I'm about to finish reading Lou Gerster's account (Who said Elephants can't dance ?) of his time at IBM, one of the world's largest corporations. Although I can't say Louis Gerstner is a great writer (and Lou acknowledges this in his foreword), the story is well worth a read.
Part of what I do for a living is managing turnaround situations. Hence getting this book was a no brainer. It reminds me a lot of Jack Wekch's own account at GE (Straight from the Gut) with similarities and great differences.
Similarities:
1) there is very very strong focus, in both men's approach to management on people:
- they take great care in building great management teams
- letting underperforming people go (GE institutionalized this by firing the bottom 10% of staff every year, based in their performance)
- developping communication between people and breaking up corporate fiefdoms (by products or geography): GE had set up Crottonville as a tool, IBM has now a World Management Council (I believe however that GE's system is more efficient)
- aligning the right incentive with performance (both introduced stock options to a very large employee base vs. only top executives previously)
- identifying top talent and helping them develop & grow within the form (Gerstner explains how he retained people, Welch more on how he developped them through corporate training at Crottonville, how he personally went over evaluation of N-2 people, etc. One of Lou's first tasks was to hire a top HR person and build an organisation around it
2) customer focus
- GE imported the 6-sigma approach from Motorola to bring the right value proposition at the right time to their clients, not more, not less
- IBM: have everything done at the company dictated by the marketplace
eventually both companies developped a large services arm, representing today over 50% of turnover
3) focus on success
both men strive in excellence and seem to have a passion for winning. Welch coined the #1 or #2 phrase. Gertsner achieved the same result, exiting lines of business where he could not achieve sustainable competitive advantage.
4) thinking out of the box
Gertsner consistently challenges historic habits, finds new ways to address the market (opening up proprietary technology, refocusing around the customer, unifying brand management, selling and maintaining competitor's products, acquiring technology outside effectively killing the not-invented-here-syndrome...)
Welch did much of the same, although the list would be too long to list here.
Some differences that I see between the 2:
- enormous emphasis on the IBM brand repositionning in the market place (over $5b in brand marketing), building a centralised PR function. I don't remember such as focus at GE, although NBC consistently still airs pure GE ads
- Jack Welch was a product of GE: although he was named the best manager in the world, his record os not really better than previous GE CEOs (as demonstrated in Collins very interesting book: Build to Last). On the other hand, Gerstner is an outsider, trained through an almost one-of-a-kind track: Dartmouch College, Harvard Business School (from which he graduated at 23), McKinsey & Co (where he made it to senior partner in just 9 years), and a great services experience at American Express, and consumer products experience at RJR Nabisco (hired just after the KKR buy-out. for a fantastic read on LBOs and corporate greed, give yourself time to read Barbarians at the Gate !)/ Now he's the Chairman at the world's greatest private equity corporation: Carlyle ? My point is, Jack Wekch's success was predictable because part of a process of bulding leadership. IBM's was not, and Gerstner pulled the trick right. Can Sam Palmisano and the next CEOs do the same ?
Now I can't wait for the paperback version of Carlos Ghosn's Turnaround account at Nissan due in may this year (I prefer paperback, because they are cheaper, easier to carry and usually updated with reader's remarks from the v1).
Much more could be said on comparing Gerstner's and Welch's books. But I'll stop for now.
Has anyone read any of these books and wishes to share their perspective ?