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December 07, 2009


Chris Ward

It's noticeable that IBM's customers are (typically) the same now, as they were then. Governments and Big Businesses. Of course, the customers-of-customers are a much more diverse set.

Anyone can buy from IBM, of course; http://www.ibm.com/shop sells direct planet-wide, and there's about a hundred thousand partner businesses who remarket IBM-branded items; but the IBM salesman typically calls on the Governments and Big Businesses.

What of the rest of the world, though ? Sometimes it feels as if IBM (and IBM's competitors) are in a 'struggle for relevance'. No longer is there an IBM Personal Computer to grace your desk; no longer can you buy an IBM OS/2 operating system; and although you can buy an IBM Lotus SmartSuite , if the IBM salesman sells one copy, his manager will pause for thought.

Recycle an old PC from 'ebay' http://pages.ebay.com/rethink/ , download Linux from any of a number of university web sites, and take IBM Lotus Symphony http://symphony.lotus.com for nothing, and you're good-to-go on the desktop. Doesn't add to the financial coffers of any of the 'old guard'. Is that disruptive, or what ?

http://interactive.bis.gov.uk/backingyoungbritain/backing is an interesting 'public service' project, and the need to run it suggests that the 'next generation' ... the schoolchildren ... haven't benefitted as much from the 'attack of the killer micros' as they should have done.

Noticeably, IBM and Microsoft both lend their names to it. But I don't think the two competitors are uniting, or more to the point I think they are independently profitable, competitively separate, and going to stay that way for the foreseeable future. IBM Lotus Notes or the Microsoft Office System ? Get both salesmen to call, and pick the one you like best. Not likely you'll buy both. Make one salesman ... and his employer ... go hungry.

Of course I would like my employer's product to sell. But competition drives innovation, and I like that even more.


Irving had to think about commenting on this but on carefully re-reading your post glad for the delay and more deeply appreciate the depth and wisdom of the post. By way of Fair Disclosure I was on those e-business task forces (there were five, 4 industry, 1 technical) serving as subject lead and principal strategist on two (Supply Chain, Transportation), advisor to 1(Healthcare) and contributor to 1(Technical). To your Lessons I'd add and be prepared to change the culture. If you look at the aftermath of the effort the most successful changes were in the hardware divisions where Linda Sanford led the charge to re-architect the mainframe, setting the moementum in place for the current revamp of all server product lines using RISC architectures, a common platform and the opening a path for CELL-based servers that will see IBM dominate the mid- and upper-tiers from here forward; at least for large installations. The next levels up the stack were exponentially less successful and got farther and farther away from IBM's hardware centric roots and required more and more cultural change, change in business practices and in management systems.
After the Task Forces I spent the rest of the decade leading the charge on transportation and SCM solutions; an in effort in which we faced enormous internal barriers,lack of support and an almost total lack of funding for the solutions that worked. Worse we were subject to the same cost controls, overhead burdens and expectations that an established business was that was traditional.
We worked extensively with the Software Division who started that period as a thousand points of isolated and technically driven darkness (the DB2 experts thought exposing an API was value-adding and customer-centric). Steve Mills gradually won over, re-organized and re-cultured the Software Group into the powerhouse and main profit driver that it is today but not without major fights. One of our legacies was the Websphere integration broker which almost cost the job of our executive to get Software to adopt but has become a mainstay of their business since the early 00s. The solutions business was shut down in 99/00 after wasting $B of investment on what were largely marketing support efforts. Yet the promising solutions that were true breakthrus, wanted by the marketplace and key customers and would have given IBM a dominant and revolutionary position in NCC-based computing coupled with outsourced services were shut down. As they had been in the 92-94 downturns.
So Lessons #4 is draw your inspiration and initial solutions concepts from a careful, deeply informed and expert examination of the marketplace, not from the Labs or other internal sources. Lesson #5 is that Innovation has to be treated as a separate major investment initiative and requires a different organization and management structure until it's a self-sustaining business. When we did e-business (network centric computing as it was) our holy grail was B2B integration coupled with enterprise integration, component-based software development and re-engineering business processes to leverage the capabilities. B2C computing was termed the fireflies in front of the storm. In other words in terms of what we tried to do on a a 1-10 scale our ambitions were about a 7 while the ultimate achievements were around a 3 because of cultural and management system barriers.
There's never been a time when Innovation is more important to more industries and the economy as a whole. So pardon me for chiming in but in this climate it is these challenges that will determine who is successful in coping, adopting and adapting to the myriad disruptive innovations we see all around us.
From those and other experiences over the years developed an approach, framework and context for managing innovation embodied in this:
http://www.scribd.com/doc/18645347/From-Aha-to-KaChing-Innovation-Business-Performance-Challenges-and-Economic-Prosperity From Aha to KaChing: Innovation, Business Performance, Challenges and Economic Prosperity


Interesting insights and advice - I am on a project for a software vendor looking at how and what we need to change to address the current disruptive innovations in our space

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