April 26, 2013

IBM CEO Rometty Admonishes Employees to 'Think Fast, Move Faster': Is this a Case of the Cobbler's Children having No Shoes?


Late night TV show host David Letterman in his opening monologue, typically introduces comedic bits with the saying, “Have you seen this? Have your read about this?” Well, there was an item that appeared in articles in The Wall Street Journal and Reuters this week that you may have missed regarding IBM CEO Virginia Rometty taking to the Internet via a five-minute intra-company video that urged the 430,000 troops need to “think fast and move faster.” This came on the heels of earnings that came in below analyst expectations.

With the caveat that I am and continue to be a great admirer of IBM, and have been a faithful and thankful shareholder for more than four decades, this seems like an example of the old saying about “The cobbler’s children having no shoes.” There is an important lesson for all large companies in this that needs to be considered.

Words to live by

According to both articles Ms. Rometty told the company’s employees the following:

"Where we haven't transformed rapidly enough, we struggled…We have to step up with that and deal with that, and that is on all levels."

She also had a few more blunt words including: "And if anything slows you down, call it out," she urged. "Engage management, engage leadership, and let's deal with it." And, she instituted a new rule that if a client has a request or a question, IBM must respond within 24 hours.

The reason this struck me as really interesting is because one of the most closely watched reports of the year is IBM’s own survey of CEOs which it periodically conducts. In the 2012 report, done through face-to-face meetings with 1,709 CEOs from around the world, is entitled “Leading Through Connections.” The key findings regarding what CEOs were focusing on to deal with the new normal of the connected world were

Rometty’s new rule about being more responsive speaks volumes on all of this. 

Financial analysts pointed to IBM’s weaker than expected earnings as attributable to it not being better positioned in certain key and growing markets like cloud computing. However, that is relatively easily fixable given the company’s impressive R&D capabilities and its ability to buy the missing pieces of its offers that its customers are demanding. 

It is the reason why focusing in on the responsiveness and agility issues, particularly as they relate directly to improving the customer experience—customer in this case being broadly defined to include employees who are consumers of IBM’s internal IT resources, along with major customers and partners up and down their value chains—stands out.

Indeed, in what I have continuing characterized as us being in “The Age of Acceleration,” where the only constants are change and the fact that the speed of change is quickening, it has become clear that those who are responsive and agile and leverage rather than fight change are going to be the winners. This is especially true for the largest organizations where behavioral changes tend to be too slow in relationship to the speed at which customers and the best competitors are changing.  

As we are all aware from the recent buzz surrounding Yahoo’s CEO Marissa Meyer’s ordering remote workers back to the office, the focus of CEOs on improving the customer experience by changing internal practices, and leveraging technology with precision, really is now a top if not the top priority. IBM is not the first or last large company that is investigating how to think faster and move quicker based on the drivers of the Age of Acceleration. That said, along with the video, Ms. Rometty might wish to make the CEO survey compulsory reading. 

Don’t count Rometty short on getting this corrected, and at a speed that should not be underestimated. As an IBM life-time employee she knows the company’s strengths and weaknesses and how to make things happen. This is going to be one that the business schools along with everyone else are going to be watching intently. 




Edited by Stefania Viscusi




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