The IBM Culture … the Times Are Changing
The thing I have learned at IBM is that culture is everything.
- Lou Gertsner
Have you worked for several businesses? Have you noticed the differences in culture between these businesses? After I retired after being at one location for 30 years, I went to work for a second business for 6 years. It was after that I realized the significance of the culture of a business. I worked the first 17 years with IBM and its culture. IBM was steeped in culture especially during those years.
The challenge in most businesses is culture — changing our entrenched ways of thinking, acting and organizing. In some cases, the culture is changed by leadership with no game plan intended. It just happened through the style of senior leadership or business decisions made over time. This was the case of IBM and its culture … many cultural changes, most of them that occurred through business changes and decisions over time.
I was very fortunate to have spent the first 17 years of my career (1977–1994) with IBM and its culture. When I left IBM it was because IBM sold its Federal Systems Division because the business was in trouble and it needed the cash.
No one had as much influence on IBM’s culture as its first two CEO’s … Thomas J. Watson (CEO from 1914 to 1956) and Thomas J. Watson, Jr (CEO from 1956 to 1971). Let’s examine some of the influences from these two great businessmen.
“THINK” is a motto coined by Thomas J. Watson in December, 1911, while managing the sales and advertising departments at the National Cash Register Company. At an uninspiring sales meeting Watson interrupted, saying:
‘The trouble with every one of us is that we don’t think enough. We don’t get paid for working with our feet — we get paid for working with our heads.’
In 1914 Watson brought the motto with him to Computing Tabulating Recording Company, which later became IBM.
In 1962, Thomas Watson addressed an audience at Columbia University in New York City and he zeroed in on IBM’s basic beliefs … the core of its culture.
…I firmly believe that any organization, in order to survive and achieve success, must have a sound set of beliefs on which it premises all its policies and actions.
Next, I believe that the most important single factor in corporate success is faithful adherence to those beliefs.
And finally, I believe that if an organization is to meet the challenges of a changing world, it must be prepared to change everything about itself except those beliefs as it moves through corporate life.
This last comment is one that we come back to later in this article. But first, here are some of Watson Jr’s more profound thoughts on IBM and its culture:
Respect for the individual
There are many things I would like IBM to be known for, but no matter how big we become, I want this company to be known as the company which has the greatest respect for the individual.
It is essential for each of us to strive to retain originality and to maintain our identity as human beings.
We believe in the importance of the individual in IBM and we’ll never forget it. We think it’s more important than the most fantastic electronic product that we could ever invent.
This is a company of human beings not machines, personalities not products, people not real estate.
Employee inputs and participation
Nothing is more vital to the continuous improvement of IBM than constructive suggestions or criticism by each of us — fairly given and fairly received.
“Think it through” [is] a reminder that creative, individual thinking is an indispensable tool in finding solutions to the manifold problems of today’s modern business and social activities.
Thinking things through is hard work and it sometimes seems safer to follow the crowd. That blind adherence to such group thinking is, in the long run, far more dangerous than independently thinking things through.
We are looking for the factual, outspoken, courageous man who will really call them as he sees them.
Management decision making
Let’s avoid being overly cautious, conservative, playing it safe. We should have the courage to take risks when they are thoughtful risks. We must try to make clear, sound, aggressive decisions, not waiting until every possible base has been touched. Each of us must aim to make his own decisions, and shun the process of decision of agreement of all possible interested parties. We should be motivated by what is right for the IBM Company rather than by the niceties of internal diplomacy. We expect that there will be mistakes. We must forgive mistakes which have been made because someone was trying to act aggressively in the company’s interest.
Place to work
One of the proudest claims is the fact that people say IBM is a good place to work. I like to think that as we continue to grow we are not only going to live up to that claim, but make IBM an even better place to work.
It is essential for each of us to strive to retain originality and to maintain our identity as human beings.
No subject occupies more executive time at IBM than the well-being of our employees and their families.
We are looking for the factual, outspoken, courageous man who will really call them as he sees them.
And here are some of the very creative contributions of IBM and its culture during these years.
Influence on social change
In 1914, 76 years before the American Disabilities Act was passed, IBM hired its first disabled worker.
In 1943, Ruth Leach becomes IBM’s first female Vice President.
T.J. Laeter, IBM’s first Black sales representative, is hired in 1946, one year before the time of Jackie Robinson and Branch Rickey.
T.J. Watson junior issues the company’s first equal opportunity policy in 1953. The Civil Rights Act is not introduced until a decade later.
Industry firsts
In 1951, IBM first started work on the IBM 701, the world’s mass produced computer.
The IBM 1401 was the first computer in the world to sell 10,000 units.
In 1962, IBM developed and implemented the Sabre reservation system for American Airlines. The goal in this development was to support large computer sales.
In 1963, in the riskiest decision ever made in business, Watson bets the future of the company on the development of the IBM System 360. This product takes several years and $5 billion to develop, making it the largest privately financed commercial project in history.
IBM is responsible for the development of the first automatic teller machine, the UPC bar code, and the laser printer.
IBM leadership
T.J. Watson philosophy was that all the problems of the world can be settled easily if people are only willing to THINK.
IBM success in early culture days was based in hiring and developing the best talent in the world. In 1932 IBM starts an education department for both employees and customers. Following in that in 1935, they open the doors of the first professional training school for women.
By the late 1940’s IBM products were being used in 79 countries.
While Lou Gertsner did a remarkable job of retooling IBM’s business to bring it back from extinction, no other CEO has been able to influence IBM and its culture the way of the Watson’s, even though they tried. Compare the changes during the Watson years and those of the posts Watson years … quite a difference, isn’t there?
In 2003 — long before social platforms like Facebook or Twitter took hold — executives held a worldwide IBM values “jam” to engage its huge global workforce to refresh the company values. During three days, tens of thousands of employees logged onto a company intranet site that let them observe and participate in instant-message-style sessions about corporate values and how they shape what employees do.
Over the next two months, the jam discussions were analyzed using textual analysis tools. As a result, the company got a snapshot of how employees saw IBM values and how they translated into behavior. The words “trust,” “invention,” “innovation,” and “client” were among those used most often.
Based on the results, the company updated its “basic beliefs” to resonate in the modern world:
Customer service translated into “dedication to every client’s success.”
Excellence today meant “innovation that matters for the company and the world.”
And respect for the individual became “trust and personal responsibility in all relationships.”
Kind of a happy to glad change, don’t you think?
Quite a cultural change in itself.
Many say that conditions today are different — and they are. Are they so different though that respect for the individual no longer applies in today’s society?
In a Watson’s IBM, respect was pay for performance, respect was placing an employee where they performed best for the corporation, and respect was maintaining two-way communication between employee-owner and manager.
Respect was fundamentally understanding the uniqueness of the individual and their differentiated contributory roles. Is this thinking out of date in the 21st Century? Or is it just waiting to be rediscovered?
Peter E. Greulich insight
March 9, 2013
So, IBM’ers of today, what do you think?
Mike Schoultz is the founder of Digital Spark Marketing, a digital marketing and customer service agency. With 40 years of business experience, he writes about topics that relate to improving the performance of business. Please Bookmark his blog for awesome stories and articles.
