Leading Change When Business Is Good

Leading Change when business is good Sam Palmisano’s challenge: finding a mandate to continue a company’s transformation, his response a bottom up reinvention of IBM’s venerable values Palisimo recognized the key task would be to unite IBM’s global workforce behind a common business vision and a common set of values. IBM help 3 day discussion via the corporate intranet about the companies values, dubbed ValuesJam * Struck a core with employees company wide, positive and negative feedback * At the heart of ValueJam was what was worth preserving and what needed to be changed * In 1914 Watson Sr. decreed 3 corporate principles

1. Respect of the individual

2. The best customer service

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3. The pursuit of excellence Palisimo used original basic beliefs and feedback of ValueJam as a basis for new set of corporate values * Palisimo was a true-blue IBMer who started as a salesman, he was deeply invested and passionate about the company’s success * Gerstner was an outsider, a former CEO of RJR Nabisco and an ex McKinsey consultant * To prove these new values were more than just window dressing Palmisano made changes immediately * He called the director of a major business unit, e business and charged her with identifying gaps between the values and company practices * He said an Organic system is what a company needs to adapt.

Which is IBM’s values (values, principles, DNA) of company. They allow you to change everything from your products to your strategies to your business model but remain true to your essence, you basic mission and identity. * Unfortunately over time Watson’s beliefs became distorted and took on a life of their own * Employees were stuck in the old way of doing things they could never see another view * When market shifted they cut work force 400,000 people, equivalent of providence RI * How do you get people to passionately pursue change? You can’t command and control mechanisms on a large highly professional workforce * IBM doesn’t use hierarchical management system because employees and clients won’t accept it * IBM uses a value-based management system.

You have to empower people while ensuring that they are making the right calls the right way that is consistent with who IBM is * People rather than products become your brand One way to ensure that is to inform their behavior with a globally consistent set of values * After opening the online Jam Palisimo had a drive to change the company more * Most IBMers were willing to do whatever it took to save the company. Their pride and jobs were at stake * There was resistance to change, Palisimo said instead of galvanizing people through fear and failure you have to galvanize through hope and aspiration. A small team settled on IBM’s new corporate Values 1. Dedication to every clients success a. Maintain a long term relationship where what happens after the deal is more important than what happens before its signed 2. Innovation that matters- for our company and for the world b. Employees talked about how their work touches people and society or fight terrorism with their data technology 3. Trust and personal responsibility in all relationships c.

Relationships with suppliers, investors, governments, and communities * Published these revised values and received positive and negative feedback * Palisimo printed all the responses, 3 ft. high of paper work n read it all, brought it to a meeting and told everyone to read it all because now they need an action plan they can’t be all talk. * Changes Palisimo made * Change in the way they grant top executive stock options * Change in the way they set prices Gave managers $5,000 annually they could spend in extrodinary situations that would help generate business or develop client relationship or to respond to an IBMer’s need. This showed trust in line manager’s decisions! * Palisimo said if we get most people in the company excited and offer them something worth believing in and working toward. If they become dedicated to these values and what they are trying to accomplish then the company has a confident future.

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