Why IBM Will Be Saved by Analytics — and Steven Mills

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.

Executives Help Themselves, Hurt Everyone Else

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.)

What seemed particularly interesting at the time was seeing these executives leave IBM and fail spectacularly at smaller firms where they couldn’t game the system like they did at IBM. Over the years I lobbied for an internal auditing group to go through a company, find executives like this and get rid of them before they cause irreparable harm. They are, in my view, a cancer on the company. As an auditor, I did have some success doing this, but it wasn’t nearly large or fast enough to prevent what eventually happened, largely because the most powerful problem executives were too well protected.

But analytics, applied correctly, will change make these gaming executives extinct.

Analytics Assures That Executives Know What’s Going On

Analytics done right is sourced in real numbers that flow into dashboards that executives can use to see how things are really going. At IBM Enterprise2013, the U.S. Open presented a dashboard on its Web property that uses analytics to not only properly provision the service, but to report back real-time loading and money saved.

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At a glance, and assuming someone isn’t corrupting the data, an executive could see if his subordinates are doing their job. No amount of BS would be able to cover up problems. Seeing this, I was struck with how a similar system, applied to the Obamacare website, could have either prevented the embarrassing failure of that site or pointed solidly to the problem(s) that created it.

One thing that drove me crazy at IBM was that the firm didn’t deploy its own technology, based on the screwy argument that doing so pulled resources from customers. That isn’t true today, though, and IBM regularly has its CIOs talk about how they use IBM tools to ensure IBM’s success. Analytics — applied correctly with current IBM tools — should assure that IBM never again has the kind of problems that eventually drove me away and nearly caused the company to fail.

It’s a pleasure to meet down-to-earth executives who make it to senior positions on merit rather than gaming the system. Mills not only knows technology; he’s motivated to make sure it’s used properly inside of IBM ensure that the company survives and succeeds. With folks such as Mills at the helm, and with tools that advance analytics into decision engines such as Watson, IBM is in a position to make its customers successful while assuring its own future. Never forget that analytics can save your firm from the executives who might game your company into oblivion.

Rob Enderle is president and principal analyst of the Enderle Group. Previously, he was the Senior Research Fellow for Forrester Research and the Giga Information Group. Prior to that he worked for IBM and held positions in Internal Audit, Competitive Analysis, Marketing, Finance and Security. Currently, Enderle writes on emerging technology, security and Linux for a variety of publications and appears on national news TV shows that include CNBC, FOX, Bloomberg and NPR.

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