CEO successions at large companies, like Unilever and IBM are not spur of the moment decisions. They are carefully orchestrated and managed – with the bulk of the action often taking place back stage.
So are their interviews with the media and analysts – well rehearsed and predictably patterned. Which is what makes Ginni Rometty’s interview with Fortune, shortly after her appointment as the new CEO of IBM – no palace coup, Sam Palmisano is retiring – so terribly refreshing.
There was none of the usual pabulum about vision, and globalization, and the new normal; just solid insights.
Allow me to share a few that resonated most with me.
Reinvention: When asked what was the most important thing she had learned from Sam, Ginni replied – “the biggest thing Sam taught me, and not just me but the whole company was: Don’t accept inevitable.” Meaning, you’ve got to keep reinventing, constantly making new markets, like Smarter Planet, Analytics, and the Cloud.
Personally, I really like this emphasis on creating new markets. One of the least discussed tenets of customer-centricity is leading the customer, creating new markets, as Swatch, Starbucks, and Tata Nano have done.
Implementation: It helps if you are the author, or co-author, of the company’s strategy. Ginni Rometty was an integral part of building IBM’s current strategy, the 2015 roadmap. Not surprisingly therefore, her dominant focus will be on implementation and execution. That said, it was still refreshing to hear that reaffirmed – too many companies spend too much time rearranging the furniture, and not enough time following through on their commitments and convictions.
Value Proposition: “What do you stand for” is an easy question to ask. It’s a very difficult question to answer, especially for companies as large as IBM. It was very well answered in the interview – IBM stands for client value, R&D, and Innovation.
Several of my blogs have discussed two of these issues in depth – customer value and innovation. Its one thing to know what the right things are – it’s another to be committed to them. Given the near death experience IBM had in the 1990s, it’s unlikely that they will take either customer value or innovation for granted. Or get smug about their achievements. Both hallmarks of companies primed for long term success.
Learning Mindset-Longer Horizon: In his book “How the Mighty Fall” Jim Collins speaks of the dangers of hubris, the enemy of long-term success. Of all the elements that comprise hubris, thinking that a company knows all that it needs to know to manage both its current and future operations is the most toxic. In short, not having a learning mindset. So one has to take note when Ginni Rometti says rather candidly – there are a lot of things we don’t know yet.
Additionally, both academicians and consultants have railed against short-term thinking, favoring quarterly gains, sometimes at the expense of long-term performance. This is especially true for activities that form the spine of the business, such as R&D. Even more pleasing to hear IBM’s newly appointed CEO talk of the longer-term horizon for IBM’s R&D efforts, and to continue historically aggressive levels of R&D spending.
Business-driven Technology Agenda: This blog has carried several features on customer-driven innovation, on customer-led marketing, and customer centricity. It has even quoted Ted Levitt on a few occasions, especially his classic – customers don’t buy ¼” drills, they buy ¼” holes. IBM is a Technology company. But Technology is at best a ¼” drill. The sad part is that several companies still love their products and factories more than they love their customers (courtesy Regis McKenna – Real Time). Based on her interview, it appears that IBM is unlikely to make that mistake any time soon – not just technology for technology’s sake, but for the effect it can and will have on the world. Ginny Rometti offered the example of Watson, and its potential to reshape healthcare around the world in our lifetime.
A very dear friend and business associate, Gary Kirby (who used to work for Glaxo/Glaxo Wellcome/Glaxo Smith-Kline, and who is sadly no more), and I used to enjoy asking questions like:
Who reads the HBR?
Who follows the advice of leading management thinkers?
What types of companies are most turned on by implementing next-generation management practices?
Regardless of how we cut it, we came to the same, painful realization that smaller companies were often the hungrier, more eager, and took more risks, perhaps because their survival depended on it.
It’s heartening to note – at least based on the interview – that behemoths, like IBM, are hell bent on showing that they too are hungry, keen, and eager. That they can be the fountainheads of next-generation management practices. We applaud them!