Last week, I attended the SDForum Visionary Awards event in Silicon Valley. SDForum is a non-for-profit organization for the technical and business community in Silicon Valley aimed at helping them exchange information on emerging technologies and best practices. The Visionary Awards are given each year to honor industry leaders who have pioneered innovation and fostered the spirit of entrepreneurship.
This year, Lou Gerstner received a 2006 Visionary Award, along with Vint Cerf - Internet founding father and Chief Internet Evangelist at Google; John Hennessy - President of Stanford University; and Terry Semel - Chairman and CEO of Yahoo.
I had the pleasure and honor to introduce Lou at the event. In my remarks, I talked about Lou's impact on IBM and the IT industry, as well as offered some personal memories from my time working with him at IBM.
Below is the draft of my remarks
Lou Gerstner Visionary Award Introduction
"Lou Gerstner’s many accomplishments are very well known. In particular, prior to his present position as Chairman of the Carlyle Group, he was Chairman and CEO of IBM. So, by way of introduction let me offer some personal reflections on the nine years I worked with him at IBM.
To begin, there was Lou’s arrival at IBM in April of 1993. It is hard to describe how bad things were when he became Chairman and CEO, and how very painful it was for those of us who had been at IBM for a while. Beyond worrying whether IBM would make it, I personally had three key concerns: would Lou conclude that we could no longer afford our Research labs, where I had spent my first fifteen years at IBM?; would Lou sell our mainframe business as many were advising him to do?; and, even more personally, would Lou eliminate the SP parallel supercomputing business I had started and been leading for about a year?
These were all very valid questions for a CEO coming to a company on the ropes. Happily, Lou’s answer to all three was a resounding “No”.
In fact, Lou strengthened the role of our Research Division by encouraging it to work closely with clients. He was enormously supportive of our transformation of the mainframe into a modern platform. And he turned out to be one of the SP’s strongest supporters, especially when we moved parallel supercomputing to support commercial applications like data mining in addition to scientific applications.
Then there was IBM’s embrace of the Internet. That came in the fall of 1995 with Lou’s keynote at Comdex and his Business Week interview, as well as with the formation of the Internet Division where I became General Manager.
At the time, the Internet was aimed primarily at consumers and focused on networking, while the market was focused on the browser wars between Netscape and Microsoft.
IBM had no presence in the consumer market, no presence in networking, and we did not have a browser. Other than that . . . we were in pretty good shape.
Determining IBM’s role in the Internet required profound insight into what the Net itself meant, and Lou saw, before just about any one else, how it would transform business and society.
He realized also that – for IBM - the Internet was a gift from the gods that would help us integrate all of IBM, focus us clearly on our business, and make us relevant once more in the marketplace. This led to our e-business strategy, which I think will be viewed as one of the most successful of the Internet era.
Finally, there’s the time Lou gave me some advice that has served me very well to this day.
It came in the wake of an interview with a New York Times reporter. The reporter asked me for a reaction to the announcement by a major competitor of a serious initiative to attack our mainframe business.
What I meant to say in reply was, “Well, no matter how powerful the company, sooner or later it must learn its limits.” What came out of my mouth was “Sooner or later even the most powerful company confronts its own Vietnam.”
Lou read the quote.
Lou was not happy.
He explained that – despite the competitor’s attack on IBM - I should have focused on the positive things we are doing and why they are good for our customers and the marketplace. “Publicly criticizing competitors”, he said simply, “was not becoming.”
I have followed Lou’s advice to focus on the positive ever since then. But I really understood what a cardinal principle it is for him when his excellent book, “Who Says Elephants Can’t Dance?” was published.
Lou told some of us that his editors were worried that the book was too “serious” and were asking him to spice it up with some juicy, negative gossip. Lou told them simply that it was not that kind of book and that he wanted to focus on the positive – the same advice he had given me years earlier.
Of course, there are also a few hard facts about what Lou's leadership meant to IBM's employees, its shareholders and its place in today's IT industry.
I don't believe it’s an overstatement to say that Lou architected one of the most remarkable turnarounds in the history of modern commerce. During his tenure, IBM's share price increased more than 800 percent, and the company's market value improved by $180 billion.
Along the way . . . the company reclaimed its reputation for technical leadership . . . recreated itself as the premier provider of IT solutions . . . and with the e-business initiative . . . captured the essence of the networked world and its impact on both business and society.
Anyone who's followed his career knows that Lou personifies the values of corporate citizenship. That’s abundantly clear from the way he committed himself . . . and the resources of IBM . . . to the reform of public school education in the US and internationally. For these efforts - as well as his business achievements - he was named an honorary Knight of the British Empire.
Lou, it was a pleasure and an honor to work closely with you for nine years at IBM. I continue to rely on the lessons I learned from you – the businessman, the strategist and the thinker - but equally important - the man of integrity and character.
I thank you for all that. And on behalf of over 300,000 IBM colleagues who are still employed by the company you pulled back from the brink . . . we congratulate you on the richly deserved recognition bestowed on you tonight."
Of course Lou Gerstner deserves the accolades mentioned in your tribute to him. What is often lost in the IBM transformation story, however, is the role played by many IBMers in the trenches who rallied around a plain-talking leader. Like you, I remember Lou's arrival in 1993 but from a much different perspective.
Downsizing was the mantra. Wall Street (and our competitors) wanted layoffs and the dividend cut and the company split up and sold. Middle management was for the first time fearful for their jobs. However, few of us working at the time ever doubted that IBM would make it.
We had some of the best people, technology, and war chest that few companies could match. We simply were too slow and fought harder with each other than competitors.
It took the outsider, Lou Gerstner, to implement what all the insider management already knew. To his credit, he took the time to understand IBM's strengths...helped in large measure by IBMers around the world thrilled by the prospect of meaningful change embodied by the arrival of Lou.
Posted by: Blaine Berger | July 04, 2006 at 12:43 AM