InformationWeek
Defining The Business Value Of Technology
| March 2, 1998 | ||||||||||
Big Blue's Big E-Business Plans
By
Lou Bertin
As a colleague of mine would say, What could be wrong with
this scenario? Plenty, if the organization in question is
IBM and the market in question is the broad electronic-
business category. What puzzles me is why this should be so.
In a
recent interview
with
InformationWeek, IBM chairman Lou Gerstner laid out an
ambitious blueprint
detailing
IBM's pursuit to become the key supplier of software,
hardware, and services for global electronic business.
Given Gerstner's unquestionably successful performance in
the incredibly challenging business of refloating a sinking
ship -- a
role that has stymied other capable executives
(see Amelio, et.al. at Apple Computer, and Palmer, et.al. at
Digital Equipment) -- one might reasonably think that
observers, at minimum, would take a wait-and-see approach
before launching into criticisms. This hasn't, however, been
the case.
A surprising and sizable portion of the response to
Gerstner's pronouncements, in the form of letters to
InformationWeek and comments made privately, has been
strongly negative. Not skeptical, but negative. What puzzles
me is why this should be so.
In Gerstner, IBM has a leader who unquestionably has
demonstrated his ability to achieve the near-impossible:
ensuring that hundreds of thousands of employees and
business partners are pulling in the same direction at the
same time.
In Irving Wladowsky-Berger, Gerstner has the person who was
most responsible for reversing the fortunes of IBM's
Enterprise Systems business, one of IBM's cornerstone
revenue producers, and equally importantly, the heart o
f
IBM's corporate soul.
Through IBM's legendarily strong relationships with its
customers, Wladowsky-Berger has a ready-made (and pre-
conditioned) base of initial prospects for IBM's E-business
offerings.
There are dozens of other factors that could be cited in
IBM's favor -- the talent of its work force, a reincarnated
culture that (unlike the past) rewards initiative, the
freedom that comes with the ability to invest heavily in the
future. Those three elements alone should be enough to make
a strong business case in IBM's favor.
Based on the public and private commentary that's followed
the Gerstner interview, however, all of the objective detail
can't overcome one highly subjective negative that, when
boiled down, yields the following statement: "IBM is too big
and too established to succeed in a new market."
That line of thinking has been universal among those I've
spoken with who are bearish about IBM's prospects. It's a
strong opinion, honestly held by some people I've co
me to
know and respect over the years. From this perspective,
however, it bespeaks arrogance that is utterly astounding.
Stated another way, that thinking says that the lessons of
the past mean nothing. That only the young and the hungry
will thrive. That somehow new technologies and new ways of
doing business are solely the province of the tiny and the
nimble. To all that I say, What rot.
This industry doesn't have a pretty history in terms of
companies that are able to reinvent themselves and their
cultures to reflect changing realities. There are some, to
be sure, but the list isn't long. That, I think, accounts
for a great deal of the skepticism about IBM's chances.
Indeed, IBM itself almost fell victim to its own hubris and
ponderousness.
But simply because something happens only very seldom
doesn't mean it never happens at all. And companies, like
people, absolutely are capable of learning new lessons and
of abandoning old patterns of behavior that had outlived
their usefuln
ess.
One person who wrote us said, "Lord, help us!" in assessing
part of Gerstner's strategy. The same, I believe, can be
said to those who discount the value to any organization of
lessons learned, sometimes the hard way, and experiences
gained.
As for sheer bulk, if I'm going to do one-on-one battle, I
like my chances much better against someone my own size
rather than, say, Shaquille O'Neal.
The market is going to decide for us which camp was right
and which camp was wrong. But handicapping a horse race
solely on how a horse looks in the paddock on race day is a
sure way to the poorhouse. Let the races begin.
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isualize with me for a moment: You're an analyst and an
organization approaches you with a business plan. The
organization is looking to extend its presence in an
emerging, high-growth market and bases its pitch to you, in
part, on the following:
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