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.
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Iāve had a lot of experience turning around troubled companies, and one of the first things I learned was that whatever hard or painful things you have to do, do them quickly and make sure everyone knows what you are doing and why.
I think it would have been absolutely naĆÆveāas well as dangerousāif 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. Iāve 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.
I have always believed a successful company must have a customer/marketplace orientation and a strong marketing organization. Thatās why my second step in creating a global enterprise had to be to fix and focus IBMās marketing efforts.
I was depressed to realize that despite the powerful logicāthat this services-led model was IBMās unique competitive advantageāthe culture of IBM would fight it.
This kind of wrenching cultural change doesnāt happen by executive fiat. As I found, I couldnāt flip a switch and alter behaviors. It was, by any measure, the hardest part of IBMās transformation, and at times I thought it couldnāt be done.