Change at IBM

Change, even small change, can be disastrous for companies unprepared. IBM suffered recently partly because a trend towards cloud computing altered the environment for their software products. (See blog on October 22 Responding to Change) Today I read a follow up article on Bloomberg, talking about how IBM is responding. References for both articles are below.

ibm

 

I found some really interesting aspects of this. Firstly, IBM are relying on an executive called Lance Crosby to lead the enormous change. Crosby was founder and MD of a cloud based service provider, called SoftLayer) acquired by IBM last year. Crosby has been absorbed into IBM and given the lead on a strategy seen as critical to IBM.

Think about the implication of that – how many Chief Executives would appoint a newcomer to lead a critical strategic initiative rather than try to absorb the acquired IP, and appoint a trusted lieutenant to lead the charge. Most large companies are conservative, and would do the conservative thing. Perhaps that is a reason why many acquisitions do not meet their acquisition objectives. The need for a whole mind set change seems to have been recognised, good work!

Secondly, “At IBM, “there’s more smart people than I’ve ever met, but not necessarily cloud smart,” Crosby said in an interview. “A lot of things happen within an organization because that’s just how things have happened. It takes like a challenger to come in and say, ‘Why are you doing it this way?’”

Spot on. In all companies things so often are done because that is the way they have always been done. When change happens, many activities keep on happening even though the need for them has finished. That is a key secret to many of the business optimisation successes I have been involved in.

Again, IBM seems to have recognised the need to challenge the existing order and let it happen.

A third interesting element for me is: “The challenge for Crosby, 44, is getting IBM colleagues to simplify how they hire staff, sell products and develop tools, while also widening their customer base.”

Simplify how they do things, including hiring staff. No doubt that this is from Crosby’s interview, and I suspect is a nod to some of the frustrations associated with trying to bring changes to such a huge and established company. Is the “hire staff, sell products and develop tools” an indication that the criteria and process in place at IBM is less likely to attract the types of people required for this new business area, or develop appropriate new products?

Will the established way of doing things be powerful enough to resist the efforts to bring about changes? It is a huge task to take the IBM product range into the cloud but I believe that the fastest and most reliable way to do so would be for IBM to fully embrace those changes and empower those responsible for bringing about the changes.

That will have some implications – what about the managerial layers whose job it was to enforce the policies and processes that have kept IBM at the top for so long? IBM successfully re-invented itself in the 1990’s, it will be interesting to see if they can do so again.

The final interesting thing is that in New Zealand we have many companies with established long standing boards, management, and policies and processes. How able are they to re-invent themselves? In particular our smaller companies with the lawyer, accountant and banker as the board or advisory board for the last umpteen years – are they up to the challenge of change?

 

See http://oncoreunlimited.co.nz/responding-change/ Today I read a follow up article on Bloomberg, see http://www.bloomberg.com/news/2014-11-12/ibm-s-crosby-drafted-to-speed-latecomer-s-shift-to-cloud.html