Understanding IBM

Part 27. Pensions

Sitting down to talk with most members of the FAA upper echelon will give a technology-oriented person the willies. Most of these people have been in government service for thirty or forty years, during a period of massive technological change in the mainstream of society. Yet a tour of most ARTCCs (Air Route Traffic Control Centers) would have shown (until just the last year or two) bank after bank of 1950s-style mechanical patch panels and rotary switches attached to long copper wires and coaxial cables. The ATC (Air Traffic Controller) display panels use large green-screen radar maps provided by ancient tv-tube technology.

Why has there been so little change in the FAA equipment and procedures for decades? Because of the extreme caution that occupies the minds of the FAA management. The last thing these folks want to see is sudden changes, because the business of keeping airplanes up and flying in a shared airspace is very risky. "All change is risk" might be an appropriate motto for the FAA, just as the other extreme might be the "All change is progress" fallacy so common among most of the computer industry elite.

A similar mentality bordering on neurological sclerosis once occupied the halls of IBM's headquarters. The long-term career stability of the FAA and the long-term employment policies of IBM were very much in synchronization. After a while, the large pension due for many years of service becomes an impediment to open-minded thinking, because the risk of damaging a smooth retirement path becomes progressively greater. Aversion to risk becomes the key feature of the upper-management mentality.

Fortunately for IBM, the change at the top in 1992 also signaled a change in the mentality of the entire management bloc. The cost-cutting regimen installed by CEO Lou Gerstner was particularly targeted toward those who were nearing retirement, so that a large percentage of risk-averse people would be gently removed from the corporate decisionmaking process. This allowed a more open-minded approach to newer technologies such as the Internet, CMOS-based mainframes, and various PC initiatives. This is one of the main reasons for IBM's dramatic recovery over the last six years, leading to a rise in the value of its stock by a factor of six.

Sadly, the only exodus likely to occur at the FAA is that based on fear of the looming Year2000 problem. Technology alone cannot cure technical problems because a change of group mentality is required. Hopefully, IBM will continue its process of regeneration and rejuvenation.

Most recent revision: August 13, 1998
Copyright © 1998, Tom Nadeau
All Rights Reserved.

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