Editorial: December 2002

Louis Gerstner joined IBM in 1993 and, according to his just-published book, Who Says Elephants Can’t Dance?, he took just a few months to make what he concedes was the most important decision of his career: Don’t break up IBM. His reasoning? With the advent of client-server computing, and a highly networked world already on the horizon, everyone—industry gurus, securities analysts, the press—was insisting that IBM’s vertically integrated model, based as it was on the company’s past as a builder of mainframes, no longer applied. Corporations, in this view, would simply purchase the technology they needed and integrate it themselves.

But Gerstner wasn’t buying it. “As a big customer of the [IT] industry,” he says, “all I wanted was an information technology platform, and a partner, that would allow me to run that business the way I wanted it to run.” He believed that IBM’s role as a top-to-bottom integrator of corporate IT would only become more critical as the mainframe world faded into the past. So he decided to keep the company together.

It was a brilliant, and counterintuitive, move. And it worked. Yet according to Gerstner, the decision was relatively easy, and he’s made it by page 61 of his book. The vast majority of the rest of the book, all 300 pages, is devoted to how that strategy was executed. And by far the most important factor in executing that decision involved changing IBM’s culture, a Herculean task indeed. Everyone has their own supply of horror stories about Big Blue’s pre-1990s entrenched bureaucracy, its lack of responsiveness to customers and its unwillingness to take chances, so there’s no point in repeating Gerstner’s own. (Though it is worth mentioning that when Gerstner arrived at IBM, the company “had, by actual count, 128 people with CIO in their titles—all of them managing their own local systems architectures.”) Gerstner makes a good case that with his leadership and the willing cooperation of many hands at IBM, old and new, he succeeded in convincing most of its work force to realign its decades-old culture with its new services-oriented, customer-driven strategy.

At some time or other, just about every company faces the problems IBM faced when Gerstner arrived—no clear customer-focused strategy and poor alignment to the go-to-market strategy that did exist. More and more, these problems involve making sure a company’s IT is fully in support of its strategy. How companies are trying to solve these problems—from management buy-in for IT strategy to executing strategy from the bottom up—is the theme of this issue’s roundup of the IT alignment conference sponsored by CIO Insight and the Balanced Scorecard Collaborative in September. Executive Editor Marcia Stepanek reports from Chicago on the critical themes that emerged, with interviews with the CIOs of Capital One and UPS, the cowinners of our annual CIO Insight Partners in Alignment Award.

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