Understanding IBM

Part 5. Free At Last!

When President Lincoln freed the slaves from the American South in 1863, and more especially after the Civil War was concluded and such freedom could be legally enforced, there was an unspoken question that had to be answered: what was a person to do with such newfound freedom, having never been educated in how to use it? How would a person apply their talents and their abilities to make a prosperous future for himself or herself, if they had never experienced the opportunities of risk and reward based on personal decisionmaking? Having been used to having their food handed to them, their clothing and shelter provided for them, they now would have to fend for themselves; yet every decision had been made for them, so they had no training in making smart business decisions and having to take the consequences of those decisions. How well would they fare?

Similarly, when the Soviet Union was replaced by a federation of independent republics, citizens who had never had the opportunity to learn business principles now had to do so without formal training. An entire economic structure had to develop around a people who had never experienced having to make all their own decisions about work, about politics, and about life. How well would they fare under such circumstances that they had never been trained for?

Having one's business decisions corrected and second-guessed by a powerful authority makes a person a little gun-shy, doesn't it?

Though not nearly as total in its control as a condition of servitude or communism, a condition of constant legal control and second-guessing existed for some 45 years at IBM, due to a U.S. government consent decree that just wouldn't go away. Every business decision that could affect market position, product bundling, and license agreements was subject to a judge's oversight. This meant that a constant state of bureaucratic siege existed, in which every decision had to be verified by the legal department and backed up by a truckload of documentation.

Imagine the sclerosis that occurred. An entire generation of leadership grew to maturity at IBM with the heavy hand of government waiting to clamp down on a misstep. Imagine the lack of zeal, competitiveness, and drive that must have resulted. Is it any wonder that IBM became so gun-shy that little companies like Netscape and Microsoft began running circles around them?

Fortunately, the liberated slaves proved up to the task and are beginning at last to show the potential they always had. And in a few more years, Russians and their neighbors will likely catch on and begin making sense of the capitalist opportunity. And lo and behold, even IBM has shown signs of life, particularly in their wise embrace of open standards and global networks. Having finally been released from the last vestiges of the consent decree, IBM must find their way around and begin competing to their fullest potential. Perhaps in a few years, the "bad old days" will be a dim and distant memory for everyone.

Most recent revision: January 6, 1998
Copyright © 1998, Tom Nadeau
All Rights Reserved.