DEVELOPING STAGES ANALYSIS Updated August 18 2015
Logo of IBM

IBM Public-company

ARMONK, UNITED STATES OF AMERICA — The International Business Machines Corporation is an American multinational technology and consulting corporation, with headquarters in Armonk, New York, United States. IBM manufactures and markets computer hardware and software, and offers infrastructure, hosting and consulting services in areas ranging from mainframe computers to nanotechnology.
The company was founded in 1911 as the Computing Tabulating Recording Company through a merger of three companies: the Tabulating Machine Company, the International Time Recording Company, and the Computing Scale Company. CTR adopted the name International Business Machines in 1924, using a name previously designated to CTR's subsidiary in Canada and later South America. Securities analysts nicknamed IBM Big Blue in recognition of IBM's common use of blue in products, packaging, and logo.
In 2012, Fortune ranked IBM the No. 2 largest U.S. firm in terms of number of employees, the No. 4 largest in terms of market capitalization, the No. 9 most profitable, and the No. 19 largest firm in terms of revenue. Globally, the company was ranked the No. 31 largest in terms of revenue by Forbes for 2011.
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STATE BY TRANSITION

IBM
Wheel position details:
Stage:
2
  • Revenue, GDP, Activity: Rising growth
  • Organizational focus: Innovate/Nurture
  • Main motivating force: Vision
  • Ideal role of leader: Builder
  • Source of inspiration: Outside
  • Cohesion trend: Integration
  • Company attractiveness: Buy/hold
  • Breakup risk:
Leader:
 
  • Role: Builder
  • Reign: 2012 - Present
  • Fit:
    - Leader fits organization
Transition slider

STAGES OVER TIME

TIMELINE SUMMERY

STAGE TRANSITION PERIOD STAGE
Organizational focus to:Innovate / Nurture 2015 -  
2
Organizational focus to:Explore / Discover 2002 - 2015
1
Organizational focus to:Confront / Purify 1986 - 2002
4
Organizational focus to:Scale / Optimize 1985 - 1986
3
Organizational focus to:Innovate / Nurture 1981 - 1985
2
Organizational focus to:Explore / Discover 1973 - 1981
1
Organizational focus to:Confront / Purify 1969 - 1973
4
Organizational focus to:Scale / Optimize 1956 - 1969
3
Organizational focus to:Innovate / Nurture 1914 - 1956
2
LEADERSHIP TRANSITION REIGN ROLE
Virginia M. Rometty 2012 -   Builder
 
Samuel J. Palmisano 2002 - 2012 Transformer
 
Lou Gerstner 1991 - 2002 Reformer
 
John F. Akers 1985 - 1991 Grower
 
John R. Opel 1981 - 1985 Builder
 
Frank T. Cary 1973 - 1981 Transformer
 
T. Vincent Learson 1971 - 1973 Reformer
 
Thomas Watson Jr. 1956 - 1971 Grower
 
Thomas J. Watson 1914 - 1956 Builder
 
Note: Consult Timeline with sources below for supporting material.

ESSAY

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Note: Check the new sources (press articles) added to the latest TIMELINE event below!

Over the last 4 decades, IBM's history is marred with repeated adaptations to changing technologies and markets. So far, it has been able to strike growth by steering its organization daringly and by staying clear from the thunder of falling rocks. 

As a transformer, Samuel J. Palmisano has identified a broad platform of technologies and businesses but it is up to the current CEO, Virginia M. Rometty, to steer the organization in identifying the derivative niches and products that will allow IBM's revenues and profits to rise again.

Uncertain about what the growth prospects for IBM are today, Rometty may need several years to make this happen. As a leader with a builder-type role, she'll need to identify a distinguishing vision soon when one of IBM's novel undertakings clears the view by the solidly rising growth that it produces.

HISTORICAL NOTES

Virginia M. Rometty - Builder role

When Virginia M. Rometty is appointed, Palmisano leaves behind his choice of core competencies that should function as platform for a new cycle of revenue growth. Rometty's challenge is to innovate and nurture the novel solutions that the market requires using these competences. IBM's 2014 annual report reiterates the focus areas: Data analytics, Cloud, and Security. Multiple apps (some in collaboration with Apple) are being developed hoping a few will strike gold. 

Samuel J. Palmisano - Transformer role

When Sam Palmisano takes the reigns from Gerstner, IBM's business model needs fundamental change. Palmisano's mandate is to move IBM 'into new unique businesses with high profit margins and potential for innovation' such as cloud computing, his smarter planet initiative (focusing on government and infrastructure), and software analytics (including 'Watson'). He sells the PC business group to Lenovo and acquires PriceWaterhouseCoopers consulting.   

Louis V. Gerstner Jr. - Reformer role

An outsider from RJR Nabisco, Lou Gerstner takes on the long-overdue reform of IBM when he is appointed CEO. 'The last thing IBM needs is a vision.' He purifies the organization by focusing 'on execution, decisiveness, simplifying the organization for speed, and breaking the gridlock.' A leader who excels as reformer, Gerstner manages to save IBM from extinction. Yet, in the last two years of Gerstner's reign, the inevitable happens: declining growth. A transformer is needed who reinvents IBM by exploring the core competencies that might function as platform for a new cycle of growth. 

If you'd like to share, follow or like this analysis, please, login first.

Note: Check the new sources (press articles) added to the latest TIMELINE event below!

Over the last 4 decades, IBM's history is marred with repeated adaptations to changing technologies and markets. So far, it has been able to strike growth by steering its organization daringly and by staying clear from the thunder of falling rocks. 

As a transformer, Samuel J. Palmisano has identified a broad platform of technologies and businesses but it is up to the current CEO, Virginia M. Rometty, to steer the organization in identifying the derivative niches and products that will allow IBM's revenues and profits to rise again.

Uncertain about what the growth prospects for IBM are today, Rometty may need several years to make this happen. As a leader with a builder-type role, she'll need to identify a distinguishing vision soon when one of IBM's novel undertakings clears the view by the solidly rising growth that it produces.

HISTORICAL NOTES

Virginia M. Rometty - Builder role

When Virginia M. Rometty is appointed, Palmisano leaves behind his choice of core competencies that should function as platform for a new cycle of revenue growth. Rometty's challenge is to innovate and nurture the novel solutions that the market requires using these competences. IBM's 2014 annual report reiterates the focus areas: Data analytics, Cloud, and Security. Multiple apps (some in collaboration with Apple) are being developed hoping a few will strike gold. 

Samuel J. Palmisano - Transformer role

When Sam Palmisano takes the reigns from Gerstner, IBM's business model needs fundamental change. Palmisano's mandate is to move IBM 'into new unique businesses with high profit margins and potential for innovation' such as cloud computing, his smarter planet initiative (focusing on government and infrastructure), and software analytics (including 'Watson'). He sells the PC business group to Lenovo and acquires PriceWaterhouseCoopers consulting.   

Louis V. Gerstner Jr. - Reformer role

An outsider from RJR Nabisco, Lou Gerstner takes on the long-overdue reform of IBM when he is appointed CEO. 'The last thing IBM needs is a vision.' He purifies the organization by focusing 'on execution, decisiveness, simplifying the organization for speed, and breaking the gridlock.' A leader who excels as reformer, Gerstner manages to save IBM from extinction. Yet, in the last two years of Gerstner's reign, the inevitable happens: declining growth. A transformer is needed who reinvents IBM by exploring the core competencies that might function as platform for a new cycle of growth. 

TIMELINE

END OF ANALYSIS

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  • Revenue, GDP, Activity: Uncertain growth
  • Organizational focus: Explore/Discover
  • Main motivating force: Conviction
  • Ideal role of leader: Transformer
  • Source of inspiration: Inside
  • Cohesion trend: Fragmentation
  • Company attractiveness: Sentiment driven
  • Breakup risk:
  • Revenue, GDP, Activity: Rising growth
  • Organizational focus: Innovate/Nurture
  • Main motivating force: Vision
  • Ideal role of leader: Builder
  • Source of inspiration: Outside
  • Cohesion trend: Integration
  • Company attractiveness: Buy/hold
  • Breakup risk:
  • Revenue, GDP, Activity: Stable growth
  • Organizational focus: Scale/Optimize
  • Main motivating force: Culture
  • Ideal role of leader: Grower
  • Source of inspiration: Inside
  • Cohesion trend: Integration
  • Company attractiveness: Buy/hold
  • Breakup risk:
  • Revenue, GDP, Activity: Declining growth
  • Organizational focus: Confront/Purify
  • Main motivating force: Openness
  • Ideal role of leader: Reformer
  • Source of inspiration: Outside
  • Cohesion trend: Fragmentation
  • Company attractiveness: Sentiment driven
  • Breakup risk: Partial or total