Yesterday, IBM announced that Ginni Rometty will succeed Sam Palmisano as CEO in January next year. Palmisano will remain on board as chairman.
Here’s what I think…
- Ginni Rometty has been my front runner for the job for a long time, and last year I was certain she’d get the job
- Ginni is the right person for the right time for IBM
- It’s a healthy thing that Sam is staying on as Chairman
- IBM’s rejuvenation has been built on the shoulders of many giants
- IBM’s approach to succession management is something a number of firms can learn from
- Looking forward, IBM’s future depends not just on keeping the elephants dancing, but in getting them to dance in sync
- OH.. And one final thing (that really shouldn’t need to be said)
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Ginni Rometty has been my front runner for the job for a long time, and last year I was certain she’d get the job
I attended IBM’s “Think” conference in July[Correction – the “Think” Conference was in September], which was a gathering together of 750 current and future leaders (and the odd exception like me) and I was kind of expecting the announcement to be made then as the event had the feel of being the highlight of IBM’s centennial year.
Of course you’re entitled to say “yeah – sure you’d say that now..!” But if you ask any of my analyst colleagues, or any number of IBM execs, they’d tell you that I’ve been opting for Ginni in the “CEO Sweepstake” for a long while now. The thing that really convinced me was Ginni’s participation in the IBM Start Conference last year. If ever there was an executive at the very top of their game it’s Rometty. The start conference was one of those (rare) occasions when I took notes in a format (evernote as it happens) that means it’s actually possible to dig out what I wrote afterwards. Here’s what I wrote at the time..
GR on top form.
Emphasising business outcome over tech
“HIPPO” decision-making (Highset paid person’s opinion) giving way to fct bsed dec-making (analytics)
Taking techie gorp and positioning it in business terms
So, no, I didn’t write “Ginni Rometty is going to be IBM’s next CEO”, and it may not be entirely clear from my awful notes what it was about Rometty that made me think that – so I’ll explain.
Ginni is the right person for the right time for IBM
Ginni Rometty is a rare leader. She can combine the “Vision Thing” with the “Doing it thing”. While she can talk in a compelling and engaging way on a stage about the future, and what that means, she’s also plenty capable of getting down and dirty when it comes to sales pipelines and opportunity management (Rometty is currently running Sales globally at IBM).
So she’s the right person.
It’s also the right time, IBM has gone through two fundamental phases under Gerstner, then Palmisano. Gerstner took an organisation that was suffering from a significant degree of dysfunction and made it more agile and responsive.
In his book “Who Says Elephants Can’t Dance”, Gerstner describes the extent of the management and structural change that he brought about. But Gerstner’s legacy wasn’t a single dancing elephant, it was several (At a minimum you could identify a Software elephant, a hardware elephant and a services elephant) and they didn’t always dance that well together.
I should say (because I was firmly corrected on this point some time ago by Steve Mills) that Gerstner didn’t have to “teach” the elephants to dance – he made them dance. Palmisano’s task was to begin the process of getting these elephants to dance in sync – Because as I see it, the big belief underlying Palmisano’s strategy is the Globally Integrated Enterprise (a topic that Palmisano has evangelised a great deal during his tenure).
Whenever Palmisano talked about the GIE, I got the impression that he wasn’t just preaching some apple pie – He was making it very plain that in the future businesses will have to organise themselves in a fundamentally different way. Here’s a quote from a paper written by Palmisano in 2006 (Another “must read” that can be found here – http://www.ibm.com/ibm/governmentalprograms/samforeignaffairs.pdf )
Real innovation is about more than the simple creation and launching of new products. It is also about how services are delivered, how business processes are integrated, how companies and institutions are managed, how knowledge is transferred, how public policies are formulated
Underlying the GIE vision is a collection of pretty simple ideas –
– The globally integrated enterprise will require fundamentally different approaches to production, distribution and work-force deployment – This doesn’t just mean “labour arbitrage” it means actively finding the best place to do things (including R&D – something that US multinationals have traditionally kept largely within the borders of the USA)
– Collaboration is a key component to the future success of organisations, not just within markets, but across multiple borders and between multiple actors (including Government)
And when you look at the work the IBM has done over the past decade and a bit, you should be able to recognise these goals at the core of IBM’s strategy, and the values expressed in the idea of the GIE are what under-pin IBM’s “Smarter Planet” vision.
Indeed, I’ve been talking for a while about the “Smarter IBM” project that I believe has been underway as Palmisano and his leadership team work towards the goal of making IBM into a GII (Globally Integrated IBM). Ginni will be taking the helm at a time when a great deal of progress has been made towards that goal, but there remains a great deal to do.
The next evolution of IBM’s journey towards global integration will centre on how well IBM can continue to take its significant competencies in software, hardware, technical services and business services and present them as a joined-up, synchronised proposition to clients.
I think that Rometty was made for this job.
It’s a healthy thing that Sam is staying on as Chairman
I don’t think that Ginni has any need of a “guiding hand” or a “friend to phone”, but the combination of President, CEO and Chairman isn’t necessarily a healthy one (although in fairness Palmisano managed to juggle the potential conflicts well). While IBM traditionally expects CEO’s to retire at 60, Palmisano is a long way from being too frail to make a contribution, so I think it was a good call to retain him in the role of Chairman as part of a mature long term succession strategy.
IBM’s rejuvenation has been built on the shoulders of many giants
While Gerstner and Palmisano deserve a bucket of credit, and while Ginni Rometty’s contribution to IBM’s strategy (and the execution of it) is a matter of record there are quite a number of senior executives at IBM who deserve a share of the credit for IBM’s current position. The one I know the best is Steve Mills who has transformed IBM’s software business and is now in charge of both Software and Hardware. Steve, at 60, was “timed-out” of the running for the top job but has played a huge role in driving change within IBM.
IBM’s approach to succession management is something a number of firms can learn from…
During the two days of IBM’s Think Conference, there was a flurry of rumour (later confirmed) that HP was about to fire its CEO Leo Apotheker. I couldn’t help tweeting at the time :
@thinkovation: Ironic to be at an iBM event discussing the next 100 years of leadership while HP appears to be struggling with the next 10 days
The fact that HP’s board had to flail about to find a not entirely perfect fit for the job should be a cause of deep embarrassment in the face of other companies that manage to develop an executive team that contains several potential candidates.
Looking forward, IBM’s future depends not just on keeping the elephants dancing, but in getting them to dance in sync
So, I’m back onto dancing elephants. Sorry if the metaphor seems trite – but I think it’s fundamental to IBM’s future. So much so that I commissioned a couple of drawings from a wonderful local artist Karen Reed (http://www.karenreedart.com). So here’s the pitch. Gerstner took on an IBM that consisted of a bunch of Elephants, that were busy doing their own thing. They needed to dance though, so he culled some and organised the rest. Palmisano’s mission was to get those elephants to dance in sync. And while Sam has made excellent progress, it’ll be up to Ginni to continue the elephant wrangling
OH.. And one final thing (that really shouldn’t need to be said)
The fact that Ginni is a woman, really, really isn’t the point. Yes, it’s another milestone in our slow progress towards common sense and it’s important in that context. But IBM shareholders can rest easy knowing that if there were a better candidate for this job at this time, the board would have appointed that person.