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?

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.

I came to see, in my time at IBM, that culture isn’t just one aspect of the game—it is the game. In the end, an organization is nothing more than the collective capacity of its people to create value. Vision, strategy, marketing, financial management—any management system, in fact—can set you on the right path and can carry you for a while. But no enterprise—whether in business, government, education, health care, or any area of human endeavor—will succeed over the long haul if those elements aren’t part of its DNA.

Tough as that was, we had to suck it up and take on the task of changing the culture, given what was at stake. I knew it would take at least five years. (In that I underestimated.) And I knew the leader of the revolution had to be me—I had to commit to thousands of hours of personal activity to pull off the change. I would have to be up-front and outspoken about what I was doing. I needed to get my leadership team to join me. We all had to talk openly and directly about culture, behavior, and beliefs—we could not be subtle.

IBM over the past ten years has begun to develop the ability to handle a very high level of internal complexity and even apparent contradiction. Rather than hiding from conflict or suppressing it, we’re learning how to manage it, even benefit from it. This equilibrium can be achieved only when an enterprise has a very sure sense of self.