USA: Heller on management - How IBM went off-beam. (2 of 2)

USA: Heller on management - How IBM went off-beam. (2 of 2) - So this is not a short-term problem. It has been festering through most of Akers' tenure. To be fair, Business Week offered half a dozen gurus the chance to come up with a cure, but to no grea

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Last Updated: 31 Aug 2010

So this is not a short-term problem. It has been festering through most of Akers' tenure. To be fair, Business Week offered half a dozen gurus the chance to come up with a cure, but to no great effect either: most wanted to generate cultural change, which outside of desperate short-term crisis is a lengthy process. The most specific plan was that of Thomas J Peters. In his "In Search of Excellence" days Peters was a great IBM fan: now he "wouldn't hesitate to break it up into five pieces".

Five easy pieces would certainly be better than one impossible whole. I have long argued that IBM never learnt the lesson of the wondrous launch of its PC by the uniquely autonomous group established at Boca Raton. Commercially, that short-term sensation was a long-term migraine, setting up the clones who undercut IBM's market position. But managerially it was a miraculous demonstration of the latent powers of the corporation, for all its size and self-conceit.

It is not only the Lilliputians who have tied ropes round the giant - it is the matrix. The painstaking effort to harmonise global product lines and production with national companies has robbed IBM's great businesses of the directness of command and control that were granted to (and later removed from) Boca Raton. It could easily afford the bureaucracy of matrix management in the days of cost-plus pricing in an almost entirely mainframe world. Today that world has changed but IBM has lagged behind.

Any workable prescription has to be far more radical than anybody has yet proposed. Sacred cows have to be slaughtered as the matrix is destroyed, power is given to autonomous, clearly defined global businesses, and the central role of the Armonk HQ is drastically reduced. But where in Armonk does the buck stop? If it stops at Akers (and where else?), does not part of the problem - and very possibly the solution - lie there?

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