Lou Gerstner

They were famous for decades for its strict dress code, dark suits, white shirts.

They only dropped this in 1995 when Lou Gerstner took over, when the company was fighting to survive, when they were fighting to look less like a corporate establishment and more like a tech startup.

It was losing talent to customers everywhere.

So the rules typically change when the power changes.

Well, let's dig into one case in detail.

So you open your collection with Lou Gerstner at IBM.

Why did you start there?

I started becoming a lecturer at the university maybe like 15 years ago or so.

And that was about transformation.

It was like a study of about like for business administration students talking about transformation of companies and it was just a guest lecture first and i talked about one hour about how patents can be used in transformation and that was the case that i chose because it was really a big case at that time i mean lukasna took over ibm when they were selling mainframe computers you know computers the size of a room and all these thin clients with the people who are working on on this one computer basically and then they came macintosh and the personal computer and they lost their complete business from one day to another basically and they filed for chapter 11 and had really difficulties and then lou gerstner took over and saw the value of the patents, saw the research that was done on all these basic technologies that all the new computers were also using.

So he basically asked the new competitors whether they wanted to use the technology that they actually already used.

And whether they wanted to pay license fees or he also had to litigate some patents.

I think that's the magic and creating a space for your leader's who then create a space for their leaders, really important.

And then with the recent passing of Lou Gerstner, who is a former CEO, I reread Elephants Can't Dance.

And when I read it the first time, I was a newer IBMer, and I'm not sure it hit me the same way now as I'm a true leader of an IBM business.

So yeah.

I love reading autobiographies, and business autobiographies to be exact.

And I was reading Lou Gerstner's Why Elephants Can't Dance at the time, which is an amazing book for anybody.

Still, it's still valuable, I would say, if not more now with what's going on.

And Lou Gerstner had the, had the re- had the massive, herculean, you know, herculean, Homer-esque, uh, task to try and get IBM to survive within an 18-month period or go bankrupt, right? And, and what he did was, you know, in a global multi-matrix environment, which I'm sure you would understand and appreciate sort of where you've come from and who you've sort of worked with and so forth.

In multi-matrix environments, you get lost in the noise of KPIs and objectives.

And what he realized was, wow, within 12 months he worked out, after doing many, many trips around the world and vetting subsidiaries, and all the usual multi-matrix environments, was that people respect what's inspected of them.

And that's really the key.

So one of the things we do when we work with an organization, one of the first things we do, we say, what's your genome of values, right? What do you value? And then we ask, what do those values cost you? My favorite example is Lou Gerstner and the legendary transformation at IBM.

He said, we're going to value the customer and I'm willing to forego revenue on every sale to do it.

I've interviewed dozens of executives from IBM at that period, including the one who led the e-business initiative.