IBM
0219 IBM Corporate Strategy Group
In the early 1980s Derek Haslam, who was one of the best bosses I ever had, was replaced as my (Biomedical) boss by John Hickox. John was a rather strange manager, ex-army, whose brother was a leading orchestral conductor. Where Derek had left me to continue to live in Molesey, and even paid my travel expenses, John insisted that I moved down to Basingstoke. This was not particularly welcome, as my roots were in Molesey.
By this time Mike Martin had resigned, having lost the battle for leadership of the Biomedical in the UK, and gone to another biomedical company. I later learned that he had become a vice president, which shows the typical value of IBM personnel at the time.
He was replaced by Bob Warren, who had been working at the labs in the US on behalf of GSD. Bob was a nice guy, who I enjoyed working with it. On the other hand he was not the world's best salesman. Never mind, we were selling more than enough equipment to meet our targets. The other new joiner was John Lyman, our engineer. John had been an engineering CE who travelled the world for GSD. His move was a promotion, and he was quite ambitious.
The only problem I had, however, was that I had started to worry about the problematical future of Biomedical Division. By then Biomedical had already paid for itself, simply by leading the way for the PC; which was, at that time, a monumental success. The principles underpinning the theory of the Independent Business Units had been successfully established.
On the other hand, when I looked at the calculations, it became clear to me that Biomedical could not be viable within IBM. It would certainly have been viable as an independent company. Its turnover, backed up by the expertise incorporated in its personnel, would have made it a leading company in the biomedical field. The problem was that Biomedical Division had to carry the massive overheads that any division was subjected to by IBM. I reckoned that the division had to hit a revenue of at least $200 million pa before it broke even within IBM. As it was clear that there was no chance of us doing this, I sent a report to this effect to the EHQ (European headquarters), where it was grudgingly accepted. EHQ then passed it on, with its backing, to the corporate board in Armonk. At the same time, however, the new management team in Biomedical US were once more asking for greater investment to grow the division. It has to be remembered that John Opel, who was then IBM’s global CEO, had set up the IBUs as his own personal baby – and his reputation was linked with them. I was impressed that, despite this, he backed my recommendation and Biomedical Group was disbanded.
As this was happening, I was making a move out of Biomedical. Following my usual procedure, I talked to John Steel (the UK’s Corporate Head of Personnel) about the various jobs on offer and settled for one in Corporate Strategy. This was the IBM UK's global corporate strategy group; covering DP division as well as GSD. It looked an ideal position, but once more it was a bummer. Surprisingly, it was a relatively conservative -- albeit political -- department. Worse still, I was seen by its management as a junior, only fit - as ex-GSD - to do the junior jobs.
In particular, I had been hired in – as I later found out -- to put in place a tracking management system for promotional activities. At that time there were something like a thousand marketing staff at the UK headquarters, spending something like £1 billion a year. Management were worried that many promotional activities, which were started, quite often never got finished. Thus, something like 1,000 activities were put into the plan at the beginning of the year, but only something like 100 were actually run. My job was to introduce a computer system which would monitor progress of each of these activities to make certain they took place. I had a team of development programmers at Chiswick, though I was still based at Basingstoke. The problem was that, as I explored the state of affairs in some depth, it dawned on me that the situation was considerably more complex. It was true something like 1,000 activities were started. It was also true that the list then was reduced down to 100, even before they were launched; by a form of natural selection. Thus, it became obvious, as they progressed, most of them didn't meet the requirements of the branches or the market. Hence they were abandoned. Even after the 100 made it through to the field, only about 10 were really successful. Indeed, the resources that should have been provided for the 1,000 projects were gradually switched until they were concentrated on just these 10. My reasoning was that any system which ensured that the resources would actually spread across all 1,000 projects, instead of being concentrated on the few successful ones, would in fact be disastrous. It would bar the ‘natural’ selection of the most important projects
Accordingly, I recommended to the board that they abandon the project and just implement tighter management of the successful projects when they emerged. The rationale for this was accepted by most senior management, but was greeted less well by my own management; whose baby the whole project had been. Thus, with my successful advocacy also went my real job. Accordingly, I hung around for the best part of a year with very little to do. Eventually I actually took to taking my Open University work with me and doing it at my desk. When I was asked about this I said that I had to have something to do.
Thereafter I was really only involved in two projects. The main one was the operational support for the marketing plan process. Each year IBM produced a massive marketing plan, which ran to around 400 pages. It was our job to bring this together. Indeed, my first job was to shred -- personally -- all copies of the previous plan. It was so confidential that I personally had to collect them from all the senior managers; and then had to spend many hours shredding them by hand. It was too confidential to be sent to the outside shredder which all other material was. The main fact, which impressed me most of all, was that significant number of these marketing plans came back literally with layers of dust on them. It was obvious that few of the plans had actually been opened during the year.
Accordingly I tried very hard to cut the plan back to under 50 pages. I failed, but I did manage to reduce it to something like two hundred pages.
In any case the main practical part of the planning process was a three-day meeting, away from IBM premises, where all IBM's senior managers were brought together to discuss the draft plan. Indeed, it really didn't matter what the published plan contained. What was important was what all these managers understood from the meeting. It was one of those classic management situations where theory said that one thing -- the written plan -- was important when the reality was another -- the face-to-face meeting with all those others involved -- was what really drove the whole process.
We met at a residential at a hotel not too far away from Basingstoke, where my two bosses chaired the meeting and I managed the operational side. It was quite fascinating, especially as it gave me a significant insight into the IBM planning process; which was at the heart of my later book about IBM.
The other activity I was actually involved in came about almost accidentally. A telex had come in from the States asking for a whole range of facts and comments. It came from someone who was unknown to the group. Their reaction, therefore, was to a “Pass it on to David”; he can waste his time on it. As I worked my way through it, I realised that the questions were much more fundamental that anyone had appreciated. Accordingly, I rang my contacts in the States and found out that the unknown originator of the telex was in fact the new corporate planning vice president worldwide! What I was working on was, it turned out, the UK's corporate strategy for the next five years. I beavered away and put together a very comprehensive document. I presented this to the UK management on the last day before submission, and then discreetly informed them who the recipient was due to be. Never have I seen so many managers trying so hard to rewrite a document in my life. Of course they couldn't really rewrite the main thrust of it. Thus, by default, I wrote the IBM UK corporate strategy for the next five years!
I also stirred up a storm when I discovered that the industry marketing departments, before the recent reorganisation the main driver for IBM marketing with 700 staff, had disappeared without a trace. All their staff had been reallocated to a range of new departments, but their responsibilities hadn't. Thus, there was a great big hole in the organisation - with a wide range of activities which had simply stopped. My management, who had pushed through the reorganisation, were again none too pleased.
As was often the case in my career, I had got up the nose of my management. Accordingly, I was not surprised when they told me I was to be shunted off to run EXHIBIT. I was very upset and made this clear by management, since I thought I was being dumped. In fact it was to be best job I ever had IBM.
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