IBM’S ROAD TO TRANSFORMATIONAL CHANGE
Executive Summary:
Since 1911 IBM has witnessed a lot of changes till date, in fact the company first sold commercial scales as well as punch card tabulators and later moved onto mainframe computers and calculators; at present it deals with software, consulting and IT services. Recently IBM had come into news by breaking into the two digit growth earnings per share for straight 9 years. However the picture wasn’t as rosy as it is now.
During 1993, IBM was at the brink of collapse and was nearly declared bankrupt. There was a lack of direction and focus which led to an $8 Billion loss to the company. At that point of time, IBM’s CEO Louis Gerstner had to gear up and face the tides with steady dedication. …show more content…
He faced major problems in approaching the employees as well as the customers, management related clashes and high costs.
Diagnosis:
Gerstner realized that changes had to be introduced quickly. He noticed that IBM was too rigid and did not welcome change easily or adapt according to new situations. The Mental and social health of the organization was deterring. So he brought about changes in the culture by inculcating the need for team spirit, creativity and innovation. He also worked to make the organization to be more customer focused and was successful in doing so by making tough decisions and abiding by them even after facing much resistance from others.
Planning for Change and handling resistance to change:
Gerstner did not split up IBM instead he changed the nature of IBM ore business by concentrating on 3 main strategies- i.e. Firstly – to keep IBM together, Secondly- creation of divisions that would focus on solutions and open networking and thirdly re-engineering of the business by changing to open standards from a propriety one.
The following Steps were taken to plan out a strategy to initiate changes and spread one vision right from top to the bottom:
• Planning the objective
• Remaking the …show more content…
IBM has shown the magnitude of transformative power of ideals right from functional products to an un-categorical product, from employees to brand ambassadors, from incidental innovation to growth propelling strategies. This all show that a large and old technology company could be forward looking in their approach to rethink the entire business from the why to the how and to the what. By doing this IBM has not only succeeded in making a smarter planet but also has proved to become a successful fast growing valuable
Executive Summary:
Since 1911 IBM has witnessed a lot of changes till date, in fact the company first sold commercial scales as well as punch card tabulators and later moved onto mainframe computers and calculators; at present it deals with software, consulting and IT services. Recently IBM had come into news by breaking into the two digit growth earnings per share for straight 9 years. However the picture wasn’t as rosy as it is now.
During 1993, IBM was at the brink of collapse and was nearly declared bankrupt. There was a lack of direction and focus which led to an $8 Billion loss to the company. At that point of time, IBM’s CEO Louis Gerstner had to gear up and face the tides with steady dedication. …show more content…
He faced major problems in approaching the employees as well as the customers, management related clashes and high costs.
Diagnosis:
Gerstner realized that changes had to be introduced quickly. He noticed that IBM was too rigid and did not welcome change easily or adapt according to new situations. The Mental and social health of the organization was deterring. So he brought about changes in the culture by inculcating the need for team spirit, creativity and innovation. He also worked to make the organization to be more customer focused and was successful in doing so by making tough decisions and abiding by them even after facing much resistance from others.
Planning for Change and handling resistance to change:
Gerstner did not split up IBM instead he changed the nature of IBM ore business by concentrating on 3 main strategies- i.e. Firstly – to keep IBM together, Secondly- creation of divisions that would focus on solutions and open networking and thirdly re-engineering of the business by changing to open standards from a propriety one.
The following Steps were taken to plan out a strategy to initiate changes and spread one vision right from top to the bottom:
• Planning the objective
• Remaking the …show more content…
IBM has shown the magnitude of transformative power of ideals right from functional products to an un-categorical product, from employees to brand ambassadors, from incidental innovation to growth propelling strategies. This all show that a large and old technology company could be forward looking in their approach to rethink the entire business from the why to the how and to the what. By doing this IBM has not only succeeded in making a smarter planet but also has proved to become a successful fast growing valuable