Understanding IBM

Part 2. The Vision Thing

When a company becomes big and slow, it is common to brand that company as "lacking vision." Often, the company becomes maligned as one that is lacking in foresight, innovation, planning, and any other form of quality, courageous leadership. In other words, the typical picture that is painted of a big company is some sort of blob that just gets by on its own momentum.

IBM is a very big company. Even today, after years of reducing the rolls by a combination of layoffs, early retirement, and attrition (hiring at a slower rate than people naturally leave), there are something in excess of 250,000 IBM employees worldwide. There are something like eight or ten major divisions at IBM, meaning that there are tons of managers, senior executives, VPs, and the usual bevy of lawyers, accountants, advertisers, and consultants. That's a lot of management.

It has been said that there are two kinds of authority in corporations: leadership, and management. When a company the size of IBM has so many managers, often the leaders get lost in the shuffle. Leadership can sometimes get stifled by the culture of management. The difference between a leader and a manager, of course, is simple: managers are concerned with Doing the Thing Right. Leaders are concerned with Doing the Right Thing. When a company has as many resources as a small city, management (conserving of resources) begins to become quite important; people start worrying more about doing things right.

Yet leadership can still be shown in such cases, provided the vision is great enough. John Kennedy provided an entire nation with one simple goal: "To the moon and back by 1970." Because the goal was large but the words were small, the project outlived its originator and by 1969, mankind had walked the surface of the moon and returned. Leading a country or a city is a lot like leading a business; it involves providing a vision and then articulating that vision to the managers and then on to the workers.

Does IBM have a vision? Well, let's look at where it has focused its attention in the past four or five years: banking. It seems like all the major wins for IBM have come in banking, particularly the big, multinational banks with hundreds of billions of dollars in their portfolios. At the same time, the banking industry is undergoing sweeping deregulation, and is poised to enter -- and perhaps dominate -- other fields such as insurance, credit, real estate, and stock trading. Why is that? Because while these other organizations certainly can handle money, they can't handle it quite the same way as a bank can. You are not likely to see an insurance company or a credit union begin building huge vaults, stockpiling cash, and training security guards. There is something different about a bank; perhaps it is because they handle pure capital instead of the more esoteric versions that society has dreamed up recently. Banks are also devouring each other at an unprecedented rate, and we may eventually see only ten or twenty major banking conglomerates worldwide.

Another area of IBM vision is programming. IBM has invested so deeply in Java, they are basically becoming a "tail that wags the (Sun) dog." It is IBM that is setting the pace for development platforms, performance improvements, and applications to real-world situations. It seems as if IBM is betting the farm on Java, and winning.

No, IBM will not win every tussle with its competitors, but it seems to be winning the important ones, the ones with tremendous upside leverage potential. The fact that IBM has in the past few years recognized and begun to ride these megatrends speaks volumes for the vision factor in their leadership positions. Maybe it is in our own limited view that we cannot grasp the size of the IBM vision. Maybe it is we who lack perspective in this case.

Most recent revision: December 25, 1997
Copyright © 1997, Tom Nadeau
All Rights Reserved.