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Recruiting Strategies

Monday, August 7, 2000

Big Blue Goes Extreme to Attract Talent
IBM’s “Extreme Blue” is an internship program to show prospective hires the giant’s nimble and exciting side

By Cate T. Corcoran in San Francisco

Time was when a job offer from IBM was like a degree from Harvard, conferring a lifetime of security and prestige, even if you did have to wear a blue suit to work every day. These days, however, Big Blue faces an image problem. Many of the best computer-science and MBA grads now consider the company stodgy and conservative, compared to the likes of cutting-edge startups. To boost its reputation and attract young talent, IBM has launched a new, elite internship program called Extreme Blue that tries to mimic the excitement and challenge of working for a startup.

“One of the goals of the project is to find talent that is so awesome, who would get so many offers that typically, they wouldn’t think about IBM,” says Extreme Blue manager Alex Striffler-Hernandez, a recent Stanford University graduate. To achieve that, the spiky-haired executive says: “We want to create that startup atmosphere in IBM with all the resources IBM has and still act nimble and fluid.”

ENTREPRENEURIAL STYLE. Most interns work in teams of four — three engineers and one MBA — to develop a product and a business plan. IBM chooses the projects, which deal with real-world problems and mostly involve wireless technologies. And just like startups courting venture capitalists, the students will pitch their business plans at the end of August to IBM senior executives who will decide whether or not to fund them.

“It’s not about running copiers for the summer,” says John Patrick, an IBM scientist and well-known Internet technology guru. “This is about real, hard-core problems and market opportunities.” The company takes care to match the assignments to the students’ interests. Each team is appointed a mentor who is a top business executive or scientist. This year, they include two IBM Fellows, the company’s term for its highest-ranking research engineers.

This summer’s 50 interns are divided between IBM’s Almaden (Calif.) research lab and another location in Cambridge, Mass. And the students don’t have to wait until Pitch Day to meet powerful executives and tout their projects. Chairman and CEO Lou Gerstner met with interns at Almaden last month, and Patrick stopped by a few weeks ago.

The day Patrick visited, the students gave informal demonstrations of their products in their cubicles and asked his advice on how to take them to market. One group is working on a technology called Tspaces, a Java-based application that allows devices such as Palm handhelds to communicate with any other networked device or computer. Patrick related the story of how he recently dropped his cell phone in a lake. He suggested that the students focus on making it possible to back up data stored on them, such as telephone numbers, and to transfer data between incompatible cell phones. That way, if a wireless phone comes to an unfortunate end, the information on it would be preserved.

PITCHING IBM. Later that day, Patrick assembled all of the interns and gave them an impromptu talk about the cool stuff his group has done at the IT giant — everything from being a Linux advocate to creating Deep Blue, a chess-playing computer that beat grand master Gary Kasparov. In return, the students quizzed him on whether the company has a risk-taking culture and how it treats failure. “It’s an art form, how to get innovation going and still support the mainstream [activities],” Patrick replied. “It’s a risk to spend the billions we do on R&D.”

IBM is also spending plenty to run Extreme Blue this summer. Interns are paid well, getting roughly 70% of an engineer’s starting salary, says Striffler-Hernandez. (This year, $64,000 was the median starting salary for a student with a computer-science bachelor’s degree from Stanford.) IBM pays for their apartments, a necessity in Silicon Valley where a one-bedroom unit can run about $2,000 a month. Foozball and video games with surround sound lighten the atmosphere at the office. Under Striffler-Hernandez’s care — he was once an Eagle scout — the Almaden group has taken in Yosemite and a San Francisco Giants baseball game.

Several interns have changed their attitudes about Big Blue since starting the program. Jon Gottschalk, a computer-science major at the University of Illinois, entertained internship offers from Microsoft and several startups but decided IBM was the better choice. At a startup, his manager might have left, “and I’d be sitting there with an ill-defined project that may not go anywhere,” he says. The work at Microsoft didn’t seem as interesting as what IBM
promised. “I had this impression that IBM was this old, slow company that made mainframes and was extremely conservative,” he says. “It’s exactly the opposite of that — fast-paced and [with] cutting-edge technology.”

UNCERTAIN OUTCOME. However, whether any of these hotshots will end up working for IBM remains uncertain. Last summer, when Extreme Blue was a pilot project in Cambridge with 25 engineering students, the company offered jobs to five interns. Only one — Lonnie McCullough, then a junior at the University of Texas majoring in computer science — eventually signed on. He formally accepted the job offer in February and started working full-time in May in Cambridge. This fall, he’ll move to the company’s labs in Austin and finish a few remaining classes at the same time.

Before the internship, he thought IBM was “this huge company that was slow to react in the marketplace.” But, he adds, “that perception was just completely shattered last summer.” When asked about their own career prospects, several
participants say it’s smart to work for a big company to gain experience and contacts before venturing out on one’s own. Extreme Blue alum McCollough agrees: “I wanted to go someplace where I’d have the freedom of a startup but feel secure that I wouldn’t be out of a job three weeks from now.”