Monthly Archive for May, 2009

  • The First Crisis: Intel Gets Beaten at its Own Game

  • In the early 1980s, Intel’s three-legged stool almost came crashing down. When the company first started, it had nearly a 100 percent share of the memory market. New competitors appeared in the 1970s, but it was not until the 1980s that the Japanese broke Intel’s rock-solid hold on this market. They did so by producing [...]

  • The Dual Levers of Success: Execution and Strategy

  • It all started in 1968, when Grove teamed up with two other people who shared his vision for a new business. Andy Grove, Bob Noyce, and Gordon Moore thought they could own the world. They had discovered that they could store ever-increasing numbers of transistors on a single chip without noticeably increasing the costs. More [...]

  • What Would Andy Grove Do?

  • Most companies don’t die because they are wrong; most die because they don’t commit themselves. They fritter away their momentum and their valuable resources while attempting to make a decision. The greater danger is in standing still. —ANDY GROVE, cofounder and former CEO, Intel I submit that all businesses, whether they are bricks origin or [...]

  • Invest in R&D: the Solutions Perspective

  • Shortly after Gerstner arrived at IBM, he demonstrated his willingness to invest in the company’s future, in the form of research and development, despite the company’s mind-numbing losses. On the table was his predecessor’s plan to dissolve IBM’s research and development department. Again, Gerstner went in the opposite direction. He decided to keep the Watson [...]

  • From Big Iron to E-Business Juggernaut

  • The bold moves that Gerstner made early on proved that IBM’s CEO was among the first leaders of long-established companies to grasp the mind-boggling potential of Internet technology. The IBM chief regards the Internet not as simply another new technology, but as the leading edge of a bona fide paradigm shift: Every day it becomes [...]

  • When Hardware Stalls, Turn to Service

  • Gerstner knew that IBM’s hardware business, which had carried the company for so long, was shrinking at an alarming rate. Within a 3-year span during the early 1990s, hardware sales dropped 50 percent, erasing more than $14 billion in hardware profits. Meanwhile, margins were thinning to an alarming degree. Although the company sold $12 billion [...]

  • Gaining the Solutions Edge

  • Early in his tenure, the new IBM chief set his sights on expenses. Desperate to get costs under control, Gerstner eliminated 60,000 jobs in his first year as CEO, using the blunt instruments of layoffs and early retirements to transform IBM’s unyielding white-shirt culture. Jumping to the punch line, the effort (and related efforts) was [...]

  • Put a Customer in the CEO’s Office

  • But Gerstner knew he had to go far beyond simply keeping the company together. He knew that a dramatic shift in mind-set and culture would be a key prerequisite for any sustained turnaround. Through his personal observations, he had determined that the company’s insularity and arrogance had helped to fuel its downfall—that the company’s long [...]

  • One IBM is Better Than Eight

  • In December of 1992, IBM’s then CEO John Akers developed a plan to break up his company into several smaller units. The plan—to some extent motivated by the Justice Department-inspired break-up of the Bell system into the "Baby Bells"—had many advocates, especially within the company. With IBM in such dire straits, many insiders believed that [...]

  • What Would Lou Gerstner Do?

  • IBM is a solutions company. We start with a customer’s business problem, and work back to the right combination of technologies and expertise. —LOU GERSTNER, former CEO, IBM So there was IBM, the company that had led the prior phase of computing and had invented many of the industry’s most important technologies, crawling out of [...]

  • Potential Roadblocks to Sustaining a Learning Culture

  • Creating a learning culture almost always involves a massive effort, and this is especially true if it’s necessary to re-create the culture of an existing organization. If you decide to embark on the path of developing a learning culture, pay close attention to these potential stumbling blocks: A BLOATED BUREAUCRACY. Nothing can slow an organization [...]

  • A Road Map for Creating a Learning Organization

  • Nearly every move that Welch made in his far-reaching effort to reinvent GE had both intended and unintended consequences. For instance, his restructuring/downsizing phase strengthened the organization’s financials, but had a negative impact on morale. This had two important implications for the learning-organization initiatives. First, the organization had to keep a watchful eye out for [...]

  • Creating a Learning Infrastructure

  • Welch did not start as GE’s chairman with the notion of creating the world’s largest learning organization, nor did that accomplishment come easily or quickly. It took many years, lots of sweat and blood, and a series of courageous decisions in the intervening years. He did, however, send the right message almost from the very [...]

  • The Four Characteristics of a Learning Organization

  • Although the road to a learning culture is unique to each organization, all learning cultures share certain characteristics. Here are four such traits: INFORMATION IS SHARED AND ACCESSIBLE. In a learning culture, data and information are not kept secret or hoarded by management. Instead, they are readily accessible, so that managers and employees share a [...]

  • The Welch Legacy

  • Jack Welch achieved extraordinary results with uncanny consistency. He achieved double-digit growth year after year, helping to build his reputation as an iconic business leader who could do no wrong. He was a role model for others to emulate: Double-digit annual growth became the benchmark for all CEOs and corporations in America. Welch debunked many [...]

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