Got rid of the IBM PC in the end want to go? Samuel J. Palmisano, the answer is: IBM's goal is to change your business process and business model, and this will be a 5,000-billion market
question: IBM completed What is the greatest invention?
if you familiar enough with the history of Big Blue, and you may be difficult drilling machine in the 1930s, 1960s, mainframe and personal computer in the 1980s to Select mmOK, drilling machine may be too far away, and IBM PC's success is not alone in the credit, but do not forget there is another choice: pull IBM in the 1990s that brought down by IT services.
but the final answer No doubt there is only one: IBM itself.
if it was intended to explore, from many point of view, IBM in modern business history are not unique: The owner of 94 years of ups and downs in history of the company is neither the oldest, nor the most consistent , the same is not the largest, highest market value. but over the past 50 years, it has always been regarded as an American icon, why not?
to IBM with the to the reason for this is, there is little a company as long as it plays a modern corporate form of organization change this, as well as a pioneer in the technology market .80 years ago, when Thomas. Watson (Thomas Watson) will calculate the system Table record company (CTR) changed its name to International Business Machines Corporation (International Business Machines), this is just a production of watches for the main business of the unknown company, but the old Watson was first aware of corporate culture on the shaping of business, and unprecedented in a business marked with a color distinctive personal mark. and his early declaration of Little Thomas his successor. Watson (Thomas Watson Jr.), after countless executives with the father and the disputes arbitrarily and even human beings into the IBM mainframe era, the same historical significance is His success led directly to the enterprises for R & D attention. But when IBM CEO after a few attempts in this market either on the enclosed fences, loss of ambition to continue to expand, it verge of bankruptcy. and this is exactly outsiders Guo Shina (Lou Gerstner Jr.) offers to show nearly perfect the art of business opportunities for recycling, but also on the end of the century to become one of the most outstanding CEO.
precisely because of this legend, when Gerstner IBM and retired from a successful rescue, people with 30 years experience in IBM CEO Sam Palmisano either 7 (Samuel Palmisano) expectations of only one: Can he led IBM back to the golden age?
This is the IBM internal .2003 September call a media conference, when the His goal is to make the elephant dance. And now Samuel J. Palmisano, IBM want to do is to make renewed to a glorious past. Now is the night, the moon than there are stars. we want from the night into day: only one day Sun. stick, IBM has just had a sharp drop in income $ 5,000,000,000 for the fiscal year. and he must also confront the fear 9.11 after a series of emotional and scandals of Enron caused investors to large enterprises strong dissatisfaction.
at the moment The simplest choice is no doubt continue to Gerstner in office has proved a viable business model mm Gerstner go in when IBM, in 1994, Palmisano is to enter the service sector, and in a few years to fight the company's total 42% of revenue, but the cash cow mm Palmisano aware of: IT services industry has become the most valued the opportunity to stick to this will probably be repeated in the late 1980s brought the plight mainframe. conventional market, and others if you do the same, you are in a low-margin markets. ? IBM may be able to bring the path of transformation of enterprises in China are some thoughts and ideas inspired
Zhou Weikun
ibm transition as IBM IBM Chinese history. and he experienced the rise of IBM, after the decline and revitalization, summed up the three experience: a dream realized evergreen should focus on strengthening the competitive advantage in three areas. The first is to achieve the fusion of strategy and execution through; the second continued to build the capacity of innovation and transformation; the third is the use of high-performance culture to attract the best talent. and all the competitiveness of the establishment of these should belong to the companies around the core values to be unique. < br> In the week view, the strategy and execution must be mastered. strategy and execution should be the relationship between fish and water, relying on each other, inseparable. strategy including market insight, strategic direction, innovation, focus and business planning, and implementation is a strategy to ensure the smooth implementation, which involves staff, formal organizations, critical tasks, and a number of factors such as climate and culture. At present, many enterprises have a misunderstanding, that is often fragmented strategy and execution to do. The real targeted , a clear vision of the company, will be in developing strategies at the same time to consider the enforceability of the strategy; and by the chance of success of the company in the process of rapid development, you need a relatively long-term strategy to ensure that they can for the next opportunity come prepared.
Second, the integration of innovation and transformation of IBM over the years is the magic weapon standing in the market. can be said that innovation is the attitude, the transition means. many companies place more emphasis on technological innovation, that innovation and invention is just technological breakthroughs, they rely on the most advanced technology research and development to remain competitive, traveling in the most high-end value chain. But innovation not only in technological innovation, but also in innovative business models. successful companies should be committed to the invention and industry insight force combined with a truly valuable innovations to promote the development of productive forces.
innovation can change the way people think and methods, and transformation requires changing. entrepreneurs must develop a strategy and values of care to emphasize when innovation, and committed to the business model compatible with the market and customer needs, the face of changing market to adjust themselves towards the top of the transformation of business models and processes. This is the trick stay focused enterprise.
Finally, high performance culture to attract the best talent. in addition to the values of sustained, high-performance culture is a potential to retain and motivate key employees. IBM's view is that business people to find the most suitable, by all means so they get exercise and training, and then let these people go to work. These More importantly, companies will from the beginning as a high performance culture driven, that is, stressing the best people, require employees to do the best, emphasis on performance and growth, and rewards and punishments according to the performance.
respect for talent IBM is the supreme doctrine was, and through a variety of measures to try to attract, motivate and retain the industry elite. IBM has nearly 40 million employees worldwide, the company uses many techniques to ensure that staff communication and improve efficiency. In addition to the staff involved in the company value of the global discussion, is also investing in training great employees, employees can easily access the Internet from within his training needs. IBM has also implemented the Chinese traditional excellent staff, and providing development opportunities.
most important is that this training in three areas of competitive advantage, will always be around a center, the center is the company's core values. This is the tradition of Samuel J. Palmisano, the IBM extended on the basis of values, establish annual income to 900 billion little businesses, and IBM PC business losses over the years also affected the company's overall profit margins, but as most of the company since the 1980s, iconic assets, IBM get rid of PC, just like Edison General Electric to sell lighting to create a business, or turn off the Disney animation business as a historic moment.
have found a value of 5,000 billion market: not only to provide IT related services, and further helps companies to change business processes, outsourcing functions outside its core business sector. At the same time, he drastically changed the IBM, both Gerstner era of some of the strategies may be revised, but also some of IBM's tradition of trade-offs and updates. All these are seen as business observers say goodbye to the traditional move Big Blue.
this transition will succeed? is too early to draw such a conclusion. But Palmisano view, this is a bold plan, but the risk is not high, because the market demand for IBM in the march followed.
the end of 2005, IBM will become the IT history first to reach 100 billion U.S. dollars annual revenue of the company. Not only that, Palmisano has promised, the company will maintain an annual growth of at least 5% of the sales and double-digit profit growth. He hoped that in 10 years, IBM's consulting and outsourcing business to grown into an annual income of 500 billion business.
the same: they both need to outline the new company's future, but they do not have a clear strategy design. Gerstner at first assumed office had said: was ridiculed as the Only I was IBM's customers, so I can put the company located in: for the customer. product purchasing experience so he knows what IBM defects. For this, he gradually solve the customer needs to the greatest extent, and the IT services revenue growth is set to transform the company's core business.
is, therefore, the time when Palmisano Review He believes that the greatest achievement during Gerstner is not to find a change in IBM's strategy, but let IBM to re-establish customer-centric orientation.
Palmisano also has a relatively clear concept: customers benefit the most from oriented perspective, technology services should not be in the form of product packaging sales, and the like water, electricity charges as based on usage.
August 2002 when he was at a strategic meeting, to express this idea, and subordinate to design a mainframe as early as the era of cross-products, no one knows how this idea is extremely ambitious.
Palmisano did not continue the meeting, but to go back and ask ourselves, all participants customers, and then collapse back together into a final answer.
3 months later, October 29, 2002, in an e-mail to senior management, the Palmisano wrote: what the great business with other companies to distinguish mm and lead its industry to set the agenda. which has been on a characteristic history of IBM. Now we saw a chance to set the agenda I believe we on the next great the edge of opportunity, not only is our opportunity, but also the entire IT industry. promotion of Most of the previous innovation are the technologies to market, such as computers, operating systems and Internet Information Industry, the prosperous result, it was Zhou Weikun likened to the Each area needs it to go. discussion of strategies on how to integrate corporate resources around the demand. Palmisano will discuss the final break, and recalled, he said: However, all discussions are proceeding from the company, Palmisano recommend that all people should get out of IBM, to listen to the views of customers, they would most like to solve problems and find ways to cope. a problem, we should also know what to do. ; the most difficult problem you us a team of experts, in-depth into the details of being. They soon found that, for consumers, the biggest problem in the supermarket is very easy to get lost, a lot of time to find their own goals, rather than shopping. For this, IBM has developed a scanner and a liquid crystal display containing a shopping cart, which it plans to show the mainland supermarkets, and provides information on purchasing related products. the convenience of customers is the direct effect of the move allows people to buy more multi-commodity.
in this big change, Samuel J. Palmisano, IBM also in carefully to avoid the mistakes of history have, for example in order to maintain profitability while ignoring changes in the market. in the office shortly after his predecessor, Lou Gerstner, He found that the company lost an important reason for continuing to maintain the huge profits S/390 mainframe, policy makers would rather not share price dropped. Gerstner stressed courage to face the reality of the rapid development of a positive price-cutting strategy, while technical updates with 10 .7 billion years, each mainframe prices fell 96%, but sales growth, when he left office in 2001, when 10 billion to 19 billion U.S. dollars investment return.
Samuel J. Palmisano, president back in office, he and lower cost open-source Linux operating system founder Li Nasi? Torvalds (Linus Torvalds) intimate contact, and then announced that IBM will invest one billion U.S. dollars in this area . With the application of Linux, IBM increased its ability to help customers reduce costs on many levels.
across the border
experienced revenue declines for two consecutive years 2001,2002, IBM's performance in 2003 was finally able to pick up. Services business accounted for the proportion of total revenue while further departure from the Gerstner 42% to 48%. But one worry is that when the IT services become common, it will not be hardware, like Dell, led by the king type costs enterprises in the price war engulfed?
IBM do not forget the lessons of the field early in the mainframe, to protect the market from attacks, it was opposed to client / server computer and the development of personal computers, but the rapid development of chip technology and new competitors continue to join, and finally to the loss of positions in IBM.
measures only one: to find new markets. For Palmisano I am concerned, this revelation appears in the 2 years with Procter & Gamble CEO Lafley Group (AG Lafley) one will surface. Lafley to Palmisano P & G's 100,000 employees to guess the real people who have left the number, the final answer is: 1 / 4 mm is enough others such as human resources and customer service work can be outsourcing.
post by estimate, Palmisano found that this is an annual income of up to 500 billion size of the market: an enterprise IT and business has never been a profit margin, which is the traditional double the profit margin IT services.
Obviously, no company will benefit in the case of no outsourcing of their business. bear the brunt of the killer, still the price. such as IBM in India in 2004 the acquisition of the third largest call center company Daksh, can help customers save a lot.
on price alone is clearly not enough, IBM will own advantages positioned to help customers improve business processes, with the most advanced IT technology to speed Effective enterprise information transmission, thereby making the market reaction to management changes and the speed of business. IBM and even hope to get some commercial work of a living person, such as for information collection and analysis.
Traditional whether IBM will enter a new business with a few months time to study, and now, IBM set up a number of > start with the potential customers began to dig. such as Finnair and IBM in 2001, had signed a ten-year contract, data center operations, and IBM service and research sector initiative to help establish the mathematical model of the Finnish air, looking to increase customer loyalty, reduce costs and improve the way back to the collapse rate.
2002, the Marathon Oil Company is to reduce the cost of its financial sector and to achieve corporate performance data to date shows. IBM's consultants analyzed the Marathon business process, it did not just upgrade its software system, but recommendations to improve the company's overall financial processes, its accounts payable from 18 days to 8 days. and for the establishment of a management monitoring data at any time The to achieve the goal, Palmisano first in 2002 to 3.9 billion in the acquisition of PwC Consulting, and with 21 billion acquisition of Rational Software Corporation. This allows IBM to provide customers with a background of consulting and other services but not limited to the possibility of IT products and services.
should be said, IBM does not have any time in history than it is now more emphasis on conscious innovation. sale of its PC business, too, although the intention has been in IBM for 10 years, but never really implemented. although the loss of the company's overall profitability and share price, but the advantage is that the IBM PC in many enterprises have a high penetration rate, which facilitates the provision of IT services to IBM into the enterprise. And since 2000, was promoted Palmisano President and COO after starting to actively promote this. out of the total market value of 1.2 trillion, but only 6% annual growth areas in terms of the IBM corporate culture is the biggest benefit to further focus on innovation and service.
With the deepening of market exploration, in the original accounting, human resources, customer service and procurement on the basis of the four operations, IBM is moving into six new areas, including consumer electronics, service, insurance claim customer service, optimization supply chain.
software sector was 3.8 million employees re-training to enable them to be more focused on the banking, insurance, automotive, energy, telecommunications, life science and other key industries in 12 key business issues. on the IBM Software Group should focus on 12 key industry restructuring ideas to come from customers and hardware business has thus to be adjusted. Not only that, IBM is increasing commercial research staff, when in mid-2002, IBM is only in the number of people to concentrate on this to 3500, and today the figure is 50,000, and an annual growth rate of ten thousand.
the past, IBM's 38,000 sales representatives to sell their respective departments, but the re-integration of IBM's Palmisano sales team, will be responsible for hardware, software, consulting and even employees of the various types of have to own at least four individuals: a sales staff, a service, a software staff, a research staff. This IBM known as the part of the 10-year human resources outsourcing business, valued 400 million yuan. since 3500 P & G has outsourced the work, including computer and customer relationship management. in human resources, establishing a 21 on the speed and accuracy of performance appraisal criteria , IBM all standards, IBM took over in the month before, according to market research firm Gartner, P & G achieve its only 9 of them.
return to the golden age of
2003 �� 1 28, in the year The first board meeting, Palmisano put forward a proposal that shocked everyone: to halve its dividend, reducing some of the incentive effect of the best technical team led by 20 executives. allegedly the only one figure to reach 300 to $ 5,000,000.
mm relative to its predecessor, never refused to enjoy a huge bonus move Gerstner mm Palmisano value greater emphasis on the team. this is just his personal label to lay one of the actions, a more courageous act is the beginning of 2003, he followed up to 92 years IBM's Executive Management Committee closed. this month to convene a round table for 12 people, not only determines the annual strategic toward IBM, is IBM's highest Characterization of the identity. But in Palmisano's view, that the ancient tradition of the greatest drawbacks is that: it is too slow in decision-making, and, all composed by the company's top role, but also limit the understanding of its market line.
In this one year ago, he found a better on the pass issued to achieve decision-making organization. through the establishment of strategic, implementation, and technical three groups, and the best of each sector, not just the top employees move to where he can better understand the market and the company's situation.
this series of changes, even if it seems observers in the outside world, but also counted on the most daring. But as the effectiveness of more than 30 years for the IBM employees , Palmisano clear, the real golden age of the IBM way of introduction, only changes in the times to develop new rules of the game. who served as former CEO of John. Ake Wales (John F. Akers) Assistant to the experiences that most directly experienced Palmisano The lesson: fear of people say, father and son time, IBM's core values is want employees to respect customers, even competitors should also be fully respected; allow staff of the enterprise loyal, but huge changes in IT industry, IBM redundant staff means a huge cost, and transformation of resistance. The era of the great success of the small Watson for many years due to the loss of anti-trust lawsuit to IBM the competitive state of mind.
light of this, Gerstner has not changed although the values of the old Watson left, but his annual staff appraisal standards in the three most important to victory in the market, execution, teamwork spirit.
While the efforts of Lou Gerstner, IBM back to life, but it can not be considered a great company. This is Palmisano's mission. After taking office, he let the company's special operations team collected the views of 300 senior executives and more than 1,000 employees with a special discussion to the old values-based company, proposed three new values, then these values to all employees discussion. finally established a , innovation is to be, integrity and responsible foreign business, are a foundation of trust and responsibility.
Palmisano all time
Gerstner and Palmisano like to compare: they are different too.
and stern, tough and highly offensive of Gerstner than Palmisano more kindly. When the company in early 2004, IBM vice president of on demand business to China John Lutz, a reporter asked about the similarities and differences between two-term CEO, a former assistant Lutz Gerstner said: . While IBM for many years, but he never tainted with IBM early formation of the broken stick, or straight out of the room, go to the customer call.
phone is the most used tools Palmisano, if not called in to the customer, he is asking employees: ; moment said: in a moment. students recalled, although the personality and good, but if he can not put down in the arena opponents, he sullenly.
1972, the Palmisano from John? Johns Hopkins University after graduating into the IBM, he starts from the sale , then in IBM Japan, IT services, PC Business Unit and the mainframe sector have had experience. as the Gerstner's predecessor, John? Ake Hills executive assistant, he was the latter as ;.
1994, the experienced 21 years of IBM experience, Palmisano went to IBM's outsourcing subsidiary, ISSC (Integrated Systems Solutions Company). Palmisano go in the ICCS, he has been with the IBM internal high-level challenges, try new methods and to achieve performance reputation.
in the late 1980s, including some large customers, including Kodak to IBM put forward higher requirements: they not only want IBM to sell its mainframe and PC, IBM also hopes to help them manage the entire IT system. IBM realized this was a time the market, this is the birth of ISSC. Although able to maintain hard, but its successor under the business consulting and systems losses in the tens of millions a year earlier.
Palmisano to his Department under this business losses. and when his deputy Gooden? Myers (Gordon Myers) a few months with in-depth study of this business, he brought bad news: earnings is impossible, even the best expectations, it is only to maintain a tie. listening to the report, Palmisano first as you normally smile, then said: must find ways to honor. I do not want to accept the fact that you can not do. type: Gooden asked employees to submit suggestions for improvement, and require all departments ISSC this business teams to provide support for cross-selling. to the end of the year, the business turned a profit.
during the ISSC, in order to expand their business while and maintain the independence of this sector, Palmisano fully demonstrated its tough side of people. From performance appraisal to the margin settings, he has been declared to the top of this business is too different from other, similar but not language. , morning, noon or night, to see customers. Global Services (IBM Global Services).
but also gradually becoming apparent contradiction: the staff had other business services are looking forward to achieve its original business, sales increase, but IBM Global Services competitors often use to display products The neutral and objective of customer service, and soon led to IBM a strong resistance to other sectors. and the growing global services staff arrogant, the more difficult to identify other employees.
involved in the Gerstner-led Palmisano the process of peace-keeping. IBM to re-arrange the salaries of managers, so their income linked to the overall performance of the company. Meanwhile, Palmisano PC production process re-engineering, forced to listen more support staff. He also re-created for the IBM server brand, enhance their differentiation, and pushing for the operating system UNIX servers. These actions should be on April 15, IBM released the 2005 first quarter earnings, Apple released the same period, General Electric and other companies made impressive achievements in different, IBM's growth in the first quarter was only 3.3%, if the depreciation of the dollar removed positive effect, the actual growth was only 1%. The results immediately so that it fell 3.6%, on the IBM recently launched a major restructuring of the message will also be there. Does this mean that, Palmisano wrong?
Even the most optimistic observers may be admitted, Palmisano did, is a great adventure. for any company, will ...
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