I look for people who work to solve problems and help colleagues. I sack politicians… Solve problems laterally; don’t keep bringing them up the line.

I think it would have been absolutely naïve—as well as dangerous—if I had come into a company as complex as IBM with a plan to import a band of outsiders somehow magically to run the place better than the people who were there in the first place. I’ve entered other companies from the outside, and based on my experience, you might be able to pull that off at a small company in a relatively simple industry and under optimal conditions.

This is part of my management philosophy. Executives should know they don’t accumulate wealth unless the long-term shareholders do the same.

I have worked in services companies (McKinsey and American Express) and product companies (RJR Nabisco and IBM). I will state unequivocally that services businesses are much more difficult to manage.

This kind of wrenching cultural change doesn’t happen by executive fiat. As I found, I couldn’t flip a switch and alter behaviors. It was, by any measure, the hardest part of IBM’s transformation, and at times I thought it couldn’t be done.