Company, Its Leadership, History, Vision,

¶ … company, its leadership, history, vision, and values, along with other corporate stances, integrated with some of Stephen R. Covey's leadership theory. It will profile IBM leader Samuel J. Palmisano, including his leadership style and qualities that set him apart from other corporate leaders.

IBM - The Company

IBM is one of the most successful companies in America today. It resides at number eight on the "Forbes Top 500" business revenue list, and operates globally with over 300,000 employees worldwide. Historically, IBM was incorporated in 1911 in New York State, but its origins were actually in the 1880s, when the first time recorders and tabulating machines were created. One of the company's active during this time was the International Time Recording Company (ITR), which eventually became IBM, when it merged with two other early time and measurement manufacturers. When first formed, the company had 1,300 employees in several states, and "manufactured and sold machinery ranging from commercial scales and industrial time recorders to meat and cheese slicers, along with tabulators and punched cards" ("About IBM"). The company continued to grow and develop new, innovative machinery and business tools. They also continued to incorporate other, smaller manufacturers, too.

In 1924, the name was formally changed to the International Business Machines Corporation (IBM), and it has been called that ever since. Thomas J. Watson, Sr., led the company from 1914 through 1952, when leadership passed to his son, Thomas J. Watson, Jr. It was Watson Sr. who first created the "Three Basic Beliefs" of IBM "Respect for the Individual," "The Pursuit of Excellence," and the "Best Possible Service to our Customers." These values have been modified throughout company history, but the basic form still exists and is still responsible for corporate actions and the corporate mission. Throughout the war years, IBM worked with national defense and after the war, they invented the first "calculator," a massive machine that was 50-feet long. It also introduced a vacuum-tube computer in the 1950s, and introduced the computer language known as FORTRAN, a mainstay of mainframe computers throughout the industry. Watson, Jr. led the company into the computer age by creating a business model based on business equipment and solutions. IBM created large-scale computers that had interchangeable software and hardware, and really helped create the computer revolution in America.

Watson, Jr. stepped down as CEO in 1971, and Frank T. Cary took over the duties in 1973. The company launched the first floppy disks in 1971, another innovation that is still in use today in different forms. John R. Opel took the helm in 1981, the same year that IBM introduced the IBM Personal Computer (PC). IBM changed the way businesses do business and families work and play with the introduction of this small computer that could fit on a desktop. They also introduced token-ring networks in 1985, which allowed uses to network their computers together and share information, and they helped fledgling companies such as Intel and Microsoft by awarding them contracts for operating systems and components.

In 1985, John F. Akers became CEO of the company. He "focused on streamlining operations and redeploying resources" ("About IBM"). In the 1990s, the company faced disaster because they had created a computer revolution that did not match their standard and long-practiced business ideals. The company lost billions of dollars and went through turmoil and chaos. Louis V. Gerstner, Jr., the first CEO from outside the company, took over the company in 1993 and managed to turn it around, making it a successful and viable business venture again. Gerstner led the company until Samuel J. Palmisano was named CEO in 2002. Palmisano took the reins on January 1, 2003. Today, the company employs 319,273 people in 75 countries, serving 174 countries around the world. Company revenues for 2004 were 96.2 billion dollars, making it the largest information technology company in the world ("About IBM").

The corporate success of IBM actually led to the creation of legendary Stephen F. Covey's "The Seven Habits of Highly Successful People" and many other Covey books. Covey was a consultant to the IBM Executive Development Program and he wrote his book after his experiences working with IBM, along with doctoral research he had done on Benjamin Franklin and early ethics. Covey's research showed that a "character ethic" was extremely important in successful organizations, and this ethic included "integrity, humility, fidelity, temperance, courage, justice, patience, industry, simplicity, modesty and The Golden Rule'" (Jackson 95). Coincidentally, this ethic is extremely in line with IBM's overall history, corporate values, and mission statement.

The company's mission statement, taken from the corporate Web site, states, "At IBM, we strive to lead in the creation, development and manufacture of the industry's most advanced information technologies, including computer systems, software, networking systems, storage devices and microelectronics. We translate these advanced technologies into value for our customers through our professional solutions and services businesses worldwide" ("About IBM"). The company's vision has always been forward thinking for employees and clients. IBM has transformed in the past 100 years, and will certainly continue to transform through the 21st century. The corporate vision is seen in the "Management Statement" included in the "Corporate Responsibility" area of the IBM Web site. The statement notes, "IBM's management systems derive from our business model and our values. They are designed to achieve maximum innovation, efficiency, and enterprise integration -- leading, we believe, to client success and long-term, trust-based relationships" ("About IBM"). Thus, the corporate vision and values look toward the future and continuing what they have done so well in the past - building long-term relationships with their customers. The company meets their needs today and far into the future, and this is an important facet of any highly successful organization that uses "principle centered leadership," another one of Covey's successful business models. Clearly, the current leader of IBM must be a highly successful leader to command the helm of such a diverse company, and he must be attuned to employees, business, and ethics to create a successful model for today and the future.

IBM's Current Leadership

The current leader of IBM is Samuel J. Palmisano, who has led the company as Chairman of the Board and Chief Executive Officer since January 1, 2003. Palmisano has been with IBM since 1973, serving in a variety of areas and capacities. Most experts call his leadership style "softer" than the more dictatorial styles of some high-powered leaders, such as Carly Fiorina, until recently the leader of computer rival HP (Marken 9). This "soft-touch" style of management often leads to "open communications, availability, and building trust" (Marken 9), all of which seems to have occurred in the IBM organization since Palmisano took the helm. These are some of the most important attributes of a modern day successful leader in the global marketplace, as Covey notes in his writings. In fact, in his book Principle-Centered Leadership, Covey talks about IBM and its reputation. He writes, "IBM's bedrock is their belief in the dignity and potential of the individual. Once you have the principle-centered paradigm, you will produce the evidence to support your new perceptions of people" (Covey 179). IBM is a model of this new, innovative, and successful type of management leadership, and because of this, they have continued to evolve, grow, and gain success - often at times when other businesses like theirs were suffering.

Palmisano touts leadership on many levels and innovation as keys to successful leadership. IBM fosters communication between employees and management on a variety of levels. When Palmisano first took the CEO job, he created a forum for employees to discuss problems at IBM. Called "ValuesJam," the forum first was a diatribe of negativity, fear, and problems within the country. Many managers wanted to shut down the forum, but Palmisano would not hear of it. Eventually, the employees turned to more positive comments, and some real issues were addressed and solved because of the discussion (Editors 1-2). This is an excellent example of Palmisano's leadership style and the corporate culture he promotes. He is an open, honest manager who empowers his employees to innovate. He also has created trust throughout the company, which gives employees a feeling of security and well being that is absent in many modern American companies.

The company has always been extremely interested in its employees, its corporate vision and values, and the global environment, and the many programs and corporate sponsorships the company has created illustrate this. The company has always been known for its high ethical standards and corporate responsibility. During World War II, when the company created many items for national defense, including bombsites, the company only took a 1% profit on these items, and turned the money into a fund to help widows and children of IBM workers killed in the war. They have long contributed to educational funds, and they were one of the first corporations to offer "employee group life insurance, survivor benefits, and paid vacations" ("About IBM"). IBM is an innovator in technology, but also in the internal corporate environment, and that is another reason they are a successful 21st century corporation. They have high standards for themselves and their employees, and it shows in how they do business and their corporate responsibility.