The book is about the remarkable turn around of IBM in the 1990’s. In a nutshell, the mega large computer firm was going down the pan until Gerstner's arrival as the new leader.
I have been promising myself I must read this book for a couple of years and it is still on my ‘must be read' file ...... which gets bigger each passing week!
Peter Duncan, Vice President of Center for Simplified Strategy reviews the book at this link
http://www.strategyletter.com/CD1003/book_review.asp
I just love the following practical tips about simplified strategic planning that are taken from Gerstner’s book.
Thank you Peter for the review and amen to Mr Gerstner’s vision of simplicity and pragmatism.
These tips are things all large organisations can do if the leadership allows and I would argue all are based on simplicity.
- Lack of focus is the most common cause of mediocrity
- A successful, focused enterprise is one that has developed a deep understanding of its customer's needs, its competitive environment, and its economic realities.
- This comprehensive analysis must form the basis for specific strategies that are translated into day-to-day execution.
- True intelligence (not biased or wishful thinking) wins wars
- Allocating resources is where strategy becomes action
- Strategy can only take you so far...in the end it comes down to leadership and execution to achieve results
- Superb execution comes when strategy is simple and crystal clear and the organization has its values and commitments aligned with that strategy.
- Leadership is critical and it takes passion and integrity to do it well.
My question - if we know it makes sense why don't we do it?
My answer - lack of passion, vision, integrity and leadership at the top.
But of course you may not agree .........
5 comments:
Sounds like a great book. I am like you though, way behind on my reading list. I will have to catch up and maybe read it later in the year. BTW Institutionalized is a riot don't you think?
I agree! Oh how I agree! Is it difficult to do these things? No. But, is it hard to do these things? Yes. The difference is that they are not complicated things to do (or be), but they require focus and commitment, therefore they become hard to do.
(We should have more discussion about this after we both read the book!)
Trevor,
Vision without action is like a day dream; Action without vision is a nightmare. I believe BOTH vision and action is important for the success of an organization. It is very important for the senior management to understand that a top-down approach to management & decision making doesn’t always work. A bottom-up approach is necessary & highly recommended to reap the real benefits of scale, size and competitive position.
I always believe that the most important (and challenging ofcourse!) thing in managing large corporations is to run them like your neighborhood corner-store. I believe IT IS POSSIBLE and CAN BE DONE and boards have done it. Its jus a question of willingness to do it and that requires a lot of focus, patience, perseverance, vision, action, competence, strategy, commitment, passion and the likes…
I've read Lou Gerstner's book. It's good. He's credited with snatching the company from the jaws of defeat and he did that by attacking the old corporate culture of arrogance and aversion to risk which was a result of IBM's success, especially in mainframe computing. Being the biggest and best for years at what you do can breed arrogance and reluctance to doing new things when there are no external competitive pressures to suggest you should be doing something different.
Gerstner came in at a time when the market was shifting away from centralized mainframe computing and technology commodities to distributed network computing and technology services. He shifted people's focus away from what was happening inside the company to what was happening outside of it - what the market was doing and what customers were wanting. IBM's OnDemand business - the technology associated with network computing - now accounts for a majority of IBM's revenue. It wouldn't without Gerstner seeing the potential in it and positioning the company to go after these new markets.
A self-centered corporate culture born of market dominance has been compared to poison ivy. You attack it and think you've gotten rid of it, but it tends to grow back in the most unlikely places.
The stages of development of most companies are as follows:
Exciting beginning - lots of passion and ideas and enthusiasm
Success begins to happen and profits start to look up
Arrogance starts to happen as the company believes it can forget customers!
Standard start to slip as the company gets bigger and loses its founders focus and passion and its customer obsession.
The company becomes vulnerable as rivals start to see the company has lost its focus,
Charles Handy always says the time to develop your company is when it is performing brilliantly - before the rot sets in. The best example I know is football where managers like Sir Alex Ferguson always buy new players when Manchester United are at the top of the league and winning trophies.
In the case of IBM they became arrogant about their business and missed the adventure that was the desk top computer. They buried their head in the sand a long time building main frame networked computers until Gerstner came along and rattled the cage making them wake up to the real world.
In my opinion many companies go down the pan because they become arrogant and removed from customers
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