My book, The Decline and Fall of IBM, is now available in paperback, on the iPad and Nook, as well as on the Kindle. A dozen other platforms plus an audio book will be available shortly, but these are the big ones.
Over the weekend I received a very insightful message about the book from reader Steve Jenkins in Australia, where IBM is showing the same behavior problems as everywhere else. Steve has an insight into Big Blue that I wish I had thought to include in the book because I believe he is absolutely correct.
“Finished your e-book, but skimmed the blog comments,” wrote Steve. “The ‘Financial Engineering’ is important: the C-suite is converting 15 percent of the company into share ‘value’ each year to feed their bonuses. Is that a 6-year half-life? It’s a technique with a limited application, but could work well for a decade.
“Reading your analysis, I was wracking my brain trying to think of precedents, in the Industry and really couldn’t. Not even Unisys. But there is one, it’s glaring, obvious and should be frightening to shareholders & customers: Communist USSR & the Eastern European Bloc.
“Same deal, I think. Cooked books, pain for the working classes, luxury and riches for the Ruling Elite, Ethics & Morals of no consequence. And those ‘Five Year Plans’ are the same: full of certainty and false promise, based on measuring and rewarding the wrong things (like tons of nails made) — with no concern, checking or consequences for gaming the system.
“You absolutely nailed one of the Cultural problems: ‘The Big Bet.’
– Hollerith had the punched card
– then IBM dominated with tabulators (the 1949(?) anti-trust suit)
– then TJ Watson Jr did the S/360.
– and since 1992, they’ve been hunting for the Next Big Monopoly.
“I don’t think IBM’s Board & C-suite is in denial. I suspect it’s more like the Kremlin in 1988 and I don’t have good words for it. Fantasy Land, definitely. Disconnected from Reality, certainly. Denial implies some recognition or understanding of the truth.”
Thanks for the insight, Steve. Yes, IBM in 2014 is the Kremlin in 1988 with the big question being whether Ginni Rometty is Mikhail Gorbachev? I don’t think she is. Gorbachev at least took a shot at trying to manage the transition which Ginni so far has not. That would make her Gorby’s predecessor, Konstantin Chernenko, who died in office.
I suspect that will be Ginni’s fate, too, at least metaphorically. As more people read my book and come to understand not just the house of cards that IBM has become but that it’s just an extreme example of what’s happening all over American big business, IBM’s board will come to life and try to save itself by ejecting her in favor of a more Gerstner-like character.
Heck, Rometty’s replacement could be Lou Gerstner.
My next column (the last in this series I’m sure you’ll be happy to know) is about the probable endgame for IBM.
Bob, I’m coming to the conclusion that IBM management’s current crusade to drive EPS at any cost is going to sink the company. Your correspondent’s diagnosis feels eerily accurate, particularly as this person is an IBMer. Despite the optimistic hope in my February open letter to Rometty and the board, I think it’s time for some harsher medicine.
Just finished your book and it explains the behaviours and rubbish service we are seeing as customers. While customers are in a position to cancel contracts for non performance, or at least not renew, what about all those investors in shares?
Not just the commitment to EPS that may or may only hit the level, but it looks very much like the business value is seriously being eroded.
As I understand it auditor have two key roles. Firstly to assert the accounts are a true record. Certain of the blogs seem to allude to some massaging of numbers.
The other is to point out risks and risk increases which they failed to do with the banks. Perhaps it would be good for the auditors to get a copy of this book prior to the next audit.
Should the auditors be pointing out the flat sales as an issue in an ongoing business ? The other issue in the audit report if it’s not there already, is the percentage of EPS that comes from non-key business, such as repurchasing of shares. The increasing debt would also be a risk to business continuation. Falling revenue, increasing debt.
If IBM fails or fails its Shareholders then the auditors may well get caught in the outfall.
I work in a major Australian company and can say that IBM shot themselves in the foot in the last round of “resource actions” where around 100 consultants were “let go” in one day leaving the company with a huge hole in their capability. This was in no way communicated to the customer although blind Freddy knew it was happening. .
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These positions were rapidly filled by infosys/oracle for technology and accenture/cap gemini (for gods sake!) for business analyst.
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IBM will run the (no) help desk until there contract runs out then it’ll go elsewhere. Mainframes are being replaced by Oracle exa kit and MQ is dying a slow death. Give it a year or so and an organisation that was built on IBM technology and people will have nary a trace.
As an IBMer, I have been having that “Soviet Union” feeling for a while. So it’s not just me. Well, we’ll see if something comes out of the wrecks.
The comparison with a Stalinist or a Maoist regime is a good one. In China during the 1950’s Mao was told that steel production was at its highest peak. In fact millions of people were dying of starvation because they were told to leave the fields to make steel in they back yards. You can imagine the quality of the steel produced. Local officials were in fear of their lives if targets were not met, peasants were shot if they disobeyed. It is now common opinion that Mao knew of this, but chose to do nothing, because it supported his ego and ‘power base’ in the communist world. The the good factory produced steel was being promised personally by Mao to emerging communist countries. An inevitable human disaster – but unquestioned.
Wind forward to IBM in 2014. A view from inside. Being very well connected and part of the technical elite in IBM for over 30 years, I can assure you that privately many Senior Technical Staff Members, Distinguished Engineers, and IBM Fellows (the top technical elite) think the EPS road-map is madness. The same view applies within most of the mid-ranking VPs with whom I go back many years. I am sure the same happened in China in the 1950’s unless you were a cadre or at the top.
Theirs is no longer a world of creativity and job satisfaction – most are just hanging in or the best are leaving – it is a farce when Ginni comes up with ‘treasure wild ducks’. In services, the last time I saw ‘wild ducks’ was in the ISSC services unit in the 1990’s. That was soon shut down and GTS is now run by a Finance guy who has very little understanding of what happens on the ground. The most interesting factor is the fear that pervades and also the lack of co-operation between elite technical staff who know that if they co-operate too closely with each other, there is always the chance that the other guy will claim the glory – under the current forced ranking somebody will loose and go to the Gulag. I have had a few conversations with my peers on that one and am always cautious myself. The whole system is based on fear, ‘do what you are told’ with Executives and their ‘staffers’ (think political cadres) doing most of the thinking. Increasingly the technical elite are morphing into the political cadres too – as somebody recently said, the elite technical positions (DE and STSM) are a watered down currency now-days. To make the numbers, emerging countries are ramming in inadequate (intelligent but inexperienced) staff to the DE and STSM process to make the numbers (think Steel production).
Like Stalin or Maos regime – the top of the company is dominated by fear – driven by too many executives with too much power, an exec ‘get rich’ scheme (think Soviet Dachas) and the most senior Executives whose primary skill is related to playing the internal organization and egos run riot and who cannot be challenged (surrounded by yes men/women). Sound familiar?
Reading the history of the early communist era in China indicates that each level of the hierarchy reported slightly inflated numbers for food production up the chain to the central committee which received glowing reports of abundant food production. They initially believed the reports and accelerated their plans to develop an industrial economy after mastering agriculture. Of course, since they didn’t bother to verify the facts on the ground a disaster resulted, massive famine. The effort to make steel was some kind of weird cargo cult effort to mimic the long term goal of being a steel producing nation. Mao was a vile opportunist who ended up as the face of the regime, but only occasionally was he in charge. The ruling cabal learned from their mistakes, as we now see they have achieved their goal of building a powerful industrial base. I don’t think Mao’s China is a good analogy to IBM.
Steel production has been replaced by the over building of real estate in China.
The end result will be the same.
On the contrary, I think PJ’s analogy to Maoist China rings very true. It wasn’t that the leadership of the Communist Party under Mao staged an intellectual revolt that led to market reforms. It was, in fact, the personal leadership and courage of Deng Xiaoping that came to terms with the needs of a real economy.
Yep, sounds all very familiar. @PJ: you are spot on and it mirrors my own personal experience: it’s no longer about skills and doing a good job, it’s about politics. sad to see a once fantastic company go USSR…
The analogy with the USSR is flawed. In that system people at the top were culled if they dissented or tried to change things. At least people knew who was ‘against’ Stalin. IBM operates a much more sinister system where everyone who could change matters chooses not to dissent. The system – it is called share awards.
“…not just the house of cards that IBM has become but that it’s just an extreme example of what’s happening all over American big business…”
How much of this do you think is because there’s a large group within the company that is near retirement age? It seems that the demographic makeup of the US might be part of the cause for our current financial situation.
The catch 22 is that there’s no desire to risk what they have now, yet in order to retire comfortably they need to increase share price, which only happens with increased risk (since Wall St is constantly asking “What have you done for me lately?”). The best outcome is that they can just coast until they hit 65, and hope their replacement has some new ideas.
Maybe, but I think it is caused as much by the expectations of investors/Wall Street/banks.
A copy like what IBM was, more R&D based and technically focused, does not fit the form that stock analysts expect in the current “shareholder value” environment. How do you stay a CEO? Making and improving the quarterly numbers. How to do build your technical base? Investing in R&D and people. Those two goals are not mutually exclusive, but when the analysts only look at the financial numbers it is quite difficult to demonstrate long term value. More than one company and more than one industry has wandered too far into the quarterly numbers / shareholder value trap.
Unfortunately, I don’t see an easy way out, other than a company never going public. But in the tech world, that would require forgoing getting funding from VCs…
I’m starting to wonder whether this analogy applies to other large slowly sinking IT companies such as HP, Yahoo, and Dell.
Don’t ascribe to malice that which can be adequately explained by incompetence.
I’d say the incompetence part covers Soviet Russia quite well too, you know.
Malice or incompetence… Why should I have to choose? Generally, the two go hand in hand, at least when concerning people in positions of authority.
[…] plenty of other people are having the same insight. As I, Cringely’s posting this morning IBM back in the USSR? I quote: —- As more people read my book and come to understand not just the house of cards […]
Since I read Bob’s book I’ve been thinking about IBM. If IBM were a privately owned company there is no way the leaders would manage IBM they way it is being managed. If fact anyone who owns their own business would not be doing what IBM is doing. Why is that? This question has bothered me for over a week.
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In a private company value is placed on the people that produce the results. The sales people, engineers, managers, etc that make the business produce more are recognized. Given this IBM’s revenue has been dropping and dropping. Income would be down too without all the financial voodoo. It can be argued the leaders of IBM are NOT producing business results. Then why are they being compensated so well?
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Executive compensation at IBM is not based on true business results, but rather it is based on making Wall Street happy. Decisions that are detrimental to the business are okay if it makes Wall Street happy.
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In most things in life there must be a balance. In business there must be a balance at managing the business well and returning value to the owners. To do one to the exclusion of the other is not a sustainable approach. At the core of any good business is the customer. It is the customer who provides the revenue and income. Without the customer a firm has nothing. IBM is so entrenched on returning value to the shareholders it is now completely neglecting the business, and worse its customers.
The important distinction is between small and large companies, not public and private. When a private company gets large enough, then the only people who count are the ones were there back in the day. If the owner of a private company is restless and curious enough to care about what the kids in the lab think, the owner isn’t going to stick around once the company gets big anyway. The owner will cash in and go do something else.
I now look at the IBM media blitz for tennis and golf tournaments in a very different light.
It isn’t just IBM. Any sufficiently large public company can be analogized to a communist regime:
One is a political economy nominally owned by the public, but operated for the benefit of a ruling elite. The public votes for the ruling elite, but the vote is meaningless as they are only given one choice on who to vote for. The ruling elite professes to run the enterprise for the benefit of the public, but as the public can exercise no practical oversight, thanks to the resulting moral hazard, the public is slowly and relentlessly looted by the elite.
The other is a legal economic entity nominally owned by public shareholders, but operated for the benefit of an executive elite. The public shareholders nominally vote for the BOD, but the vote is meaningless as the BOD is controlled by the executives via a network of interlocking corporate BODs. Because the public shareholders can exercise no practical oversight, thanks to the resulting moral hazard, the public shareholders are slowly and relentlessly looted by the corporate executives.
You have also described crony capiltism as practiced in the US.
Heard you’ve been busy working on a new career, Tommy… https://www.banzai-institute.com/0102PTad.html
IBM’s size determined that you are unlikely to find another company to be closely compared. It’s like a small nation, so it make sense for that Aussie reader to use a country instead. In my own opinion, he/she’s got the wrong country, USSR is not a perfect fit.
The more I look into IBM’s mess, the more I found comparable patterns with China (the nation and its government).
Lists of my reasons: (top to bottom)
* The ruling Politburo (7 guys since 2012’s transition of leadership) IBM’s board of directors (CEO, Senior VPs, etc.)
Here’s where the real power resides. (Absolute power, and no one can affect them.)
Here’s where the infamous 5-year plans decided. (Yep, China still uses this methods of economy management invented by USSR.)
* Different governmental departments (Economy, Science, Education, Defense, etc.) IBM’s divisions
Head of department (i.e. IBM’s VP) fighting each other for budgets by all kinds of ways.
Lower level government officials try very hard on getting up the line by all means of possibilities (i.e. IBM’s managers), and they sure don’t care the people below them, or the place when they leave for upper post.
Layers upon layers of governmental levels (i.e. IBM’s 10+ layers of command chain), very slow to change, hard to get works done. Even hard to get top level order to the base without changing, i.e. compromised directives.
* All common people of China who have no governmental ties and who are not rich IBM’s regular worker bees
Hard works with less pays
No way of changing the wrong decisions made by government
Dare not to revolt, nor strike. The ones that tried are put in jails or worse. (i.e. being treated adversely or fired by IBM)
Bombardments by propagandas of controlled media (i.e. Think Fridays, division letters, etc. in IBM)
Of cause, China is much more complex than IBM, but you are very likely find every comparable situation that is related.
It could be a very interesting research topic for scholars around the world.
People, in their nature, are more willingly to view positive sides of a matter. A company, a whole nation, there’s no fundamental difference.
As much as I love my country, I cannot ignore the incoming crisis and all the signs associated with them. China will be in big troubles, just like IBM is.
Big trees don’t fall down overnight, the path of destruction was laid down in years.
By the way, Mr Cringely. I am unable to purchase your new book due to geo locks implemented by Amazon and Apple alike. Is there a way for people in China to buy your book legally? At least, release the book in Hong Kong (Apple Stores). I really hope to support you on this IBM affair, but you have to give me the chance. 😉
Try buying the book from anysubject.com, which is in the UK.
That (PayPal) worked perfectly! Thank you very much!
Will certainly comment back when I finish reading. 🙂
The comment by Steve Jenkins brought back some old memories about IBM. There actually was a very popular internal confidential course taught inside IBM at the highest technical levels that discussed the parallels between Armonk and the Kremlin and how it affected IBM’s technology direction. The title of the course, as usual, had nothing to do with the content!
During the halcyon days of the 360 monopoly IBM had an educational sabbatical program for its top technical people called the Systems Research Institute. SRI was IIRC a 6-9 month curriculum, with its students fully compensated at full salary and generous expenses. The top 1/2 of 1% of IBM’s technical people attended SRI, mostly as a award for consistent outstanding performance and as a way to give top practicing technologists a way to network and figure out where they wanted to move up to next in the firm. In its early days SRI was held in downtown NYC, then it was moved up to Thornwood, NY. All sorts of key, innovative technical people were asked to present at SRI, usually classes lasting several months. They in turn brought some pretty interesting speakers.
During the late 1980’s, one of the most popular speakers was an IBM engineer who was an expert on communications and connectivity. He’d had a very eclectic career. Even though he’d made some pretty senior IBMers very mad, he somehow kept moving up the ladder out of sheer tenacity and luck. He called his career technique the “Lilly Pad” approach to success. At the time I saw his first presentation he was already at pay level 60-62 (STSM) even though he was probably in his early 30’s. I remember he was a pretty smart fellow who had several degrees in nuclear engineering, was allegedly I think Puerto Rican, yet spoke Russian and French fluently and was called “IBM’s r2d2” (because that was his email ID at IBM and on the DARPAnet back then). Many said that Ellen Hancock had a “contract on him” but someone pretty high up for some reason protected him.
This fellow taught a course titled “Connectivity” and also gave a presentation called “The Con of Connectivity” but it was actually a course on the parallels between Armonk and the Kremlin, the idiocy of all the 5 year plans, the failure of SNA, the story of Token-Ring, the management and finance urge for “Mipness”, the proverbial “Side Sucker applications”, “contention”,etc. and how the cheapest and most vile technology always seemed to win out over good engineering. There was even a moment of silence as we gave homage and prayed for “Saint Rube Goldberg” the Jewish patron saint of all technologists! He was hilarious, always calling IBM “The Blue Pig”, very rebellious and not at all respectful of senior IBM management. An instructor at SRI told us that customers loved him because of his frank and blunt answers and his irreverence to IBM pompousness. How he kept coming back to teach at SRI and kept his job was something I always wondered.
r2d2@us.ibm.com was Richard H. Le Sense (IGS)
Although the name is not spelled right, yes, that was me at the Blue Pig. I am flattered that someone would still remember me from those days in the late 80’s. I retired (forcibly, I might add but with great joy and anticipation since I had created my own temporary job as a contractor) in mid-2008. I worked some as a contractor for a few years and have never looked back, fortunately starting a small firm and I love being my own boss now.
I did teach that topic (under the guise of connectivity and networking) for several years at SRI and at SSI, the customer version. It was a lot of fun and it gave me a great deal of eye opening insight on the company, how it operated and how many other IBMers as well as customers thought about the company. The Kremlin analogy of Armonk CHQ has been discussed for decades, especially because the company’s loyalty and hierarchical command structure is very similar to the then communist regime, especially the “Nomenklatura”! The 5-year plan was actually invented in IBM in the 30’s, then used by Lenin and Stalin…..
I just read the PDF version of the book from the nice folks in the UK. I don’t use Kindle because I’m just an old of privacy coot. It was a very good book, Bob, IMHO.
What name was not spelled right?
Ronc, anon spelled the name as Richard Le Sense
Richard LeSesne spelled name as Richard LeSesne
Thanks. My problem was that I kept reading the long post by Eminence_Grise, since Richard was responding to that post and not the one by anon.
If you Google for your presentation “g510-3868-ignore-store-infrastructure.pdf” , you will find your name spelled that way. As an old timer, I fondly remember SRI. Now we have ‘customer briefing centers’ to promote hype and vaporware.
Oldtimer, Thanks! I had forgotten that the internet still has some of my sordid old documents out there. One of the reasons I used r2d2 was because no one could spell my name in the company. Maybe that’s why I never got fired….LoL.
About smoke and mirrors…..In the late 80’s I was part of a development test lab in RTP. Due to IBM’s penchant for secrecy, the lab was compartmentalized quite a bit with a few rooms locked with cypher lock doors. Just before the Olympics, Computerworld revealed the code name of the future AS/400, then code named “Olympic” which caused it to be changed to IIRC “Silverlake”. When we heard that Computerworld magazine staff was going to be given a tour of our lab one of my colleagues brought some dry ice and a fan and we placed it behind the door of one of the labs protected by a cypher lock. We then blew the dry ice fog with the fan underneath the door and it looked like fog and smoke was emanating from the room. We hastily put a sign up on the door labeled “OLYMPIC ROOM” and sold seats and popcorn to anyone who wanted to watch those Computerworld folks beg to go into that room trying to open it and looking under the door! I was able to horse trade two seats for the show for a new 3290 display that I needed to run a VM system……
You might enjoy a further trip down memory lane, linuxvm.org/present/SHARE105/S5007jeb.pdf I recall being in Gaithersburg late 80’s when during a raised floor tour we came across a large box padlocked to the floor with something vibrating uncontrollably underneath. Turned out to be an early 3390 with very bad bearings. Those were the good old days, when a head crash was something to experience.
I laughed so hard they almost had to bury me nine edge up…..thanks for the link Old Timer!
3390? When I started it was of the 2311/2314/2319 generation. My problem was I could never get the small systems stigma off my career…..I started on 1130/1800’s then moved into System/7, Series/1.
Now IBM has become so much up its own fundament that it purports to believe that only IBM ‘education’ has any value. No-one can get any funding for looking outside the IBM in Wonderland world that presents all IBM products as unbelievably brilliant and knocking all the opposition for 6 (cricketing metaphor – hitting them out of the ballpark).
Asking about outside conferences or seminars gets responses such as “not sure what the training budget for this year is yet” (end of first quarter), “need to plan our internal training needs first” (end of second quarter), “no money left in the budget after the team event” (end of third quarter). Meanwhile we get overloaded with cr*p mandatory ‘training’ that is little better than a market flyer and have no time to take even the agreed, 3rd class, e-training on the products we are ‘expert’ in.
The analogy to a Stalinist state is well-made. Only good news is allowed and bad news is buried and ignored so we never learn from our mistakes but repeat them over and over. Any processes that allowed for genuine feedback have been dropped (internal mood surveys, management competency surveys). The last feedback with any bite was on Ginni’s January “lets all pull together (oh and by the way lets all not have a bonus)” talk. At last people started pointing out the stupidity of deliberately dropping any incentive to try harder (why bother if my PBC rating doesn’t reflect any kind of pay increment, do the hours and go home), and even more the downright imbeccility of still pretending we can hit that 2015 target. Ginni ‘welcomed’ feedback but hasn’t offered any more words of wisdom since.
Re: “imbecility of still pretending we can hit that 2015 target”. Next time they ask for feedback, why not suggest that EPS be raised by lowering the denominator.
In the mid 1990’s I visited IBM as a customer. One of our presenters was Michael Coleman. The man was brilliant, inspiring, and very honest. IBM was just beginning to recover from its dark days. Mr. Coleman told us on that day “We, IBM’s executives failed the company. We made poor decisions and over 100,000 employees had to suffer for them.” It was an amazing admission. On seeing that level of integrity I knew IBM would recover, and it did.
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I have to wonder what Mr. Coleman would think about IBM these days. I wonder if someone with his disabilities could survive in IBM today, let along flourish and become a VP. I wonder if that level of integrity exists at all in IBM’s senior leadership.
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From IBM’s Diversity website under 1981:
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IBM ad in such prominent publications as the Wall Street Journal and Newsweek features disabled IBM employee Michael Coleman holding a business card with his mechanical hand. The ad reads: “Some people just won’t believe that the disabled can do the job. It has to make you wonder who’s handicapped.”
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Today, Coleman is an IBM vice president.
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“I lost my hands in Vietnam. I never thought of myself as a disabled person. I was a changed person, not a disabled one. IBM offered me a job that put me out front with its best customers. Not a lot of companies would take that risk.”
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Michael Coleman, Vice President,
Global Operation: Business Partners, Midmarket
and Small Business, White Plains.
Kind of the depressing, but the vital repsonse to change is never a reversion to the past. That can’t be done. So I’m hoping you talk about what IBM really should do, next, not just going back to the “good old days”.
That’s the final chapter — the last 7000 words — of my book.
I just finished the book but still have the Afterword and Comments to read (so I maybe I should not say I am “finished”). I found the book insightful and interesting, especially for someone like me who isn’t an IBMer but grew up in a IBM company town (Poughkeepsie, NY) during the heyday of peak IBM employment in the 1980s. I also recognize the Cringely conversational writing style that I remember from reading “Accidental Empires” many years ago. I also enjoyed the radio interview on WNYC about the book (podcast link is below).
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https://www.wnyc.org/story/big-blue-brink/
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The Mid Hudson Valley, which has been incredibly dependent on IBM for decades, has been spending the last 20 years trying to cope with the unraveling of IBM in the local economy, and it ain’t over just yet. Our local reporter on the beat had an interesting article on Sunday that is worth sharing.
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https://www.poughkeepsiejournal.com/story/news/2014/06/14/ibm-left/10537609/
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Hope the eBook and paperback becomes a best seller!
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I wonder if your book will end up being in curricula for decades to come at MBA schools, once IBM falls.
Elsewhere on the net I’ve made that same connection. But you Robert X (what is X?) date the CCCP to a era of ’88. HP in 70s had a chance to invent the PC thanks to the two Steves who worked there who offered it to HP. IBM’s Watson said only 5 Computers needed in the world in 1940s. The AK47 was first poo pooed by the CCCP military. I’ve said possibly even here that the CCCP should have won the cold war. WiFi used only by a handfull of spies, magnetohydrodynamics still underutilized, all because CCCP equivalents of Watson knew what was needed. The international conglomerates are run as in CCCP by apparatchiks who have no vision and are frightened of making a mistake. Not just IBM but the whole of Corporate USA is communist system of control. (So too USA States, Counties and Cities – all run in 2014 on the Communist Model I’ve said QUOTE “On reading Malanga’s ‘Brennan’s Revenge’ I’m shocked, appalled and flabbergasted that the USA will be the first state in history to become socialist via the judiciary.” just recently, you’re too dumb Robert X to see the signs!! ) GM had a great opportunity in 1970s to reinvent the car under Carter’s forced fuel economy – well in 2008 they went bankrupt and became a State run business. A DOUBLE PROOF OF MY ACCERTION!! Many other examples abound.
Bob
I’m very excited to read your book, on paper.
Are there any other sources for your paperback besides Amazon?
I know they want to be the only game in town, but I’d prefer to do my buying elsewhere.
See numerous stories like
https://www.motherjones.com/rights-stuff/2011/07/ohio-warehouse-temps-unemployment
:-/
They are not slaves. They chose to take a minimum wage job. If the company didn’t exist, they would have to work at another minimum wage job, if one existed. Of course, they could try unionization. In any case, your not shopping at Amazon doesn’t do anything to help them. OTOH, shopping at Amazon increases Amazon’s need for those warehouses and shipping centers, thereby creating more jobs of all types.
It’s an illusion of choice.
It’s not a matter of “taking this job or another job”, it’s a matter of “take this job or nothing”.
I knew people who used to work at Amazon warehouses in Kentucky, and they used to say that a fast food restaurant had better working conditions.
Re: “take this job or nothing”. If fewer people shopped at Amazon, perhaps the only choice would be nothing. In the early 20th century my grandfather came to the US to join relatives in the south. His only choice was “nothing”. So he moved to New York City where there was work.
Waxing nostalgic from my formative elementary, junior high and high school years.
Grew up in Endwell NY, part of Triple Cities of Binghamton, Johnson City and Endicott NY.
Home to Link (later Singer-Link, Endicott-Johnson Shoes and IBM).
IBM employees lived in every neighborhood.
“Zipper Heads, Bomar Brains, etc…”
IBM was always a sales company that happened to embrace engineers and technical people in its own controlled way.
Make no mistake- Conformity essential.
Lived on Sunset Drive- make left on Country club road,
go 1.1 miles and turn left onto Watson Blvd,
Go another 3/4 mile an hit the IBM Country club.
Club house with indoor pool, IBM Glen (nature lined day park/ picnic area), 9 hole and 18 hole Champion Ship golf coarse free to all IBM employees and their family members.
Minimum entry level job(custodial like) circa 1977 rumored to be over $6/hour.
Employment for life.
1978; 1/4 of my High School Class relocates with their parents to Charlotte NC.
Better tax treatment and no responsibility for contaminated local water wells.
1980’s Old IBM widows who lived in same 1500 sq ft house for 40 years began to die, leaving shockingly large charitable bequests. I’m talking about rank and file, not execs.
Donate accumulate stock options/pensions, typically worth 1-3 million dollars.
IBM was not the first to promote life long employment.
That distinction belonged to Endicott-Johnson Shoes who pioneered a program of providing affordable housing for its employees. Lot of “EJ” homes built up through 1940s.
Sadly, EJ slowly declined starting in 1950s due to less expensive foreign shoes, a basic commodity if there ever was one.
IBM maintained technical folks, high end engineers in Endicott through-out 1990s.
Guess these folks really sharp and just did not want to move south of Mason Dixon line.
I remember my friend/accountant telling me about IBM engineer clients looking to start their own companies who had developed patented communication techniques (phone, internet, etc..) that could be transmitted over standard electrical lines.
They were frustrated at the time because main stream IBM managers/ R&D etc… expressed no interest in promoting this. To be honest IBM always had great engineers but was rarely at the forefront introducing new/disruptive technologies.
2014- The wells are still polluted and IBM has little influence in the Triple Cities of upstate NY.
Current phrase that comes to mind: “Snakes in Suits”. ref Bob Hare.
Has not embraced the Watson’s values for almost 30 years now although did pay lip service for a while.
Hello Bob,
an endgame you can loose, of course – but you always have the chance to win it. Even if you are the undisputed underdog…
Greatings from Germany
Hugo
I started my engineering career at IBM in the 80’s (Fishkill, NY semiconductor fab) and its sad to see how far they’ve fallen. I have to think the change in executive incentives in the 80’s is part of the problem. When shareholders pushed for a large part of executive compensation be related to stock prices, they got what they wanted. You get the behavior you incentivize for.
During the last 7 years or so, virtually all of their net income has gone to share buybacks. They also paid out $20B in dividends over that same period and spent virtually nothing (in comparison) on R&D or capital improvements. Much of this with borrowed money (the ratings agencies have threatened to lower IBM’s rating because they’ve borrowed so much). Any wonder they’re dying?
David Stockman has a good analysis, though I’ve seen similar data from others. His is just one of the better written.
http://davidstockmanscontracorner.com/big-blue-stock-buy-back-machine-on-steriods/
I read a review about Bob’s book on amazon, complaining the boos is short of solutions. Well, that’s not up to Bob, but to IBM’s politbureau. And what’s on their agenda, we all know. The three things they care about is money, power and not employees.
The “looking for the next big monopoly” observation is the key observation here. This attitude shows itself in Rometty’s exhortation to “Be indispensable”. IBM punch cards and mainframes were indispensable. Microsoft Windows and Office were indispensable. Nowadays, “indispensable” tech companies aren’t as indispensable as they used to be, and the period in which a tech company is indispensable is coming and going a lot faster than it used to. One can expect to be useful for an extended period of time, but being useful is hard work.
paid for pdf via books@anysubject.com….waiting several hours and still now email giving me access to this book.
Maybe anysubject.com is a subsidiary of IBM… or at least using the same business plan
As an Ex-IBMer last year, several years ago had an opportunity to talk with one of the executives in a “Town Hall”. The thinking inside IBM is that anyone that is a “mover” should change jobs every two years if you want to get upward mobility. The “Town Hall” is a carefully arranged, pre-screened meeting with an executive and a team of locals carefully chosen and screened to represent the “population” at the local site. At this meeting a question was asked, “What do you do if you inherit a group/project that is already irrevocably broken?” “Can you get the funds to fix it?”. The reply was “No, in most cases you just try to unbreak it as well as possible so it looks like you have made a positive impact on the situation.” This was later demonstrated that if project xyz was losing 10 million a year, cuts were made so it was only loosing 6 or 7 million a year. Yes, spreadsheet jockeys have been running the company for quite awhile.
My favorite was the depreciation drill that occurred at least twice, sometimes 4 times a year. Managers were asked to review their assets and get rid of high dollar assets. These same assets were recent purchases that were critical to testing, and had each gone through several rounds of rigorous justification meetings (stupidly so) but each one was weighed against the overall spreadsheet. As a manager more time was spent justifying and re-justifying than any other single effort. At one point several years ago, someone did a study and the numbers were something like “the average user/requestor was spending less than $500 a year on PO’s, but it was costing nearly $800 per PO for the time/effort to generate/justify/approve each PO.” A decree came down from on high that any user could request a PO for less than $500 with only a managers approval and a manager could spend up to $5000 with only their managers approval”. That decree lasted about a year and was pulled without fanfare several years ago. Bob’s book could have been several hundred pages longer if he used more inside stories, but then would more likely been branded as “Fiction” by the IBM Librarian. If you read Dilbert regularly, one would swear that he has spent the majority of his business life at IBM. You simply can’t make some of this stuff up. I miss a tremendous group of talented folks around the globe, but don’t miss the job at all.
I’ll further the stupidity of the IBM thinking that “anyone that is a “mover” should change jobs every two years if you want to get upward mobility”.
I’ve been on a project contracting for 6 years now – I’ve seen other IBM’ers come and go as work needs ebb & flow – but I and a small handful of others are kept on the contract because we are considered the “top performers” by the client, and they don’t want to let us go. But of course, come IBM evaluation time, I’m rated a 3 specifically because “I haven’t moved around to other projects, I’ve been on the same one for years”……. and of course, those that are often moved around from project to project because nobody wants them – they’re usually the first to be let go as among the lower performers – so IBM gives them better ratings because they’ve been on multiple projects. Just yet another example of how out of touch with reality IBM management is.
Job Security
When the axe comes for you, approach your customer and take the team with you. It will be cheaper for the customer.
Dont buy the PDF… anysubject.com are non-responsive…shame Mr. cringely associated himself with this ripoff web site.
I relayed your comment to them via their web message form. The form asked for my email which I provided. Half a day later, I received an email response, which is paraphrased here: I’ve had a few customers who didn’t save the file when they were asked to, and were given a replacement file, except for one person, whose email won’t accept the file, and with whom I can’t communicate. I’m guessing it is (name removed). If so, I’ll refund his money. I’ve sold nearly 400 copies, and had some lovely feedback from people. Please advise. Clive
all is forgiven…thanks for the help
But (1) – I paid via paypal and in the paypal notification there was NO link to the pdf
(2) – I have used the same email ISP/program for many years and never had an issue with receiving files
(3) – maybe after the 2nd attempt failed you could have emailed me
Mark, have been reading your columns since InfoWorld. Just bought the ePub version and looking forward to it. I was a Lotus Notes guy for years, continually astonished by how little IBM promoted Notes and Groove, two platforms that delivered (actually, I still use Groove/Sharepoint Workspace daily) amazing productivity (thanks to Ray Ozzie’s vision, of course).
Looks like it’s was discontinued 4 years ago: “http://en.wikipedia.org/wiki/Microsoft_SharePoint_Workspace”. According to the wiki it was replaced by SkyDrive Pro, which is now OneDrive for Business.
Well you all wanted GLOBALIZATION so badly – which Gorbachev outlined in his 1990 book “Perestroika: New Thinking for Our Country and The World” – in which he said “Western companies must accept foreign workers”. IBM is 71% Indian workers. Cheap, brilliant Indian labor was supposed to be a boon for IBM. You mean to tell me that “former Soviet” ally India didn’t keep IBM GOING AS PROMISED? Back when it was all American workers IBM was booming.
America is having its communist moment, and just as communism collapsed USSR and China, it is now collapsing Amerika. Globalization is the New Communism. Meanwhile all the “former” communist countries are getting filthy rich off stolen American tech and industry.
From Each According to his Abilities, to Each According to His Need.
Indeed.
“From Each According to his Abilities, to Each According to His Needs” Perhaps the problem is Americans voting for political parties that espouse that principle, while they should be fearing it instead.
Gerstner?! Surely you jest. He planted the seeds of the present destruction by destroying employee trust in corporate minions– starting with the disastrous for stockholders ham fisted conversion of the pension plan. As a bonus, the medical pension benefit was stealthily changed with a public announcement put on an obscure publicly accessible web page no one ever heard of until informed by corporate email.
Do you realize that IBM has never, and will never, save any money due to that pension disaster? I was astonished that stockholder suits did not erupt. Employees forced unwillingly into the defined contribution plan still fume and don’t perform fully to capability, and these are core employees in their prime years of contribution to the bottom line.
Now any pronouncement from corporate leads to a search for the hook and/or knife. It took a surprisingly long time to completely destroy corporate credibility, and now corporate simply isn’t likely to be followed into any desperate attempt to recover the company. Gerstner was saved by the employees (before he screamed you are a cost center not a profit center and stabbed them in the back), but Rometty has much less chance of being followed into the valley. Palmisano, maybe, he was a smart guy…
The way IBM could make a comeback is to put quantum computing in the cloud and make it accessible to everyone for a couple bucks a month, that coupled with a virtual reality OS could do some damage. Too bad they are who they are.