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Who Says Elephants Can't Dance?

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Who Says Elephants Can't Dance?

Leading a Great Enterprise Through Dramatic Change

Harper,

15 min read
10 take-aways
Audio & text

What's inside?

Louis V. Gerstner Jr. saved IBM from bankruptcy and restored it to iconic leadership.

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Editorial Rating

9

Qualities

  • Innovative

Recommendation

Legendary CEO Louis V. Gerstner Jr. pulled off the turnaround of the century by bringing IBM back from near bankruptcy. He completely remade IBM, a monumental task considering its size, its hallowed traditions and mission, its strong corporate culture, and the remarkable challenges it faced in a rapidly evolving marketplace. He details the steps he took to resurrect IBM and restore its legendary leadership position, and he explains why he chose a bold, risky path to strengthen and unify the iconic company when astute observers believed it had become an irrelevant corporate relic. Gerstner says that even though he wasn’t an author, he decided not to use a ghostwriter. Be glad he stuck with his own voice. getAbstract finds that he has written a superior business book: analytical, well organized, focused and methodical – a work of masterful storytelling in straight-shooter prose. Current and aspiring CEOs can learn from Gerstner’s war stories and from his visionary leadership. This may be an ironic twist, considering Gerstner’s famous quote that IBM didn’t need vision – it needed superior strategizing and marketplace performance. As it turns out, he supplied all that and vision, too.

Summary

The Blues for Big Blue

The International Business Machines Corporation is a truly mammoth blue-chip organization with enormous annual sales revenues, hundreds of thousands of employees and myriad operations across the globe. Thomas J. Watson Sr. created IBM, known as Big Blue, in the early 1900s, making it the world’s leader in computing long before the computer age. In the 1930s, the US government selected IBM to automate its new Social Security system, just one illustration of the company’s wide scope and breadth.

Tom Watson Jr. became IBM’s CEO in 1956. He made the company a global digital king by selling its System/360 mainframe, which incorporated the latest integrated circuit technology. In the 1960s, IBM spent $5 billion (more than the Manhattan Project cost) to develop System/360. From 1965 to 1985, thanks to this system and its profitable peripherals, IBM’s revenues increased at a 14% compound growth rate annually. The company’s gross profit margins averaged a staggering 60% annually. IBM dominated the computer market with its 30% share. No other computer company came close.

Then UNIX debuted. Its “‘open’ operating environment” enabled “pure play” computer...

About the Author

Louis V. Gerstner Jr. was IBM’s chairman and CEO from 1993 to 2002. Previously, he served as chairman and CEO of RJR Nabisco, as a senior executive at American Express, and as a consultant at McKinsey & Company.

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