A colleague loaned me his autographed edition of Louis V. Gerstner, Jr.’s Who Says Elephants Can’t Dance, and in the course of a five-hour flight from Raleigh to Cinncinati to Providence, I plowed through it, testament perhaps to my speed reading prowess or perhaps to the less-filling-tastes-great density of the story of IBM’s dramatic turnaround under Gerstner from 1993 to 2002.
- IBM lost $8.1 billion the year Gerstner took over the helm from John Akers. It made a profit of $8.1 billion in 2000.
- The stock price was $12.72 on 3/31/93. It was $120.76 when Gerstner retired.
Any questions? Good. First, let me first praise Gerstner for writing the book himself. No ghost in the wings and the writing is actually precent decent. Sure, there’s an element of messiah-walking-on-water, but give the man his due; a non-technologist walking into an epic mess, he did one thing and he did it well: he executed a plan, using Chrysler’s ex-CFO Jerome York to attack the expense-side of the business while he developed the transition out of hardware and software into services. His management incentive plan gave the executive team some skin the game — and while Gerstner doubtlessly and deservedly enriched himself in the process — the turnaround reads like a page from the McKinsey playbook, where Gerstner was the hot star in the 60s and 70s, making partner at one of the youngest ages in the firm’s history.
I would recommend Douglas Garr’s IBM Redux for a better, more objective account of the turnaround, and for some better and nastier anecdotes about the dysfunction that was in place when Gerstner arrived. Who Says Elephant’s Can’t Dance is actually pretty good with the leadership econiums:
“Passion. As a student going through Harvard Business School, I would never have guessed that passion would be the single most important element of personal leadership. I don’t recall the word ever being spoken during my classroom time at Harvard.”
While you could print that on a poster with a picture of a high jumper, the reality is that in technology especially, it’s the passionate leaders that lead the dynamic companies. Ballmer, Jobs, Ellison, McNealy — these aren’t dry corporate-speak drones, and Gerstner points out, with some awe, the degree to which the technology business is insanely cut-throat in its ad hominen attacks, religious wars over formats and standards, and chaotic in its pace of innovation and decline. That he was able to walk into an organization beset with acronyms and legacy systems, investing billions in things like SNA and OS/2, and turn it around is, in the end, the most amazing turnaround story ever told.