IBM: Dare to be Different

When the International Business Machines Corporation (IBM) appointed Lou Gerstner in the early 1990s, the company was on its knees. Its main problem lay in its lack of flexibility. While the fragmentation of the industry back in the 1980s and 1990s saw many companies selling computer components such as processors and storage separately, IBM sold its computers in a neat package that resulted in profits crashing. But another major issue lay in its people.

Gerstner was faced with the formidable task of picking the company up and turning it around. But to do this, he had to concentrate on coaxing it off the tarmac first. When seeking out IBM’s weaknesses, Gerstner found the workforce lacking the resolve that was needed to be able to survive the tempestuous landscape the era had brought with it. Gary Hamel comments in Harvard Business Review, “Insulated from the real world by layer upon layer of dutiful managers and obsequious staff, IBM’s executives were too busy fighting their endless turf battles to notice that the company’s once unassailable leadership position was crumbling around them.”

So, what happens when a company looks in the mirror and doesn’t recognize itself? Well, by the end of Lou Gerstner’s first full year as CEO, the company was still in dire straits with $15 billion in cumulative losses over the previous three years. Gerstner was adamant that distractions such as brand responsibility and values were an indulgence the company could ill afford. In his own words, "the last thing IBM needs right now is a vision." Instead, the company fixated on doing everything in its power to meet its objectives - to survive. But it was soon to question at what cost.

Geared to Evolve

Thanks to the bright minds of notable engineers (read about ‘How a Gang of Unlikely Rebels Transformed Big Blue’), Gerstner's successor, Sam Palmisano, a man who'd worked at the company since 1973, inherited a very different company, one that was no longer near the brink of extinction. Recognizing the contrast but seeking a resolution to the company’s identity crisis, Palmisano’s team carried out a 72-hour thought experiment in July 2003 with over 50,000 of IBM's employees to ask a surface-simple question: "What are IBM's core values?"

To IBM's CEO, the question was integral to how the company, which he saw as an "organic system," would function. How it would fight future threats, adapt to change, and meet favorable conditions intended for its continued survival hinged on its values. As Palmisano put it, "[these] "principles" or "precepts" or even "DNA"—are what enable you to… change everything, from your products to your strategies to your business model, but remain true to your essence, your basic mission, and identity."

Palmisano's question received over 10,000 comments from his employees. In the end, the exercise resulted in three values: "dedication to every client's success," "innovation that matters—for our company and for the world," and "trust and personal responsibility in all relationships." These values were now inherent to the company, but just like DNA, needed the bodies within the system to manifest them into reality.

Values Into Action

IBM had historically attracted the brightest minds on the planet, who, during Big Blue’s darkest hour, had salvaged its heart from the wastelands of modern capitalism. There was no better way to showcase "trust and personal responsibility" from within the company than by letting these people shine through a continuously experimental attitude as well as an internal infrastructure that had been rewired to support them. This naturally led to "innovation that matters," such as the cutting-edge work IBM has achieved with the Mayo Clinic and the data technology and AI models used to fight terrorism, among other notable achievements. And to ensure a dedicated approach to their clients' success, the company changed the way senior executives benefited from their stock options, granted once shareholders realized a 10% growth in their investments.

IBM's brand values and responsibilities were knitted together like two strands of a double helix, but recent times have tested the company's mettle.

The Courage to Challenge

The death of George Floyd had put a spotlight on the facial recognition algorithms used by authorities to identify and arrest individuals. The methods corporations and organizations are using to stockpile images raise some major eyebrows when it comes to privacy. Add to this that the technology to date is inherently unreliable and racially biased, and the consequences to the global community become clearer.

These problems have made IBM step away from facial recognition and inspire widespread dialogue around its early adoption, especially by police authorities. In his public letter to members of Congress, IBM chief executive Arvind Krishna, clearly explains the reasons why the company no longer offers IBM facial recognition or analysis software:

"IBM firmly opposes and will not condone uses of any technology, including facial recognition technology offered by other vendors, for mass surveillance, racial profiling, violations of basic human rights and freedoms, or any purpose which is not consistent with our values and principles of trust and transparency."

IBM's clear understanding of its values is now benefiting the global population in the debate over the software's early use. By adopting its overtly public stance on facial recognition, IBM acknowledges that the global community needs to heavily scrutinize this innovation. It does this while calling out its "personal responsibility" to raise attention to the dangers of the technology's widespread use, especially when it comes to people of color. This sets a powerful precedent for other companies like Amazon, Microsoft, and Clearview AI's facial recognition technologies to operate with transparency.

IBM's 'self' identity - as an organism with a set purpose and well-defined value system - has ensured its ability to impact people positively. Perhaps, this is why it can now stand with us as an ally through our darkest moments, acting as a torch for other companies to follow.