Stories
Stories
Blue No Longer
In March, Louis Gerstner (MBA '65), IBM's CEO since 1993, stepped down after achieving a remarkable turnaround at Big Blue. Gerstner, who lacked any previous experience in the computer industry, frequently defied conventional management wisdom during his rescue of the troubled giant, as he recounted to the New York Times (March 10, 2002).
At the outset of his tenure, for example, Gerstner scoffed at the notion that a new vision needed to be articulated for the company. That would require “a yearlong debate,” he said, when what was needed was “to save the company economically.” A veteran of customer-oriented firms such as American Express and RJR Nabisco, Gerstner proceeded to shake up Big Blue's culture, reinventing IBM “from the customer back, not from the company out,” so the firm would become driven by the marketplace. He scrapped plans to split the company into several smaller units (“Baby Blues”) and concentrated instead on cutting costs (by paring the workforce and closing plants) and expanding IBM's capability to help companies meet the full range of their computing and IT needs. Keeping IBM intact “was a big risk, but I never doubted it was the right thing to do,” Gerstner said. In another bold move, Gerstner and IBM opted early on for open systems — despite the company's tradition of developing its own technology — and embraced the nascent Internet. Thus, when the Internet took off, creating a vast new world of potential customers, IBM's size was once again an advantage.
Asked what he would miss most, Gerstner, who will stay on as the company's chairman until the end of the year, replied, “I love winning. I get excited by our success. I get very frustrated by our failures, too, but I enjoy the game.”