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Waking IBM: How it got back on top

June 10, 2013
IBM was a has-been in 1994. Fujitsu, Digital Equipment, and Compaq were hammering down its margins and stealing profits. EDS and Andersen Consulting were stealing the hearts of CIOs. Intel and Microsoft were running away with PC profits. Customers bemoaned Big Blue’s arrogance.
Today, IBM is an e-business powerhouse. Big Blue is back on top, a leader in e-business services. The company, which lagged behind every computer trend since the mainframe, caught the Internet wave. By 1999, it had completed 18,000 e-business consulting engagements. One-fourth of its $82 billion in revenues originated from the Internet.

By Robert Tallent (Managing Director and Founder – The Synergy Group)

How did a company that had lagged behind every computer trend since the mainframe catch the Internet wave? A small band of activists built a bonfire under IBM’s behind–and Big Blue fanned the flames.
Who lit the first match? Nerdy, midlevel IBM-programmer David Grossman and his cohort, career IBMer and high-level strategist John Patrick.


Is your company facing possible annihilation because of complacency? If so, use these steps to start an insurrection–and put your firm back on track.
1. Establish a point of view that’s
a) credible–founded on unimpeachable data,
b) coherent–lays out a bulletproof argument,
c) compelling–speaks to people’s emotions, and
d) commercial–connects to your firm’s bottom line.
When Grossman, toiling in the bowels of IBM’s Theory Centre at Cornell, saw Sun Microsystems co-opt IBM’s raw data feed during broadcasting of the 1994 Winter Olympics, he developed a point of view: Big Blue must get out in front of the Web – or rivals would eat its lunch.
2. Write a manifesto that infects others with your ideas.
Grossman and Patrick published a Web-extolling, six-point missive that included

3. Create a coalition of colleagues who share your vision and passion.
Patrick set up an on-line news group that let IBM’s underground hackers trade technical tidbits. Within months, 300+ enthusiasts had joined the virtual Get Connected team. In return, this volunteer army taught Patrick Internet culture–and began transforming IBM.
4. Pick your targets.
Identify potential champions–senior managers who can yank the real levers of power. Know their challenges and goals. IBM’s activists wowed CEO Lou Gerstner with an IBM home-page mock-up – then converted 300 top officers with a dazzling demo.
5. Co-opt and neutralize.
Don’t demean and humiliate adversaries–disarm them instead.
To win over IBM’s feudal lords, Patrick devised win-win propositions such as: “Lend me some talent, and I’ll build a showcase for your products and send your people back with prototypes of cool new products.”
6. Find a translator to build a bridge between you and higher-ups.
Patrick served as translator for IBM’s T-shirted Internet buccaneers, helping top brass see connections between the Web and large-scale corporate computing.
7. Win small, win early, win often.
Small, frequent successes help your firm feel its way toward revolutionary opportunities. IBM’s demo site for on-line sales of 1996 Summer Olympics tickets had a million hits a day from score-hungry sports fans. This small win helped Patrick acquire more human and financial resources–which let him build a bigger Web site that processed 17 million hits a day.