Top 10 Reasons Why Ginni Rometty Will Fail as IBM’s New CEO
Author: Steven Zolman
Note: Updates to this article linked below…
IBM’s first female CEO, Virginia “Ginni” Rometty, is in after Sam
1. IBM Forgot Who They Were. The “M” in IBM is for Machines. Machines for International Businesses; that is who IBM was. Who is IBM today? Somewhere along the way, IBM figured out that it was much cheaper to sell services than it was to produce goods, and so they focused their efforts on these “high margin” services instead of equipment that was capitally intensive, was quickly commoditized, and was not able to sustain such a strong business model. What has happened since is that the services business is now impaired, not able to generate the kinds of profits IBM wants, and is now the source of huge cost cutting measures to try to save it (or prepare it for sale). Ironic to be sure, but IBM used to build things, they used to build things of high quality, and they used to service those things extremely well. Now, they are increasingly focusing their business around sales guys who sell services, and services people who are increasingly low skilled because they are cheaper than highly skilled resources. Hmmm, something may be wrong with this strategy. If Ginni’s not able to create a new understanding of who IBM is, she will fail as its new CEO.
2. Ginni Has No Vision for the Future of IBM. Or if she does, she hasn’t told anyone yet. Since becoming CEO, Ginni only promises more of the same from IBM — continuing to pursue more “high margin” areas in the business — YAWN! IBM needs a new vision for the future, not the same old boring rhetoric. What will *her* vision be for IBM, and how will she make that a reality? When Gerstner devised this high margin pursuit strategy, it was a tactic to save a dying company, not a complete vision for the future. IBM hasn’t been able to move beyond this temporary fix to the next evolution of what it will become in the future. If Ginni’s not able to clearly articulate her vision for the future of IBM, and if it’s not substantively different from what it is today, people won’t believe in it and won’t rally around her, and she will not be able to save IBM, and will fail as its new CEO.
3. IBM Executives are out of Touch. IBM has gone through major transformations before, and the last major transformation was designed to make the company more lean, more efficient, and able to make better decisions. One of the stated objectives of that reorganization was to reduce bloat, simplify management, and connect the company to the decision makers so they would make better business decisions faster and more effectively. Today, IBM has more layers of management than it did before these efforts, and that executive bloat has not only cost the organization more money, it has further insulated top decision makers from developing a real understanding of the business, and therefore their decisions are not as good as they can be. What’s worse; there is no real accountability for these bad decisions because they don’t see the real field impact, and are not able to decipher what’s working and what isn’t, rendering them as useless politicians that merely manage their careers. Her closest advisors will be giving her junk advice. If she can’t figure that out and slash through it, she’s done. Also, if Ginni can’t slash management layers, improve decision making, and create more accountability with (far fewer of) these career IBM politicians, she will fail as IBM’s new CEO.
4. IBM’s Sales Culture is Poison. IBM’s sales culture has nearly ruined the company as many of its executives have no real knowledge about the products and services they sell, rather an obsessive desire for more “high margin” sales. IBM’s sales aspirations, and its plan to achieve those objectives, will ruin the company if not revised. IBM has developed growth objectives for earnings, and all indicators of the plan to achieve these aggressive targets seem to come at the expense of jobs, primarily jobs based in the USA – in favor of shipping them overseas, as this is thought to be ‘less costly’. The scale of a reduction required to achieve the aggressive growth targets for earnings suggest that while executives and sales folks will stay, most everyone else will need to go. The staff changes will require massive cuts in technical folks. The very same technical wizards who invent the products, get the patents, establish a new and innovative technology that can create a dominant market position are the ones that will need to go to achieve the targets. IBM’s sales culture and its current strategic plan will kill IBM if Ginni can’t stop it, and so far, she is only promising more of the same.
5. IBM’s Executive Compensation is Misaligned. IBM has aligned executive compensation to its earnings per share targets, and if the executives achieve their targets, again, primarily by downgrading skilled workers in the USA, and moving labor from the USA to lower cost countries, which will be a move that kills the ability of the company to innovate and solve complex problems, they get stock incentives. This executive compensation misalignment continues to drive behaviors towards activities that are killing the organization, yet the strategic plan hasn’t changed, nor has the executive compensation arrangement changed since Ginni’s arrival. If this continues under the current model, the executives will make out, IBM customers will suffer, a great number of IBM employees will lose their jobs, and a great American institution will go down in flames. Ginni needs to change where she places the cheese if she wants to change the behaviors of her executives, but again, that starts with a new strategic vision, and that has not yet been espoused in a clear, articulate and compelling way; in fact, quite the opposite. If Ginni can’t reset IBM’s executive compensation plans to better align them to the right behaviors to foster growth, innovation, quality and excellent service, she will fail as IBM’s new CEO.
6. IBM’s Rape, Pillage & Burn Acquisition Strategy. This is an area where IBM deserves some credit. At least they get the sequencing right. If they were to burn first, they wouldn’t be able to rape & pillage, so at the very least, let’s give them credit for knowing how to ruin a company properly. One of the ways IBM has cloaked its demise is to continue to buy highly profitable businesses with the hoards of cash the company controls. Once they do buy a new company, however, as a matter of routine, they saddle those organizations with bloated IBM processes, force them through standards processes that strip out much that was special, unique and cool about the acquired entity, they increase charges back to the mother ship to siphon off profits, and ultimately, they make the company no longer able to satisfy its customers, who eventually leave. Once IBM has sucked out all the blood, they leave the body for dead and go find another new company to buy (and subsequently ruin). If Ginni would change this model to be one of finding innovative companies that offer excellent services and provide high quality products, and helping those companies grow and develop, IBM could turn it around, but all internal signs indicate a continued focus on lowering skills, slashing R&D, eliminating innovation, and selling more promises with fewer deliveries of those promises. If this acquisition strategy persists, Ginni will fail as IBM’s new CEO.
7. IBM’s Offshore Model will kill its Services Business. I hear a lot of people say that IBM is a services company. Well if that’s the case, they are actively trying to commit suicide by killing off their services business. Over the last five years, IBM has aggressively pursued an offshore staffing model, seemingly believing that more unskilled workers are a more effective way to do business than having fewer higher skilled workers. Apparently, IBM doesn’t understand that you can’t outsource making a baby in a month to nine women in India. Not only does this create problems with logistics, language, communications and other issues, it eliminates the organization’s ability to solve complex problems. Many of our clients who subscribe to this model are dramatically disappointed with IBM’s lack of effectiveness on resolving issues, and amazed at how long it takes, and how many people it requires to get resolution. The aggressive offshore model particularly affects IBM Global Services, which represents a disproportionate share of revenue and employee head count, so the impact here will be severe. In the last 18 months, NET(net) has noticed a sharp increase in the number of disenfranchised clients who have terminated their agreements with IBM and sought arrangements with other suppliers. If Ginni allows the IBM Offshore model to continue in Global Services, the company will further convolute its ability to execute, become less able to solve complex problems, and will continue to lose more business at a faster rate.
8. IBM Sells Futures. What is IBM’s strategy? Smarter Planet? No, my laundry machine doesn’t do the wash when it knows I have plenty of excess hot water. No, my irrigation system doesn’t water the lawn when water prices are the lowest. No, my refrigerator doesn’t order groceries for me from the store when I’m running low. No, my car doesn’t sense when I am driving angry and schedule me in for a massage. IBM needs to stop selling futures, and just make stuff that works, service it well, and help its customers get value from it. IBM seems less capable more so today than perhaps at any time in recent history to solve complex problems, and it’s too busy worrying about airing commercials that look like a United Nations conference than it is about building stuff that works. It seems like IBM has been selling futures for as long as everyone can remember, and for decades, they have gotten away with it. It seems more and more however, customers are less willing to buy the hype, and are more concerned about buying stuff that works.
9. Watson is not the Panacea. One thing is clear, as IBM has studied various business models, it has determined that vertically integrated systems like those found in Big Data, (where the hardware and the software of these systems are sold together as a bundle) are highly profitable, and do not require a lot of people to service them. This idea is seen predominantly in Watson, IBM’s enterprise version of Apple’s Siri, a hugely expensive and likely a highly profitable, amalgamation of hardware and software, bundled together in a highly valuable enterprise application. Could this be where IBM is heading? They want to make huge enterprise class iPhones with Watson instead of Siri? Who knows. What is clear is that many of IBMs investments have been around enterprise infrastructure, enterprise applications, analytics and Big Data, many of the key ingredients for Watson-like functionality. This is a general industry trend as organizations like HP, EMC, Oracle and others are on a similar path of selling vertically integrated systems with hardware and software bundled into a supposedly “highly tuned” bundle that offers greater overall value. In our experiences, buying the integrated system certainly costs a lot more than buying its individual parts, but our clients have questioned the supposed “highly tuned” claims, and don’t report any more value than they would have otherwise achieved by buying the parts on their own.
10. IBM Seems to be Preparing to Sell is Services Business. Like IBM jettisoned the PC business years ago, citing a highly commoditized market and the inability to make enough profit, IBM’s services business is under similar pressure and may be being secretly prepared for sale. Feedback from insiders suggests that the cuts are so deep in recent months, that there is really no other viable explanation other than the services business is being prepared for sale. If this is true for services, it is also true for many other business units at IBM. Will Ginni’s legacy be overseeing a garage sale of IBM businesses? If Ginni can’t stop IBM from selling off its business units that do not drive enough bottom line profit, she will not only fail as its new CEO, she will go down in history as IBM’s worst CEO of all time.
Ginni, you have many challenges ahead of you, and we wish you all the best! It would be great to see you turn IBM around, but that leadership starts with a strategy that’s designed to impress more than just Wall Street investors. To this point, we have not seen much that would change our views on the top 10 points above, which makes us concerned that your leadership at IBM is “more of the same”. Our clients could really benefit if IBM became great again, so we are hopeful you will announce a new vision for IBM that includes making great things, helping clients get great value from those things, and servicing those things extremely well. Our clients benefit with a strong IBM in their corner, helping to deliver high value low cost solutions that result in an improved business.
NET(net)’s Website/Blogs/Articles and other content is subject to NET(net)’s legal terms offered for general information purposes only, and while NET(net) may offer views and opinions regarding the subject matter, such views and opinions are not intended to malign or disparage any other company or other individual or group.
UPDATE: It seems Ginni may be failing faster than even I had predicted. Read my recent blogs on this topic:
IBM CEO Ginni Rometty: Failing Fast
IBM CEO Ginni Rometty Ouster Imminent
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409 Comments
This is easily some of the best material I’ve stumbled on today. It’s not what I was looking for but it sure got my interest. Now i’m glad I took the time to give it a look.
My father’s lay off.
I just received a call today from my mother telling me that IBM laid off my father after 36 years of donating his blood sweat and tears to these scumbags. All they did to this poor man over time is screw him, and screw him some more. First they cut his wages, then took his overtime away and now cut this man’s job after 36 years of loyalty and never using sick time. SHAME ON YOU SCUMBAGS. Ginny Rometty is the biggest scumbag of them all as she lays in her 45 million dollar net worth and sending the jobs of hard working people to india, brazil, and wherever else. This needs to stop. It ruins families of the people that started this company and built it up to the powerhouse it was. My father started there in 1980. He basically worked there for blood money. Unbelievable. They say he “MAY” be able to work for a vendor. after his one month of severance and three months until he’s actually gone. We need to stick up against this. My fathers birthday was May 11th now eight days later he is fired from these scumbags. if anyone wants to talk more please email me at axt10@yahoo.com. It needs to be made aware of how IBM screws over employees and how it hurts families…… I’ll say it again….. 36 years he has been there and this is the respect this 61 year old man gets. WOW! complete BS from you GINNI. But us little people you could care less about. Just keep running IBM into the ground you scumbag. Just don’t bring down the hard workers that made that damn company. I am so happy i read this article. I know anger is the main motive for this response but wow i hope this woman fails big time.
Sorry to hear of your Father’s layoff Jeff – high corporate towers rarely equate to high company morals. The issue is being able to hide behind company objectives that don’t consider the individual people who are affected. It’s sad to see.
Sorry to hear that. I have been working for IBM for 12 years now and they have not rewarded me with a raise for over performing. This is ridiculous.
Thank you. Glad you stumbled in and stayed for the show.
This article is the most incredibly accurate Ive seen about what is going on at IBM. Would really like to hear Warren Buffet respond to this!! He / Berkshire Hathaway is the largest shareholder I think. Hes not one for having sympathy for job losses. But surely should get that its the result of exceedingly top heavy arrogant management, and their massive blunders.
It is always just so exciting to discover good content such as this with all the less relevant content that’s out there. After all, you can definitely tell that alot of time and patience with into this. Do you work with content writers or do you write your own content?
We write our content in house…thanks for the note!
You will barely come across content like this anymore. I recall when you could find one or two topics like this in minutes however now it’s significantly harder.
just so much good information about IBM out there that the critical stuff gets lost? 😉
This wasn’t the website We were looking for however now I’m thankful I found it. I realize it’s very popular on the web. Good job.
Thank you. Nice of you to say.
That is excellent content. One of the best subject material We’ve come across at this time. Carry on the good work.
Thank you! We will keep it coming…
This is great content. One of the better subject material We’ve discovered today. Continue the nice work.
Thank you!
You can barely find content like this nowadays. I recall when you could find a few posts similar to this in less than 10 minutes but now it’s substantially more difficult.
As someone who ha worked @ IBM Offshore let me enlighten as how cheap and outdated IBM’s client offerings are:
* They send fools to client locations as functional consultants.
* They have imbeciles in their sales teams who for get projects by promising 100 days of work in 10!
* The tech teams are then bulldozed to accept the whims of these idiots.
* Most internal employees spit on ibm’s treatment of employees annual hike and give a shit about their work.
My working life is now a nightmare because of steadily deteriorating IBM software which they will not support.
20 years ago I was using a slick, functional custom written programme to do my job. The supplier was bought out by IBM. They stopped supporting it. It was replaced first with a clunky but just about working hack which looks as it was written in VB, Now it is written in something sitting in windows explorer, the uploading doesn’t work, and data simply gets lost. I’m literally thinking of walking out of an otherwise good company because of this cr**
If they had done nothing they would be leading the field.
How do they do this?
I don’t think gender has anything to do with it – and I don’t think her compensation is out of line with what others have made in her role, or what the market currently pays – so I don’t criticize her for that. What I do criticize her for is having no strong vision to make IBM relevant again. That is where she lost my support. If you have the top job, you have to have a vision for what you want the company to become, and you have to align everyone to the flawless execution of your vision, and she has failed on both accounts so therefore, it is time for her to go.
Excellent submit. Seems as though much time and energy went in this.
Thanks! It did.
You must have worked in IBM…You understand the psyche of this blue mammoth which is driven by blue blooded Career politicians.
IBM would soon go bust.
Awesome content. If only all information We’ve found was just as exceptional. Continue the great effort.
Thank you very much. We will keep it up.
Is actually good to finally find great postings like this. I really liked it.
Thanks much.
I think jettisoning the service practice (GBS) is a good strategy. Here’s why: GBS is hopelessly broken and mired in 1990’s thinking. They have poor skills in their own hardware and software products. I know this first hand after working with them as a business partner on a customer engagement for 2 years. IBM would do better to sell off an awful services practice led by dinosaurs who refuse to learn modern project management practices, or skill their underlings in the products they service. There is absolutely no continuing education plan in place for GBS, which accounts for much of their failure. They have the old “big 5” consulting mentality, whereby they approach giant projects with large up-front design, excessive (and rarely used) documentation, revolving door personnel, and “shock and awe” of showing up with hordes of mediocre consultants. Hell, a client practically has to sublet and entire floor for the IBM resources assigned to the project. Most of those resources have only one arrow in their quiver – no interdisciplinary skills here.
Yes, IBM should jettison this practice while it still shows any profit. Let PWC take it back over. Then they should build a new service practice organically, from the ground up, starting with the IBM Software Services group (aka Lab Services), which is a smaller, competing services practice attached to the software group. This will ensure higher quality, higher skilled services, with employees who actually understand the products they’re working on!
How many billions will they pay to jettison the GBS business? Could it be like the GlobalFLOUNDER deal, where they pay the buyer $1.5 billion just to take the lousy business off the books? If so, they can pay me a billion to take it.
Don´t know when this article was written, maybe right after IBM announced Ginni as new CEO few years ago. But today, 11/17/2015.. would you still write the same text Steven Zolman?
Regards,
Rodrigo
Look for a new Ginny focused blog soon this week…
Yep. New blog just posted today, that says Ginni’s outster is no Imminent. http://www.netnetweb.com/IBMsGinniRommettyOuster
Based on the number of opinions, this is undeniably a truly involved topic. Whenever I come back to this post there’s an interesting visitor post better than many of the previous ones.
Zollman has basically said it all. But how can the demise of IBM be managed? The legacy mainframe biz has to be run by someone – but who? The rest can be feasibly – not easily – chewed down and digested by the rest of the community. The “services” biz must be bought by Wipro or Tata, it is already a purely Indian Onshorers outfit.
Judging by the number of opinions, this is undeniably a very engaging subject. Whenever I return to this post there’s an interesting guest post better than some of the previous ones.
I agree… these people are amazing!
The board has not fired Ginni because she is a woman and they do not want her to crash and burn. Sorry.. Truth hurts. She was hired as the CEO because she was a woman and now they cannot let her go because she is a woman. But at some point, the street will force the boards hands. The best they can do at this point is to get a shadow CEO in there to prop her up.
You can call me whatever name you want but this is the truth!
You are right. Truth is always stranger than fiction. She is the bad luck charm for IBM.
The board is going to have to fire her, or wall street will step on the stock’s throat and not let off until they do.
I must say that this really is the most exceptional posts I’ve discovered for this niche. I am going to certainly keep an eye on your posts.
Thanks a lot.
Virginia Rometty is a disaster – common knowledge. But the Board of Directors is a conglomerate of failures. They tend to be modestly unsuccessful execs who were never really good at their jobs in the first place. Their companies may be profitable but not because of these dolts. The Board needs cleansing, Rometty needs firing, and a new corporate agenda needs development. Duh.
Spot on. Stay tuned.
Wonderful content when compared to some of the other posts I’ve discovered. Continue the nice work.
Thank you — will do!
You could write whole textbooks on the managerial and organizational failures of IBM and its relentless race to the bottom.
Ginny I suspect was chosen for better or for worse as yet another ‘transformational leader’ in an era where identity is more valuable than skills or accomplishment. And since IBM is a company run by process and the belief that anyone can be trained to push the right buttons to the extent that anyone can be sufficiently competent at anything, the powers that be felt it was worth a gamble.
Many have written about the top heavy management structure of IBM before. It’s not news. That there’s twice as many layers of management as 20 years ago is a known fact. Moreover there are directors and officers with NO direct reports at all. We used to call that putting someone out to pasture. Now it’s a bona fide career path. But the problem with endless layers of management isn’t simply that they serve no useful purpose it’s that they’re actively counterproductive. Managers now serve to do nothing but report upward the status of the status of the status reporting upward. In a company that prides itself on ‘metrics’, metrics are created out of nothing to do nothing other than make work.
Too much management breeds fear. When your own job is based on thin air, with little to show for it than spreadsheets that tally the status of other status reports you tend to throw your weight around with paranoid ferocity. And since there are so many senior officers doing this, it further breeds an endemic knee jerk panic response from everyone lower down. A VP calls about some silly thing and immediately 300 people are roused out of bed to manage a critical situation which does not exist.
Accomplishing anything always takes a backseat to following and managing the process. The process is king. Don’t mess with the process don’t skip any steps and by god you will report on every single step, cross every t dot every i even if that means you have to drop what you’re doing and rewrite status reports from a year ago. If a person is needed for your process you find that person. If they can’t be found, do nothing until you do. If customers complain things take too long, don’t listen to them because that’s how the process is supposed to work.
And if you accidentally manage to fix or accomplish anything outside of the process you seriously put your job at risk. This is not a casual threat. It is real.
For years and years IBM’s HR environment has been one of benign neglect. They haven’t pretended to worry about people for 15 years or more. Which is fine as long as they don’t get in the way. Another basket of required online training, another set of rules about what you can and can’t do. But the review system is, and everyone agrees, broken. It’s something akin to the Soviet Union where ‘we pretend to work and they pretend to pay us.’ Employees were dragged out every 6 months to write term papers about their goals and accomplishments which typically, their own managers would substantially rewrite to fix their own objectives and then at the end of the day virtually no one was ever given an increase. Ever. It’s a forced distribution which awards a tiny tiny group of favorites average sized increases and the great unwashed beneath them are told year after year “times are bad, the industry’s bad, the economy’s bad, your business unit didn’t make their numbers, etc etc”. Which is, as most will agree a complete waste of time. Better they simply tell the people who they were planning on rewarding to write their term papers for legal backstop and leave everyone else alone. Because everyone knows who the anointed are. The scuttlebutt is that this review process is changing and a new better review process is in the works. But when you’ve built your company on not rewarding anyone and the CEO proudly proclaims after 13 straight quarters of failure that everything is working perfectly according to plan it’s hard to see what improvement this could be.
Following on this theme, the HR environ is completely clueless even when it comes to doing the things they want to do. Above a certain level, technical staff are awarded with a higher band which, depending on the person and the number of patent applications they submit can be either in the engineering field or the non engineering field. But even here if management and HR want to give you that promotion they make it well nigh impossible because of the absurd conditions on it. Candidates are told to ‘apply’ for that promotion and submit their ‘packet’ which could be years and years worth of documentation which will then be ‘studied’ by a mysterious Star Chamber of elders who will then decide or not, in a year, or two, whether to tap you on the shoulder or not. In the meantime the candidate is worked to death with the hope they will eventually get the nod the company is hoping they burn out and quit. It’s very much like a partnership track without their actual reward or benefit of partnership and no clear rules or guidelines on what the best approach for the candidate to take. The upside is that if the candidate is rejected, after having been offered a promotion that was never real in the first place, and they haven’t burned out, they don’t have to quit. They won’t be given a first line management job and their career path is as effectively dead as everyone else in IBM.
A much more sane and humane approach would be to tell all new hires this is as far as you will ever get in IBM and the best advice they can give you is learn what you can and quit in 3 years.
Organizationally things are a mess. Long priding itself on being the best ‘matrix managed’ company, IBM has always been a vast assembly of stovepipes that don’t communicate with one another. Matrix management means everyone is on a conference call and no one is in charge. No one facilitates. And each mini stovepipe is free to create their own sphere of responsibilities because the myth is that everyone will get along and freely share and communicate. They’ve created a mantra of ‘go social’ replete with new web web apps, wikis, forums and the like to facilitate this and employees find themselves automatically enrolled in dozens and dozens of ‘communities’ they don’t recognize, understand or use. Community owners are happy though because they report upward all their stellar enrollment numbers.
a strong deposition – and in line with the vastly overwhelming sentiment expressed in these responses.
thank you for the insider insight. as an outsider forced to endure Lotus Notes, it explains much
My former manager picked me up in late 2012, I was caught up in the RA in June 2013 after 6 short months with the company. The client decided that this was unacceptable and in response IBM offered me a contract slot. Three weeks later the program manager communicated to the contractors that IBM was losing money and that all contractors would have to take 1 week off per quarter without pay. I left 8 weeks later because I refuse to be treated that way esp. when it’s such a challenge to find and retain talented senior IT folks. The client dumped IBM several months later for non performance. You reap what you sow.
this is much more common than you may even realize.
Judging by the number of comments, this really is undeniably a truly involved topic. Everytime I revisit this post there’s an interesting visitor post better than many of the previous ones.
one thing’s for sure… the folks here are passionate about the topic. Thanks for checking back. Check back soon, as another Ginni blog is about to be published.
Its great that Ginni at least is trying to fix the organization by restructuring. But the execution is undoubtedly flawed. For example, high performing employees are getting randomly fired with a 3 rating, after years of a 1, 2+ rating. So the execution of the layoffs and restructuring is left to Managers, who may or may not be capable of taking this decision unemotionally.
80% of managers in IBM are from non-technical background, the wise tech guys have long left the company (at least left GBS). So these managers will keep their close circle intact and fire others at will. The other high performers resign watching their colleagues getting sacked. Instead Ginni and the board must create a comprehensive long term plan of restructuring, and not leave it to the whims of a single class of people (People Managers.)
So many GREAT people have left IBM — it’s really sad.
The article says that the ‘M’ in IBM stands for machines. But throughout IBMs history, the prime focus was on the ‘B’ of business.
IBM never was very creative at the technical level, but on many occasions it professionalized more or less experimental products, the most famous example being the IBM PC.
Currently, technological improvement is not the most interesting field to innovate. But for that very reason, many businesses no longer consider IT a competitive advantage, so they are ready for “strategic outsourcing”. And here IBMs strength is its worldwide presence.
Those “strategic outsourcing” deals are failing in record numbers, and while IBM is worldwide, it doesn’t lead in many segments anymore – becoming less and less relevant to all but the laggards in the market.
The full company name is: International Business Machines Corporation. I think is obvious the focus is on “Machines for Business” therefore Machines not Business”.
I’m really delighted I came across this post. It’s nicely written plus the information is great. I am hoping to find more like this.
Thanks much. Keep checking back, a new post is coming soon.
Not one of the various posts I’ve come across are like this one. You are able to tell alot of work went into this.
Thank you. A lot did. more to come.
Only if I could come across more content like here, that would be great.
We agree! This is certainly an underserved space, but we are doing our best.
I am one of those several hundred Engineering college graduates who were selected for ibm in 2012. I completed my graduation in 2013. The selection procedure was quite difficult and lots of lofty promises were made, including an exaggerated salary. I waited for one complete year, before getting the joining date, and my desire to have the brand name of ibm lead to this huge mistake of sacrificing a year doing nothing. One thing you must know is that your degree is not at all relevant at all. I thought that ibm gives some good training but that odd one month of training was just a joke. I was trained in Java. Core Java completed in 2 days, advanced Java and servelets completed within 3 days! To add to that, there were other stuffs like html,sql,dbms.. All sandwiched within this one month of training. Moreover, I have worked in 2 projects so far, and haven’t written even a single output code in Java. I actually had no option but smirk, when asked on which technology I am working on, and say that am working on “advanced copy-paste”. The work hours were long and the work was massively stupid. Everything is based upon pure dumb-luck and your managers. And within this one year, my people manager had been changed for 4 times! And its ridiculous how your project manager can also become your people manager. The offices are littered with managers at every corner and I am yet to figure out what’s their actual work apart from giving out ILC codes and panicking about discrepancies. Unfortunately, I came across many great people stuck ,working there . If you stay for 3-4 years, you develop no real skill apart from knowing the copy-paste mechanism of the tool you’re working on, and hence making a switch to different company extremely difficult. I have seen many young people who got really comfortable with the lifestyle of ibm and they just don’t want to come out of their comfort zone despite the poor salary and everything that’s mentioned here. All I have seen is hypocrisy. I decided to leave ibm after working for just one year.
thank you!
Definitely is nice to finally find decent posts such as this. I actually liked this.
Thank you!
I started in IBM 4 years ago and it was a great company to work for. Everything is going worse and worse.I don’t mind to work hard and stay longer if required and there is the need for. But seeing how the management is treating the employees, seeing everyday people become zombies,and being managed from people who have no idea about technologie,sales and people management I think that it is really time to leave. They keep going spending a lot of money in things and activities that does not matter instead putting in place a fair bonus plan. People are micromanaged and treated like stupids.There is a huge volume of admin and things everyone has to do that are not related at all to their job role but this things are part of the measurements and career progression.The salary increase was 74E a months( before taxes). The management promises to the employees so many things like; if you do that you will have that…..or indirectly: you help me taking responsabilities and thing to do( a part of your job)I’ll remeber that and put you forward for a career progression. It does not matter if you are really good in your job or not, important is visibility and politics. There is no transparency and fairness at all. Sometimes it happens tha your manager communicates to you the bonus) not written)and at the end you will get less money in your payslip. When you ask about an explanation no answer is provided. A lot of people are leaving. People who worked for the company 10-15 years. I could write more but I’ll stop here. The internal reorganization the company is having will just make things worse than they already are until the ship will definitely sink. It is a pity because it has been one of the best companies to work for and I was so proud to be part of this organization. Hope things will turn on in a different way…………
IBM!!!company with no Integrity!! Screw client for money !!Don’t care shit abt clients success !! Don’t bother on ‘Treasure wild ducks’
Well thank god, next week will be my last day with this this sinking ship !!
Feel very sad, the way the ship is being skunked by complete idiots such and Ginni Rometty and the team.
I was from IBM Malaysia, the only country in AP which did some profit, unfortunately under a screwed up leader ship by the county leader, Paul Moung, the ship is headed to the drain !!
New deals were close, revenue was recognized, but no resources or skills sets to implement nor maintain, cuuz the purpose is to recognize the revenue and screw every clients!!
With such tag line … where do you plan to head ? Since complete idiots are running the organisation, what are you expecting ?
You sell recognize revenue on NON-CAMMS product but say no recognition if you are not aligned to CAMSS !! what kind of idiots ideologist ?
Malaysian Country head ? Do you have any clue what’s going in your country? Do you have any clue what’s going in STG and GTS ? how ppl are running the business in fumes ?
If you can’t perform pls leave, don’t heat up the chair further screw up the organization . I believe you know where the door is !!
There are still some hope, if we happen to have a Country GM with balls!!
I curse you Ginny, just today got to know she doesn’t have any kids. God sees everyone and gives appropriately
Ritesh, I am embarrassed that you work for IBM, your remark is away out of line as a human been.
Look at the frustration level of an IBM employee .. 2015 is not yet past, IBM has started giving hopes for 2016 betterment.. . Really! They think us to be that Dumb n Idiot!!
No Hikes, No PBC’s, No MBA’s, No extra bennefits! People should go on strike all together someday to bring the Flying Management down to Earth!
Amen!
robchinamail@gmail.comat business performance justifies execs getting a bonus. They get a big bonus for a bad year and then a bigger bonus when the eps or stock price recovers back to where it was. Maybe some top execs should be held accountable and terminated for poor performance. But in IBM the execs are always protected. With a new plan and a reorg they can last forever and keep getting bonus as they divest, sell-off, restructure and transition IBM down to a shadow of what it once was.
IBM is a sinking ship. As an employee I had great expectation of Ginni too. But they only talk no action. Employees are not taken care of. They are treated like objects that makes money for them. Too many management layers and wasting money on overhead. So much politics and division within the company. Managers often do not know about technology. They loose clients because they do not know what they are up against. And may be Ginni is shielded from all these bad stuff going on within the company. It is one of the worse places to work. That is all I can say
as evidenced by many of our clients, the integrity of the organization is certainly questionable. Too many clients have faced nefarious actions designed to extract value, and not enough good will designed to enhance value.
IBM is a company with NO integrity, more time you spend in this company.. you will loose your personal integrity !!
IBM integrity is all talk no action. they only interested in 1 thing .. which is numbers $$$
once meeting … no one cares of the ppl who gave the money !! how bad !!
IBM just announce their MBA – Market base adjustment. Ppl who are entitled should be aligned with CAMMS!!
IBM’s traditional business is with core banking, logistic, enterprise computing mainly emphasize on IBM p-Series / i-Series / storage environment
These ppl who are currently supporting this infrastructure are being ignored!
The support team contributes 70% of IBM yearly revenue, now there are being ignored !
I just can’t believe a IT company with survived for the last 100 years are currently run by complete idiots !!
There are multiple Business Unit’s which contributes ti IBM multimillion revenue such as STG, GTS, IGS and etc now they are not align with CAMS which hardly contributes 10% or more revenue!
If everything is abt CAMSS which the idiot’s up there think then IBM is digging their own grave and naming the date for their funeral
It’s really sad to see how the a wrong management can screw up the company down to drain !!
Good luck !! may god have mercy on you !
70% of revenue, but how much of profitability?
IBM was a great place to work. I worked in India with IBM for 6 Years. I started off as a fresh graduate from a B- School and at the end of 6 years i was managing one of IBM’s biggest accounts. I learnt a lot in the 6 years i spent with IBM, both technical and managerial. Today I am a successful delivery manager because of what I learnt in IBM. I agree to the fact that there are more “Leaders” than needed. In fact every one is a “Leader”. Lot of very good technical and managerial guys left cause they were not taken care of properly. Managers run the team emotionally. None of the managers have no knowledge on the contract and have no clue what their client is all about. They don’t know what they have signed up for and don’t care what the team is doing. No one has a vision. Its very unfortunate to see IBM in its current situation. Hope things get better
This is completely consistent with everything we have seen on how projects are run – it’s like the sales team and the delivery team never talk about the contract, the commitments made to the client, the agreed upon SLAs, or the real work effort required to achieve the desired results.
And so it seems there will be a large round of redundancies in GBS…given that we are pretty much sold out and are struggling to find people to work on projects … who are we getting rid of exactly? It’s disappointing that the executive management seem to have their heads in the sand and I think to be honest that many of the problems are rooted in overall unrealistic expectations within the industry (ie this problem is not just an IBM problem but industry wide).
Over the past few years I have consistently seen customers pressure for lower and lower cost “drive the offshore mix up to 90%” … “we’re not paying for performance testing..” or just “take $1m off the price”. This behavior (usually driven by a procurement department with no accountability for delivery quality) is leading to over reliance on lower skilled resources who in turn make more mistakes, drive up costs and increase everyone’s dissatisfaction … or simply corners get cut with the resulting consequences. Whenever I have seen business/procurement take sensible view to balancing price with delivery quality (they don’t just select on lowest price) the resulting projects/programs have resulted in a successful partnership and a good result.
I really don’t know where this next round of head cuts will take us, all I know is that there are fewer and fewer of us with 15yrs+ experience around that know how deliver. My advice – get back to investing in your quality people Ginni and stop blaming them for your (and Sams) poor decisions over the past 5yrs.
a return to quality would be a nice change.
I wonder if people who criticize so passionately and subjectively have actually been successful in running a large corporation before themsleves. Its very easy to judge when you are not in the hot seat and it doesnt take much brain power or EQ to judge others – consider if you yourself have even come close to such high responsibility levels. Why would you assume offshore is lower skilled? because being American is being higher skilled? This article is purely researched and one sided. All the people commenting negatively want to be anonymous, what a joke. There doesn’t seem to be anyone taking responsibility for their lives, if you are that unhappy leave! Its always the company’s fault – no matter who that company is – it cant be you or anything that you are or not doing? IBM has its challenges and it doesnt do everything right as with any other company. Provide a more balanced view next time.
I’m not sure what you’re looking for in terms of balance Natasha, but the article was not titled the 5 reasons why Ginny may be successful and the 5 reasons why she may fail for a reason.
It was my intention to highlight some of the deep seated organizational problems that we have learned through direct experience working with our clients, and how those problems will likely prevent her from succeeding without a strong change of her approach.
The article is an opinion piece and an overwhelming majority of the comments are in support of the analysis – with many folks sounding off about their own personal experiences.
If you have counter points, make them – instead of criticizing respondents for being anonymous, not having big enough jobs, or not taking responsibility for their own lives.
Opinion piece – I guess, but extremely insightful, and dead on accurate, about the problems IBM has gotten itself (and by proxy its customers into). I’d like to feel bad for IBM – but with Sam P. taking 9 figures out of the company (and Ginni’s teed up next, yes?) the only people I feel sorry for are its customers.
Not just CEO, the whole management kind of sucks. 90% of the managers don’t know anything about technology, or only know technology 15 years go. There’s distinguished engineers who knows how to evaluate engineers but they don’t do this job. The 1, 2+, 2, 3 scale turns out to be a joke or a game for those first line managers who rate people based on their “gut feeling” – if you are a genius without knowing how to “appear good” or bullshit with “affirmative tone”, 1 is absolutely not for you. This company is now full of arrogant people, and real talented ones would definitely walk away because there’s no reason for them to stay, no matter from compensation, management or anything.
we have heard this time and again from some of the best who have left.
This is not new… and I think Ginni will parachute from IBM real soon.
People love to join IBM few years ago, rather a dream to join IBM one day. But now, things are different due to poor leadership in IBM, specially India DCs (Bangalore & NCR); Situation at present;
– Outside IBM, many companies take extra round of an interview if they see person is coming from IBM – beat any level.
– Hiring a big challenge, maximum experienced people do not wish to join IBM and those who join, then on higher salary – “5 years planning” good? You duffers!!
– IBM has many managers but no leaders, people who wish to act as leader, he is either out of the account or IBM.
– IBM Management needs to drill down more on stupid ratings formula – “2, 2+,1 & 3” Think more, does “1” rater always be a top performer? 95% who get rating “1” are not even qualify for rating “3” but they gets due to their stupid BOSS or well wishers. Rater “2” – 90% are the ones who put in their efforts to make account green or meet customer’s expectations, and should be rated “1” or “2+” But pity on IBM and its policies which can never happen, since duffers are running the show.
– Maximum IBMers hide them self behind policies which hamper various deliverable and their stupid immediate managers supports without understanding the actual reasons or impact on customer.
– T&T group in IBM is another reason of IBM’s failure, they don’t own or have responsibilities -As by the time IBM management understand issues/problem, their project target dates comes near and to save penalties, steady state teams pushed to take over stupid T&T work as bonded labor.
– 10% IBMers who beleives in issues and not in work, which they stupids feel is only the way to be in lime light of IBM management.
– Bonded labor “IBMers” should get salary hikes, in last 2-3 years no salary hike, any plans?closing business units? Attrition is high, which impacts deliverables and customers. IBM loosing business? WHY TOP Management don’t see all this?
Stupid won’t agree to my solution and intelligent who agree won’t be have guts to implement. Hence, no suggestion!!
I would like to say here is that IBM is spending toooooo much efforts and resources on complicated processes that are deterring from moving forward. Inside the work environment, one single/simple task involves tons of meaningless efforts, non-value added processes and disturbance from compliance team, not sure this worth the hassle.
Is there a project governance process? 😉
Agreed terrible CEO, she has no strategic direction or imagination, i.e. the CEO’s job., and thus the company will continue to suffer. All she knows is to buy back shares. After reading these comments It sounds like she does not motivate, inspire, or engage employees, I have no clue how she got that job. She needs to leave.
Unlikely to happen without a big ‘win’ they can construct for her.
What a disaster. The CEO and all of its senior executives need to go. Removed from office. This leadership team is the worst in IBM history. All this bet on cloud computing…IBM is so late in the game…it is just wishful thinking that this company can be. Market leader in this space. Apple , ORACLE, MSM these are companies with strong vision and talent to get there and make a real difference and create real value. IBM keeps talking about creating a smarter planet. How is this possible with a bunch of idiots at the helm.
IBM’s Smarter Planet initiative started in 2008, and we still don’t have any information about how much it contributes to the company’s profits.
As much as I disagree with the outsourcing model, a model devised by Goldman Sachs in 2001 and used by numerous companies, it is nothing more than a tax evading scheme for U.S. based corporations to avoid pay taxes. The present term is inversion. IBM is not isolated to this.
IBM is burden with internal policies that every employee must adhere to for the growing executive team to make their measurements.
How can IBM turn itself around? Is it too late to scrape the much adverstised roadmap 2015 IBM executives promised a 20.00 per earning share?
Like other multinational U.S. based corporations who are captializing on the deflated dollar, IBM has become a cash cow, with the cash going to buy back stock so its prices can increase.
Maybe the era of executive compensation made up mostly of stock options should be terminated.
IBM recently abandoned the $20 EPS targets, and more and more IBM executive agree every day that the target did more harm than good.
As IBM is not keeping up their revenues and planning to sell out IBM India GBS, started cutting off the resources due to cost cutting from IBM, IBM India GBS, IBM kolkatta managers / Management are very much afraid of their jobs safety and they started harassing the subordinates and reportees so that their job will be safe. Now because of IBM Kolkatta IBM India employees are facing lot of problems and started resigning one by one. There is 40% attrition rate was reported from IBMIndia.
40% is a lot. Hard to see how that is sustainable.
I am current US IBM employee, i am int the GBS consulting division which falls under AMS. This is my 10th year in IBM and i can say – its becoming worse and worse to work. Earlier, employees were given utilization targets – like 105% utilized for the whole year — now utilization targets are quarterly …utilization target means – you have to be billable/productive for 105% – for the quarter – if you take vacation or a national holiday comes in – you have to work extra hours to compensate for that – because then your utilization will fall below 105%. These are the reasons they use to give PBCs of 2 -or 3. In my division this year, for 3rd quarter – you know what the utilization target is – 100 fking 26% — that is 126%. I work on a project with fortune 500 company – where IBM team have no clue how to make everything work together. Client has made these comments several times in the meetings that it looks like a amateur company rather than a professional company – since they keep on repeating the same mistakes over and over again.
They reduced most of the benefits – but the worst one — for 401K matching – they would match upto 3% – but only do the actual transfer at the end of the year — so if one works for whole year and gets fired or leave the company on nov or dec…IBM will not make the 401K contribution.
your description about the client complaints regarding the skills of the project teams are very common and the 401k match deferral got a lot of chatter about another management decision that negatively impacts the workers.
My husband worked for IBM for 25 years way back. He has now passed away but I remember how much we loved the company how dedicated he was to it. He started in the Store ad worked his way up to be a Security Analysist . In his final years at IBM when things were changing from the company supporting their worker he would say that IBM stood for Idiots Become Managers how true these words are today.
Sorry for your loss.
all fool manager they never work … lack knowledge people work there if good people bevcome lazy after join the comapny
ibm one of the worst company in the world,
no policy some people spoil the company nature day by day. soon ibm will shutdown
If IBM need to success than they need to fire at least 35-40 % of there work force specially in management/ project management and grand father type of technical resource who don’t leave company as they don’t get job elsewhere but they are expert in yes sir … policy and keep there job here in IBM.
Many time I saw people initiate similar new project with different name just to show that they are working on something.. .
Also most of the technical projects consists 80% management/PM who want to justify there job and 20% technical people who actually do the job… infact in one of the project I told the leaders that you have 14 managers and 3 technical person in a automation project …what is the logic behind this ??? and they don’t have any words …
specially mid management too don’t have vision … whatever the top mgmt decide … it become toothless till the time it reach bottom … useless people getting top awards …
we commonly see this in client projects we audit 80/20 to managers instead of to technical folks that do the work.
As IBM is not keeping up their revenues and planning to sell out IBM India GBS, started cutting off the resources due to cost cutting from IBM, IBM India GBS, IBM kolkatta managers / Management are very much afraid of their jobs safety and they started harassing the subordinates and reportees so that their job will be safe. Now because of IBM Kolkatta IBM India employees are facing lot of problems and started resigning one by one. There is 40% attrition rate was reported from IBM India.
APPLE + IBM PARTNERSHIP
I agree IBM have less number of technical professional and more managers. Every body is manager here..
IBM has in many ways ceased to be a company in the sense that a company exists to make and sell something. It’s more like a hedge fund or at best a Harold Geneen-type conglomerate. IBM decided years ago they would acquire their way to EPS in lieu of organic growth. Why try to start a Fortune 200 business from scratch when you can buy a few smaller companies each year, cobble them together, lash the key talent in for 18 months, suck them dry and cast them away? It really matters very little to IBM Sr Mgt what they make or sell – it could be servers or software or avocado dip. Doesn’t really matter. Why? because it’s a company of M&A and patent lawyers and accountants who run everything according to spreadsheets, status reports and Powerpoints. The service business only exists to support internal sales of newly acquired products and companies into each account. And if clients are leaving, so what? Offboarding a big client takes a year. By then everyone will have moved off like locusts to the next one.
Internally, as long as you can put together a weekly conference call with 50 people and talk about the status of the status of your status reporting reporting, you’re good to go. Metrics Metrics Metrics Metrics. Whatever it is, run a report on it and trend it to two decimal places. Every week. Doesn’t matter what you measure or what value it provides, just so long as your spreadsheet has more rows and columns than the next guy.
15 years ago I was 5 levels from the CEO. Today, after many lateral job moves and doing more or less something similar all those years, I am now 11 levels from the top. I would have to look up who my 4th line even is and wouldn’t recognize them if they fell on me. But why bother? In a few months he or she will be someone else.
thanks for the valid and entertaining comments Wombat.
I was ibm 2013 and with 25 years selling experience it was one of the worst working experiences of dealing with poisoned rogue mangers, ibm is tied up in metrics and identify wiith all of wombats comments, they are doomed…..
This isn’t the way it had to be, except that we (or we allowed) the people that make the rules to start using METRICS as the end all for everything. Never mind what the effect on the human condition was, all that matters is that we measure something, then compare it again and again so that we can show “improvement”. Bullshit. Once we allowed ourselves to believe that if we only measured something with an arbitrary figure, then it meant that people with spreadsheets got to control the argument. Then we started to believe that we all had to “improve” quarterly. You know, immediate results. Immediate results implies that it’s possible. Most often, results are best measured over a longer time period.
Until we all speak up, this kind of madness will continue.
Valid points regarding IBM, nowadays the operations and solutions in IBM are poisoned. the bunch of managers in solutions are only doing spread sheets and power points and very likely know nothing on the matter they should care about. Important roles are taken by a bunch of managers that do nothing but attend meetings saying things that experts, clients dont give a shit.
IBM are now moving to Near Site delivery centres, as of July 2014. The offshore model worked for a while, but the cost / benefit is now weak.
IBM should take a page out of professional sports. When you team keeps losing ( revenue falling quarter after quarter people are not buying your product /service offerings… which equates to fans not coming to the games) and is not making progress, firing the players is not the solution…. it’s the head coach, general manager and other key executives…..IBM reminds me of General Motors when they almost died in the late 80’s and early 90’s.
same thing happened to IBM SD in thailand
There is a couple of good point in that article but it’s a shame that they are completely drowned in the massive rant.
Kinda hard to take it seriously.
Lots of points need some researches too (like Smarter Planet, the author doesn’t seem to know what it is about).
This article was a waste of time.
Staying loyal til the end?
must be a leader…. haha
A real concern I see is what Cloud offerings IBM will ultimately offer as Cloud matures. If I’m a Customer, the first thing I’d consider to place in “the Cloud” would be my systems of record, such as ERP, CRM and ERM solution suites that “run” my business. IBM DOES NOT own any of these solutions !! For example, if I’m SAP (an ERP solution suite provider) I’m going to want to “take down” all the Cloud business myself. Where does this leave IBM ? Last time I checked IBM is not supporting SalesForce.com (a CRM solution suite provider) !!
Seems IBM has been struggling greatly with cloud revenues much to your point.
This article is right on! #4 is particularly applicable to me as I was told three times I was doing too well when achieving 200 to 300% quota and losing all my accounts every time I achieved great success. I was there almost 14 years. All my time in software sales. They don’t like reps who are very successful and punish. This is not a company for an aggressive, creative, hard working person. It is very political. Not a good culture at all.
what do you think the “commission management” department does..?
what do you think the dismissal in sales & distribution unit or whatever the b.unit you were?
I am an IBM India employee and I handled one of the Implementation project with limited resources, less experience and skill and this is the biggest reason that Outsourcing fails on many ground for IBM.
Now, I am working in Onshore and usually, I hear feedback from Clients that IBM resources are very good but management is not. The negotiation is not on proper terms, internal politics for onshore/offshore is out of handle as well as getting resources from different region (Like Delhi NCR resources will not be used in Bangalore or Pune) is making it worse.
Above to that, There is no motivation as no bonus or even proper appraisal and seniors want to retain onshore making employee less motivating and employees are leaving it like sinking ship. So only managers are in the company and Freshers.
HR processes are so bad that it is not even 360 degree. One can’t do anything if their manager who is poorly executing or giving performance ratings based on grudge.
I guess Marce works in a country with low inflation. So Hike does not matter much. Compensation should take Demographics into consideration. Else people will become poorer each year, unable to pay regular expenses and leave. I have seen IBMers leaving after getting so poor and unable to sustain family. Whatever learning, comfort respect you speak of are irrelevant. Family comes first.
‘ IBMers leaving after getting so poor and unable to sustain family. Whatever learning, comfort respect you speak of are irrelevant. Family comes first.’
Interesting to hear this point. I thought I was the only one who felt this way when I left IBM
The biggest worry for a IBM brand loyalist like me and similar others is that whether I can ever proudly claim that I AM A PROUD IBM’ER any more. An IBM’er is one who Reads, Understands and Applies in his area of work without any fear and bias. Can any one in IBM can stay if he follows the above practice. The answer is NO. The reason being the Leadership is in India has first Regional mindset followed by upper cast domination attitude. He actually is not worried about the business, the best practices, well established R&D, Right person for the job, IBM’er first for its internal job poisitions (above 2nd line), following its own HR policies and many more to mention. Leadership recognises a few who are very close to him /her where as the actual contributors are some one else who are immersed in their job functions. They are often spineless even to voice their opinion thinking fear of losing his / her job. Directors like Padmanabhan sukumaran who has a problem of Mental constipation and verbal loose motion lacks ability to connect with customers and talk business or technology. His full time interest is to safeguard his position and would not allow any one to grow beyond his heights. He has never appreciated one individual in his team because it was not his tendency. You will be surprise to note that it is his own expression to many in IBM. Anupama Ambe- She can bring people from any where to IBM with very high salary and do not care about his / her strengths. She will make sure she sends people out of the organisation if she finds not supporting her ill will. She is least bothered about IBM and its principles. Danvender Sudev became director for safe guarding some one’s Dog. He cannot survive in Domestic business and lacks any quality and ability even to speak to Customer. Sudheer pandita thinks that he is a great guy in IBM with over 15 years of experience but lacks agility and undermines others efforts, finally will ensures a skilled professionals ouster. Ultimately a directors in IBM GTS GD is full of corrupt individuals who do not care for its employees. I have not seen a clear road map for the technical employees growth. Due to Band and salary disparities across IBM Business units it is close to impossible to move another division. There are few execeptions to this too. The biggest and unacceptable shameful part is the actual contributors and the one who gets year on year promotions are different. For Ex : Santosh Nair gets promotions for successive 5 years until the stage of Director from Team leader position. Is there a morale ? Hey IBM “Can you tell one of his unique contribution to IBM’s business ? IBM’s Compliance and Trust office and HR investigation are just eye washes if you escalate a matter to them. They remain Mute spectators and be in deep mourning until some thing happens. The end result will always be a futile exercise. Frequent Blue page changes to another manager without his knowledge and will be forced to victimise a genuine employee. Retaliation and work place harrasment is the order of the day and no one can question it. What happened to your values IBM ? What are you trying to safegaurd ? Is it not impacting your business. Last but not least Ganesh Margabandhu, one intelligent joker and racist, will ensure he gives promotions to only Iyers and Iyengars in the organisation. To quote an example he promoted Sairam, Amar bhaskar, perumal, TN Rangarajan etc., at the same time who were his direct reportees. He was the one who spoiled the GTS-GD organisation by poor governance and lack of managerial acumen. IBM needs only such people.
Wow. So much of caste discrimination in your post dude. Please grow up. There are crap managers and crap people in all organizations and at all levels. So if you are pointing fingers against one caste you will have someone from your caste doing the same against other castes.
Not only cast discrimination , there are manager’s family ( brother & sisters ) and relatives are glorifying the positions by virtue of their godfather golden hands .These must be there in other organization but very unexpected to 100years old IBM . Like Cheenaaa said about those corrupted leaders who are spoiling this company India part last couple of years and now along with that new top leaders of IBM Global are another contributor for putting the last nail on the coffin. Sometime thinks we public call out always about the corrupt individuals in the government portfolio but I believe today’s India you will find most corrupt and unethical ,zero loyal leaders and manager in the private company like IBM . This people are most vulnerable cancer of the society and time is coming up to expose them by help of media and political support of country . On poison can kill other poison. In fact one of X leader of IBM ( mentioned on the top ) holding the similar top position in EMC after being kicked from two other places and there in EMC even his tea serving boys doesn’t give him respect because of his behavior ,attitude , arrogance , think employee his servant except his cast people.
So That is why I say “se pa pum pererê gangorra”
I work for IBM, the article might have some true comments, but IBM is a good company to work for. Unless you only care about money (Which is what most people in this article seem to care about). At IBM I feel respected at all times by my managers and my colleagues, there is flexibility on how I do my job and there is trust and support from management. They will not pay me for taking and external course, but there are many, many many resources available for you to get educated, gain more experience and learn. If you don’t take advantage of these resources, well, too bad for you. I think there is too much resentment from people and despite the fact they complain how IBM only cares about money and profit.. well, those who complain about not getting better salaries, didn’t they leave the company for the same reason? (They only think about money). I have worked for more than 20 years in different companies in South America and in Canada, and I am truly happy to work in a company as IBM, maybe I could be making more money somewhere else, but here I feel respected, supported and I have all the resources to learn and to participate. And I do take advantage of all that I can… maybe someday I will leave IBM but it is here where they allowed me to build my reputation and I will forever be grateful to this great company. All companies only think of making profit, all companies treat workers as commodities. I really don’t think that it is too different in any other company but what I get and how I feel fromw orking at IBM I have never received it before. Thanks IBM.
If one feels respected at IBM I am sure an IBM brand loyalist would never leave the organisation. Money for him is secondary. But that’s not the fact. Unqualified Managers and their leaders have spoiled the organisation by violating the great IBM heritage be it people management or IBM processes. You do not see in reality of IBM that you dream about
That’s right Marce.
Being with IBM is really a great opportunity.
I think ginny needs to quit…
IBM is trying to cut its own leg.
Quote:
“Yes, IBM is a buy back machine on steroids that has been a huge stock market winner by virtue of massaging, medicating and manipulating its EPS. But eliminate the accounting razzmatazz, M&A tricks and under-investment— and IBM’s true earnings might be fairly estimated at $8/adjusted share.”
http://davidstockmanscontracorner.com/big-blue-stock-buy-back-machine-on-steriods/
That is a really good tip particularly to individuals a
new comer to the blogosphere. Simple but very precise info… Thank you for sharing this amazing tool.
Extremely important read article!
#6 hits home well. It’s been about 7-8 years now since the “assimilation”. It’s been down hill the whole way I’m afraid. Most product “design?” seems to be driven by several layers up “You must do XXX so that I can make the sale and get my PBC bonus”.
Okay maybe I’m a bit jaded?
maybe, but doesn’t mean you’re wrong.
Thanks IBM, you finally gave me a pay raise…1% after 6 years!!!, all the while idiot VPs like PL are earning 6 figure bonuse for doing nothing but pissing customers off and having to repeatedly ask what our department (EUS) does….totally out of touch with everything. Treat your employees better Ms. Rometti…
not exactly a recipe for fierce employee loyalty
My story is little different, I never worked in IBM never apply, but My father was working over seas one of Nato base in Asia area where mostly used IBM products around 1970’s and after. He was a good Machine operator and also great repair man from seeds, not as a school geek like they just see the things on paper or in theory. I am sorry if one of you enter this group, no offense but did you see 30 years ago there was a tech school??
So he was office machine tech where at the moment they all used to have IBM tank type writer with ball head, telex, and electromechanical calculator machines. He used to fixed this machines and he never been in America Nor finished tech school but he was great what he was doing.
I am my father only son continue today for this kind stuff, well technology change I work on computer repairs and some mechanical systems. but As my father, did not finished any tech school also, I have seeds!…
Today, I am holding multimillion dollars project in my hand with two prototype. Thinking to get this in market. I started to write several companies including IBM. As respond They can not take a look at my project unless it has been patented or trademarked and I need to be a company!…
This is probably is not coming to me from the head but stupid secretary and I am sure my mail did not even reached anyone else but this stupid freak who takes the mails for head!…
You know why? Cause heads always busy within meetings, travels, spend time in vacations, more and more… they don’t care company fails or runs. they even don’t know actually if the company fails cause ignorant stupid secretary or someone else thinking I am piece of s..t or worthless someone, while she/he seating behind the desk in the morning with coffee and donuts on table, spending day with answering a few calls or ignoring a few emails, or chatting with others to fill their work time, and I am sure neither manager or CEO knows what is going on since they are in meetings/seminars within another country.
My question is; If I was an employee in IBM and I invented things that I have in my hand, what was gonna be?? Increase my salary and fire me following months?
What?? I invented something let say I work in IBM, Do I have to get patent or Trademark for this?? Aren’t they who is the one called people for inventions? giving school projects to student so they can suck the ideas free but if someone is offering and idea,no they can not take it cause I am not company, no patent, no trademark!…. My idea is next great idea like Iphone, or android but it is not phone, something that will effect the World like Iphone or Android.When it comes out will be late for who ignore me….Goodluck for IBM then…..
hey,i can feel the energy and passion you have for your idea. Hope you get someone pretty soon to launch yr idea. good luck
Ginni will never fail, IBM will fall.
Can somebody in IBM advise the sort of salary they pay to Architects with about 12 years of total IT experience?
I ask this because of the following –
1. I had a technical telephonic interview and then was called for assessment in UK. A day before we had the assessment, they posted for the position again. It is now just 2 weeks that we had the assessment and I have been notified that I didn’t make it. Additionally, the position is also showing as closed in IBM job site – which means they are no more accepting applications for the post.
However, what intrigues me is that assuming somebody has made it, they should have still have the position open till the recruitment is over. Especially we were told that there are more positions than the candidates on the day of assessment. Given the short time we had the assessment(2 weeks back) as well as the job was posted last time (3 weeks back), it is almost impossible that they have completed the entire process of doing review, issuing offer letters and then candidates actually having accepted them.
Will they close a position all of a sudden even before the recruitment has been finalised?
2. Additionally, I have got linkedin feedback from IBM interviewers that they thought i am an excellent candidate but IBM sent me a letter stating they didn’t select me. On further request for specific feedback, I was told in the manager’s interview it was felt that they had people who matches the requirement more closely.
Bit baffled whether IBM UK are really looking for people..if so, what are the salaries they are planning to give to Architects? Can somebody advise what are the salary range for this role with a total IT experience of 14 yrs. I asked for 56K Basic – was that too much? can that be a reason?
It will be great if any IBM er can provide any feedback/inputs – this is purely for my information only.
I don’t want to spend time on something when the org seems to be very opaque.
IBM sales is ran by managers with an operations background typically no sales and most manager can’t even explain to you what a sales cycle is. The inside sales departments are sweat shops with some of the worst managers I have ever worked with. IBM compensation plans are horrible and you never get raises. Its also hard to move up because its political you have to have relative that worked as an executive for the last 40 years. If you are intelligent and have a master degree do not work for IBM you will literally pull your hair. Oh Yeah and my favorite innovation at IBM is another acquisition….
most of the projects run by managers. architect salaries are the lowest in the industry. and even if you manage to pull out some more during joining, it is guaranteed that salary will be frozen for some time to come. most of positions will be filled with contractors and do not prefer permanent employees. managers control the salary and most of them are at best managing operations with no foresight. if you are any good don’t bother joining.
I attended Partner World at Vegas last month. First of all, it was organised at a wrong place where all these drunk IBM executives had missed many of their session in the morning. Opening speech from the CEO had got nothing interesting. No impact, no vision, no direction and no important points to highlight. Overall, I would say even in Asia, the IBMers are only worry about sales sales and sales. It has very bad reputation where all partnership are just bullshits.
it was a good opportunity for Ginny to make a bold statement about the future, but again, nothing much new.
Hi! I worked for IBM 7 years ago and now I am returning. Meanwhile 7 years out of ibm’s atmosphere I witness the big data results being enhanced even more since social networks growth. by using big data + mobile it’s a good north BUT, it must be done precisely/focused/goal-oriented once MOBILE or INTERNET OF THINGS are too ample and has a various way to get worth. I mean, it sounds a great partnership since user details of determined target consumers are managed by a powerful company that has others great partnership to make worth it ~ APPLE + IBM
cloud and big data is the ball turns.
IBM stated grid computing 10 years ago. Now IBM is showing greed computing.
In my career, IBM has been absolutely the worst place to work. The company is top-heavy, with a bunch of idiots running the company. VP’s reporting to VP’s with no direct reports — it is just gawd awful. There is no vision. There is no leadership. Just a bunch of executives who should be investigated by the SEC. I do not know a single individual who is glad they are working for IBM. What once was a great company has become just a pile of conglomerated crap.
top heavy and heavier it becomes day by day. managers are becoming jobless day by day and higher management wondering what to do.
I used to work for IBM 11 years . The last year was the worst as far as I remember. People are getting more frustrated by receiving PBC 3 for good work. Managers tell them they don’t have any choice and they need to give PBC 3 to someone ( numbers of PBC 3 are bigger year by year). Managers are liars, they can promise you a lot , but you will receive nothing. Salary is almost identical every year. No rises. Annual Bonus was canceled this year, because Ginni didn’t want annual bonus too. Manager accepted this and they won’t give annual bonus to anyone (with exception of PBC 1) Newcomers get better salary than 10-years experienced employees. If you want better money ,you need to leave company and reemploy. Stupid . but IBM is not easy company to understand this politic. I left , because I didn’t see any hope to be there longer. I think I should leave sooner.
This is true, I had identical case by myself
Bang on accurate assessment as I see it from my little corner of IBM. I work in Services – IGS IGA. I’ve worked for IBM more than 25 years, and morale has never been worse. Many of us are disapponted that the latest round of layoffs passed us by. I just don’t want to work in this toxic environment anymore.
your comments say a lot, unfortunately… all the best of luck in the future.
IBM is also strong arming their best business partners. I have been partnered with them for over 25 years and there is no strategy, no partner loyalty, and they make our company, an IBM business partner, do things we don’t want to do so they can make money. We get threatened to be thrown out of their program if we don’t participate. At their ibm partner meeting in Vegas several weeks ago, it was pathetic with the few number of partners there. IBM continues to talk about the billions they are investing in different industry initiatives, but their is no accountability and its all marketing fluff! Very, very sad! There used to be a time when we were proud to be a business partner of ibm’s… now, we are looking for our MS or Oracle strategy to save us.
we didn’t touch on their partner model, but you bring up a good point, and certainly there is enough content here for another blog.
Like any other big company. Profits are all that matter. Employees mean nothing overall…iBM uses attrition and a low morale standard to get rid of employees and those that are replaced are underpaid contractors with no benefits. They could care less about their clients. Only when customers complain to a high enough level do they take action. IBM presses to do more with less and if you don’t like it you can leave…Gary Woodward actually said this to a group of employees years ago. He needs to be replaced, a wretched human being. Bottom line they are like any big company, Profits are #1 and employee happiness ranks at the very bottom on their scheme. No raise or bonus in many years, even as a 2+ contributor, and being told we are lucky to have jobs sure doesnt seem like a morale booster. All employees other than overpaid executives are underappreciated, and the ones in the trenches that are client-facing are underpaid…the faces of IBM should be treated better and not taken for granted. IBM is full of liars, doubletalkers, and cheats. Should have sued IBM when we had the chance.
My entire department in Tucson was cut today. ginni must get a certain dollar amount for every head that is cut in the quest for RoadKill 2015.
an all too common story I’m afraid.
IBM is a big joke. They are a bunch of thieves. No integrity…the only thing they think of is money..money.money and more money to make their stockholders happy.
they are a for profit company, but the public culture of EPS has been the root cause of many bad decisions that seem to erode long term customer value and employee satisfaction
As an existing employee of An IBM company, i wrote to the top most management on why it is failing and running under losses, but no one cared or bothered to do anything about it. I mentioned with solid proof by way of valid documents on the same. I questioned IBM’s leadership who were not able to turn around the company’s negative output for 7 long years and still nothing was done to them, they easily move to different role, but the low end employees were given the boot. Surprising these so called useless leaders are eating into the earnings of the company without any contribution and responsible for the losses directly. They are visionless and don’t know anything about strategy, stupid useless they are more of people managers than anything else. Removing non contributing leaders will save the company than removing thousands of hard working soldiers. The company doesn’t know that they need hardworking ants and not lazy elephants. The lower band employees who are basically soldiers are out there on the battle field while these useless leaders are sitting in A/C rooms and enjoying life. This trend will surely sunset the company very soon.
very soon might be a bit of a stretch, but it certainly doesn’t bode well for the future.
in IBM, the project in which i am working, it’s turnover is doubled then too what i am getting is shit.. managers gives less hike to employees and they get good hike. they make false promises but they dont do anything. i would say to management that i am not dumbass, i know how you are playing game. but dont forget same could happen with you too.. i have seen lot of partiality management does. I worked very hard then too i did not get as much i expected but the guy who did not do anything he got more than me. I promise once i leave this company i will forget that there is a company which has name IBM..
ys IBM is political , its only in IBM that Band 9 Arindam Bhattacharyya goes on rampage after women and its women who silently quit, and he gets a 2+ rating wow
Strange things have happened to IBM in Middle East- UAE, Oman, Qatar, Saudi etc.. All of them are emerging markets and IBM hasn’t capitalized its situation in terms of getting newer clients.. It has lost major clients.. when I escalated the matter working with a huge client in UAE. IBM sidelined me and cornered me in their interviews for a permanent job in IBM. Especially thanks to few fellows are so lazy , or in-determinant in their approach for getting clients or retaining them They lost Retail, Banking and Logistics & Supply Chain segments to ORACLE .. ORACLE was smart enough to push one application after another and in ME, Oracle is a major player .. thats a smart move in Smart Planet.. rather than advocating Smarter Planet IBM screwed many products and clients and now in deep crisis.. This is one off examples..
Being a IBM Product loyalist.. I think I will have to look into different spheres for my living and move into much safer zone..
As an IBM employee, I had an opportunity to talk with foreign colleagues. The situation is the same around the world. IBM is pushing down individual’s PBC ( employee annual review ) in order to reduce the money that they will pay to employees. All great professionals are leaving the company and only people who are involved on internal politics are going to manage positions or being promoted. GBS is reducing its workforce and is on the way to be sold.
By the way, we don’t have another Sam Palmisano on the market to save us again. Black clouds over our heads.
Sorry… Not Sam. I am talking about Lou Gerstner.
I worked in IBM India for around 4 years in ITD. It was 2005 and market was good and new accounts were coming. The way IBM took over new accounts was funny in a way, that the entire team put in place was literally of outsiders who knew nothing about IBM values and systems. It caused serious delivery isues in IBM. Then they went ahead and rolled the BLO business into ITD, turning into a crappy place, with really low skilled workforce infused into Technical Delivery. Then there was BPO leaders moved over to take control of technical delivery. There is a team of top executives in India who are holding on to their positions by virtue of being in iBM for the last 20 plus years and they won’t let any bright leader come up. So this is the story of politics. They are least bothered about what IBM is selling and how is it selling and who is the best fit for which job. There are good people in IBM but then few only. The top leader needs to eb sincere in finding a capable leadership to drive the company. If we have tp leaders interested in their own well being and compensations then the company is sure to sink.
> 16 years at IBM, Ginni kills the company, I have never seen before when a CEO visits her/his headquarter, only authorized individuals could meet her/him and ask only well-chosen questions, she is really out of reality, how it works at IBM and how to develop new business opportunities. I guess, she will surprise all of shareholders very soon.
we have heard this from others as well… viewed more as a protected politician than an authentic leader.
It is 2014 year and 2015 just few months from now… i am really dissapointed with IBM…i can say that im seeing low morale of employees in United States, Brazil… People are just being asked: leave or do something to bring more resources… Not so many pbcs 1,2+ but most of 2 and 3. People are loosing faith on this company. i wish you all the best, considering that we have some cloud rivals coming up: amz and google.
It is not just in US or BR or UK, it is the same in India, PH or AU. Bottom line is Ginni will go down along with Warren Buffet but she will take the company down the drain by 2015.
Hi! I worked for IBM 7 years ago and now I am returning. Meanwhile 7 years out of ibm’s atmosphere I witness the big data results being enhanced even more since social networks growth. by using big data + mobile it’s a good north BUT, it must be done precisely/focused/goal-oriented once MOBILE or INTERNET OF THINGS are too ample and has a various way to get worth. I mean, it sounds a great partnership since user details of determined target consumers are managed by a powerful company that has others great partnership to make worth it ~ APPLE + IBM
cloud and big data is the ball turns.
watson was created before 2008. Siri came out in 2010. saying that watson is a “version of Siri” is a ridiculous analogy which smacks of a child’s version of the universe: everything else in the world is a poor representations of the stuff i know right now. Shakespeare’s ‘Taming of the Shrew’ is just such a lame version of “10 things i hate about you”. What the hell was he thinking?
the point on Watson had more to do with IBM’s move towards selling solutions for higher margins and how it sees that manifested in Watson, but they seem to be losing the point about the integrated steak and focusing more on the Jeopardy sizzle.
IBM’s poisonous culture pushed me to the limit and I left. We were told on day one that we were all salesmen, and yet as a consultant responsible for delivery I would watch the actual salesmen do incredibly little (lack of technical knowledge was the main reason).
After a number of successful years at IBM, I had my best year in terms of sales landed and utilisation (above all but one of my peers), but was told at my annual appraisal (the dreaded ‘PBC’) that I had to accept a low grade. It turned out that it was my turn to “take one for the team”, because no actual reason was given for the low grade. In fact one colleague, who would often call me because he was bored with no work to do, got a higher grade than I did. So I left.
I’d always wanted to join IBM since I could remember, but the experience turned out to be very different to what I’d been promised.
Interestingly, IBM recently tried to convince me that they wanted me back. Flattered, but too happy where I am, thank you.
glad you are in a good place now – congrats.
Idiots sold the x86 business to Lenovo today. Jan 23 2014.
The entire upper management and middle management in IBM’s STG are worthless idiots. Not a single idiot is educated. There are people getting away with murder inside the company.
Bunch of idiots can’t strategically think to make profits. Open a book and look at selling it off. Sold. WHAT A BUNCH OF IDIOTS.
The upper management is screaming “Cloud” and “Watson” without even having the slightest idea of what the business entails. The idiots in middle management are non-technical worthless pieces of *&i%, who are trying to keep their jobs by doing the same job monotonously every year.
wondering how Lenovo can make profit when IBM was not. This is a puzzle to me, can any one explain….
I think once an entity is no longer penalized with the SG&A overhead allocations and internal charge backs of perhaps the world’s most top-heavy organization, sometimes a fairly good business can emerge.
Add to that the ability to make simple decisions by folks that are focused on the business unit without the political dance that is required up the IBM management chain, and who knows… even PCs can be profitable.
Too much middle management, too many politics, not enough focus on engineering and customer value.
The problem with IBM is not just about strategy or leadership or say a combination of both. It is becoming much deeper.
Having been in the company long enough, I can fairly say that the real issues are like the elephant in the room. Several of them actually.
1) Global Business Services as a group has major fault-lines, mostly by design. Teams working in delivery, naturally falling in the middle and lower parts of the pyramid are constrained by the system and the process to work like robots without any space or time to work on fresh ways to bring value to the client. The informal rule that only those in the top of the pyramid can understand the client and as a consequence his needs stinks and pollutes the work environment. Though all leaders parrot the various proverbs on client value and team work, the truth is that there are so many islands and most of the challenges arise out of working with fellow IBMers. Clients are much more co-operative.
As seen in the other comments, the notion of taking jobs from one geography (high priced resources, developed country) and moving them typically to another geo (low priced resources, developing country) has further accentuated this environment of ‘US’ vs. ‘THEM’.
Since 2006, teams in the delivery world have been doing good work offshore. If that pool had been further upskilled to also expand into lateral ideas and client value triggers, GBS would have made much more than what we are today.
2) Over emphasis on women. It is amazing how merit is being openly side-stepped to promote women since the recent quarters. No issues in this policy, if only the women are earmarked and groomed in advance (for a couple of years) before promoting them to critical make or break leadership roles. That way, they will be able to stand on their own and not be labelled as lucky short cut takers. A lot of men are ventilating their thoughts on this, inside closed doors. Not really surprised that teams are not excelling. What is the real incentive for the men now?
3) Most of IBM leaders in GBS and GTS are quietly uncomfortable on the new blogs, video messages environment. Mainly because the hierarchy structure and their individual relevance as gate keepers is diminishing. So anyone gets to comment or know what the executives are thinking about. The virtual flat world is becoming a challenge to the real world complicated pyramid.
Current Overseas IBM Employee, while I disagree with those who say that you can only find the talent in the US, we face the same problems here, and IBM can’t keep the talent outside the US interested either, I recently had a talk with my collegues from the US, Sigapore, Ireland, Mexico, all of us young people with 5 years in IBM and we have reached the conclusion that unless you want to participate in company politics engineering talent is no longer recognized, they don’t value it and we have stoped caring, we are fed up with their bureaucracy and crappymanagement, IBM is a great place to start, but if you want to grow as an engineer better go somewhere else.
Will IBM give chance to ex-employees with PBC rating 2,3,3 ?
IBM´s strategy is not more the grow type. Just the survival one. The Thinking heads of IBM is intending to walk cutting its own legs. Let me explain better, they are very volatile with people, so, don´t matter how your knowledge or fidelity with company are. So there is no investment in people. The result at short and long term of this? People will not work with passion and dedication. Watson is “turning is his grave” seeing the best of his endowment being destroyed.
To Mr. Zolman
I think this article is very important and good to think about!
I respect your views and I’m no position to argue.
But I do feel that if there is anybody who can make IBM stronger than ever its Ginni Rometty! She have experience in technology, she have done the hard work, she understand that “clients need first” is not just a gimmick phrase! She is responsible for Watson success! and this just the beginning of this Eco system. we IBMers on the floor have 100% faith in Ginni Rometty!
Jonas while I appreciate you being a fan of Ginni Rometty I think you miss some key facts. Let’s not forget that Ginny was on the Board of Directors of AIG when it fell and the specific committee she actively was involved with was Executive Compensation. Executive Compensation was the area that came under attack when AIG was investigated.
The comments in this article around Executives and Executive Compensation align with Ginny being on the AIG board. Add to that since Ginny took over the number of newly minted Executives and Executive promotions has gone up drastically from the time of Palmisano and Gertsner.
Jonas, I agree with you. But Mrs. Rometty is cutting our arms and legs to give to the client. Is like to give your children’s milk to the neighborhood and left them without it.
Thanks for your feedback.
Appreciate your confidence. IBM organisation is placed on the immoral grounds…how Ginni is going to face it first ? and take measures to eliminate it.
Please understand my earlier comment is NOT anti IBM – I simply doesn’t understand their strategy but maybe the company has grown to big therefore lack of leadership.
Globalisation is not only a plus its also a treath!!!
Tim
Former Danish IBM execution specialist for major customers!
Tim
I am one of those nobodies working in India which is how I interpreted from the comments on this article.
To start it off, most of us who join aren’t stupid, rather we have no choice and we need a job so we join. People might be smart but they aren’t interested in IT work but to have a job and support their families they join.
At the same time, yes many do have communication issues since most of the people aren’t interested enough in learning English properly and being able to talk in a decent manner.
To put things into perspective, most Offshore resources(company terms lol) are overworked, mistreated and have such shitty first and second level managers. These people have no idea on how to run the business or even on the technical knowledge of the project. Most of them get in through some connections with the existing managers/recruiters. They form a coterie with the other managers in the project and stick on to the project like leeches.
One of the major grouses in the comments is the outsourcing. Well the problem isn’t that the people here are stupid, it’s rather that the management here takes in freshers right from college and without sufficient expertise in the industry and gives them positions which should ideally be filled with people having 4-5 years experience. And while billing the client, Ibm will notify that they have resources who have had 5-6 years experience working on the projects. For those who are/were in IBM and know about the band system, the process being followed here is :
To remove people from 6B and 7A levels and replace them with people in 6G(graduate hires from engineering colleges) and 6A(you get to this level from 6G after a year).
This in my humble opinion is what is destroying things offshore.
I truely understand, as it is normal that folks from India are engaged until 10pm! But can I engage people on the other side before 6am? I am in the middle (of nowhere) trying hard to understand. Sadly it’s all about short term money, client value? and what was the M in IBM already?
Not rubbish at all ! With no knowledge of this blog, as an ex-IBMer here was my assessment from a few weeks ago. Common themes abound!
I) In GBS the “PWC mafia” is seen to have won out. You are either in the in-crowd or not, very akin to how the Freemasons look after their own.
Ii) for external professionals joining IBM, it becomes very clear that it is “their way or the highway”. They have an implicit belief that the way they do business is the best and only way to do business. They have no interest in leveraging off expertise and experience gained elsewhere.
III) their employment policies for career, diversity etc are excellent and deserve recognition. However, the ability for managers to execute in accordance with these policies is close to zero due to cost constraints (ie no training, no career progression, highly centralized quotas for performance evaluations etc). This includes the sheer desperation demonstrated at the end of each quarter to do whatever it takes to meet the targets or to be publicly lambasted across the globe if you are seen to fail.
Iv) their internal systems and processes are the worst by a long way that I have observed across several global corporate companies. Putting these shared services offshore makes the whole thing less flexible and more bureaucratic. Individual managers have close to zero discretion to do anything. The successful managers are the ones who can work around these systems and processes and not get caught.
V) after the GFC, the business strategy went into full number-crunching cost minimisation mode which meant that their reputation for quality, business development, customer relationships and value for money flew out of the window. What they don’t realize is that the more they do this, the more their business spirals in a downward direction
Vi) over the past three decades, there is a pattern of local redundancies which fuels the competition with really good people which then reduces their competitive position.
Vii) given their size, one option for them is to continue to acquire software companies. The problem is that by the time that they add the IBM overhead to these business models that they become immediately less competitive.
In summary, my sense is that things have to get a lot worse before they improve. They need a new global CEO from Google or somewhere else to give the place an almighty shake-up. Until then the behemoth will continue to fumble its way along…..
that would be a much needed shake-up and change of strategic direction.
When I joined IBM 29 yrs ago I was struck by how much every employee, from the janitors to the execs cared about the company. I retired 1month ago because it was hard to find anyone that cared about IBM. I worked in IBMs research division, after working at Bell Labs. Experiencing the collapse of Bell Labs was painfully. Living thru the destruction
Complete and total rubbish! If even a part of this article was true, IBM could never make $100 Billion in revenues.
Ginny needs to: major on the majors , not major on the minors. Enlarge your inner circle to get broader support. Motivate not intimidate people, particularly publicly. Translate your focus on clients to actionable plan… I had direct contact with Ginny when she held the position right before becoming IBM CEO & I must say her motivational management style leaves a lot to be desired. Ginny, please make adjustment before it is too late. Thank you.
TROLL!!!!!!
Imagine how much IBM could make if none of this way true. Sorry to say Jay – most of this is completely true, and all of it has been told to us by many IBM customers.
I retired 5 years ago from IBM Global Services after almost 45 years with the company. In my day we were called Customer Engineers. My specialty was first in the Tab Card area, then Banking (teller machines), then PC’s and Store Systems. Worked my butt off and was proud to work for IBM. Does anyone remember IBM’s 3 basic beliefs? The most important one was “Respect for the individual”. I am a 3 time IBM Means Service award winner and a bunch of local awards. That and $2.00 might get you a cup of coffee. BUT, what I am saying is that we used to be proud of the work we did and we were recognized for it. IBM showed us respect. I retired 2 years before my planned date because I didn’t think I would live another 2 years under the extreme stress that was being placed on all of us. Best move I ever made. Of those over 40 years, the first 35 were the best. It went downhill from there. Too much micro-management from several levels up, MASSIVE pressure to “make the numbers”, no more incentive to do a good job, just happy to still have a job due to massive “Resource Actions”. As stated in the article, the focus was taken off of Customer Service and the employees. When you take out the underpinnings, the building will fall.
nuff said
thanks for your service.
As an IBM employee for the last 17 yrs, I find most of this article ridiculous. There are some statement that merit consideration. There are areas that need trimming as would ANY company. While I may not be the biggest fan of Ginni, I still give the company confidence as we traverse thru this very sluggish economy. Sure the writer here is part of the competition so he’s entitled to his own opinion. I think what hurts IBM the most is the SO to places like India. We spend more time cleaning up after the folks over there who are suppose to work the remote issues. Most times they can’t read the script properly and there’s always a client howling about the communication bridge and that is a fact. However, like every business trading on Wall St, the current effects of bending and watching over the shoulder to day traders does not make for smart business and the plans that guide.
I’m not sure what to make of your comment.
You say you do not agree with any of the points, you call them ridiculous, but you provide no evidence.
Then, you reiterate one of the points of the article, validating it with your comments.
BTW; we do not compete with IBM in any way.
Yes I totally agree with the above 10 points. Soon one by one divisions of IBM will be history under Ginni. Complete lack of Vision and IBM’s policy of Diversity killed this with many total wastes in the company
thanks. Agree with the lack of vision, not sure about the policy of diversity killing the company.
I don’t agree to many things you wrote here. But I do feel Sam Palmisano was much better leader. And the new CEO is turning out to be a big mistake. Well 3Q results are out. Everybody know the revenue went down and more so in growth markets. Why this sudden drop? It because of the recent public employee bashing she did and its beginning to impact IBM. Ginni needs to learn a lesson that if you yell at your employees particularly in Growth markets with thousands of opportunities with other companies you WILL LOSE GOOD PEOPLE and YOU LOSE SALES. AND YOU PAY PEANUTS compared to other companies. Get it dummy!
With her new memo which is again in public domain she continues to demotivate 400’000+ employees WW. Many are not even in sales she has this “yell at all in public” attitude and then she blames it on her direct reports. She failed and she should gracefully step down. I wish a day will come when SHE is replaced with someone who has more support within the company and is more of an inspirational and charismatic leader and not a loose canon like Ginni. IBM always had such leaders with a few exception like this one.No hard feelings but what is currently going is systematic destruction of a 100+ year company. Wake up board members and investors please.
seems an odd way to try to motivate a few hundred thousand employees.
Seeing how the IBM share price has sunk to a 52 week low today, down $12 on the day, just how long will it be before a vote of no confidence is raised? As a shareholder myself i raise this now as she is costing me dearly.
I agree with every point you raised. No leadership, no vision. And how astute of you with point 10, IBM selling off its services business. Already it has unloaded its CRM ubusiness to Concentrix. What next?
The crazy thing is that Concentrix thinks its got itself a good deal. Nothing could be further from the truth. Its CRM business has been a loss maker for a long while. It is its Finance and Accounting business, which IBM is retaining, that is the real earner.
we wonder if spin outs can be more successful though – without the albatross of the IBM SG&A allocations and charge-backs weighing them down.
Another revenue miss. Only a billion dollars and now the analysts are questioning whether EPS is taking all the focus.
Randy, Excellent point. Having worked at both PWC and IBM for a combined total of 27 years I can say that the Public Accounting firms know that most former staff will end up in a position that may have an impact on future business. It’s a shame that IBM does not embrace their former employees with some time of formal alumni program as the Big 4 firms do. The worst customer is one that you treated like crap as you kicked them out the door. The only good memory of IBM comes at the first of every month … my pension check. Trust me they will default on that at some point.
we have seen this happen many times.
One more point you missed.
In the old days, people quit their IBM jobs on their own, and still considered themselves IBMers. They helped bring IBM into their new employers.
These days people just get kicked out. Guess what they will do when IBM tries to sell to the companies they now work at? Considering there are a lot angry former IBMers out there now, many decision makers, IBM’s customer base is getting smaller with each layoff.
this is actually a big point. former employees were like alumni, but no longer that way.
Only one reason why Ginni will succeed: Warren Buffet endorsed IBM by acquiring 5% stake. He must have done his research.
The investment from the Oracle of Omaha does make me wonder what I am missing… but we have long since believed that Ginny’s moves would be good for the stock value, just bad for its customers.
Very true article. I hope Ginni has a chance to read it. IBM doesnot have guts to retain and keep great talents. The env is frustrating and they TALK about Innovation and reward their employees with nothing for innovating. Ginni or whoever is in IBM should remember that great companies like great empires were built bcoz it were the people who worked for them and the empires that abused its own people are now lost in history. IBM is treading on the same path. From US and EU now in South Asia. soon we will hear IBM in Afghanistan and who knows , in Africa (Nigeria ,Uganda or Sudan). It closes office wherever it gets costly and employees start demanding. This
company WILL NEVER HAVE GREAT TALENT .
Seems like many of the best have left for greener pastures.
I remember the days when we were happy when we made our clients happy. Those days are no longer with us because the decisions are made increasingly by so-called IBMers who are essentially politicians, the kind of people who try to milk clients, and hence IBM, until they die.
a common complaint among our clients
It is in large part the rape, pillage and burn concept that the so called leaders use. I worked for IBM for 9 years and was attacked in every way over a rumor about a book. They drugged, raped, recorded, and tortured me physically and I had to abandon my home as a result. They called me crazy and dragged me through the mud over a book dedicated to God and thanking them for the challenge. The only reason they hired a woman is to try to cover up the sexism that dominates the culture. If you look closely at a lot of articles you will see that another individual was up for CEO. Rod Akins was actually next in line but they overlooked a black and chose a woman because they knew they messed up by having me raped and tortured. I am a black woman and it was initially blacks who attacked me in the job because I was climbing in the ranks. (Long story) Anyway, they had me under extreme surveillance and heavily racketeer end against for the last three years. It only recently lightened up because they boasted about the billions they made raping the image of a former employee.
The only reason the company is still in business now is because it helped other companies turn a profit from raping and exploiting me. IBM is going down day by day even with its allies because the dirt it does to defend itself is going to catch up with it.
Since I was accused of writing a book against the company I decided that I would write a book that tells what they did to me in the first five years and another book about what they did to me over a rumor.
Both are available on my website. Blacklibertyproductions.com
The bottom line is this, the article is right in saying Rometti was set up for failure but the company won’t fail because she is a woman but because of what the company did to a woman.
Agreed, I am a current IBM employee and the life is being sucked out of me! No raises and not even talked to in a professional manner! I cry weekly due to the work load, frustration and rudeness. NOOOOO respect for employees at all. Why do I stay? Been told I can’t xfer to a new role within IBM, is that legal? Working on my exit plan out of IBM, applying for roles but no bites so far…
Fantastic read! I have worked in IBM for the past 3 years and definitely it is the worst place I have ever worked in my life. Low morale, no respect with employees, no promotions (people were promote to manager roles and kept the same salaries), IBM just sucked life, time and efforts out of me. I am done with it and working in a much better place now. Good luck to Ginni, she is just being blamed because people forget the shit was done way before. Just remember that it will all get worse after 2015.
good luck in your new role.
Ibm makes over 100 billion a year. Enough said! Now go to Apple and try to destroy them…
don’t get me started with apple 😉
As an ex-IBMer (20 years ago) but still in touch with peers and people still in IBM, there is truth in what has been said in the article and comments. Two things strike me now; one, the low morale of the employees I meet; second, the feeling that if things carry on as now, IBM will eventually become a ‘broker’ of solutions and not a provider. I don’t know what the solution is but it isn’t putting the faith in hardware – that is what killed Sun as an independent entity, a thing I forecast when I was at Sun and long before it actually happened. Pity, as IBM was a great company and treated me well but it seems it is definitely not the ‘beast’ I knew and loved from 1969-1993.
it would be great to see them restore some of that former luster.
Thanks for the article. Some interesting perspectives.
you are welcome.
thanks for reading!
8 Months, 2 PM’s , 3 Architects and 4 SME’s to install 3 x86 windows servers into our existing environment. What a joke.
We are sick to death of rubbish service and are going elsewhere. IBM can no longer function effectively at it’s core services. Hello AWS bye bye IBM, to hard , too expensive, too slow and no customer care. What a rubbish IT services delivery company.
Dear Subhashis
I agree with what you are saying but a glorious pat does not ensure a bright future…The reason IBM has survived so long is because it ensured employee satisfaction(see in the comments by the man who worked 20 years) and thus made sure that young people stayed in that company for longer times but now it just wants temporary services from younger people and gives them a menial job and worse salary…..Do you expect people to stick around for 2 shares of IBM a month????If you are saying that leaders would stick and crap like that then let me mention that people working this “interesting” job at IBM and so called not leaders managed to qualify for prestigious PGP programmes. If those people are not leaders I wonder who are….
Representative of a 10 year old company commenting on 100 year old company’s strategy and capabilities. This is the joke of the century .. come to terms with the reality guys .. IBM has survived much much more than such bitter sarcasm and negative propaganda over the years ..
not suggesting IBM won’t survive.. .rather the challenges that Ginny faces and why we believe she will fail in this role unless we see some marked improvements.
do you have anything to add to the conversation apart from your sarcasm and negative propaganda?
Correct. I do believe Big fishes survive longer. Congress party ruled us for several years over 400+ seats and then deterioration begun slowly. Now it’s reduced to less than 50. IBM is going worse than this in terms of business ethics, employee morale, so called leaders, Spineless HR etc.,
I agree to this blog mostly. Off late India services business especially global delivery has become center for ‘Toady’ managers and executives where true talent is being ‘managed’ to their tastes. Creativity, innovation is at stake. Business knowledge level is low and ability to solve complex problems is minimal. That is because focus is on ‘labour hours clocked’ but not the value addition which they cannot measure.
most of our clients complain about this
Thomas Watson Sr. understood business. “Make your Customers profitable, make some profit doing that”. IBM looked for needs and met them. Tabulators, Sorters, Typewriters, 360 Architecture, General Purpose Computers, etc. At the time they were developed, no one else saw the need. IBM did not compete with “cheap”, they provided the best and showed their customers how to make more profits with it. IBM didn’t look for the lowest wage employee, they hired the best candidates and paid them well. IBM’s profits were a reflection of how well their customers fared. That’s the vision that is missing today. The business is identifying and meeting customer’s needs, even before the client knows about it. That has not changed in 102 years. The discernment to discover solutions, whatever they may be, is the critical asset that has been lost (or discarded). Everyone else is also trying to find the “cheapest”, there is no margin there, delivering excellence is the only path to enduring success.
IBM was never known to be the cheapest choice. In the past customers would pay higher prices for IBM (compared to competitors) because they knew they would get the best hardware or best service. That was acquired by having the best and well motivated people on board. Nowadays it seems IBM forgot this. Good people are leaving and the job is done by beginners or low skilled (both in US an offshore) who still remain. Customers can see this and put a pressure to reduce costs. IBM, then, creates an internal pressure to reduce its own cost and get only unhappy IBMers. This seems to be an infinite looping of self destruction that no one can stop. The collapse that mr. Gerstner avoided 20 years ago seems to be just a matter of time.
that is the result of the focus on EPS as the only business driver. It’s short-sighted. Ginny needs a better vision of the future.
WTF
Dunno…
The problem I see for Ginni and IBM is that they living in a world that has failed to see that it is less about Share Holder Value and more about Customer Value. The IBM that I admire and will defend any day, is the IBM where the customer needs came first, and the rest would be sorted after the customer was delighted and happy. More and more software revenues come from “Compliance Raids” then for actual software sales.
I admire and defend any organization that stands for customer value (first) too.
The article is right on. However, there is one modification I wish the author would consider. IBM execs don’t believe that 9 women in one month can make a baby, what they really believe is 8 women in one month and a lot of overtime makes a baby.
Since Gerstner took over, it has been down hill. None of the CEO’s, Lou, Sammy and Ginni have any technical insight. How do you really expect them to have a vision. Lou was a slash and burn and follow Microsoft cause software at Microsoft had high margins. The Problem was that IBM’s software has a limited number of seats as they only do middleware as compared to consumer software which virtually has unlimited numbers of seats and are sold at retail prices unlike to business at a discount. Look at Lou’s history, CEO of AM Ex and RJR Nabisco. All he did was distance himself from the Tobacco. You don’t see that published much as he doesn’t allow it. Also, Lou was second choice, although after he was chosen he made the board state he was the first choice for the CEO. Then he passed the torch to Sammie baby. Sam was responsible for stuffing the PC channel for 8 quarters in a row, after which the market collapsed. He also pursued software and service but didn’t add much except for acquiring companies and gutting them. Then he set up Ginni, he made the promise of $20 eps by 2015. Now Ginni is stuck with making it. There is nothing new to do with IBM after selling off the PCs, and now looking at dumping x86 servers and blades and potentially the service business which is so labor intensive and has known low margins I don’t know why IBM ever when into it.
Remember its always easier to cut then grow. And cutting is only a one time gain.
LOL about the baby comment.
There are a few salient points in the blog – the services business overseas – the way it was done and the push over there regardless has / is painful and I do not see immediate relief. I do think morale is very low and the company needs to get a handle on that one. I also think culturally we are out of touch with each other inside the company. I also think the blog is quite emotionally charged and there are a lot bitter people expressing views that are warped.
From a business standpoint – selling the PC Company was the right thing to do – just look at Dell and HP and the issues they have right now – trying to stay in touch with the handheld devices as powerful as some pc’s does not work. It is a commodity business that drives revenue but profits are weak. We are a mufti-faceted company – SW/HW/Services/Consulting/etc. – it is a complicated business model that other companies are still trying to emulate without success. We are never going to be hitting on all cylinders or in all geographies at the same time. Go to business school if you need to understand this better. The arguments over a lack of vision – Smarter Planet and Watson are views of simple minded individuals – analytic s, cloud, Smarter Planet and Watson are drivers that we need to push even more. Certainly the software business is here to stay – not all that deep on whether we have tanked all those companies we brought in but I dare say “I don’t thing that is all true….we probably had some failures but much of what we bring to the table is top notched stuff that is far deeper than most of these people are able to understand.
My key thoughts:
* I think our service business is grossly miss-managed and poorly structured for the future
* Yes – finance has way too much control – while they are an important part of our leadership and necessary direction – just look at what we have turned into……..
* Our Senior Exec’s ARE out of touch with the rank and file
* Some of our mid-level executives (VP/GM) are book smart but pound foolish – they don’t know enough to come in from the cold and are only concerned with their next potential promo.
* HR is the absent minded professor here
* Morale needs to be addressed – bring back more awards and employee recognition – HR where are you?
* Reductions in force/layoffs – whatever you want to label them are here to stay – it is the new norm for better or worse
* All companies have to change – it will never be the – way it was – those companies that don’t or can’t change are left behind …………………..
* A company of 450K worldwide employees is different than a company of 100K US based – it just is …………..
Yes, I agree with the sentiment – we are not perfect as a company – we make mistakes – but we have done a lot of things right – a 100 year old company doesn’t stay in business without doing things right.
To close – I’m a 32 year employee of IBM – retiring soon – while I leave perplexed as to where we are heading – I give thanks that this company paid me well – allowed me to buy houses and put my children through college, pay for weddings – take vacations (although not all of my yearly allocation). I worked my butt off – huge – ungodly amounts of overtime – relocated – took temporary assignments – became a several million mile flyer on different airlines and took part in huge changes in IBM. I still say “thank you” – while sometimes painful – it was a good ride. I wish IBM well in future and all of you the fortitude to make a difference.
Thank you for your service. All the best!
This article gives so much of insight to what is going on in organisation like IBM. The organisation has compartmentalised so much and have created so many controls to make it more messy. While the organisation has started working on layer reduction, but this doesn’t seems to be impacting the layers of so called shortsighted, nimble foot Execs who are trying to cover their ass and not taking holistic approach to solve a problem. The Revenue and profit has become daily life of all leaders, they are not bothered to look at what are we doing differently to satisfy cleint and how do we differentiate from others while servicing the customers. Most of them does lip service and make decisions which is not medium term and long term. Since CEO is looking at quarter nos, all Exec down the line have become Team leads to manage monthly, weekly and daily. Servoices industry is all about people and IBM is missing that bus, it is now a commodity.
thanks. good insights.
Supplemental reading:
http://www.cringely.com/2013/06/20/ibm-to-customers-your-hand-is-staining-my-window/
Thanks. Some really good stuff in there.
good read
Thanks!
Stop offshore delivery and start selling computers again? What a load of codswallop. This thread is just full of bitter ex-IBMers
I love the use of the word codswallop. Lots of ex-IBMers in this thread to be sure, but I consider them concerned about the company they once did / still do love, not just bitter.
My husband worked for IBM for 25 years way back. He has now passed away but I remember how much we loved the company how dedicated he was to it. He started in the Store ad worked his way up to be a Security Analysist . In his final years at IBM when things were changing from the company supporting their worker he would say that IBM stood for Idiots Become Managers how true these words are today.
another unfortunately accurate TLA (three-letter acronym). I have seen hundreds of them for IBM; most derogatory.
This is an excellent and accurate article. However, all of these problems pre-date Ginny’s tenure as CEO. Of course now she is responsible for them.
*ALL* of the problems pre-date Ginny? How about #2; her lack of vision? That one doesn’t pre-date her. Regardless, that wasn’t the point of the article. The point was… these are the reasons why we believe she will fail – or said another way, these are the challenges she will have to overcome if she is to be successful.
I agree with this blog on most of the points. Especially i) vision is lacking ii) extremely slow due to unnecessary processes. iii) too many managers
I don’t agree on few points i) offshore is not necessarily low skilled. Some of the countries are producing brightest minds than US. e.g Mark Z( facebook). Facebook and Google have branches in India. They are enabling companies to produce best software.
So it’s the company who recruits people. Talent is available everywhere but it comes with some cost.
I hope IBM wakes up and recognizes these points to stay in race..
no doubts that offshore resources can be innovative and highly skilled – and when used that way, it works quite well.
when used as a way to cut costs and reduce service quality solely in an effort to boost the bottom line performance of the company, it seems to be bad for customers, bad for employees, and ultimately counter productive to the good and rightful long term goals of the organization.
I Don´t think it’s just the lack of CEO´s vision. IBM is a bureaucratic, has internal groups constantly damaging between them, has bought companies to destroy internally, without preserve what has made them successful, and is slow to respond to the market, the search for practical cases in its internal database is waste of time without any innovation and is not alignment with the SW manufacturers, the SOW doesn´t pose a solution is a very large document with no real value. With this elements how can increase the revenue?, IBM need a full revive “renovatio” or will be die.
die? probably not for a very long time, but I hear you.
It appears to me that the facts represented in this article are quite accurate. My experience with working with the executives in the IBM Armonk board room is that there have been too many ego’s and not enough thought leaders runnung the company. The strategy of the “Technology Team” Leaders is to do whatever looks like it will meet the stated ROI / GPM goals whatever it is and whatever it takes on a very short term basis. This process is usually done without the consideration of the IBM technology assets or the mobilazation of the employee base. The preferred path is to use IBM external business partners to execute the “Master Plan”. This always results in wasted human capital and no long term strategy for the company. The easiest thing the execs. seem to like to do is acquire S/W companies, Blue-wash them, raid and plunder them and then load the unemployment offices with their abandoned victims. I left IBM because of this mess and now work very happily and profitably as a proncipal in an employee owned globally based Consulting Engineering firm. I am much better for having made this change in all respects!
good for you – all the best!
Where are all the visionaries and forward thinkers IBM touts in it commercials and marketing pieces? When IBM (International Bowel Movement) has a poor quarter they resort to old fashioned Glen Gary Glen Ross tactics of threatening its workers with job loss and then laying off thousands. To do what? Motivate the remaining workers to get on the stick. Is there any evidence of creative problem solving or thought leadership in mid or upper management other than the interesting play of musical chairs they perform each year? Have you spoken to IBM clients and asked them about the level of support the receive after they sale? It would appear that upper management is going to drive the car into the ditch, but before they do they will strip it clean and line their pockets to the maximum.
Lots of feedback on how IBM commercials tell an entirely different story from the IBM that our clients see. I don’t even recognize the IBM in the commercials – I only see a fantasy of what they wished they were. I wish they actually did the stuff they show in their commercials – and so do our clients.
Too many senior mgrs, no moral, lousy pay.
Nuff said
yep; that’s it.
Agree on comments . In my opinion IBM is the best company of the world that will be ruined by their different levels of management, always looking for their own personal benefits neither their customer nor their employes.
this is a very consistent perspective we get from inside the company – unfortunately.
As an employee approaching my 20th anniversary at IBM, I commend you on the accuracy of the facts. Most observers don’t get so much right. However, many have tried to bury IBM many times. I wouldn’t write the epitaph just yet.
I do long for the leadership of Gerstner, even if he was demanding. He had vision from which IBM still benefits 15 years later. We have seen no indications internally that our current CEO has a plan of her own, and that makes everyone nervous.
To be fair, Ginni has one of the most difficult jobs in the world, and IBM’s competition all have challenges of tehir own, most of them much worse, and much more immediate. Critical mass matters. Having a Cash account of $18.2B gives IBM leverage that perhaps only two or three other companies enjoy. The more interesting question is how did the Cash account get from $15B Dec11 to $18.2B on Dec12. Look under the covers. IBM is quietly transforming into a conglomerate. Earnings are coming increasingly from its private equity specualtion and investment performance. Few people know that IBM is aggressively buying up residential real estate because it has cash, and the real estate is stressed and will appreciate again very rapidly, returning value to its shareholders as public corporations are bound to do.
IBM is morphing, and fussing of 3.00 EPS vs 3.05 is a bit of an over-reaction. How many companies in the world generated 3.00 in earnings in a full year, much less a quarter. You can check me, but I think no other company has a longer string of positive earnings than IBM…back to 1994.
I will confirm that working inside IBM is painful today, and our customers are sharing in that pain, which is a serious threat to any company. IBM is at war with its direct and lateral competitors, and survival to fight another day is the first order of business in any fight. There will be casualties. I could become one of them, but I see too much value in IBM products and too much critical mass for this company to fail long term. Still many best of breed products. Still a very good stock to own. The HR situation will eventually settle down, and the key is that in context of IBM’s competition, IBM is still mostly winning the larger war, even if losing battles to Dell servers, Cisco UCS, and agile specialty services companies. It might not be pretty, but IBM will survive while many will not. My suggestion to employees, clients, investors, and pundits is take the long view of IBM when considering any action.
I largely agree, but the concern is over the lack of vision for the future. The current environment seems to remain EPS focused with slightly less than a total disregard for customer satisfaction.
It is clear that Ginni will fail to lead IBM’s future. A CEO, who only has eyes open for Wall Street, not care about the key elements, the employee, will be abandoned definitely.
IBM over the last 8-10 years has fully transformed itself into a company more concerned with financial engineering gimmicks so that they focus on profit before ALL else. Employees and Clients are down on the list. This is a recipe for disaster that will have results similar to what happened in the “OLD” IBM under John Akers…No respect for employees and by extension clients = going out of business strategy. However, before that happens, there will be a cleansing of leadership, similar to what happened in the transformation from Akers to Gerstner
it seems difficult for IBM to admit its mistakes – even in the face of missing expectations and contracting revenue.
I hope that CEO can see this article…
Rumor has it — she has seen it, and is not all that happy with its content. Truth hurts maybe?
IBMer in silicon valley. The salary has been stagnating and benefits dropping like a falling knife. Management seems only care about the 20/15 target. So many good people have left or retiring. Also no vision in future products at all. Management and executives are only “yes” people to the upper management. Employee morale is very low and dropping. Management knows how to talk but no idea in implementation. IBM products are hard to config and integrate.
This is not a high tech company but a processing company that knows cost control well. However, any disruptive new technology has the potential to displace existing IBM product revenue. It knows how to talk about ‘big data’, ‘cloud’, and ‘visualization’, but its solution does not integrate well and poorly designed. Its service business will face increase competition from cisco, hp, dell, oracle, etc. It is early to say Ginni will fail. But for sure she is not a bold executive. She is not likely to make any major changes in IBM execution. She will steady the ship. She is like most large company executive, she cares only how to respond to wall street analysts. One thing IBM does well is cost control and manage cash flow. It’s able to use the cash flow to reduce shares and return dividend. The question is will large corporations keep the IT spending with IBM. However, if IBM cannot attract the best minds in high tech, then it is a tough task to compete in a very competitive tech world.
well said. completely agree.
This is also how I feel. So sad but true.
-IBMer
This is simply a recipe for disaster similar in magnitude to what happened during the transition from Akers to Gerstner, but for different reasons. IBM has transformed totally into a cost, cutting, financial bean counting, financial engineering focused company. Bean counting and profits come at the expense of it’s people. This will not last. There WILL be a dramatic transformation coming in the future similar to the transition from Akers to Gerstner. It will take time. There will be a flushing of the leadership and it will be for all the better, but they will have to go through the hurricane wringer once again, just like in the early 1990’s
International billing machine
There is another important reason why IBM will fail unless things change – the complete demotivation of the customer-facing sales force.
For the last few years, unrealistic sales targets have been set simply to pay less in commissions and bonuses. Reps who make their numbers early can expect a huge quota increase. Technical staff know that a sale only results in more work, with no increase in bonus or salary. Therefore, there is no real incentive to actually sell, which is reflected in IBM’s lack of revenue growth. All the good reps have gone elsewhere, where they can make some money.
The executives need to take a basic psychology course, because the stick never drives behavioural change except downwards, and the carrot is far more effective in producing results.
We have heard this same information from many IBM sales representatives.
Exactly true! The top execs. think they know what is going on, but they are either clueless or worse, being deceptive in what they have done to the rank & file, especially the sales force. This is what happen its when you focus ONLY on profit and EPS AND incent the top execs ONLY on profit and EPS NOT revenue, client satisfaction, employee satisfaction…
I agree with this article, having experienced IBM twice in my career, for 10 years in the “good old days” pre-Gerstner, and again as an acquisition for another 7 years in the Palmisano period.
People can debate whether the IBM strategy is right, whether the company will fail, and whether Ginny is doing a good job.
However there is one thing that can’t be argued – employee morale is shot, and IBM simply doesn’t care. When a company withdraws cups from the kitchens, and forces employees to dring water from the tap by cupping their hands over the sink, that says everything you need to know about what IBM thinks of its employees.
hadn’t heard that one yet.
I’m pretty sure Steve Mills is secretly smiling at this very insightful article.
I hadn’t heard the “no cup” story, but I will tell you we had to buy our own notepads because there were none to be had. At the same time and while IBM employees were being terminated, many thousands of dollars were spent to ship pallets of obsolete, broken hardware back to corporate storage. There is no way any metal reclamation could have recovered the money and time expended.
I’m a proponent of eliminating waste and increasing efficiency, but IBM has gone beyond that in a search driven not by the “voice of the customer” but executive greed. They have lost what Watson held as basic concepts in regards to the employer/employee relationship.
In the defense of the off-shore teams, I worked on a daily basis with the teams in Pune and Beijing and, some language challenges aside, I found them to be both technically adept and competent.
I’ve been gone for a few years courtesy of a reduction in force and have landed elsewhere. I will say I only miss the talented individuals I was privileged to work with (some of whom were also let go and have since moved on to better things). I don’t miss the corporation in the least.
I was proud to be an IBM’er (almost 15 years), but you would be hard pressed to compensate me enough to work for, or with them, again.
Not only that, but trash bins were also removed from IBM premises in a number of locations. Not having to hire someone to empty the bins, and instead have the employees take the trash either home or to the clients (who do have such amenities) was an example of the kind of industrious initiative that IBM management comes up with to impress Ginni and help IBM reach the Road Kill 2015 EPS target.
You should have seen the pile of trash that was stacked at some desks the first week this change was implemented, before a notice went out that employees had to get rid of it (though no suggestion was given as to how).
16 years at IBM and had my fill last year, as I couldn’t muster continue to support the husk of a shell that IBM has become. Ghouls at the VP level and up that are gnawing on the bones of what was once a fantastic company, a company I was proud to work for.
I still have friends hanging in there, and it sadens me to hear how their situation continues to deterioate quarter by quarter. Soon even the most “blue” remaining talent will wake from their dreams and see that the IBM they depict in their mind is just a product of their imagination, and no longer exists. When those I care for has exited, then Ginni and team can drown the baby or bury the corpse best they whish for all I care, but as long as I have friends there I continue to take the mismanagement of the company very personally, even if I’m now on the sideline.
Exactly Right On! and you know what, there will be a huge shake up in IBM, JUST like what happened going from Akers to Gerstner. Even though the reasons/causes are different, the RESULTS will be the same!! I will definitely bet that there will be a flushing of the upper management in the not too distant future, with a whole new era ready to begin within a few years. The signs are all there….
Very true story. They change their policy where every they find money saving without caring for
employee.
IBM is full of idiot and hopeless Manager doing nothing.
Managers are thinking that they are GOD Father of this company.
Being an ex-ibmer * 2 ( that is twice !) and having worked with several other companies of global business nature in the industry and having led several initiatives and innovations in both services and product business I can tell you that IBM is the best place to work, to realize your potentials, to serve customers and achieve satisfaction. I have interacted with customers across globe and serviced them on both “Machines” side and ” Services ” side, have worked with other Indian as well as so called “American” companies, I can tell you the customers have full faith in IBM delivery and promises and that is not without reasons. IBM is truly international and has successfully achieved to pick right talents from India not just because of COST leverage but because of the availability of talents. The article is wrongly suggesting that Only technical talents are available in “America” and the cheap resources are in “India” in off-shore model. Think the writer is either not woken up yet to world realities or pretending and living in past glories. The reality was realized by IBM a decade ago and a strategy of increasing the footprint in India was taken. That has resulted in actually growing the company more stronger and giving more global capability. I have worked closely with Ginny’s works in my earlier tenue when she was not yet CEO and I can tell you that She will not FAIL but will LEAD IBM to a better position. I am only Sad that I am out of IBM and still wait for the day I can become an IBMer yet again- particularly to be part of Ginny’s team of transformation. Writer should really now revisit – since he wrote this ( 2012?) and see the changes in the offing. The drop of quarterly results or share values are very normal in business and not driven by strategies but more localized issues. For strategic impact one has to view and see a long term perspective and growth chart. Wait and Watch this space.
our clients who rely on IBM certainly hope you are absolutely correct.
Glad you enjoyed the Kool-Aid.
Lol! Hahahahah.IBM is the best place to work? I’m feeling sad for you. Well, from your post, I’m convinced not only IBM is the best place for you to work, it’s the best you will do. The only time I’ve laughed/ laugh harder is when I look at codes written by ‘talents’ like you
Yeah, as a 30 year retired IBMer, I’ve seen the crap code from the Indian “talents”
As a support engineer for several huge ibm storage products, I have to say that the Indian talents are one of the least trained, most frustrating part of my job. They open support tickets so we can hold their hands because they know squat about the priducts they’re supposed to be administering (like TSM). Whatever we do to try to help them learn what they need, it backfires: it promptly escalates to their managers which whine to our managers, which end up chastising us in the end. In turn, our managers to NOTHING to improve the situation. As long as the metrics LOOK good and they get a 2 or 2+ PBC rating, they don’t give a crap about us nor the customers who need real support.
BTW, totally true: ibm products are some of the worst to integrate and support. Especially TIP, WAS, DE, and all the other crap that some idiot manager one day decided was a good idea to integrate and got a PBC 2+ for it, leaving us support and customers to do the real work.
at least in real world man should ride the horse, not the other way around. Now feel like the market is riding IBM – IBM is not driving the market anymore like what it used to be. it is “hauled” by the market, which no one 100% knows about in reality. doing so causes the whole company to go after the fancy “buzzwords”.
I think it is accurate, and well written. After more than 15 successful years at IBM, I finally had to leave it. It was disappointing to see the changes that IBM has introduced. Even most of the negative comments were exactly what I have been seeing. It is sad, I put a lot of blood and sweat into making products for this company, and the parasites, favoritism, … greed, … have put it on a path of ruins.
Now, outside, I am at a good company, with great values for products, and for the employees that produce them.
IBM wasn’t interested in change, so I had to make the change instead.
I’m sure the smart folks there were sorry to see you go – and yours is an all too common story I’m afraid.
Lot of dead meat walking around..and don’t need that many layers of management ..it’s only the workers they attack when. It comes to layoffs so they can save themselves….
the many layers of management is often referred to as one of the critical problems in the company. Those layers of management have actually grown under Ginni, when by all accounts, they should have been reduced dramatically.
This will all be changing shortly…One or two more quarters with no revenue growth and IBM upper management will be right on the hot seat…
All it’s true… I ran 3 months ago… IBM bought in 2010 Sterling Commerce, the day after we no longer sell anything…
this was one of the acquisition examples I was referring to in reason #6 of the article. Thanks for publicly confirming this.
While I agree that Rometty has work to do, I don’t agree with this analysis. No company prospers by doing what they did 50 years ago. Resisting change was a large part of what got IBM into trouble prior to Gerstner.
Nor is a focus on the money wrong….I work because they pay me!! Should the company be any different?
But I love the description of Watson as an enterprise level Siri
Staffelter Hof has been making wine since 862. So that’s 1151 years.
I also don’t think I’m trying to suggest that making money is wrong, but our clients believe that focusing on EPS as your primary goal *at the expense of* customer service is a misguided long term strategy.
Steve, you are absolutely correct!!They have neglected the employee and the client and the WILL pay for this through lost revenue and then profits and then REAL change will occur at the TOP…The change will be every bit as dramatic as the change from Akers to Gerstner, and all for the RIGHT reasons…
I have been at IBM for over 8 years and seen the company lose so many good people in that time. They screw their staff to make a profit, people will only be screwed for so long and then they leave. IBM is process bound and heading for disaster. Road Kill 2015
Ouch. Bold prediction.
the goal of the execs, is to extract the maximum wealth for themselves. It does not matter if the company continues to exist once they have left does it?
The above is the actual goal.
The stated goal is to maximize shareholder value. Not customer satisfaction not long term health of the company or any other form of ‘good’.
Since the execs are rewarded based on the share price, any fool can see how the two goals are one and the same.
How does a company increase share price? Sell assets. We do that. Buy our own shares. We do that. Lay off as many works as possible. We do that. Maintain the farce of being a technology company, we do that by buying other companies, taking their assets (customers), laying off the employees.
If we cant lay people off fast enough, we sell a chunk of IBM to Lenovo, tell the employees they are not being fired, they will become Lenovo employees, and then Lenovo fires them 18 months later.
Will Ginny be a success in doing all that? Sure any fool can do this.
Will IBM exist as a viable company. Nope, that is not in the plan.
If exec remuneration vested only in 10 years, then you would see very different actions as there would be an incentive to make the company a success, not the execs.
well said. Many similar thoughts are echoed through some of the article comments, giving them ring true with more volume.
I agree with everything you say, except that IBM will NOT go out of business. With a little “Divine Intervention” the leadership will be replaced, just like when Akers and his admin were removed when the “ship was sinking” and a new era was brought in with Lou Gerstner. It will be very similar to what happened during this transformation to Gerstner. The pieces of the puzzle are already coming together…Watch how events unfold….
The company is a complete mess internally. It’s not just sales, it’s management, senior executives, the fact that 20% of the workforce does 95% of the work. There is so much dead weight here (and shitty nepotism that favors arrogant offspring of arrogant executives) that it’s produced a management system based more on politics than merit. The hardest workers are typically the least rewarded.
We hear this quite often as well. Too few doers, and too many managers, where career management is seemingly much more important than delivering customer value and producing actual results.
Steve, this will end very badly, however, it will be VERY good longer term as IBM will go through a transition EVERY bit as significant as the transition from Akers to Gerstner and from what I can see, the tea leaves are lining up just perfect…the stage has been set and the play as begun….watch how key events and indicators are unfolding as we speak..
Amen, to that comment. I work for one of the IBM “Royal Family” offspring, married to another royal family member. A complete place holder that can’t be fired despite doing virtually nothing other than drawing a $250K+ salary. Nepotism, check, arrogant, check, political, check, dead weight, check.
So fun to read this validation. Thank you Steven.
yup, it seems true but comparing to Indian IT companies like TCS,Infosys,CTS IBM is much better.
I agree with most of this article. Ginni should think about this seriously. Do we really need 400,000 employee in the company? and have quite a big management team.
For technical members, when we’re doing the development work or handling critical PMRs, there’ll be quite a lot members to push you to deliver the code/fix as soon as possible, but seems the ones who is doing the real work is less and less, there’re lots of architect/1st line mgr/2nd line mgr/director/product manager/release manager/test architect…
So lots of good talents left IBM finally, and this vicious cycle is becoming more serious every day. When this situation can be ended?
I think the writer needs to blog without prejudice, he needs some serious home work to do…
The writer clearly did do his homework. This is 100% accurate.
thank you. we did study this by talking to hundreds of IBM customers.
I really agree with what the author says, IBM is now low profitable bussiness , and this is frustrating many IBMers inside the company, there is one very important point that IBM forget that is to keep the morale without which IBM will have nothing more to sell finally. one of my Ireland comate says, “what we do here now, is just a job in IBM, nothing else… “.
Rakesh, Lord knows, what you say makes ABSOLUTELY NO SENSE. The writer is VERY accurate!!
Curiously the only readers who aren’t agreeing with the article conclusions are *esh individuals, that says something
Today’s quarterly results (1Q 2013) and a $17 a share stock price drop, certainly provides some support for the conclusions reached above. I spent 23 years with IBM, last as an executive in Global Services. I feel much of the above is true, sadly. Love IBM, being an alumni, and want to see it grow again. Saddens me to see so many businesses we made great get sold off or abandoned…PCs, Networking, POS. IBM made the first real smartphone…now we abandon the race to Google and Apple.
IBM = International Business Machines
no Machines any more…its all Services… or Software… so, International Business Services?
or IBS
or irritable bowel syndrome…
either way, I feel sick.
We have just been told that the Service Delivery organisation MUST support the Sales Team – in order for them to meet their targets….these same Sales guys that drive Porsche, BMW, Mercedes Benz etc and get a bonus that exceeds my annual salary. Erm…no Sales need to sell, they need to Sell something Deliverable, and we should be allowed to Deliver it. Sales need to stop selling UNDELIVERABLE services, that lose money and cost reputation. The bean counters need to back off, and Management need to grow a set of balls, make decisions and run the Business like a business. Stop trying to keep the Shareholders happy, and focus on the Clients and the Staff – the Shareholders have had their rewards – the Stock is at its highest EVER… with Moral amongst the staff at its lowest ever. It used to mean something to work for IBM, it used to be something you could be proud of. Now its just a job…not a career or a vocation.
I am glad the top execs get paid in hundreds of millions of dollars – good for them, but if they want that to continue, they need to keep in mind that the business needs to make that money first.
The salvo on outsourcing and the claim of IBM still being regarded as an American dream is funny. From my personal experience i have rather found that most of onshore service people lacking proper emotional quotient and mostly placed in the job through some connections while in most of the scenarios you need to be extremely qualified to get same job done from offshore. I won’t say that the claims are wrong but at least a few of them are stubborn and scented with demographic dogma.
I’d be interested to read an update from the author that addresses IBM’s decision to hold off company contributions to employee 401k accounts until the end of the year – if you’re still an employee! (No ‘vesting,’ either.)
That seems like another short sighted idea from some “Financial Wizard” to me!
Dear Hugh,
You don’t know at all what was my position at IBM.
IBM is the temple of the Dunning Kruger effect.
Big Blue is the most cynical company I’ve ever seen.
People with no ethics are successfull, but they never left a mark in the History.
@Rocco – You’re one of the typical IBM “kool-aid” drinkers who is either so far down in the bowels of some Delivery Center or employed in India that you are insulated from the realities inside. Your Pollyanna views are great, but will not serve you well during the upcoming RA’s.
She will succeed !!!
#6 is the core of the IBM business model. As long as IBM will be able to acquire innovative software companies IBM will be highly profitable.
I’m not sure that buying companies alone is a sustainable model. Looking at HP’s recent $11 Billion acquisition of Autonomy, and then the $8.8 Billion write down illustrates the risk quite clearly.
Any successful business has three competing yet symbiotic constituencies: The owners, the clients, and the employees. If any one of these groups is persistently neglected, the eventual result is the failure of the enterprise.
Unfortunately for IBM, the upper echelons of the company do not belong to any of these groups. They are parasitic with no lasting stake in the success of the company. To the extent that they are compensated based on a reward system that discounts the worth of the company’s future ability to survive, their decisions and strategy will necessarily be short-sighted and corrosive to all three of the above mentioned constituencies.
I was fired without cause in 91 after 10 years. I did seek the top Labour Lawyer in Canada to obtain what compensation could be garnered. Of the hundreds of Management that I knew, I would only consider about 2 of them to be competent. The rest were entirely technically illiterate. There have been evolvements since that time, though rarely to the positive. In reading this article and the ensuing commentaries, it is evident, the greatest failure of this company now, as was then, is an overwhelming disrespect for its’ technical personnel, and for its enduring support for their ineptitude in Management. I have only “shorted” an investment of a company once, & this was IBM in 91. I made a substantial return in the thousands, because I witnessed the ongoing corruption. I feel for the “abused” technical people & their undying contributions. This company I expect will fail, as they have not learned to respect who truly provides their revenues, and therefore their successes. It is possible IBM will survive, however if so, it will be a fraction of what it once was. The acronym IBM in its’ truest meaning, is where I-diots B-come M-anagers. Good luck to the Techies there !~ & IBM Management you are the leeches of the Business world.
While much of what I read here is likely accurate, I believe it’s becoming outdated. I work for IBM and at this moment in time, March 2013, things are changing FOR THE BETTER. I mean that sincerely. Ginni is NOT failing at all. In fact, she’s assertively leading a culture change and I’m glad to be here to witness it. I’ll post again in 6 months if things fall flat, but right now, I’m happy to be an IBMer!
Enzo, well 8,000 MORE layoffs occurring and morale is even worse now in June. Are you ready to post again!!!!!
Enzo, You said “Things are changing for better”. Do you know people are getting laid off or are asked to find another job in or outside IBM withing 2-4 weeks. YES, it is true. It happened in US, Canada and Now in India.
Steven Zolman does not know what Ginni can do or is doing within IBM, that’s very clear……shê is transforming the organisation and the results will have a long term positive impact. if only people understood what it takes to preserve the core DNA, a peek inside IBM now and what the leadership is doing and the steps being taken will be a testimony to that.
That transformation you’re talking about (and I have no idea what you’re talking about, but maybe there is one and I don’t know it) is not demonstrating any positive results for IBM customers. Our customers are being borderline abused by piss-poor products and support. And our in-the-trenches management has reached the point of saying “I can’t help you, Mr/Ms customer – I just don’t have enough people.” The only transformation I’m seeing is one of despair, apathy and grief. What am I missing here?
Exactly the same feeling I have. We have a customer in Asia and more than 10 executives or higher level visted this customer in last year, most of them came from worldwide. But customer told me they never got a clear feedback to their expectation on product improvement. Everyone went there and heared customer’s complaints but no one gave a response.
Kalyan, what are you talking about??? IBM has not been able to grow revenue in years, has played financial engineering to drive profits so that the top execs benefit and morale is rapidly worsening. Here’s a company that has bought over 150 firms and still can’t move the revenue needle…IBM is simply playing financial engineering at the EXPENSE of its employees and its clients….Lord knows, there will be a transformation and a flushing of leadership EVERY bit as significant as the transition from John Akers to Lou Gerstner. In fact, the ingredients of this storm are already coming together..Watch and learn how a company will once again reinvent itself to focus on Employees and Clients FIRST before only focusing on profits..it will be something to watch over the next few year…
Most of this 10 criteria are true for many more IT Companies. I bet collegues from Oracle, HP etc. would agree. The post describes very well how difficult it is to transform such a big organization. Unfortunately, today’s management grown up when the environment was much easier to handle. They don’t have an answer how to react to crisis and new challenges. I mean, what kind of business goal is it, to define a stock price or to improve the world ?? sure, it’s important to attract investors – but stock price to me it’s not a strategic goal – but a result of a good strategy.
Well, here’s the challenge – how to define a strategy for a croud of 420’000+ employees + mio of stake holders ?
difficult to answer – may be it would require complete new approaches. May it would require to refocus and resize the whole company. Ginni has received a big elephant again and needs to find a way to dance again – but with new music and new dance partners. Good luck
Unfortunately the title of this article is misleading. There are no 10 reasons why she will fail described in the text, there are just 10 possible challenges the author believes she is facing.
I am not sure when this was written but the first comment is dated Mar 2012 so that gives me a starting date. Point #10 has not happened…yet. They did sell Retail Stores and that was probably the rumors referred to in point #10. I hear more is coming so Services is not out of the woods. I think many of the points made by the author are valid to a degree. Internally we talk about these issues often. It is frustrating watching this company reinvent the wheel as far as policies and direction are concerned. Changing the terminology for previously abandoned business techniques is annoying. I don’t now, maybe the thought is the constant change keeps employees from being complacent or bored.
Executive pay is also discussed often among the rank and file. Fairness is always the subject. The 401K delayed payments is the latest in a long line of earnings ploys that anger many of us.
The one thing that may keep IBM viable longer than many people think is, who is better in this business? Dell or HP? EMC or Cisco? Microsoft? All of these companies have problems. IBM at this point in time is probably the best of the lot. The innovation in technology is not near the level it once was. IT is a maturing industry. There are no more leaps to be made. It’s in small steps these days.
And another thing to keep in mind with all this off-shoring going on, our government’s policies have tremendous affect on the decisions large companies make. The more government interferes, the more likely those old “unintended consequences” come into play.
Sadly, this article is accurate. The first thing Ginni needs to do is not only get rid of MANY/MOST layers of management across the ENTIRE company, but also reduce the number of managers at each remaining layer.
Here in research we are paralyzed by the management/executive bloat which results in our official projects being 80% posturing and only 20% substance, and we need to sneak around to do our good work; most of the organizational effort is spent on managers politic-ing and fighting each other, while researchers are left to fend for themselves to actually do good work. Watson is nice, but we could have many such quality results if the managers would get out of our way and let us actually do our jobs. Instead we have most people working on stupidity and only a “blessed” few, on the occasional project for which research management actually takes some responsibility, get to do real forward looking work as their full time job.
We could save billions AND have much better technical results if we would have a much flatter organization. Get rid of all the second and third line managers – they just add politics.
The second thing Ginni needs to do is force the remaining managers/executives to actually make decisions AND take full responsibility for their decisions. Today, they do neither; when its layoff time, the technical experts get fired and all the managers/execs who made the wrong calls to begin with keep their jobs. Employees can do everything their management asked and still get killed at PBC time because the management called the wrong shots, but its the employee who gets hit instead of the managers/execs.
The third thing Ginni needs to do is put an end to this stupid push towards higher earning per share. It’s ruining the company. We need to get back to doing excellent technical work and having great revenue as a result. EPS is a fig leaf to hide the fact that we are disintegrating due to management bloat and executive aloofness.
IBM is still a great company with good people and lots of innovation happening every year- Ginni is smart and understands one thing that most companies forget over time. This is still a people business and relies on senior leaders to understand and respect relationships with employees, clients, partners, etc.
She will right the ship -no more short cuts – in order to be sustainable it will require a few hard decisions about products services and people – and I have great hope that she will get it done. I worked at IBM for over 12 years and although I have moved on – I am buying stock in them with confidence!
IBMers commenting negatively here don’t see necessarily the FULL picture. YES, the company is being run by finance…duh, have you been privy to the World Economy lately? #1, above, couldn’t be FURTHER from the truth. Services are becoming fastly a lower-margin commodity, HOWEVER, software is a HUGE margin…and I like it in the Software Group, currently. #3, 4, and 5 are unfortunately quite true. I don’t believe for one minute that this will kill the company, let alone harm Ginni’s position as CEO.
Worst is, you all are not seeing what is happening in GTS, services are going, and the service is getting worse across outsourcing and managed / shared. People, good people are being let go, and no replacements.. makes the job very hard to do as a SDM, there’s no one left to go to.
Bob, It is good to hear a SDM admit they are struggling too, and for what reasons. As your ( possibly, who knows ) employee let me tell you I don’t blame you. I can see that our pain is coming from far, far, up the chain..
The worst is: you don’t know what’s wrong until it is too late. Very well said article and I bet Ginni should has read it silently and awaiting for more on “What” & “How”.
Time will tell. All the best to her because IBM has been & I hope will continue to define America’s success. Forge ahead, Ginni!
I’ve been thinking of writing a letter to Ms. Rometty to express the parallels I see between her and Carly Fiorina. Both were positioned to fail before taking control of the business unless they made bold and accurate changes to the business models. IBM is failing by cannibalizing it’s skill base, it’s product base, and it’s organic business at large. Each time they purchase another firm they add it to the organic business junkyard. The large, highly advanced U.S. skill pool is being decimated in lieu of cheaper support. I am part of this mess and I can assure you there is nothing wrong with the U.S.A. education system. The US has the highest skilled labor pool right out of college. The customers of IBM are being short changed and will continue to drift away from this strategy as they need stable and highly skilled support to ensure their businesses are able to compete.
I’m discovering this analysis today, very well documented. BTW, I resigned these days exactly for these reasons and conclusions I made myself. I am in the field at IBM for almost 30 years and working hard, I do not see a motivating strategy and for several years there is no relevant incentive for people working in services. The statements above are also true out of US, in Europe … really too bad.
Good insights. As someone inside but below the executive ranks, #3 hits the nail on the head. Business and technology decisions in IBM are no longer made by the people who should be making them, but by the folks in finance and legal. Morale is the lowest I’ve seen it in my 14-year career, and TRUE talent is leaving the company in droves. It’s sad.
Oh, and BTW, they told us today that they’re keeping our 401k match until the end of the year, starting in 2013, instead of distributing it in each paycheck. So glad I can help you accrue MORE cash and interest, IBM! If you’re not employed on December 15th, you don’t get that year’s match on December 31st. I wonder how many layoffs will be on December 1st.
IBM is in a death spiral.. it was a good company to work for in the late 90’s, and has been consistently selling out the most valuable asset a company has (its best employees) for short term stock gains.. that benefit overcompensated, horrifically bad top management. Making customers happy is the lowest priority they have. I have been with them a long time… but am jumping ship… Disney and State of TX got it right.. Sell your stock before it tanks.
I just received this **amazingly accurate** analysis from an IBMer. Great job
I was a Vice President in services years ago and anyone who spoke against the outsourcing model was considered anti-IBM when it was evident that finance was calling all the shots and long term be damned. I worked a number of initiatives she “participated” in adding zero value, insight, knowledge, or know how. They will not promote anyone to the top who did not attend one of five ivy league schools, irrespective of their value and accomplishments. Deny Welsh is living proof of that. When the finance guy got busted for insider trading, she was the tallest midget left standing. The shell game is finally coming to an end.
and how much money does IBM spend with Gartner each year?
While elements of what you say might very well be true the overall story is more complex than the picture you paint and like it or not the only constant is change and that always challenges everyone, forcing us to stretch ourselves and improve. Whether IBM has got it right or wrong is not for me to say, but time will certainly prove it -one way or another
Gartner seems to think she’s got it right for now.
According to a recently published document.
Vendor Rating: IBM
Published: 29 June 2012
Overall Rating = Strong Positive
A random look at a few details of the rating include Strong Positive for Strategy, Marketing, Organisation and some of their market and service offerings…
Dear “44 years IBM-mer”
You, and people like you are exactly the cause why IBM is aiming to crash.
You understood nothing about the article. “$20 EPS by 2015” is just not a valid target for a technology firm!!! It’s only valid for a Wall Street firm.
The only valid target/vision is CUSTOMER VALUE.
If IBM leaders don’t realize it and start acting for it, the company will go down in flames no matter what else is going on in the meantime.
By the way I’m also working for IBM – the Hungary branch. We here would so much like to boost IBM’s value by adding our own… if only the company would let us do that, and not smother us with bureaucracy, try to measure us by systems developed for production(we’re doing services, after all).
I agree with 95% of the article, with one comment: Wake up, USA, there’s life outside your borders, intelligent life!
32 year veteran of IBM, the last half in services. From my seat in the business, everything in the commentary is 100% true. The author must have been a long term IBMer to comment this precisely and accurately.
The only thing I would add is that in the services business, our hands are so tied by oppressive management and worthless bureaucrats which treat professionals like children, that we can’t keep clients satisfied.
Without radical reform, IBM will gradually die. To paraphrase TS Eliot in “The Hollow Man”, IBM will die “not with a bang but a whimper.”
I sold my IBM stock at $208, because the current strategy is not sustainable. Sooner or later, those vultures will come home to roost and IBM will no longer be able to financially engineer their business results.
I’m not certain that selling off the services business would be a bad thing for the IBM employees that work in it. Nobody can run that business worse that IBM has.
Last, the author leaves blame for this situation with Sam and Ginni – which is entirely fair. I think credit should be shared by the IBM Board of Directors which has allowed this travesty to occur. I have zero confidence in their competence.
I have never seen a company which manages solely by their stock price lead their industry. If you want to lead the industry, make it a priority and the stock price will follow.
I think the writer is a bit general throughout. As an IBMer I certainly don’t want to see skills or innovation have less focus. However, I do recognize that the services business is highly competitive and to stay in the game you must be cost competitive.
There are huge challenges since the world wide web gave anyone the ability to support a client from most any part of the world. Being in the US I do see many of my co-workers dealing with more work and stress than ever before. Definitely more than almost 20 years ago when I joined the company.
I am concerned about the US. We were an industrial society until the point when we helped build up other countries after the war(s). We went to a services based economy until the internet allowed that to be done from about anywhere……I don’t see the country evolving to a new kind of society to feed it’s people.
If these thoughts are true we may have seen the peak of the US and are just going to watch it decline……Please tell me I’m missing something here.
I see that the comments show the various points of view that you can get from working in a big company as IBM. I work in the Argentina branch, and it is practically leaving the country to be replaced by India. I’ve worked with them in the past few months and I have found very few effective people that were correctly and strategically placed as managers or project managers. They’re the only ones with whom you can communicate properly. Otherwise, if you need something from a SA or any other regular employee, you’re lost. I’ve seen many capable argentines being laid off as if they were a piece of machinery that was rendered too costly to keep on working.
This article shows a very short sighted view on off-shoring. It’s described as if the only efficient market is the US. No, there are efficient and talented people everywhere. Also, sometimes the less-skilled employees come out of IBM as the better fit due to their training and experience in the company. I’ve seen a lot of high-skilled (by that I mean, having been in university, studying engineering) that do not work well in companies because they just don’t know how to behave or to adapt. It’s just relative.
What I’ve seen that is horrible and has done great harm is the continuous search for further specialization. Distributing one team’s work in many others and having one person do many accounts’ work kills efficience and shows how dumb their view of structures is.
All in all, IBM should have high-skilled employees on strategic places where they know it’s necessary, not everywhere. That’s a smart move they’re not following. Also, offshoring should be more smart too- moving to other countries is not always a bad thing, but should always be well though of beforehand, instead of only looking after the previous costs, that reducing salaries by offshoring ends up with higher costs due to accounts leaving and processes being misunderstood or less efficiently followed.
After been 30+ years in IBM, I see how the motto : IBM means service is gone !
It is the author’s view, and an expanded opportunities for IBM. But as an IBMer and lover of Knowledge Management. from where I see IBM. It is the only company which provides us with collaborative opportunities within a company. And anybody who knows Knowledge Management, can understand how the collaborative opportunity tagged with global structure can produce Innovative surprises. And Virginia “Ginni” Rometty is leader who know how to ripe and harvest such fertile fields.
Huh?
I completely agree with this article. IBM is being ruined, skilled people are laid off, projects are struggling etc etc.
This all results in a ever decreasing moral and motivation by the employees, which also does not help to save IBM.
I am an IBM employee… it’s a good article and I agree to 99%. IBM will fail if we go further in this direction…
But of course, I guessed you are a finance guy. That is exactly why you think a 20 $ EPS is the right strategy! wake up you idiot, this is not a wall street brokerage firm where you talk about strategy only in terms of EPS. And you still believe that so called ‘Dream Team’ of Fortune is by merit? come on man, everybody knows that these magazines will write anything that their biggest patron asks them to… In a nut shell, this article is bang on target. The company that Lou Gerstner revived is being killed by his protege (Sam) and the last rites are being performed by his (Sam’s) protege…
I agree with the other poster re:”44 year IBMer”. You – YES YOU – “bean counter” are the very reason why IBM is in 95% of the state this article documents. I’ve been in the company for well over 10yrs and I’ve seen the wonderful work Gerstner did to rescue us. It was never a long term solution – just a way to get the company back on track. Ever since Palmisanio (and now Ginni) have taken over they have not seen this even though Palmisanio was right there with Lou watching. Instead when he became CEO all he did was hand the reins immediately over to the bean-counters (like YOU in finance) and let them dictate the company policy and management direction (eg this stupid $20EPS target also known as the “2015 road kill”.). 10yrs ago we (Australia) use to manage a 60+ team with just 2 managers. Now, with an ever decreasing team (thanks again for those cut-backs!) we now have 3-times as many managers! Only the first-liners actually do any work. The rest sit around all day working on their “company social perception” (translation : stuffing around on the web) while those of us who are actually providing software products and maintenance (software not only needs to be developed but fixed as well) get hammered with even more and more “overhead”, less productive tools (due to a corporate mandates) all while trying to do more work with less people in the same about of time.
Go get a job in a bank where bean-counters belong and leave the technology to those of use who actually understand, work and develop it to how the remaining IBM customers actually want. Before the company is left in ruin!
The author of this article clearly has his head up his *** and hasn’t got a clue of what he is talking about. I’ve been at IBM 44 years….yes, 44…not a typo…and have seen it all and can assure you that IBM today is a sound and well run enterprise.
There is a strategy. There is a profitable annuity revenue stream (yes, stupid…it’s called Services). There are very profitable products -otherwise known as software. Just ask Larry Ellison if he doesn’t agree. And BTW, SW produces a nice revenue stream on its own. Not to mention that the strategy of buy vs build is brilliant….
There is a clear strategy….$20 EPS by 2015 and a clearly understood path of how to get there. IBM’s portfolio of offerings is the most successfull mix ever.
We have a CFO that just got voted to the Fortune executive ‘Dream Team’ and have senior execs a mile deep that can handle any part of the business at the blink of an eye…and that includes Ginni.
Jettisoning low profit, high volume products is only something that HP can dream of doing…and IBM still makes the best, fastest and most secure mainframes on the planet (that would be in the category of ‘producing products’, dope).
You could pay 20 IBM execs with what Drerek Jeter earns, or what Michael Jordan earned in his day…and probably still does…
I defy you to name one single company that IBM has ‘bought, sucked dry and left for dead’. There has been no HW company purchased in the past 10 years, just sound SW outfits that enhance the portfolio.
If you want an opinion on whether IBM is ‘going down the tubes’, go ask the stock market. My advice buddy, is to get into another line of business, because you are truely without a clue as to what reality is at IBM. BTW, I’m in Finance and I do know what I’m talking about.
Rolm, Lotus….
I couldn’t agree with this article more… They just sold of POS business in 2012…
Funny thing is Sam already did all the burn and slash so what is Ginni left with? Selling off parts of the company…
By putting all there eggs in one (services) in one basket they put the entire company at risk. You don’t see an investment agent put all his money into one stock, he diversifies to leverage and reduce risk.
What Sam and the current management team failed to see is ITS the PEOPLE that make up the company… By getting rid of all the good experience people your left with a product that isn’t very good.
IBM new model is use 4 outsource people who mess up who cares we make $$ for now.
IBM reputation is going down the tubes as more and more companies they services stop using IBM because the horrible quality they are producing. This reminds me of when Ford use to be quality job 1 then all of sudden they never mention quality.. look at what happen to them… now there back to focus on QUALITY…
This analysis of IBM’s situation and challenges in front of its new CEO looks well documented and pertinent, though sometimes a bit caricatural…
Approximately 10 years go, IBM corporation avoided failure thanks to Lou Gerstner nomination as CEO; he was able to articulate a new vision and strategy which lead to massively invest the IT Services market where IBM’s people can bring value and sell their knowledge. It worked great, but it looks like a century ago. Since then China, India and Brazil are booming, finance rules the world, communication is as simple and easy as breathing and two major crisis(internet and finance) occurred.
Alike IT products, IT services market has sharply evolved, and IBM must transform to follow its evolution and keep succeeding in it: this requires investing in transformation which requires not only money (not a problem to IBM) but also people with right and new skills, senior experience on products and integration. Which is not something we find by cutting jobs in western countries, replacing them by low-cost hiring or subcontractors in the emerging countries. This only allows to deliver low-cost services, and low-cost is a way in which IBM cannot compete nor succeed.
Alike economy, IBM has moved from a ‘technology and product based’ vision and strategy, to a ‘finance driven’ one. Look at it, the road map 2015 (fully supported by Warren Buffet) is all about reaching $20 per share. IBM is spending billions each year buying back its own shares, to meet this goal; while it dis invests in HR assets education and evolution. Explaining that customers want ‘low-cost’ and there is no other way round. Advertising technology or concepts that are not mastered nor safe yet to make new markets. The only escape is then to invest emerging countries markets, because there is so much growth that IBM can win a piece of it, where IBM hardly succeeds in keeping share in the ‘old’ regions…
Ginni is just digging the track set by her predecessor Sam Palmisano and IBM Corp’s Board.
In the end, Ginni’s first and biggest challenge perhaps is to free up from the Board of Directors & Shareholders chains… to draw a new vision and strategy for another IBM future than just a finance cash-cow. Let’s hope she can ‘make it’!
Author fails to say that he is the CEO of a competitive company (NET). I suppose that has no bearing on his opinion of IBM.
Me too (only I *was* retired from IBM — “disemployed” is another way of putting it — in the Great Purges of the early 90s), and I’m certainly glad I worked for IBM when I worked for IBM, too, because I’d sure hate to be there now … my lasting memory is of the head office type who actually circulated something asking for suggestions about what customers wanted; I’m sure I wasn’t the only person to suggest he tried asking THEM instead of US …
I retied from IBM and I always tell IBM I am glad I worked for IBM and glad I worked for IBM when I worked for IBM. I had a really enjoyable career with the company.
I don’t agree with some of the comments above, I am 11 plus years in IBM, before that in GE and other big name companies, so far IBM has been the place where there is no limit to inovation and invention. Ginni Rometty has great client focus, she is thinking in terms of solutions to address client challenges and needs be it hardware, software or services.As far as strategy IBM’s strategy for your knowledgeis Smarter Planet, Business Analytics, Cloud, Business process Management, Mobility, Integrated Expert Systems, Growth Markets etc and if you see any CIO studies these are the things on the CXO’s minds. IBM evolves as per market needs and that is what Ginni does. The author is talking of IBM we have a strategy and vision for 2015, he should be concentrating on the the companies those have real problem like HP, Microsoft etc what is there strategy.I have full confidence in IBM and people who are supporting this article will be disappointed because IBM has been there for 100 years will be there for another 100 years and more and IBMers will keep it as one of the most profitable companies of the world. I am a proud IBMer, and i have full confidence in the CEO i am working for, she is teh “BEST”.
I am surprised at how accurate this article is. I left just over a year ago after 10 years hard work with the company. I’ve seen all of this first hand. After seeing the writing on the wall and continuing to work harder for less money, I made a “business” decision to move on. I moved to a competitor that specializes in software, and couldn’t be happier.
By the way, speaking of deep cuts in benefits, thanks IBM for the 1% interest on my former pension you’re holding for me. Cheap bastages. Guess you needed to pay Sammy off.
I AM PRESENTLY WORKING FOR IBM NOW FOR ABOUT 32YRS.
I HAVE SEEN THE BEST OF IBM AND NOW THE WORST. I AM EXPERIENCING GOOD EXPERIENCED VERY LOYAL EMPLOYEES BEING LEAD OUT THE DOOR.THESE PEOPLE HAVE MADE IT THROUGH SEVERAL LAYOFFS, WHICH MEANS WHATS LEFT IS THE CREAM OF THE CROP. wE HEAR THROUGH THE GRAPEVINE OF BEING BOUGHT OUT. wE HAVE BEEN STRIPPED OF OUR COUNTRY CLUB, STRIPPED MEANINGFUL RAISES IF ANY, STRIPPED OF RECOGNITION, PAY MORE FOR MEDICAL, AND FEEL LIKE ITS ALL ABOUT THE LEADERSHIP WHO SEEMS TO BE MOVING ALL AROUND TO ESCAPE THE DOWNFALL OF OUR SITE. SHAME ON YOU LEADERS OF IBM.
I can say this after 30 years on the IBM services side of the house, IBM has never EVER been so devoid of technical skills. They may have bodies – most outside of the USA – but the skill levels are atrocious. I wouldn’t allow most of these people to work on my garbage disposal.
Can’t say I disagree with any of it. Seems a common path for all enterprises. We just witnessed the same type of death of Kodak. We need to go back to the 1850s where businesses were licensed as corporations by the local government and their period of existence was limited to their mission statement. Upon completion of their stated mission the corporation was dissolved and the investors were allowed to take a modest profit. This ensured a focus toward public welfare. Wall Street is the evil that will consume us and in the end lead to our extinction. My idea may sound crazy but only because you have been brainwashed into thinking the current business model is correct. Capitalism should only exist as a servant of Democracy. Right now we are slowly being enslaved by Capitalism and the power it concentrates among its rulers.
Its like Obama cleaning up Bushs’ Mess, Now Ginni has to clean up Sams’ mess, but she isn’t. She’s following right in his footsteps. An ungodly # of Exec’s left within the last 3 months. Why? They saw the writing on the wall.
I hope someone sends this right to Ginni, let her know what a lousy job she is doing so far.
The writer of this article hit the nail right on the head.
I agree with ‘Anonymous’ – USA is not even the largest country for IBM anymore – India is! 120,000 IBMers in one country, and growing! gives a fair indication of where this firm’s been going for the last few years, as if anyone didn’t already know – and that’s my bet for future HQ!! China is next… Brazil… Egypt… Balkan states – anywhere that wants to provide cheap labour!
IBM are just going to keep expanding exponentially into the India’s and China’s of this world, and at a cost of all the other countries. Thing is, this has been coming – for a long, long time. It’s no surprise to me at least! Internally, IBM now requires senior level approval for any project that has less than 95% Indian resources – so, essentially, that’s a local PM and an Indian team, regardless of size, irrespective of what you’re delivering!
This base of ‘disgruntled and demoralised employees’ IS the strategy – can’t you see?
How are they going to continue to ‘grow the company and remain competitive’ with all of these expensive local resources? How are they going to afford all these lovely new ‘cheaper’ Chinese and Indian resources? Simple – make the current workplace so unbearable that you leave of your own accord!
2 words – NATURAL WASTAGE!
It is rumoured that over 12,000 people have been “asked” to leave IBM this year. Very quietly, via the back door. No big announcements, no official correspondence to the media nor to the markets as this makes shareholders very nervous and prone to sell stock – just a deathly silent tsunami of ‘blue envelopes’ delivered to unsuspecting victims as they get the dreaded call – usually while onsite at a clients – to discuss their HR options the next morning…
I work in South Bank, London, the building is virtually dilapidated! It’s not had a lick of paint for 8 years to my knowledge – used tissues on the floor cos they’ve reduced the cleaning bill, dirty fingerprints on the walls, used coffee cups lying around for weeks on end, paint chipped, rusty metal showing on handrails, disgusting stained threadbare carpet, and this is in the client areas! But it’s ok, as long as the shareholders get their dividends.
It reeks of a company who are about to sell off it’s assets or downsize, or has simply given up in some countries. I, for one, amongst many, many other IBMers I currently know, am not going to be the last out of the door. It will be so sad watching it’s slow and painful death from the touchline.
But to the article, this isn’t Ginni that’s created this train wreck, she’s just the current driver! But she certainly has no intention of stopping it either!
But, there’s no such thing as a company this size NOT having a strategy. In my view, there are 2 rules about IBM’s strategy. 1 – You DO NOT talk about IBM’s Strategy, and 2 – You DO NOT talk about IBM’s Strategy.
Ginni is not dumb, she’ll have a strategy alright – it’s just she cannot talk about it!
As an employee, I think you’re missing the forest for the trees. Looks to me like Ginny is following the strategy of Sam before her – which is: get out of the USA. There’s too little profit margin and the resources are expensive. So – focus on the ‘I’ in IBM. I’m guessing the next big announcement will be that corp HQ is moving to the UK or China.
I’d be interested in some examples of #6. Which acquisitions were left for dead?
I compare IBM to the the old Roman empire – it came, it saw, it conquered and then collapsed in decline and decay…..and like the Emperors of Old Rome, the IBM executives of today fiddle while the company burns. So, what’s to say except this – nothing lasts forever, not even pure and unrelenting greed. There’s certainly no hope left.
I just received my 21st issued patent – all assigned to IBM. Where am I? Laid off 2.5 years ago. I headed an invention development team and was a certified executive project manager. I was not even replaced by someone offshore… they just asked everyone to tighten their belts and do pieces of my job. It is such a shame to see a company that invented RISC architecture, disk drives, new standards of mainframe reliability and availability, throw it all overboard in favor of a 90 day profit vision which precludes doing anything that may be the right thing to do even if the market isn’t ready for it. IBM will be replaced by a similar 3 letter acronym, RIP.
You were quite accurate about the excess levels of management. When Lou Gerstner came in I had nine layers of management to the CEO level. When Lou left it was down to five. When I retired in the summer of 2010 it was eleven. While eleven might be great for Spinal Tap it is results in nothing getting done in a business.
While I strongly disagree with some of the benefit reductions Lou implemented the reduction in management overhead made my job more fun and productive. Unfortunately the transfer of power to Sam Palmisano brought a return of the same failed IBM management that Lou Gerstner had replaced. I think IBM would have done better to go outside when Lou retired.
I left IBM last year after 17 good years exactly on the reasons described here. Instead of a technical vision and strategy, the only strategy during the past years were profit making and share price development. Firing people and spending billions for share-buy-back programs and top-management boni is not good for customers/partners/employees. Everything said here about the management is true. Most of them (of course there are exeptions!) have NO idea of their own products, nor the competitive situations. They very much focus on numbers on their own career rather than customers, employees or a sustainable strategy for the company. Next quarter is beyond their horizon.
And I can tell you from inside: most of the IBM employees are really frustrated about the behavior of the company. With Lu Gerstner the visions left the company about a decade ago.
And because of all this I left the company, I wanted to know: is there a different culture out anywhere ? And yes, there is. After some month in a new company (also a big IT company) I feel like in a new world….
congratulations on your move. sounds great. let us know where that is.
I have never seen anything this true and to the point about IBM and its current executive team; their strategy and lack of vision. It also was spot on regarding their M&A, they have killed successful businesses, including the acquisition of their Service arm by who else on the helm but Ginny, who is now divesting it, making it ready for sale. I have been involved in 4 of such acquisitions and have seen a list of companies who were bought and then destroyed after being “blue-washed,” It pains me to see that bunch of career politicians, as you called them, are ruining IBM; an AMERICAN ICON.
I wish there was a watchdog organization or a technology group that could arrest IBM’s self-serving current executive team, send them to jail till they have their day in the court for crimes against humanity, technology, and also against America. Ginny is just like rest of them, she grew up in IBM. She doesn’t think there is anything wrong, or she would have fixed it by firing these leaches to bring in a team of intelligent, competent leaders who care for IBM, its clients, and its high skilled employees who are either leaving to competition or escorted out by IBM security. All is left is these career politicians/prostitutes who want nothing but EPS for obvious reasons, they are worst than blood suckers.
Thanks for your article, so I am not the only one who sees it this way. I am sure the market and clients think the same, or a huge list of clients including multi billion dollar Disney wouldn’t have left IBM just a short while ago.
I am very worried for IBM!!!
rright. Disney is only the latest in a long list of clients who have had high-profile exits from long term IBM services agreements.
I think the author would agree with the book The Puritan Gift. While you need a profitable company to make products, good products come first.
I also think they and others have made the point that IBM got lucky. They had the ability to move in to the services and software space using their deep experience serving business to tie together everything in IT. They delivered solutions. This worked well but this model may be on its way out. That said there is always a market for people who can understand business needs and deliver IT solutions, precisely because so few people can and will do that.
This also brings up interesting issues of corporate management. I don’t think there’s anything wrong with IBM making sure it is investing in high profit businesses. Usually a high profit business is a sign of uniquely serving consumer demand – look at Apple’s margins. What is tricky for management is – how do we let the less profitable businesses run while not diverting resources we need elsewhere – people, money, and management attention.
What is of course a bad idea is turning a business in to a high profit business by cutting the good costs, the costs that add value, so that your business no longer delivers on its promise. It sounds like that is what some IBM customers are experiencing today.
As a 30 year veteran of IBM there are many true statements in this article. To add to it, to me the biggest reason I think Ginny is up the creek without a paddle is IBM has forgotten how to respect and treat its employees. W\O the support of its employees which has been the backbone of the company for the last 100 years the company is on a spiral to death. Employee morale is truly non-existent. How did they do this? By repeatedly taking away and then sugar coating every take away and insulting the intelligence of its employees. For example, IBM’s Sr. HR Exec. who is retiring in June 2013, (I’m sure with a lovely golden parachute) has repeatedly stated for the past few years every time there has been a take away in compensation plans, like no more pension plan, like deferring until the end of the year the 401k matches, if your still employed, like the weak or no employee bonus money, like the 2013 raises being deferred until 10/13, “You are lucky to still have a job” and “you still work for the best company in the world and these changes are necessary to remain competitive with other company benefit plans”. How insulting and disrespectful. Since when does the so called “best company in the world” have to be competitive with their retirement plans and compensation plans? That line is the biggest executive line of bull I’ve ever heard and its become a standard of Sr. HR executives and everyone in the business world seems to be buying it. Oh u mean because some struggling company had to try and save themselves and do away with raises, all companies should do that to be competitive? Oh you mean all companies can make more money by doing away its pension plans and we can say we had to, to remain competitive! with who and what ? No kidding! This makes you competitive how? What & who are you competing against? To see who can give its non-exec employees the least and get away with it? and then go pat yourselves on the back! the cost of business and health care has gone up, we get it, but you still have had your biggest profit years ever! You have not lowered your services prices, so how are you being competitive? you sell services and people skills, not machines and products? You just got rid of more people, your product has suffered and got rid of cost, exec’s took bigger bonuses, sold a bill of goods with creative accounting to Wall Street again and again and then made a fortune with your stock options, which is all you care about. You took away and gave yourselves more.. this is called “greed”. Best companies in the world lead with the best incentive programs to all employees, this fosters the best talent in the world across the board by merit and rewards all employees, its what the word “incentive” means. Its what the merit pay system was supposed to be. Why do the Executives in the company get rewarded so well and then have the audacity to tell the employees we as a company or business unit didnt do as well as we should have…. So the executives get the million dollar bonuses and the employees get lip service and “Your lucky to have a job” Really! Good highly talented skilled people are sick of it and walking away. IBM is now kicking off a “confidential” program to try and retain its top talent. Doesn’t that tell you that your doing something very very wrong and bad? You now need to have a special program to try and stop losing your best talent? How much will that cost? How many peoples job will be lost to pay for that brain child?.. and it just keeps going on and on and on… no good news… all bad news for the employees. They are sugar coating this raise deferral by saying we will reward handsomely the top performers… but the ones that are not quite the top… (not everyone can be the top), sorry you did great… not super duper great so here is little or nothing, please do better with less next year, if there is a next year! TY very much!
Support!
You must have been asked to step into your managers office, more than once?
The increment deferral tactic was used before in Malaysia years ago , as it was the “global’s direction”. So instead of having increment in Apr, we had it in July. Fair enough. Fool me once, shame on you.
Now its being deferred to Oct, again, the excuse is to realign to the “global” direction.
It wouldn’t be so painful if you did not remove our mobile, internet, travelling, car loan allowances,etc. And for FFS, we have to end up paying for our parking now ?
Fool me twice, fuck you ibm.