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Keep on Learning, Big Blue

June 16, 2011
Related Topics: Management, Management Training, Business Partners, Leadership Development, Management, Business Acumen
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IBM turned 100 today. That’s a rare feat for a company, and not just in today’s rapid-fire business environment.

In his best-seller “Built to Last,” Jim Collins noted that only 71 of the companies on the original Fortune 500 list still hold a place today. MIT professor Peter Senge says the average life of a company is 30 years. Not life on the Fortune list, mind you, but life as in birth through death.

IBM celebrated its centenary by publishing a new, rather hubristically titled book, “Making the World Work Better: The Ideas That Shaped a Century and Company,” that chronicles the company’s accomplishments. In those 100 years, IBM has been an undisputed technology leader, pumping out innovation after innovation that shaped our lives, starting with electronic “calculating machines” that tabulated data from punch cards to the giant mainframes of the 1960s and the rise of PCs in the '80s and '90s.

The company's tech prowess remains high. Remember the story of Watson, IBM's supercomputer that earlier this year beat the all-time champs of Jeopardy at their own game? And we're not just talking any old dudes. One of the vanquished was Ken Jennings, famous for winning a stunning 74 games as a contestant on the show.

Despite all that success, IBM faced a near-death experience in the 1990s. Plagued by internal turf battles and a bloated corporate structure, employees lost sight of their customers. Incoming CEO Lou Gerstner refocused IBM and began its transformation from a technology company to a services company, culminating in a formal division between the two in 2005. Since then, the company’s success has less to do with machines than with services, writes The Economist. Today, services accounts for $56.4 billion in revenue, more than half the company’s revenue base.

“IBM’s core competency is to leverage information technologies, science, engineering and systems thinking to solve complex problems in business, government and society in general,” writes IBM veteran Irving Wladawsky-Berger. He highlights three key capabilities that deserve the credit for IBM’s longevity:

  • Highly talented people: Not just in technology but in a diverse set of skill areas including communication.
  • Relationships and collaboration: A coordinated system of distributed leadership.
  • Harmony with the marketplace: Alignment with external trends and developments.

Given the importance of people, and not just technology, to IBM's continued success, it’s no surprise that employee learning and development plays a central role. Learning to succeed as a company means learning has to play a pivotal role in each employee’s daily work life. IBM empowers leaders to develop other leaders and provides career guidance to all members of its 420,000-strong workforce, part of the reason why it was recently recognized by Chief Learning Officer as one of the top companies for learning and development in the magazine’s LearningElite ranking.

Just like Gerstner and his CEO successor Sam Palmisano have provided strong executive leadership focused on the long term, Ted Hoff, IBM’s vice president of learning, has done the same for its learning and development initiatives. We first featured Ted on the cover of Chief Learning Officer magazine in 2003 and have since featured him twice more, once in 2009 and most recently this month as part of our recognition of companies that earned the LearningElite status. Ted also was recognized as CLO of the Year in 2005. [Warning, shameless plug ahead: Nominations for the 2011 CLO of the Year are now open!]

Those successes put IBM in a great position for the future. But as we all should know, there are no guarantees in business. With Palmisano turning 60 soon (according to some, the company’s self-imposed deadline for naming a CEO successor), IBM is working out its succession plans. The Wall Street Journal recently recapped the odds on successors, with sales chief Virginia Rometty emerging as the favorite to replace Palmisano. If that turns out to be true, she would be the company’s first female CEO and make IBM the largest U.S. company run by a woman.

Whoever that next leader is, he or she will be tasked with leading the company into its second century and ensuring it keeps its place as one of the leaders in technology and modern management. So, happy birthday Big Blue. Many more of them, too.

 

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