“Getting Back to Values, and Other Lessons from IBM”

Audio Transcript

There are three principal IBM values for which you can see the genetic strain all the way back to 1911, at the very beginning of the whole CTR that eventually moved into IBM’s evolution. One of those was the idea that it all fundamentally begins with a regard for and a belief in the people who would build the enterprise. You can use the term “respect for the individual.” You can put whatever term you want around it. But fundamentally, Watson believed that, in the end, it was going to be a concern for the people that would make the difference and that they would affect customers, etc.

By the way, not all companies have that value. Disney does not have that. Disney has no respect for the individual, near as I can see. They systematically pulverize individuality out of everybody who works there. As long as somebody’s sort of doing what a Disney person does, there’s no sense that it’s really the person. It’s the brand; it’s the processes in that case. In the IBM case, though, that goes very deeply.

The second principle was a fanatical dedication to being concerned about and understanding the customer.

The third was, as Watson Jr. put it, a kind of commitment to excellence. What it really was, was a “For God’s sake, we’re IBM—we should win” value. And that, the idea being that just not winning, not somehow ending up #1 at what you do, not just because it’s about success, but because that’s a value that, if we can’t do that, we are repulsed by the idea at an almost visceral revulsion level—that’s what that value was really about. Watson Sr. wanted IBM to be the company that won and won and won and won and won. If you were to ask him why, he wouldn’t understand the question.

I think that what Gerstner did—he beat the odds by being an outsider—was unusual. I also think that Gerstner was classically Level 4, and for a moment in his life—and it may have been only a moment—he went more toward Level 5. Because when he came to IBM, he said, “Something happened that I didn’t expect: I fell in love with IBM.” I think for the first time in Gerstner’s career as I can see it, he actually became ambitious for something larger than himself. Prior to that, there’s not a lot of evidence that there was that in him. But being CEO of IBM seemed to have brought more of it out. And if you look at how he’s set up his successor, he’s passed it on to somebody who is deeply Blue. I think he really did become ambitious for IBM.

Kevin Maney says his principal contribution was reminding IBM that it was IBM. He tried to get IBM back to that. What he made very clear was they had gotten trapped in all kinds of junk that had nothing to do with core values. Things that have to do with the way we dress, the way we talk, the way we actually put things through all these stupid procedures—that’s just junk on top of the values that, in fact, obscure them.

So, his task was to rip away as many of those as possible. One of his observations was that—just like tenure in a way, which in some ways is inconsistent with freedom of inquiry in the social sciences—if you don’t agree with my paradigm, I don’t give you tenure. Essentially, what had happened at IBM was that a lot of processes with which it grew up began to separate people from the customer, which was antithetical to the core value. So, he said, “We’ve got to get rid of that stuff to get back to the values.”