Irving Wladawsky-Berger

Re-inventing Management and Management Education

Through the years, I have watched with a kind of morbid fascination the number of once powerful companies that are no longer around.  It would appear that Darwinian principles apply to companies as much as to organisms.  There seems to be a kind of life cycle to a business, and beyond a certain number of years, the invisible hand of the marketplace lets you know that your time is up.  And every so often, a kind of near-mass-extinction event seems to afflict a whole industry, such as is currently happening in the financial sector around the world. 

How I came to my fatalistic view of business is not hard to understand.  IBM's near-death experience in the 1990s was very painful for me personally and for all us in the company.  Even though we managed to survive, as well as to recover and regain a position of leadership in the IT industry, the traumatic experience has definitely left its imprint and colors my views of the world.

Then there are the facts.  In her book Let Go to Grow, my IBM colleague Linda Sanford cites a number of ominous statistics.  For example, of more than 1,000 companies tracked by the Fortune 500 since 1960, less than one sixth of them are still around.

Reflections on Political Labels

We have just concluded a very long political campaign that culminated in the election of Barack Obama as the 44th President of the United States.  As is typical in such campaigns, you heard a lot of different political labels thrown around.  Candidates were called “extreme right-wing conservatives” and “extreme left-wing liberals” – depending on which candidate the speaker wanted to marginalize, at which end of the political spectrum.

Then, toward the end of the campaign, we were hit by a shot from left field.  Just as the Democratic and Republican conventions finished and everyone got ready for the final sprint to the November 4 elections, the world was hit by the worst financial crisis since the Great Depression.  Over the next weeks we saw the Bush Administration implement a series of economic programs, collectively referred to as The Bailout - the largest government interventions in the private sector since the New Deal. 

What is going on, people asked themselves?  Has the Bush Administration - generally considered among the most conservative in the history of the US - all of a sudden embraced socialism in its final few months?  Or could it be that political labels, like “liberal” and “conservative” are not what they used to be?  Do they need to be re-defined for the 21st century?  Let me offer some reflections on the topic.

Living in a Smarter Planet

Just about everyone agrees that we are living in an increasingly global, integrated, complex . . . and unpredictable world. What can you do about it? The only possible answer is to take the same information technologies that are making our planet so much smaller and flatter, and use them to make our planet smarter - all its processes, systems, institutions, economies and nations.

Last week, IBM Chairman and CEO Sam Palmisano addressed this topic at the Council of Foreign Relations in New York City, in a talk titled A Smarter Planet: The Next Leadership Agenda. Sam explained that when he talks about making the planet smarter, "This isn't just a metaphor. I mean infusing intelligence into the way the world literally works - the systems and processes that enable physical goods to be developed, manufactured, bought and sold… services to be delivered… everything from people and money to oil, water and electrons to move… and billions of people to work and live."

What makes it now possible to talk seriously about making the planet smarter? Sam mentioned three key factors. First, just about everything can now be instrumented - anything we care about can be measured, sensed and seen. We can now embed sensors in physical things, like cars, appliances, medical equipment, cameras, roadways, pipelines, pharmaceuticals or livestock. We can measure entire ecosystems - whole supply chains, business processes, cities, healthcare networks, even natural systems like forests and rivers. We will be able to gather huge amounts of real-time information about the state of the world.

Next, our world is becoming increasingly interconnected. These instrumented things can now interact with each other, much as they do in the physical world. Our instrumented processes can exchange information with each other so that together they can improve the operations of the larger systems of which they are parts. It is important that we break down the silos and begin to look at the world in a more holistic way, as an interconnected system where the various components collaborate with each other, so that together they get the job done.

Finally, all these various things and processes can be made much more intelligent by using the information we gather from all those instrumented components as well as from their interactions. Turning these mountains of information into real insights to guide our actions requires sophisticated analysis using powerful supercomputers. We can also use these powerful supercomputers to optimize the individual components, as well as the overall system. This kind of information-based intelligence will help us make companies, industries, organizations and economies more efficient, productive and responsive.

Cloud Computing: the Internet of Services

The October 25 issue of The Economist includes a special report on cloud computing - seven articles plus an introduction.  It is an in-depth look at this new model of computing, its implications, its value promise to companies and societies, as well as the pitfalls against which we have to guard.

In the lead article, Ludwig Siegele starts out his definition of cloud computing by first giving a very succinct history of computing:

"In the beginning computers were human. Then they took the shape of metal boxes, filling entire rooms before becoming ever smaller and more widespread.  Now they are evaporating altogether and becoming accessible from anywhere."

"That is about as brief a history of computers as anyone can make it.  The point is that they are much more than devices in a box or in a data centre.  Computing has constantly changed shape and location - mainly as a result of new technology, but often also because of shifts in demand."

He then goes on to define cloud computing:

"Now, this special report will argue, computing is taking on yet another new shape.  It is becoming more centralised again as some of the activity moves into data centres.  But more importantly, it is turning into what has come to be called a 'cloud', or collections of clouds.  Computing power will become more and more disembodied and will be consumed where and when it is needed."

"The rise of the cloud is more than just another platform shift that gets geeks excited.  It will undoubtedly transform the information technology (IT) industry, but it will also profoundly change the way people work and companies operate.  It will allow digital technology to penetrate every nook and cranny of the economy and of society, creating some tricky political problems along the way."