![A Look into “Waking Up IBM: How a Gang of Unlikely Rebels Transformed Big Blue”
6
IT for Interpersonal Communication
The key to Grossman’s case is the vision that he had of the Internet and the Web, as new forms of IT
communication, being the most crucial IT communications platform of the future. Grossman and Patrick’s
seminal ‘Get Connected’ manifesto, two of the six key ways they outline that IBM could leverage the Web
are directly related to internal IT communication:
1. Replace paper communications with email.
2. Give every employee an email address. (Hamel, 2000, p. 7)
Grossman also worked with another internet activist programmer at IBM, David Singer, who had been
involved in writing programs for Gopher in order to build, “…a primitive corporate intranet,” (Hamel, 2000,
p. 7). Corporate intranet and organization-wide email access, which are givens in most organizations
today, were revolutionary to a leading technology company in 1994.
Leadership in Action
Grossman and Patrick formed an extremely powerful leadership duo, that together were able to
transform an organization. According to James Kouzes and Barry Posner in The Leadership Challenge,
“When making extraordinary things happen in organizations, leaders engage in what we call The Five
Practices of Exemplary Leadership” (Kouzes & Posner, 2012, p. 15). Together, Patrick and Grossman
exhibit all five of these Practices of Exemplary Leadership, which are to:
• Model the Way
• Inspire a Shared Vision
• Challenge the Process
• Enable Others to Act
• Encourage the Heart (Kouzes & Posner, 2012, p. 15).
It all starts with Grossman challenging the process. He saw IBM as a stagnant organization, foolishly
turning away from an important technological development, and he would not stand for it. Rather, he
made sure to push and get himself heard, and make the organization notice. Patrick, too, challenged IBM’s
processes, encouraging his team to do the same: “’If you think of yourself as being in a box with
boundaries, you’re not going to have any breakthroughs. If [people on my team] come to me and say, ‘We
failed because we didn’t have the authority to do something,’ I’ll say that’s crazy’” (Hamel, 2000, p. 11).
The two crusaders could not do this alone, the had to inspire a shared vision to get others behind their
passion for changing IBM. Grossman’s initial passion and vision brought Patrick on early in the game.
Together, they saturated the organization with their vision, from widely spreading the ‘Get Connected’
manifesto, which “…found a ready audience among IBM’s unheralded Internet aficionados” (Hamel, 2000,
p. 7), to giving a personalized presentation to the CEO.
Throughout their efforts, both Grossman and Patrick model the way by consistently acting in a way that
was aligned with the goals and values that they had set out. By consistently being seen as focusing on
improving the organization, and being true to IBM’s interests, Grossman, Patrick, and their team gained
the trust of others at IBM. Rather than engaging in the cross-department infighting that had become so
common, Patrick’s group stayed deliberately focused on moving the organization forward.](https://image.slidesharecdn.com/0d2e4af1-a9f7-466b-b36a-e1c02c3b224f-160328003602/85/Final-Case-Analysis-6-320.jpg)
Final Case Analysis
- 2. A Look into “Waking Up IBM: How a Gang of Unlikely Rebels Transformed Big Blue” 2 Introduction to Case Study This final team project is based on the Harvard Business Review case study of “Waking up IBM: How a Gang of Unlikely Rebels Transformed the Big Blue” by Gary Hamel (2000). Here, the assessment of the case study is done by first giving the background and a brief summary of the case study. This is followed by analyzing the Organizational Structure and Culture of IBM during this change. Further we have also analyzed the Effective Communication, IT for Interpersonal Communications and Leadership in Action principles to assess the given case study on these principles. To extend this we have touched upon understanding of the conflict resolution and negotiation techniques and an understanding of change management techniques to IT enabling change in IBM. Finally, we look at some of the more immediate and long-term results on IBM. Background of ‘Waking up IBM’ Case Study This is a case study where Hamel discusses the situation that IBM was in during the start of the 90’s. The ‘Big Blue’ (as it was fondly called) was in deep waters. Its competitors like Fujitsu, Compaq, EDS, Intel and Microsoft were making life very difficult for IBM. To add to their woes IBM’s executives were busy fighting their endless turf battles. Due to the losses that had racked up, many armchair consultants had expressed their view that IBM should be broken up. The Internet was a new trend and not many were assured of its reliability and ability. During the 1994 Winter Olympics IBM was the technological partner and was responsible for collecting and displaying all the results of the event. During that event a mid level programmer at IBM, David Grossman, saw that the a “rogue Olympics website run by Sun Microsystems was taking IBM’s raw data feed and presenting it under the Sun banner” (Hamel, 2000, p. 6). Grossman was pushed to action due to this and he tried to contact the executives at IBM to get this message across and show them what internet is capable of. He faced some difficulties initially to get his point across to the executives. In order to prove his point, he drove for 4 hours to meet the marketing executive Abby Kohnstamm and to show her a demonstration of the internet. It was during this meeting that Grossman met his ally John Patrick who was present in the meeting. Together, Grossman and Patrick became this Internet tag team where Patrick would do the business translation for Grossman and Grossman would handle the technology translation for Patrick. Together they started making advancements in innovating using the internet which resulted in them developing the ‘Get Connected’ manifesto to leverage the web for IBM. The 6 ways outlined in the manifesto were, 1. Replace paper communications with email. 2. Give every employee an e-mail address. 3. Make top executives available to customers and investors online. 4. Build a home page to better communicate with customers. 5. Print a Web address on everything, and put all marketing online. 6. Use the home page for e-commerce. (Hamel, 2000, p. 7) As Patrick and Grossman’s group began to blossom, they decided to show a demonstration of the capabilities of the internet to the CEO of the company, Lou Gerstner, by showing him the mock up for a potential IBM corporate website. On seeing this, Gerstner immediately got on board and asked Patrick and Grossman, “Where’s the buy button?” (Hamel, 2000, p. 9). Still there were many skeptics and
- 3. A Look into “Waking Up IBM: How a Gang of Unlikely Rebels Transformed Big Blue” 3 Grossman and Patrick had to do their best to get everyone at IBM on board. Patrick tried to relentlessly propagated the importance of internet in every meeting and press conference to people inside and outside IBM and Gerstner supported him. IBM with Patrick and Grossman took on the task of building a website for the summer Olympics and in the process to prepare for it they also started developing websites for the U.S. Open, Wimbledon and for the chess match between the IBM supercomputer Deep Blue and the then world champion Gary Kasparov. The website for IBM turned out to be bigger than what they had ever anticipated with 17 million hits per day. It also taught IBM to do a little e-commerce when a demo site for ticket sales attracted a flood of credit cards numbers. With the success of the Olympics, the organization started to change and transform. The new way of development which Grossman brought to IBM changed the traditional approach of doing things. Patrick and Grossman’s team developed a new set of software development principles which summarized the growing Web community in IBM. The Internet group borrowed people from different teams during their projects and in the same way they would loan their team members to other teams when asked for it. In this way the employees would learn and grow immensely and this enabled a very flexible structure at IBM which served as a catalyst for innovation. All of this was highly successful because of the strong desire that Grossman and Patrick had to wake IBM up. As Hamel so aptly puts it, “Throughout their Internet campaign, Patrick and Grossman broke long- standing IBM rules and overstepped the boundaries of their own authority. But because their cause was so important and their commitment to IBM's success so visibly selfless, they got away with things that bad often sunk careers at Big Blue” (Hamed, 2000, p. 11). Even today, Patrick and Grossman are recognized as the people who turned it around for IBM. With the support of pro-change CEO, these 2 achieved the metamorphosis that IBM needed to finally again lead from the front. Organizational Structures and Cultures Before the internet revolution at IBM, the organization was divided into different departments and divisions with people having developed a parochialistic attitude (Hamel, 2000). There was no collaboration and interaction of ideas amongst the employees at IBM which had stagnated any kind of innovation. The teams were in different silos and the team members developed a narrow minded approach of not interacting with one another. This had severely impacted IBM’s position in the industry which had resulted in IBM having sever losses. After the internet revolution, the organizational Structure of IBM was restructured to a more flexible structure, the matrix structure, with the idea of developing one unified IBM (Gesmin et al., 2011). The idea was to help employees communicate easily and efficiently with each other and learn from various projects. The intention was to make IBM’s structure flat and boundaryless just like that of the internet (Hamel, 2000). Grossman and Patrick enabled this transition of IBM into a matrix structure when they started borrowing people from various teams into the internet group to build the web applications (Hamel, 2000). The same way members from the Internet group would also be transferred to other product groups when they would ask for help (Hamel, 2000). This forged strong relationships both ways and with every member who
- 4. A Look into “Waking Up IBM: How a Gang of Unlikely Rebels Transformed Big Blue” 4 went into different teams, he learned a lot about that division and he could implement those concepts into his team after his return. According to Gesmin et al., All the businesses within the company were categorized to three major groups: H1 for short term mature business, H2 for rapidly growing business, H3 for long term emerging businesses. H1 consists of short term mature businesses. 155 data center were reduced to 3 regional data center. He also reduced the number of CIO to one CIO who was responsible to make direct report to the CEO. The system development process was also reengineered, the number of in-house applications decreased from 16000 to 5200. It also integrated new technologies to meet the client demands. As part of restructuring efforts, company also focused on cost reduction process. The company had cut its workforce from 215000 to 86000 and reduced budget for its R&D activities (2011). The organizational culture at IBM also changed hugely after the turn of events with internet coming into the picture. The employees were driven by the desire to wake the company up. The movement of people from various teams ended the parochialistic outlook of employees. The top management who were busy fighting their turf battles in the past started supporting the changes that were happening. This can be seen when the CEO of the company Lou Gerstner was encouraging the team of Patrick and Grossman in their internet endeavors and the changes he made to the structure. Gerstner provided the boost to the web heads by “putting the company’s quarterly and annually reports on Web” and by signing a keynote address at the Internet World (Hamel, 2000). Patrick’s boss, VP for strategy and development, Jim Canavino encouraged Patrick and Grossman’s team to remain at the grassroots level to not be involved in any kinds of budget cuts and to support the budding innovation. The fact that the employees like David Grossman were self driven to make IBM rise again shows that the organization had good employment ethics and good employment relationships with its employees. Effective Communication: A Key to Success Effective communication was paramount to the success of the Internet Tag Team’s vision throughout the entire process. In the beginning, Grossman had hoped to turn IBM on to the power of the web through a personalized message to the senior executive of IBM’s marketing department, Abby Kohnstamm (Hamel, 2000, p. 6). Grossman did not get the results he expected from this message – something had not been fully communicated to Kohnstamm in his communication. The web, and the powerful vision that Grossman had for it at IBM, is high in information richness as it is an extremely new and novel concept for the organization, and with personally addressed written communication being best for messages of low information richness, it is not surprising that something was lost between Grossman and Kohnstamm (Jones & George, 2015, p. 482). Grossman did not give up here, however. Whether he knew it or not, his strategy to follow up in person with high level IBM managers provided the mode of communication necessary for his highly information rich message as face-to-face communication is capable of communicating information at the highest end of information richness (Jones & George, 2015, p. 482). What had been lost on Kohnstamm previously was now received by Grossman’s greatest ally: John Patrick.
- 5. A Look into “Waking Up IBM: How a Gang of Unlikely Rebels Transformed Big Blue” 5 Throughout their campaign, Grossman and Patrick appeared to be deliberate about their communication strategy, properly matching the intended information richness with an appropriate communication media. Whether that was sending out a mass email message with their ‘Get Connected’ manifesto to reach the widest audience (Hamel, 2000, p. 7), or Patrick using his sway to get time in front of 300 IBM officers to show them what their organization’s presence could look like on the Web (Hamel, 2000, p. 9). In person communication, where a demo with easy two-way conversation could be had, was also key to getting Gerstner on board (Hamel, 2000, p. 9). Patrick and Grossman created a complementary communication pair for the job they had ahead of them. Grossman, as a programmer, could translate the technical side of things for Patrick. Patrick, from the managerial side, could translate the business world of IBM to Grossman. Patrick’s involvement also allowed for easy direct vertical communication within the organization as he already had a seat at the table with other executives – giving easy access to people like Senior Vice President for Strategy, Jim Canavino, who helped keep the Get Connected group a grassroots effort rather than immediately incorporating it as a department. The importance of vertical communication was so apparent to their success, they published it in the set of software development principles they developed for IBM Web programming: “Skip the krill (go to the top of the food chain when you’re trying to sell your idea)” (Hamel, 2000, p. 11). Conflict Resolution and Negotiation Techniques When Grossman found that that IBM's Olympic feed was being ripped off by Sun Microsystems, he contacted the senior executive in charge of all IBM marketing. However, the conversation was ‘frustrating’ and Grossman had the feeling that one of them was living on another planet. Persistent Grossman, however, sent some screenshots from Sun's Web site to IBM's marketing staff. After this IBM's legal department sent a cease-and-desist letter to Sun, which succeeded in shutting down the Sun’s site. Most frontline employees would have left it at that, however Grossman drove down to IBM's headquarters, to personally show Kohnstamm the internet. He was convinced that IBM was missing a bigger point: Sun was about to eat Big Blue's lunch. Along with that, Patrick, in his endeavor showed IBM's top brass the sites that were already up and running, by HP and Sun Microsystems. He wanted to make his point clear that, everyone could have a virtual presence on the Web. Still, many IBM old-timers remained skeptical about his vision. However, Patrick constantly fought the IBM's narrow outlook, Patrick took every opportunity to drive the point that the Web was a company wide issue. Patrick united his fellow counterparts and asked them to leave their local biases at the door. Patrick said that nobody is from IBM Austin or IBM Germany, they are the part of the culture that is Internet-boundaryless and flat. These and many more incidences show that Grossman and Patrick have taken a more cooperative and more effective approach of conflict resolution to fulfil the interest of an organization instead of the catering the personal demands. Patrick and Grossman have performed the roles of the third-party negotiator, mediator and arbitrator, focusing more on the resolution that is good for the organization.
- 6. A Look into “Waking Up IBM: How a Gang of Unlikely Rebels Transformed Big Blue” 6 IT for Interpersonal Communication The key to Grossman’s case is the vision that he had of the Internet and the Web, as new forms of IT communication, being the most crucial IT communications platform of the future. Grossman and Patrick’s seminal ‘Get Connected’ manifesto, two of the six key ways they outline that IBM could leverage the Web are directly related to internal IT communication: 1. Replace paper communications with email. 2. Give every employee an email address. (Hamel, 2000, p. 7) Grossman also worked with another internet activist programmer at IBM, David Singer, who had been involved in writing programs for Gopher in order to build, “…a primitive corporate intranet,” (Hamel, 2000, p. 7). Corporate intranet and organization-wide email access, which are givens in most organizations today, were revolutionary to a leading technology company in 1994. Leadership in Action Grossman and Patrick formed an extremely powerful leadership duo, that together were able to transform an organization. According to James Kouzes and Barry Posner in The Leadership Challenge, “When making extraordinary things happen in organizations, leaders engage in what we call The Five Practices of Exemplary Leadership” (Kouzes & Posner, 2012, p. 15). Together, Patrick and Grossman exhibit all five of these Practices of Exemplary Leadership, which are to: • Model the Way • Inspire a Shared Vision • Challenge the Process • Enable Others to Act • Encourage the Heart (Kouzes & Posner, 2012, p. 15). It all starts with Grossman challenging the process. He saw IBM as a stagnant organization, foolishly turning away from an important technological development, and he would not stand for it. Rather, he made sure to push and get himself heard, and make the organization notice. Patrick, too, challenged IBM’s processes, encouraging his team to do the same: “’If you think of yourself as being in a box with boundaries, you’re not going to have any breakthroughs. If [people on my team] come to me and say, ‘We failed because we didn’t have the authority to do something,’ I’ll say that’s crazy’” (Hamel, 2000, p. 11). The two crusaders could not do this alone, the had to inspire a shared vision to get others behind their passion for changing IBM. Grossman’s initial passion and vision brought Patrick on early in the game. Together, they saturated the organization with their vision, from widely spreading the ‘Get Connected’ manifesto, which “…found a ready audience among IBM’s unheralded Internet aficionados” (Hamel, 2000, p. 7), to giving a personalized presentation to the CEO. Throughout their efforts, both Grossman and Patrick model the way by consistently acting in a way that was aligned with the goals and values that they had set out. By consistently being seen as focusing on improving the organization, and being true to IBM’s interests, Grossman, Patrick, and their team gained the trust of others at IBM. Rather than engaging in the cross-department infighting that had become so common, Patrick’s group stayed deliberately focused on moving the organization forward.
- 7. A Look into “Waking Up IBM: How a Gang of Unlikely Rebels Transformed Big Blue” 7 Throughout their journey, Grossman and Patrick continuously enabled others to act. Their ‘Get Connected’ manifesto found a willing audience of other Internet-interested individuals who now had permission to take action. By acting as a virtual team that transcended IBM’s typical department structure, their team was able to build trust and facilitate new relationships among different departments of the organization, and ultimately build greater trust in Patrick and Grossman. By focusing on community, and the idea of one IBM, Patrick especially encouraged the heart. Whether at the Internet World show, where Patrick rallied his team of people from different geographic locations with his words, “We are here because we are the IBM Internet team for the next three days. You are not IBM Austin or IBM Germany,” (Hamel, 2000, p. 9), or later in the way he would talk to people in his Web Ahead team upon losing someone from the team to another post: “We did not lose Bill. We colonized the network hardware division. Now there is one of us living there” (Hamel, 2000, p. 11). To Patrick, his team was a community. Change Management Techniques to Enable Change in Information Technology “Companies need to be innovative, expand their footprint into new or emerging markets, and stay relevant to their customers in order to be competitive” (Why a business case for change management, 2014). IBM as an organization has always strived to be innovative and when an organization wishes to accomplish such innovation challenge, change is an integral part of it. To enable such change successfully, change management techniques are of utmost importance. Patrick and Grossman's team performed activities which could be categorized into two types of changes which managers often notice: 1. Revolutionary Change 2. Evolutionary Change “Revolutionary change is rapid, dramatic, and broadly focused. Revolutionary change involves a bold attempt to quickly find new ways to be effective. It is likely to result in a radical shift in ways of doing things, new goals, and a new structure for the organization” (Jones & George, 2015, p. 336). Grossman and Patrick used Innovation as a key instrument to create a revolutionary change at IBM. The team identified “Internet” as their broad area of focus and implemented changes rapidly to adapt to the rising culture of web. “Evolutionary change is gradual, incremental, and narrowly focused. Evolutionary change is not drastic or sudden but, rather, is a constant attempt to improve, adapt, and adjust strategy and structure incrementally to accommodate changes taking place in the environment” (Jones & George, 2015, p. 336). The “Get Connected” manifesto, “Web Ahead” project by Patrick’s group and working towards building a $30 billion Global Services unit in e-business consulting showcase the gradual, incremental and narrowly
- 9. A Look into “Waking Up IBM: How a Gang of Unlikely Rebels Transformed Big Blue” 9 They also further involved people from various teams into their projects and empowered them through their actions to achieve the change successfully. Refreeze It is the process of returning the organization to a sense of stability, which is so necessary for creating the confidence from which to embark on the next, inevitable change. Patrick and Grossman worked constantly to establish a stable environment at IBM in the projects which they pursued. They published a set of software development principles they developed for IBM Web programming to ensure the whole organization was on the same page and also help them to venture out into further innovation challenges. Results & Beyond IBM which was in the brink of failure was transformed through innovation and the effective leadership of Gerstner, Patrick and Grossman. The Internet Tag Team worked selflessly towards the betterment of IBM. By identifying key areas of growth and adapting to the changing culture they were able to build a $30 billion worth Global Services Unit in over six years (Hamel, 2000, p. 6). By the end of 1998, it had consulted 18,000 projects in the area of e-businesses and a quarter of their revenue of $82 billion was from the internet (Hamel, 2000, p. 6). As of 2015, IBM continues to grow strong and is placed #44 on the list of Forbes world’s biggest Public Companies (The world’s biggest companies, 2015). At the core, IBM was pulled from the brink of failure by embracing the ideas of a few lower-level, passionate renegades within the organization. This culture of listening to individual employees has only grown since the time of Grossman making his four-hour drive to Armonk, New York to sell his view of the Web in person. In 2003, under new CEO Sam Palmisano, IBM took a deep dive into reexamining its values for the first time in nearly 100 years. Rather than doing this in a closed off board room with a handful of executives, Palmisano organized a 72-hour long discussion on IBM’s global intranet titled ValuesJam, where “IBMers came together to define the essence of the company.” Instead waiting for a pivotal moment when it would be necessary IBM to be shaken awake again, Palmisano invited everyone to the table to participate and make their impact on the deepest driving principles of the organization despite where they stood in the hierarchy: If there’s no way to optimize IBM through organizational structure or by management dictate, you have to empower people while ensuring that they’re making the right calls the right way… That’s why values, for us, aren’t soft. They’re the basis of what we do, our mission as a company… You’ve got to create a management system that empower people and provides a basis for decision making that is consistent with who we are at IBM (Our Values at Work, n.d.). In July 2006, IBM held another 72-hour global brainstorming session, titled InnovationJam. This session was designed to allow for the best ideas to surface through collaboration and the open flow of ideas among participants, who hailed from 67 companies, across 104 countries, totally over 150,000 total participants (A Global Innovation Jam, n.d.). A second InnovationJam took place in 2008. IBM’s InnovationJams’ ability to open and democratize the innovation process is an illustration of Patrick’s idea of the internet flattening an organization when put in action. What is interesting to see is that these Jams are directly related to some of the earlier Web work that Grossman performed during their crusade when developing IBM intranets:
- 11. A Look into “Waking Up IBM: How a Gang of Unlikely Rebels Transformed Big Blue” 11 References A Global Innovation Jam (n.d.). Retrieved from http://www- 03.ibm.com/ibm/history/ibm100/us/en/icons/innovationjam/ Financial Highlights. 2012. Retrieved from http://www.ibm.com/annualreport/2012/financial- highlights.html Gesmin, S., Opara, E. U., Henderson, B., Polk, D., Irtiza, S., Siddiqui, U., Mahfouz, A. Y., & Tembley, B. (2011). An Analysis of Historical Transformation of an IT Giant Based on Sound Strategic Vision. Communications of the IIMA, Volume 11 Issue 3 Hamel, G. (2000, July). Waking Up IBM: How a Gang of Unlikely Rebels Transformed Big Blue. Boston, MA: Harvard Business Publishing. Jones, G. R., & George, J. M. (2015). Contemporary Management (9th Edition ed.). New York, NY, United States of America: McGraw-Hill Education. Kouzes, J. Posner, B. (2012). The Leadership Challenge: How to Make Extraordinary Things Happen in Organizations (5th Edition ed.). San Francisco, CA: Wiley Our Values at Work. (n.d.) Retrieved from http://www.ibm.com/ibm/values/us/ Planning and Executing Change Effectively. (n.d.). Retrieved from Web Books: http://www.web- books.com/eLibrary/Books/B0/B58/IMG/fwk-carpenter-fig07_013.jpg The world’s biggest companies. 2015. Retreived from http://www.forbes.com/companies/ibm/ Why a business case for change management. (2014, July). Retrieved from IBM Global Business Services : http://www-935.ibm.com/services/multimedia/Organizational_Change_Management.pdf