Why IBM Will Be Saved by Analytics -- and Steven Mills

It's easy to tell executives exactly what they want to hear, even if it makes you like the violin player on the Titanic. Luckily, today's analytics technology gives executives real-time insight into how their firms are performing. At IBM, leaders such as Steven Mills are making sure Big Blue eats its own dog food and continues to reinvent itself in an ever-dynamic market.

By Rob Enderle
Fri, October 25, 2013

CIO — At this week's IBM Enterprise2013, I had a chance to sit down for lunch with Steven Mills — a man who is literally legendary both inside and outside IBM. He currently leads the effort to help IBM better meet the world's technology needs.

One thing that makes IBM different is that Thomas Watson Jr. baked in these transitions years ago, recognizing that the firm, in order to survive, would need to make massive changes. It's this ability to change that has allowed IBM to survive and generally flourish for over a century.

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Since I was at IBM for 10 years during some of the company's most difficult times, Mills and I talked about what had gone wrong. He corrected some of my own possible misconceptions. I spent nearly a year interviewing executives and documenting what I found, focusing mostly on problem areas. Mills' organization at that time, it should be noted, was considered to be run well, so I spent little time looking at it. Now I realize I should have chatted with him back then.

However, one theme floated through our conversation: With analytics properly applied, no company will ever have to go through the kinds of near-terminal problems IBM did in the late 1980s and early 90s.

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IBM's problem in the 1980s, shared to some degree by most large companies, was that too many executives and employees were gaming the system and not doing quality work. Internal competitive analysis organizations had learned that you got better raises and promotions if you gave executives reports that make them look favorable regardless of reality. That's partially how IBM went from owning more than 90 percent of the enterprise storage market to less than 30 percent in a few short years.

Meanwhile, executives learned that most of their peers and superiors didn't really understand the technology they managed, so they would string together buzzwords and acronyms. The folks working under them were afraid to point out that what they said didn't make sense, while the folks over them didn't know they didn't make sense. One particularly memorable executive was famous for giving directions that were literally unintelligible; people left meetings scratching their heads because it seemed like he knew what he was saying, but none of it actually made sense.

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I remember approaching the head of one of the most powerful units in the company with a long list of things that were clearly broken. He told me he was well aware of the problems — but if he tried to fix them, the fact they existed in the first place would get him fired. He was more concerned about his pension than actually addressing known critical problems.

I also spoke to an aide to CEO John Akers after he'd been fired. The aide knew Akers was being fed false information on purpose to make it seem like the company was in better shape than it was. (This, by the way, is what caused Microsoft CEO Steve Ballmer to fail, I believe.)

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