family values. He spent time as McKinsey consultant where IBM was one of his clients. So, when he accepted that challenge and joined IBM his consulting and business experience had to make up for his lack of knowledge of the IT industry.

It seems, however, to have been an ideal combination for the task at hand. It enabled him to confront the pervasive IBM culture. What underpinned IBM culture and tradition from the days of founder Thomas Watson Snr, was commitment to excellence including, superior customer service and respect for the individual. Somehow, over time, this culture contributed to IBM’s dilemma.

Gerstner decided to analyse the behaviour of individuals and apply his own interpretation of the company’s inherent strength. In doing so he turned the business around. At the end of his reign the company employed 65,000 more people and the US$13 billion in losses notched up in the two years prior to his arrival turned into profits.

The short chapters and relatively racy text is supported by copious copies of Gerstner’s internal memos, on reflection perhaps few too many. But his easy style makes it possible to scale the IBM story down to fit any small- or medium-size business. On the other hand, it scales up to draw handy parallel with aspects of corporate New Zealand.

You can skip read the 25 percent that is taken up with appendices detailing Gerstner’s communications with employees, the future of e-business and the financial overview of the IBM transformation.

I found the book strangely reassuring. It is, at core, the story of man who became impassioned about IBM and its strength. Anecdotes tell the tale: from his first-day impressions of not being allowed to enter the building and being interrogated by cleaner because he had not yet received his pass, to his meeting with 50 IBM staff in white shirts who turned up for the second meeting clad in coloured shirts to match Gerstner’s attire from the first encounter. And then there was his 60-page job description that included instructions on how to replace the office stock of sweet gums.

On the more practical side, Gerstner applied four basic strategies for the recovery of IBM:
* Keep the company together;
* Change our fundamental economic model;
* Re-engineer how we do business;
* Sell under-productive assets to raise cash.

It was brave approach, but any leader could apply these key issues to improve any organisation, and so they are generally applicable.

Gerstner comes across as pragmatic leader who took action based on good quality information and who showed great respect for the collective knowledge that existed in an organisation on the brink of collapse. His is the happy executive’s tale that includes having the good fortune to be the right person in the right place at the right time and, perhaps, also leaving at the right time.

A book for senior managers and executives in both the public and private sector looking for lessons on high level leadership.

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