As I was recently reading the book "Why Smart Executives Fail: and What You Can Learn From Their Mistakes" by Sydney Finkelstein, I was reminded of when I worked for IBM in the early 90's. At that time, IBM was an incredibly large, bureaucratic nightmare of a corporation. I was hired by their recently formed technology services and outsourcing division, Integrated Systems Solutions Corporation or ISSC (later known as IBM Global Services). ISSC was the new model for IBM; a tougher leaner organization where things like "a job for life" weren't a given. Most of the company did not know we existed. Those who did called us "light blue" as if to say we really weren't "true blue" IBM employees.
Shortly after I was hired, I moved into a management position on an outsourcing contract. As a new manager with IBM I was sent to IBM Leadership Development a.k.a New Manager School in Raleigh, NC. I was the only ISSC employee in a class of about 20 people. The first thing I noticed was the shock and disdain the IBM lifers had for me. Not only was I a professional hire, but I was also a manager. How dare the company promote someone from the outside so early in their IBM career. I found the whole situation very funny.
One of the things I remember about the class was the instructors' insistence that my division (ISSC) was going to be the model for the whole company. We talked about company loyalty. I offered that I was loyal to the company as long as they were paying me and there was a job for me to do in IBM. There was an audible gasp in the room. People argued with me that unconditional loyalty to the company was the right way to go. I argued that ISSC didn't promise me a life long proposition. Instead, I was offered a position at an outsourcing contract that had a finite life span. After the contract was over there was no guarantee of another contract for me to go to. To the surprise of most of the class, the instructors agreed with me.
Not long after that class IBM North America went through a massive restructuring effort, laying off thousands of employees. I wonder how many of the new IBM leaders I went to class with got caught in the layoff. Of those that did, what would they say about unconditional loyalty today?
Another memorable moment from that trip was a tour I took of an IBM PC manufacturing facility. I was surprised by the lack of automation. Prior to the tour I had visions of machinery and robots working endlessly buidling computer equipment. I was disappointed to see that instead of high tech, there were lots of people putting boards into PCs. But, the biggest surprise was that within a few blocks of this facility there were 2 other manufacturing sites making competing IBM PC models. IBM was so big and behemoth like, that the company was competing against itself.
IBM of the late 1980's early 1990's was what Mr. Finkelstein calls a "zombie business". According to Mr. Finkelstein, zombie businesses are companies that have a such an insulated corporate culture, so many employees with deep loyalties, and have an emphasis so focused on the positive that they fail to see negative business signals. These companies are often the biggest in their industry. They maintain a "constant awareness of their closest competitor" and they are always trying to improve internal metrics.
In Mr. Finkelstein's opinion, these zombie businesses fail to see not only what's happening in their industry, but also fail to take into account their customers and the customers' needs. The positive attitudes are so bad that people do not want to tell bad news...even to the point of not telling the CEO the truth out of fear of disappointment.
In all honesty, I can't tell you what was going on at the top of IBM...I was too far removed from it. But I can tell you from where I sat, the company was in bad shape. I don't want to imply that IBM was a bad company, or unpleasant to work for. It wasn't and there were a great many benefits. IBM just believed its own press and lost sight of reality.
When Lou Gerstner came on board, things changed for the better. Gerstner took the company through some hard times and ultimately produced a much different company. He "rocked the world" of many IBM lifers. I'll bet you they are still bitter about it.
Having been gone from IBM for about 7 years, I can't tell you too much about them today. The outsourcing contract I was on has run its course...by the way I left the company before the contract ended in case you're wondering. I still maintain some friendships with those IBM employees who found either found jobs within the company and those who didn't.
What's the point of all this you ask? Well the point is...Sydney Finkelstein is right when he talks about zombie businesses. They exist. On the surface they can seem like great places. Underneath, there is trouble. It is tempting to focus on how well your company is doing and how great a place it is to be. However, remember to pay attention to your customers, industry, etc. If you don't, you may end up a zombie. =:-o
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