In this article, Hemp and Stewart report an interview with CEO Sam Palmisano regarding a process of values clarification at IBM. Basically, IBM created a series of online forums to explore and update their values. IBM's history played an integral part in this process. IBM was founded in 1914 and at the time, the founder Tom Watson, Sr., established three Basic Beliefs: respect for the individual, the best customer service, and the pursuit of excellence. Although Palmisano believed these values had served the company well for many years, by the 1980's, they had become distorted. "Respect for the individual" had come to mean entitlement and "the pursuit of excellence" had become arrogance. By 1990, IBM was facing collapse. A new CEO, Gerstner, came in and turned the company around financially, but although Gerstner had managed to save IBM from collapse, Palmisano believed that IBM still needed a new vision to become the leader that it had once been in the industry.
Palmisano adopted a very bottom-up way of redefining these values because he believed that IBM was too large and too diverse to be dictated to. He also mentioned the quality of the employee, stating:
"You could employ all kinds of traditional, top-down management processes. But they wouldn’t work at IBM—or, I would argue, at an increasing number of twenty-first-century companies. You just can’t impose command-and-control mechanisms on a large, highly professional workforce. I’m not only talking about our scientists, engineers, and consultants. More than 200,000 of our employees have college degrees. The CEO can’t say to them, 'Get in line and follow me.' Or 'I’ve decided what your values are.' They’re too smart for that. And as you know, smarter people tend to be, well, a little more challenging; you might even say cynical."
IBM ended up following a process of open forums in which many employees shared their complaints, concerns, and ideas. The first forum was simply to get ideas regarding what employees thought the values of the company were. This forum generated over a million pages of information which upper management and consultants analyzed and used to formulate new values for the company: Dedication to every client’s success, Innovation that matters—for our company and for the world, Trust and personal responsibility in all relationships.
Then another forum was created to ask employees about these new values. Generally, the response regarding the values was very positive, but a lot of doubt and cynicism was expressed regarding IBM's ability to live up to these values. Many of these issues were examined by upper management, and changes were implemented to remediate them. For example, front line managers were given a $5,000 discretionary fund to use as they saw fit to better meet the customers needs and carry out the values of the company. At the end of the interview, Palmisano discusses briefly the balance between "soft valued and hard financial metrics."
I thought this article was pretty interesting. It had a lot more of the "bottom up" approach than the two previous articles, although it still focused primarily on the CEO. I think an interesting theme that struck me was the authors and Palmisano's attitude towards negativity. In the introduction to the interview, Hemp and Stewart mention that the initial 72 hour forum was quite negative at first and some upper level executives even wanted to cancel it, but then it became more positive after the first 24 hours. Palmisano has his own commentary on the negativity of the forums. He said:
"You had to put your ego aside—not easy for a CEO to do—and realize that this was the best thing that could have happened. You could say, 'Oh my God, I’ve unleashed this incredible negative energy.' Or you could say, 'Oh my God, I now have this incredible mandate to drive even more change in the company.'"
As someone with restorative as one of my top strengths, I really appreciated this comment from Palmisano. I have often struggled with this instinct in other people to avoid problems because I am so instinctively trying to seek them out, and it is an especially bitter experience when one gets labeled as a naysayer and then after one's warnings, something crashes and burns. I am slowly learning to recognize those environments where I can offer my analysis and those in which it is not welcome or productive. The irony is that even though people generally would consider Palmisano's attitude productive, it is not used by most people in practice. I think perhaps that tolerance to negativity is an important quality for CEOs, but it has to be tempered, because even if one really believes that problems can be solved, the people who work around one may not be able to handle the negativity that's involved in addressing those problems. That balance would be interesting to explore further. As I've already said, I'm very much in the middle of figuring out where it is.
I also thought Palmisano's attitude about his workforce was interesting--that he defined "professionals" who could not be dictated to as those with a college degree. I wonder if that is really the distinctive characteristic? When I was younger, I really didn't want to finish my degree. I thought college was a waste of time and money and that I could learn just as well on my own, but it turned out that I did not cope well in the "non-professional" workforce where CEOs consider "command and control mechanisms" good management practice. I wonder if that is because I was an exceptional case or because no one really likes to be treated that way? Whatever the case, I will agree with him that I got a lot more respect after I earned my degree--and not because I learned important work related skills in college either (I was a communication major who became an English language instructor). Is this a transformation that college really creates or is it just the mystique--a matter of people being what they are expected to be? This seems to me to be a somewhat unexamined aspect of higher education. If we are going to reenvision higher education, as many are trying to do, it does seem like the kind of phenomenon we should have a firm grasp on because it is perhaps our most important commodity--the cache that a college degree gives an employee, that right to be listened to.
Social Justice and Equity
I think it is interesting that these CEOs are generally white and male. I also think it is interesting that change, at least in this anthology, is examined primarily from the CEO level. I suppose that might just be a reflection of the type of people who read the Harvard Business Review, but then on the other hand, surely the people who read the Harvard Business Review can learn about their peers (other CEOs) through talking to them? Surely the rank and file is more mysterious? Anyway, probably not everyone who reads HBR is a CEO... so why don't they publish more articles regarding change from other perspectives? If I only learned about change from these articles, I would, I think, be justified in assuming that change was strictly the purview of CEOs... and white male ones at that.
I have recently been learning a little about the early years of the computing industry, back when Apple and Microsoft were first taking off. In the movies/documentaries I watched, IBM was always the giant, evil corporation--the stupid corporation to be taken advantage of (Bill Gates) or the souless men in suits to be despised (Steve Jobs). It is interesting that it was the small time corporate warfare of these up and coming entrepreneurs that jostled IBM (which took a wrong turn when it unbundled its products and tried to specialize in pieces). It's a reminder that privilege, being at the top, blinds people, kills innovation, and makes leaders stupid. It would be interesting if that were a greater point of study in this change literature.
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