April 1, 1993, April Fool’s Day. Gerstner took over the reins of IBM from his predecessor Akers and became chairman and CEO. At the press conference at the New York Hilton Hotel, people were full of curiosity about him. It was incredible for an outsider to take charge of the world's largest computer company. It also happened in the extremely bureaucratic and conservative IBM. Gerstner's theme throughout the press conference was: "I'm new here. Don't ask me what the problem is or what the answer is. I don't know." But he said he learned quickly and had the courage to take drastic measures. . In fact, that day he sent an unmistakable signal of what would change IBM: He distinctively wore a blue shirt.
After the meeting, Gerstner walked into the office in the southeast corner of the third floor of Armonk's headquarters, which is IBM's highest power center. Of course, it is not easy to sit in this position. Many people ridiculed Gerstner, who started his career by selling cigarettes and fast food and was a layman in the computer industry, for taking this important position, joking that he would collect corpses for IBM. However, Gerstner effectively responded to those people with practical actions.
As we all know, IBM has long been the leader in the world's computer industry and is regarded as a symbol of American technological strength and a bastion of national competitiveness. But after entering the 1990s, the Big Blue began to falter, even to the brink of collapse.
In 1992, before Gerstner took office, IBM suffered losses of US$5 billion; in 1993, when Gerstner took over, IBM, the leading company in the computer manufacturing industry, had begun to decline and was facing being eliminated. The danger of dismemberment: In the first year after Gerstner took office, IBM suffered a loss of US$8.1 billion; in 1994, IBM made a profit of US$3 billion, and has had good harvests in successive years since then.
"Gerstner's personality is tougher than nails. IBM is currently facing many difficulties and needs people with extraordinary talents like him." A senior executive of IBM once commented. After Gerstner took over IBM, he did not replace most of IBM's senior executives, but he changed the style and thinking of IBM's "old and young" through his actions and tough words.
In the face of criticism and accusations from within and outside the company, Gerstner insisted on using shock therapy, drastically cutting costs, and successfully persuaded the board of directors to carry out structural reorganization - "If the top management of the company is not determined to come up with the minimum If it takes five years to carry out reforms, it will be difficult to succeed in institutional restructuring, and the difficulty is not in the beginning, but in carrying out the changes until the goal is achieved." He also used a combination of stock options and monetary rewards to motivate subordinates.
However, Gerstner was also ruthless in excluding dissidents, even his brother was no exception. It can be said that Gerstner's handling of his brother Dick has caused a lot of controversy within IBM. As a passionate, social, and well-connected senior executive, Dick can be regarded as the traditional spokesperson of IBM. In 1960, Dick entered IBM as an industrial engineer and was later promoted to president of IBM Asia Pacific.
In 1988, Dick was assigned to handle the complex PC business. However, just before he took office, he had to leave due to Lyme arthritis, and then returned to IBM for a three-month consulting project at the company. This was when Gerstner took over IBM. As a representative of the conservative forces within IBM, Dick eventually left IBM after a meeting between him and Gerstner.
In terms of business management philosophy, Gerstner always finds ways to make the company's development direction known to every employee, and this is usually the most difficult thing for a large company. He broke with IBM's past hierarchical practices and communicated directly with employees via email. For example, if the U.S. headquarters announces the company's global performance today, then the next morning there will be a detailed report from the president in the emails of more than 200,000 employees around the world. Every time he goes to a place, he will arrange an hour to meet with all employees, talk about the company's direction, and then leave 45 minutes for employees to raise their hands and ask him questions. So he always has a way to hear the voices of customers, hear the voices of employees, and see changes in the market.
In the end, Gerstner did not disappoint his colleagues who had high expectations for him.
During his nine-year tenure, Gerstner made two of the most important decisions:
First, he rejected the proposal to split the company, but instead expanded IBM's reach globally and made its business more comprehensive. Diversification has enabled IBM to avoid the impact of the recession in the high-tech industry;
The second is to change IBM's business model and shift its business focus from hardware manufacturing to service provision. Today, IBM's Global Services has become the company's fastest-growing department and accounts for 43% of the company's total sales.
“Customer first”, Chantilly Bar kicks off strategic adjustment
A few weeks after Gerstner took office, at a resort in Chantilly, Virginia, IBM’s largest Information executives from 200 clients were invited to an extraordinary meeting. This is the first time that IBM has admitted in front of customers that it does not know everything. It is also the first time that IBM managers have humbly asked customers two simple questions: What have we done right? What did you do wrong?
Gerstner said: The information revolution is about to happen, but only if the computer industry stops worshiping pure technology and starts to focus on the true value of technology to customers. To put it simply, customers come first, IBM comes second, and all businesses come third. IBM can no longer rely on shiny shoes and a smile to get by.
Just like a master playing chess, many wonderful killstreak layouts start from seemingly ordinary sets. In retrospect, the secret of Gerstner's "magic rejuvenation" is neither a major technological breakthrough, nor a sharp price cut, nor even the ability to grasp the ever-changing market. Instead, he led IBM to find one of its most basic business concepts at Chantilly Bar: maintaining close contact with customers.
After this seemingly understatement, Gerstner immediately faced one of the most difficult choices, and it was also his most exciting strategic decision. As we once had a heated discussion, "Should we make the boat smaller so that it can turn around, or should we make the boat bigger to withstand the wind and waves?" At that time, Gerstner also encountered this problem. Former executive Akers left him with a plan to dismember IBM, and most people agreed. Faced with the panic situation, Gerstner must make a decision as soon as possible.
According to Gerstner's "customer first" thinking, a disintegrated IBM will certainly not be able to provide customers with high-quality comprehensive services. On the contrary, it can only maintain the unity of the company and let the same face face customers. Only then can we be more competitive, and this is precisely a unique resource of IBM.
If Gerstner insists on "grasping both services and technology to allow IBM to develop in an all-round way", he will not only not be able to dismember IBM, but will also try his best to turn IBM into a giant fist. Therefore, Gerstner decisively rejected Akers' dismemberment plan and decided to maintain the integrity of IBM.
This is not an understatement. To "totally deny" this dismemberment plan that most people have approved of is of course very risky. However, Gerstner ignored this. He could not compromise or compromise. This was his personality. He eliminated all interference and immediately arranged the next action plan according to his strategic intentions. It seems related to his straightforward personality. Before Gerstner's doubters began to believe him and before he had a firm footing, he launched a series of strategic actions that violated IBM's traditions. Then, he told the company's employees: "I want you to know that the wind blowing against us is about to pass. I can't predict exactly when exciting changes will occur, but I believe the direction of the wind will change."< /p>
Fortunately, at the end of 1994, IBM made a profit of US$3 billion. This was its first profit since the 1990s, and it has had good harvests since then. This may be retribution for his vigorous and resolute approach. Gerstner has won unprecedented trust with facts. Otherwise, the road ahead will be difficult for him.
On June 5, 1995, after taking care of the "housework", Gerstner finally turned his attention to the outside world. He wanted the world to soon understand how powerful his clenched IBM fist was. .
Gerstner first took aim at Lotus and wanted to take it under his control. As expected, Lotus president Jim Manz firmly resisted. Gerstner immediately decided to annex by force. Through various media, he sent a strong signal to the world: Gerstner wanted to forcibly acquire the 55 million common shares of Lotus listed. IBM offered a high price, causing Lotus stock price to double.
At the same time, Gerstner pointed out that if Lotus dares to carry out a "counter-acquisition", IBM will raise the price at any time and will stay with it until the end. Finally Manz gave in.
On June 11, 1995, the deal was finally closed for US$3.5 billion, becoming the largest acquisition in software history. Within a week, Gerstner fought a beautiful and quick decisive battle, leaving an unforgettable memory for his colleagues who supported dismemberment. IBM's morale immediately rose.
Then Gerstner used Lotus' Notes software as a bomb and immediately launched a fierce attack on the software market. Within a few months, it captured the enterprise network market in one fell swoop, once again demonstrating the power of IBM's iron fist. By the end of the year, IBM's revenue exceeded the $70 billion mark, and its mainframe business was quickly revived. IBM has completely emerged from the crisis and is full of hope.
On November 15, 1996, IBM stock rose to $145, reaching its highest point in nine years. The blue giant once again stands proudly in front of the world.
In January 1997, at the annual global employee meeting, Gerstner said: "In 1997, we had nowhere to hide. This was a year of closing accounts for all of us. 1994 1995 is the year we hold our ground; 1996 is the year we show we can grow; 1997 is the year we show the world we can be leaders. We no longer need any excuses."
Gerstner never said good words that he was not sure of, but when he said them, he was sure to deliver. By 2001, IBM's total revenue reached US$88.4 billion and net profit was US$7.7 billion, creating the climax of the "Gerstner Myth". IBM's upward trend is very eye-catching. IBM's earnings per share soared, thanks in large part to IBM's ingenious partnership strategy, even as rival companies collapsed in the protracted recession. Under Gerstner's leadership, the development of many application software was halted, working hand in hand with software companies that had been its competitors. This strategy has given IBM tremendous benefits and development momentum.
In November 1999, Gerstner formulated a policy for cooperation with independent software companies. In the field of commercial software, Microsoft of the United States and SAP of Germany have overwhelming advantages, while IBM has been in a state of loss. Gerstner concluded that for customers, not everything must use IBM products. So he decided to retreat from the commercial software field and use a cooperation strategy to fill this gap.
At the same time, Gerstner also realized that sales cooperation would fail if there was no enthusiasm for selling each other's products and it was just a formality. Therefore, he actively promoted a series of agreements between IBM and software companies. More than 70,000 IBM business leaders and sales agents have received training related to partner software in order to recommend partner software when selling information systems to customers.
Today, the alliance and profit sharing cooperation model promoted by Gerstner has involved computer services and various competitive fields. Using this model, IBM has expanded its market share in key areas such as servers, storage devices and databases. As a leader in the global computer services industry, IBM has also expanded its sales of hardware equipment and software.
During the cooperation between Siebel Systems and IBM, Siebel Systems will provide all of its business software to IBM servers. In this way, for users who purchase Siebel Systems software , IBM will be able to easily market its servers, and Siebel Systems will consolidate its position as the world's largest customer management software company.
Through its global services business, IBM has established strategic partnerships with 72 software vendors. Gerstner further stated that IBM's goal is to establish a network of up to 200 cooperative companies. He believes that in this world, a company cannot only use its own hardware, software and sales force, but must integrate itself into a larger ecosystem. And this ecosystem he talks about continues to grow and develop every day.
Through this joint venture, IBM generated sales revenue of US$2.25 billion in the first three quarters of 2001. In 2000, the operating income from this cooperation was only US$750 million. Progress has indeed been made. is obvious.
In 2001, IBM, led by Gerstner, still went against the trend and maintained a certain growth rate, and its stock price also rose by 35%.
Under Gerstner's management, IBM today has become a computer company that does not manufacture computers, and many American computer manufacturers have not realized that they have to make such strategic adjustments until today.
As the industry leader, IBM's sales in 2001 reached US$86 billion and total profits reached US$7.7 billion, second only to Microsoft in the technology industry. IBM therefore deserves to be selected into the top ten of the "Fortune 500". It can be said that all the efforts made by Gerstner during his 10-year tenure at IBM have finally come to fruition, and IBM has risen again from the ashes and regained its former glory. Gerstner spent his high school years in a highly competitive Catholic school. Under the strict discipline and encouragement of his parents, Gerstner's academic performance has always been among the best. Thereafter, he received a scholarship to Dartmouth University to study for a bachelor's degree in engineering. In the impression of his college classmates, Gerstner is a very smart, honest person, and he is quite popular, but at the same time, his straightforward personality is also very obvious.
He cannot tolerate anyone or anything that he considers stupid. If someone showed flaws or shortcomings, he would tell them point-blank that "this is stupid." If someone is making a statement that seems a bit silly to him, he will often stop the statement rather than express his opinion in a tactful way.
Shortly after graduating from college, Gerstner quickly entered Harvard Business School to study for an MBA, which laid a solid foundation for his subsequent success.
In 1965, Gerstner received an MBA degree from Harvard Business School and immediately joined McKinsey Management Consulting, quickly becoming a popular figure. Although he knew little about the financial and banking industry, he was often able to quickly absorb large amounts of information and immediately summarize corporate problems. It was precisely with his outstanding performance at McKinsey that Gerstner created a miracle at McKinsey - becoming McKinsey's youngest partner at the age of 28 and the youngest director at McKinsey at the age of 33.
If studying at Harvard Business School has made Gerstner an outstanding strategic thinker, then his 13 years at McKinsey have allowed him to fully develop and exercise his talents, and Take it to the next level.
In 1978, Gerstner left McKinsey, the management consulting firm where he had worked for many years, and joined American Express as executive vice president, mainly responsible for the credit card business. After entering the company, he completely ignored the company's promotion rules and hierarchy system and actively introduced outsiders to high-level positions. In view of the fact that American Express was facing fierce competition in the credit card and traveler's check fields at that time, he actively used consumer orientation to promote a single brand and became one of the contributors to establishing the goodwill of "American Express Credit Card" for Express.
However, after American Express acquired Shelson Company in 1981, the inflow of Shelson Company personnel made Gerstner quite uneasy. He was originally expected to be the successor of American Express President Robinson, but he was preempted by Shelson CEO Stanford Weill and ascended to the throne of president.
In 1987, although Robinson still served as the president of American Express, Gerstner, unwilling to wait patiently, began to look for new personal development opportunities. He once threw the hydrangea to United Airlines, which was recruiting a CEO at the time. However, because United Airlines was caught in a labor dispute at the time, and some people at the top of the company believed that Gerstner was not suitable for this position, Gerstner He missed out on the CEO job at United Airlines. In 1968, Gerstner married Elizabeth Robbins Linke from Virginia. For their marriage, the brilliant McKinsey strategist believed it was his wisest choice. After marriage, they had two children. As a public figure, Gerstner rarely talked about his personal life. He is a devout Catholic. No matter how busy he is at work, he always takes time to attend mass every week. However, he always dismisses the "golden motto" of Catholicism.
Everyone who is familiar with Gerstner knows that he is a person with a strong sense of time. He hates anyone and anything that wastes time, but he is willing to spend time and work tirelessly to plant crops in his yard. asparagus. Gerstner liked golf very much, but he was tired of its cumbersome etiquette.
Gerstner's lifestyle was as unpretentious as his business approach. He had little interest in bowling with celebrities, nor did he like meeting movie stars, or even meetings with national leaders. He is said to have declined an invitation from the White House citing lack of time.
But sometimes, Gerstner attaches great importance to everyone's status, especially his own status, which will never be challenged. During his time at Renault, he was picky and had strict rules about who could fly on the company's dedicated planes, and even where everyone would sit. The desk he used to work at the rear of the plane was called the "throne."
Gerstner's success in the business world is obvious to all. At the same time, he is also very concerned about public welfare undertakings, especially public school education. He is also a loyal supporter of quality education. In 1994, he co-authored "Educational Innovation: Entrepreneurship in American Public Schools" with Du Dun. He also serves as co-chairman of an organization launched by U.S. political and business leaders to improve the quality of education in America's public schools.
During his tenure at IBM, Gerstner made education innovation a project of the company to support systematic school reform. Through the Education Innovation Project, IBM has established strategic partnerships with 21 states and school districts to use IBM's technology and technical assistance to remove barriers to school reform and improve students' academic standards.
In recognition of his numerous contributions to the advancement of education, Gerstner has been awarded many awards. In June 2001, the Queen of England awarded Gerstner the honorary knighthood of the British Empire in recognition of his outstanding contributions to public education and his great achievements in the business world.