IBM at 100: How to Outlast Depression, War, and Competition

12:25 PM Monday August 8, 2011
by Nancy Koehn

http://blogs.hbr.org/hbsfaculty/2011/08/ibm-at-100-how-to-outlast-depr.html

It is hard to ignore a century of success particularly after returning from a near death experience in the early 90’s

 At its 100-year milestone, IBM shows us what it takes to outlast depression, war, and intense competition in order to remain a market leader in the midst of ongoing technological innovation. Here are several lessons worth sharing.

Be nimble and quick to adapt in a world of disruptive change(some early history) When the Social Security Act of 1935 created a huge demand for record keeping, IBM was ready, landing an enormous government contract to keep employment records on 26 million people. World War II then brought additional information-processing needs, as the U.S. military began using IBM cards to keep track of supplies, personnel and casualties. During this period, company sales grew from $40 million in 1939 to $142 million in 1945

Know your customers intimately Newly appointed CEO Lou Gerstner logged thousands of hours visiting customers, industry experts and analysts. He then set about transforming the company to rekindle IBM's historic commitment to customer intimacy, to make the organization much more integrated, and to streamline operations. The overarching strategic goal was to create an enterprise that could understand its customers wide-ranging IT needs (in some cases before they did on their own) and to deliver on these demands more effectively than any rivals. By 2000, IBM's Global Services had become the world's largest IT consulting and web services organization, providing almost 30% of the company's revenue. Nine years later, IT services accounted for 42% of IBM's $95 billion in sales.

Cultivate collective responsibility based on "systems knowledge"From IBM's early days, Thomas Watson Sr. believed you had to take good care of consumers by learning to think as they did

Stay committed to your core values, no matter whatDespite IBM's ability to adapt and change, the company's core values have remained at the center of what the organization does (and is). Shaping IBM's values and forward-facing vision, Thomas Watson, Sr. baked his driving ambition, respect for his people, faith in effective sales and distribution methods, commitment to customer intimacy and appetite for ongoing reinvention into the company's DNA