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IBM turns 100
by Anter Prakash Singh - June 16, 2011 - comments
IBM, the tech giant completed 100 years to join the elite group of US companies.
Out of the 5000 publicly traded companies, only 486 have completed 100 years. Furthermore there are only 23 private firms in US that are 100 years old.
The aforesaid data indicates that celebrating the 100th anniversary is indeed a stupendous and rare achievement for any company.
International Business Machines, popularly known by its acronym IBM, joined the elite club of such companies.
There is a lot that the middle aged tech companies can learn from IBM especially from its ability to learn from failures and from the way it has dealt with the succession issues.
IBM joins the elite club
IBM made life changing products and has made its way up to become the second largest technology company in the world. The company made innovative products like the first tabulating machine, the punch-card machine, magnetic hard drive and the computer memory.
Just recently Watson, a super computer made by IBM succeeded in beating humans during a TV show Jeopardy.
Despite all the innovation and technological leadership, IBM once faced bleak future and was revived only after it hired Lou Gerstner, its first CEO from outside, to take charge of the ailing company in 1993.
Gerstner felt that the company would be stronger if kept united though he was under tremendous pressure to divide IBM into different units. He wrote about it in his book, “Who Says Elephants Can’t Dance,” in which he detailed the process of revival at IBM.
Among the greatest strengths of the company, he described the ability of the company to provide solutions to its customers along with its high end technological knowhow. However Gerstner felt that arrogance was behind many of the maladies faced by IBM.
IBM handled several issues well
IBM has handled succession issues quite efficiently whereas others in the industry like Apple and HP are still reeling under the same.
Before Gerstner, all the company CEOs were insiders. When Gerstner desired to step down at 60, IBM again looked inside for a replacement as it had become stable and was on the growth path.
Finally Sam Palmisano was selected as the next CEO in 2002. Even though there is no rule requiring IBM CEOs to retire at 60, it is the age when they name their successors. With Palmisano reaching 60 four candidates are being discussed for the top post and all four are insiders, said Bloomberg BusinessWeek.
Jon Iwata, IBM’s senior vice president, marketing and communications said, “We have learned, from our history, to (roll with changes) in the world, like economic downturns and wars.”
“This is not like the auto industry where the combustion engine still exists, or oil, where many parts of the business are the same. We have to let go of what we have invented. We stopped making typewriters, punch-card machines, PCs. We had to move on,” he added.