Free Who Says Elephants Can't Dance?: Leading a Great Enterprise through Dramatic Change by Jr. Louis V. Gerstner

all been professionals, it would have been impossible for them to perform, given the foxhole mentality that permeated the company in
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    1993. Typically, IBM executives believed that the only real problem the company had was the daily beating in was getting in the press.
    They felt that if we had more positive stories in the media, IBM would return to profitability and everything would be normal again.
    Although my clear priority was meeting and talking with IBM
    customers and employees, I had to make some time for the media as well. Pressure was almost overwhelming. During the first months, on any given day there were more than sixty-five standing requests for Gerstner interviews from the major media. If requests from local newspapers and computer industry press were factored in, the demand was in the hundreds. If one included international demand…and so on.
    I did what I could on a tight schedule. I conducted individual interviews with The New York Times, The Wall Street Journal, Business-Week, Fortune, USA Today , and the Financial Times . But, the media let us know, loudly and frequently, that that just wasn’t enough.
    More than anything else, I wanted time, but I knew I didn’t have a lot of it. Pressure was building—in the media, on the Street, and with shareholders. A lot had been done, but I knew I would have to go public, and do it soon, with my plans to fix IBM.
    6
    Stop the Bleeding
    (and Hold the Vision)
    B y July 1993, the pressure to act—and to act in a comprehensive manner—was acute. The financials were omin-ous. Employees wanted their new leader to do something, anything, to give them a sense of direction. The media, typically, were losing patience (not that I’ve ever felt the media had any particularly noteworthy insights into what was going on in IBM, but given the fragility of the company at that time, their stories, right or wrong, could have had a devastating impact on customer attitudes).
    On July 14, USA Today celebrated my one hundredth day on the job in a long cover story. This was the story’s lead: IBM stockholders and customers might have hoped for miracles in Louis Gerstner’s first 100 days as IBM’S CEO. But that honeymoon period ended Friday—with no major organizational overhauls or strategic moves.
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    “Clearly he is not a miracle worker,” computer analyst Ulric Weil says.
    IBM stock, down 6% since Gerstner took over, “has done nothing because he’s done nothing,” says computer analyst David Wu at S. G. Warburg.
    Although I thought I had already done a lot, it was clearly time to make some major decisions and go public with them. And after all the customer and employee and industry meetings, as well as weekend and air travel reflection, I was indeed ready to make four critical decisions:
    • Keep the company together.
    • Change our fundamental economic model.
    • Reengineer how we did business.
    • Sell underproductive assets in order to raise cash.
    And, I decided I would not disclose any of the other strategic initiatives that were forming in my head during the summer of 1993.
    Keep the Company Together
    I can’t tell you exactly when I decided to keep IBM together, nor do I remember a formal announcement. I had always talked about our size and breadth as a distinct competitive advantage. However, I do know that it wasn’t a particularly difficult decision for me.
    Here’s why.
    When the computer industry first appeared on the world’s stage, its model was to deliver to customers a total, integrated package.
    When a company bought a computer, it came with all the basic technologies, like microprocessors and storage, incorporated into a system; all the software loaded onto the hardware; all the services to
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    install and maintain the system were bundled into the pricing. The customer basically purchased a total system and had it installed for a single price.