08:16 AM

IBM 100 Years: From Cheese Slicers To Supercomputers


Earlier today, IBM CEO Sam Palmisano kicked off the company's celebration of 100 years in business with a speech to students at his alma mater, John Hopkins University.

He spoke about how IBM started,"Making clocks, scales and cheese slicers, in addition to the punched card tabulator. After that, it's a blur: typewriters, vacuum tube calculators, magnetic tape, the first disk drive, the memory chip, FORTRAN, fractals, ATMs, mainframes, mini-computers, personal computers, supercomputers, services, software, analytics..."

He attributed IBM's longevity to its success at being able to change. But it is important not to change core beliefs. He quoted from a 1962 speech by Tom Watson, Chairman of IBM and son of its founder:

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.

Mr Palmisano said:"Tom Watson was not talking here about ethical precepts. For him, a company's beliefs were about its identity - what makes it distinct... what shapes its decisions and behaviors. If you could codify and sustain that core, it would ensure that the company remained unique and differentiated... decade after decade."

He described a project he initiated nearly ten years ago to discover the core values of IBM. It was important that these values be adopted by employees, but, "Employees today are super-smart, highly independent... even cynical. You can't come down from on high and tell them, 'These are your values.'"

The solution was to host one of IBM's famous "jam" sessions - online meetings where employees from all over IBM brainstorm around specific subjects.

"It was messy, passionate and contentious. But in the end, IBMers embraced a new set of values - because they themselves had shaped them. I truly believe that none of our work since - remaking IBM's portfolio of products and services... globally integrating our company... even launching our Smarter Planet agenda in the depths of the global recession - would have been as effective or sustainable if we had not first gone back to basics, back to our roots, back to the foundation of our culture."

He said it is hard to perpetuate a company culture when the founder is no longer present -- something that companies such as Apple will have to deal with.

He moved onto the challenges leaders face in adapting technology. Technology should not be seen "merely as a succession of gadgets, websites and 'next big things.' It's much more. It's the way our world works."

A second challenge is what he called "global integration." This was described as an economic global re-balancing. It is this trend that has helped re-shape IBM.

"We changed from the 20th century "multinational" model - where companies created mini-versions of themselves in country after country, in order to be able to operate amid the crazy quilt of international trade and regulatory barriers. Instead, we are moving to something new... and far more systemic - what we call a globally integrated enterprise. It's not only changing the market opportunities we pursue... but also the way we work and run the company - from sales and marketing to HR and research."

IBM started a program called "Corporate Service Corps" modeled on the Peace Corps to start training its top executives. These teams are sent to communities in emerging markets, such as Ghana, Philippines, Turkey and Vietnam.

"They work in communities with NGOs and local leaders to jump-start their economies... and to make their cities smarter. And when they come back, they spread what they have learned to their colleagues through social media... these targeted interventions are having a transformative impact... both on local communities and on the IBMers themselves. Most say it is one of the most meaningful experiences of their lives."

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