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I then proposed that, based on my reading, we had five ninety-day priorities:

  • Stop hemorrhaging cash. We were precariously close to running out of money.
  • Make sure we would be profitable in 1994 to send a message to the world—and to the IBM workforce—that we had stabilized the company.
  • Develop and implement a key customer strategy for 1993 and 1994—one that would convince customers that we were back serving their interests, not just pushing “iron” (mainframes) down their throats to ease our short-term financial pressures.
  • Finish right-sizing by the beginning of the third quarter.
  • Develop an intermediate-term business strategy.

Finally, I laid out an assignment for the next thirty days. I asked for a ten-page report from each business unit leader covering customer needs, product line, competitive analysis, technical outlook, economics, both long- and short-term key issues, and the 1993-94 outlook.

I also asked all attendees to describe for me their view of IBM in total: What short-term steps could we take to get aggressive on customer relationships, sales, and competitive attacks?

What should we be thinking about in our long-term and short-term business strategies?

GerstnerWho Says Elephants Can’t Dance?
p.25

Related Quotes

He said the basic research unit was not affordable and needed to be downsized. He was quite concerned about IBM’s software business, mainframe business, and midrange products. As I look back at my notes, it is clear he understood most, if not all, of the business issues we tackled over the ensuing years. What’s striking from my notes is the absence of any mention of culture, teamwork, customers, or leadership—the elements that turned

out to be the toughest challenges at IBM…

I went home with a deepening sense of fear. Could I pull this off? Who was going to help me?

GerstnerWho Says Elephants Can’t Dance?
p.27-28

I laid out my expectations:

  • We would redefine IBM and its priorities starting with the customer. We would give our laboratories free rein and deliver open, distributed, user-based solutions.
  • We would recommit to quality, be easier to work with, and reestablish a leadership position (but not the old dominance) in the industry.
  • Everything at IBM would begin with listening to our customers and delivering the performance they expected.
GerstnerWho Says Elephants Can’t Dance?
p.47-48

6: STOP THE BLEEDING (AND HOLD THE VISION)

“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.
GerstnerWho Says Elephants Can’t Dance?
p.57

[The key strategic decisions] were:

  • Keep the company together and not spin off the pieces.
  • Reinvest in the mainframe.
  • Remain in the core semiconductor technology business.
  • Protect the fundamental R&D budget.
  • Drive all we did from the customer back and turn IBM into a market-driven rather than an internally focused, process-driven enterprise.
GerstnerWho Says Elephants Can’t Dance?
p.72

A frenetic approach just makes the company even more unstable. One, you’re not likely to be right. Two, even if you are right, nobody knows what the heck you’re doing. Three, you haven’t bothered to listen to anybody, so you have strained relationships you want to cement. Now, if you’re going to run out of money in five or six days, you’ve got a bit of a different story than if you’re going to run out of money in ninety days. That’s what I call the ‘burning platform’ problem. If you’ve got a burning platform problem, you don’t have a lot of time, so you have to take things in two steps. You have to gather your team together and say, ‘Guys, before we do anything else, we had better put this fire out. Then we’ll take a deep breath.’” - Henry Schacht.

Neef, CitrinYou’re in Charge - Now What?
p.218