Home > News content

Centennial IBM: a model of transformational change worthy of global business research

via:博客园     time:2019/2/16 11:32:25     readed:294


Text / Liu Xuehui

Source: Meteorological Business Think Tank (ID: lisizhiku)

Key points:

IBM was founded in 1911 and has a history of 108 years. The history of IBM is the history of modern computers.

The history of IBM's centuries is simply a history of transformational change driven by generations of legendary CEOs.

Several successful transformations of IBM tell us that the development of an enterprise cannot deviate from the trend of the times. There are no enterprises that will always be successful, only those that constantly adapt to the times. “Environmental security” is a strategic thinking that any business manager must have. Enterprise transformation must have the courage to divest the old business, and the compromise in the face of the trend is to condone the decline of the enterprise.

Transformation and upgrading is not a separate strategic adjustment, but a systematic transformation process from strategy to organizational structure to team behavior. It requires comprehensive upgrades of models, processes and mechanisms.


By 2019, IBM officially recognized the establishment time of 108 years, which is more modest. In fact, the company's real age has reached 133 years old. As a technology company that has surpassed a hundred years of history, it can be said that the history of IBM is the history of a human computer.

People who have a little memory of the IBM notebook era are very clear. IBM Blackbook was the standard for business people, and its popularity is no different from today's Apple notebook. Even today, Blackbook is still the notebook of choice for many business people.

However, since the sale of the PC business and the sale of the computer business to China's Lenovo Group, IBM's distance from the average consumer has become more and more distant. So many people don't even know the name of the IBM company. But it doesn't matter. To this day, many large commercial organizations are respectful to IBM and know the weight. Anyone who is a little familiar with Huawei has known that Huawei has a lot to do with the intellectual support of IBM today. To this end, Huawei also paid billions of service consulting fees.

In the "Fortune" 2018 "World Top 500" ranking, IBM ranked 92nd in the world, with revenue of 97.139 billion US dollars, equivalent to about 655.2 billion yuan, equivalent to more than 600, the total of Ali, Tencent, Baidu. Million yuan; profit is 5.753 billion US dollars, equivalent to about 38.6 billion yuan.

This transcript is not worthy of pride for IBM. Even if compared with myself, it is down by 11 places from the previous year. However, as a company that has been transformed into a consulting business, this level of revenue and profit is not too disappointing.

Innovative ability is an important indicator of whether a company has future growth potential. In the 2017 patent statistics list published by the US Patent and Trademark Office, the number one is still IBM. This is IBM's 26th consecutive year, and its patents reached 9043 in 2017. In terms of the number of patents, there is no more than this company in China (China's Huawei and BOE have entered the top 25 in the world).


Patent data statistics of companies in 2016 and 2017

In addition, IBM is still the world's second largest software company, the second largest database company, the second largest server company, the third largest security software company, and the sixth largest consulting company. It is the largest application infrastructure for 14 consecutive years. And middleware companies. The company built the first hard drive, the first floppy drive, the first architecture to implement on a variety of different but compatible machines, the first widely used high-level programming language, relational database, the first super Scientific computer, the first RISC design and the first DRAM chip and so on. The US "Times" said: "IBM's entrepreneurial spirit is unmatched by humans in the history of … … no company will bring such a huge amount to the world industry and human lifestyle like IBM. Impact. ”

In the “2018 World Top Ten Information Technology (IT) Companies” ranking, IBM ranked second behind Microsoft. Followed by eight companies including Oracle, Accenture, Hewlett-Packard, SAP, TCS, and Capgemini. Among them, the birth of Microsoft and Oracle is directly related to IBM. And in terms of business life, IBM is far ahead of other companies.

What is of interest to many people is how, as a technology company, IBM has been able to adapt to change for more than a hundred years and stay ahead of the curve.


1911 was a very important year in Chinese history. The Revolution of 1911 ended the feudal monarchy that ruled China for more than 2,000 years and began to move toward openness and democracy. In this year, the other end of the globe, the merger of the international time recording company, the ruler company and the watchmaking machine company, established the Computing-Tabulating-Recording Company (CTR company). IBM officially determined that this time is the starting point for the company's development. If we trace the time when these three companies were established, history will be pushed forward for more than 20 years. From the history of computer development, it can be said that from this moment, human beings have embarked on the journey of machine intelligence.


Thomas · Watson

In May 1914, salesman Thomas · Thomas Watson entered CTR and immediately took over as IBM President and General Manager. Since then, the name Watson has become an important IP of IBM. It has been repeated, and even represents many of the smart technologies in the future. It is named after Watson. In 1915, Watson proposed the famous "Think" slogan, which began to be used inside the company. Years later, the popular IBM notebooks around the world were named "Thinkpad".

In 1917, CTR entered the Canadian market under the name of International Business Machines Co., Limited. This is the first time that the name IBM has appeared, and then it entered the European market in 1919. In 1924, CTR officially changed its name to International Business Machines Corporation, the IBM company we are now familiar with.

Watson’s appointment greatly promoted the development of IBM. He is good at speaking and likes to promote himself and the company. Time magazine said in the memory of IBM's centennial memory of Watson: "He was the greatest salesman of his time, and his greatest product was always his own." To promote their names, many of IBM's foreign subsidiaries in the 1930s were labeled Watson, not IBM.

In addition, Watson has a savvy political mind and has made a lot of large-scale business related to the government. That's one of the original genes why IBM has always been good at dealing with governments and large companies. With genius marketing talent and government relations, during the Great Depression of the United States in the 1930s, while other companies were fading, IBM grew against the trend. During this time, IBM's scale quickly grew from a few hundred to more than 7,000. One of the important reasons is that Watson used the perforated card equipment of IBM's main company to lobby the Roosevelt government and enter the social security system of various governments. In 1935, the Social Security Law enacted by the United States brought enormous challenges to accounting services. With the help of punch cards and IBM accounting machines, the Social Security Board can process up to 600,000 benefits calculations per day for the 26 million workers covered by the first social security law.

The ability to obtain such an order is directly related to Watson's emphasis on R&D investment. In the most difficult days of the US economy in 1932, Watson took out $1 million to build a modern laboratory in New York. This lab led IBM to lead the way in technology products throughout the 1930s.

As we have said before, all the old companies that have experienced the world war are all affected by the war, and so is IBM. During the Second World War, Watson signed a contract with the US Department of Defense to produce a large number of arms, such as machine guns, sights, and engines. IBM produced the M1 carbine and the Browning automatic rifle, and the Allies used IBM's equipment extensively for military computing, logistics, and other military needs. Two-thirds of the company's new plants are all invested in munitions production, and production has expanded threefold.

After World War II, Watson put forward the slogan of “realizing world peace through international trade” and constantly promoted the benefits of free trade. Watson himself is a staunch supporter of the US Marshall Plan. He actively promoted the revitalization of the European economic plan and made a lot of public relations efforts. In recognition of these contributions, Watson was later awarded the honorary legion of one of the country's highest honors.


Mark I

During the war, IBM also really opened up the computer field. The important symbol is the famous "Mark I" computer that was successfully invested in Harvard University in 1944. In 1947, it also cost $1 million to launch "Select Sequential Control Computer" (SSEC).

When most American families began to have telephones and radios, indicating that American society entered the electronic age, Watson responded to the era when IBM turned IBM into a “punch card machine” company, which captured the first of IBM’s 100-year history. Sub-important trends and opportunities. IBM's early success benefited from Watson's grasp of the pulse of the times and his excellent business ability combined with politics. Because of Watson’s reputation in the business world, he has set a record for the largest and longest entry in Who’s Who in the United States.


In the Watson era, the punch card machine became an important label for IBM's business. But with the advent of computers and tapes, IBM ushered in the first crisis. At that time, many managers still believed: “IBM is a company based on punch cards, and the foundation will always be punch cards. "Watson is faced with the need to transform, although it is heart-warming, but it has not been determined enough, which indicates that the era that belongs to him has come to an end at this time.


Little Thomas · Watson

In 1952, Watson's son Thomas · Thomas Watson junior became president of IBM, and IBM's new generation of leadership was born. At the time, Watson invited the founder of the computer, von · Dr. Neumann, as the company's scientific advisor, and developed IBM's first stored program computer. By 1956, with the death of Old Watson, Little Watson became the chairman of IBM and took full control of IBM. Although the punch card machine business used to be the source of IBM's cash flow, Little Watson still believes that computers are the future direction of development, and bravely announced that they want to self-subvert and enter the electronic age.

Under the leadership of Little Watson, IBM is targeting large computers to embrace the electronic age. IBM developed the world's first-generation mainframe "IBM360 system", which cost $5 billion to develop. This investment was 25 times that of the US government's previous research and development of the atomic bomb "Manhattan Project".

It is no exaggeration to say that the core technology of “IBM360 System” has laid the foundation for today's databases, personal computers, the Internet and e-commerce. The Apollo 11 on which humans landed on the moon was executed on five “IBM360 systems”. It was because of this input that IBM later emerged six Nobel Prize winners, six Turing Award winners, 19 American Academy of Sciences, 69 American Academy of Engineering academicians, and 10 US National Technology Awards and 5 US National Science Award.

“IBM360 System” was launched in 1964 and achieved great success. It achieved an overwhelming advantage and soon became the market leading computing platform. In 1969, IBM achieved 70% market share in the computer market, becoming the first large IT company to be called “Evil Empire”. In this historical period, IBM was the only one. The computer market at the time was dubbed by the US media as "IBM and the seven dwarfs" (seven dwarves referred to Burroughs, UNIVAC, NCR, Control Data, Honeywell, General Electric and RCA, respectively).

This transformation not only brought quality and quantity breakthroughs to the company's development, but also created the discipline of computing science, which represents the latest stage of human development. Also in the Little Watson era, IBM has established the image of “Big Blue” in the world.

In 1971, Little Watson retired and Frank T. Cary took over. In the era of Cary, IBM began to play an increasingly important role in people's daily lives, appearing in more and more scenes.

In 1971, IBM produced a computer-guided "Apollo 14" and "Apollo 15" space shuttle successfully landed on the moon. In 1973, IBM first introduced the ATM, and Union Trust was the first bank to install a self-service terminal. In 1975, IBM introduced the first 5100 "portable" computer. At the time, depending on the size of the storage space (16KB, 64KB) and optional storage accessories (such as 8-inch floppy disks), the price ranged from 9000 to 20,000 dollars.

In the 1970s, a database expert at IBM published a classic relational database paper, but was shelved by IBM. The database expert took the liberty and left IBM to create the famous database company Oracle. To this day, Oracle is still the best and strongest database in the world, making IBM the strongest rival in this business.


In 1977, Apple made the first very successful and mass-produced personal computer. Four years later, IBM also released the first generation of PCs that convinced business people, priced between $1600 and $4,500 and storage capacity from 16KB to 256KB. The founder of this computer is called Estelic, also known as the father of IBM PC. Later, the personal computer produced by IBM became the standard for all manufacturers to produce PCs, so these computers are collectively referred to as IBM compatible machines.

When IBM was preparing to produce and promote personal computers in the 1980s, it found Microsoft, which was not known at the time, to write a suitable PC operating system for it. At the time, Bill · Gates' Microsoft acquired SCP-DOS from Tim & Middot; Patterson and made appropriate improvements to form MS-DOS and install it on the IBM PC. With the power of the IBM brand, Microsoft has suddenly become the dominant player in the PC operating system.

In the late 1980s, IBM helped create a network called NSFNET (National Science Foundation Network), one of the first networks to use TCP/IP. The project fundamentally triggered the birth of the Internet and changed the world of business and people's lives forever.


In 1985, John · J. Akers took over as president of IBM. After Axe took office, his performance was flat. What made him even more troubled was that the compatible machine manufacturers that were supported by IBM had occupied 55% of the global market, even more than IBM itself.

In order to prevent other computer companies from copying, IBM unexpectedly took a step in April 1987, "bad game", launched the so-called "micro channel structure" bus technology. The introduction of this technology was intended to prevent IBM-compatible machines from being copied, but the result was that IBM was isolated from other vendors in the computer market, greatly diminishing IBM's market position.

After the 1990s, due to the increasing power of personal computers and the drastic reduction in demand for mainframes, IBM’s main source of mainframe business suffered heavy losses, and its operating conditions became terrible. The continuous loss reached US$16.8 billion, setting a new record in the history of American companies. The second highest loss record was once thought to be insolvent. At the time, Bill · Gates even said directly: "IBM will close down within a few years. ”

In desperation, CEO Axe submitted his resignation to the board of directors in January 1993. After that, the board of directors issued a hero post, and even set up the “Tracing Committee”, hoping to find someone to save the danger “Blue Giant”, but no one wants to accept this mess.



Surprisingly, Lou Gerstner, who previously worked at a tobacco company and had little or no computer knowledge, was appointed as the new CEO of IBM. Although Gerstner said at the CEO's conference, he had the courage to take drastic measures to change the status quo of IBM, but also reluctantly said: "I am new, don't ask me where the problem is or what answer. ,I do not know. ”

Explain that he led IBM to turn around the autobiography of "Who said that elephants can't dance?" In the book, Gerstner described the bad situation of the company in 1993: “At the end of May, I saw the performance data for April. Profits fell by another $400 million, a total of $800 million in the first four months. Mainframe sales fell by 43% over the same period. IBM's other businesses ——software, maintenance and finance—— basically rely on mainframe sales, so there is also a decline. ”

After taking over IBM, Gerstner did not replace most of IBM's senior executives, but he reversed IBM's style and thinking through his actions and hard-line speech. He also uses a combination of stock options and monetary rewards to motivate subordinates. He broke the past IBM's hierarchical approach and communicated directly with employees via email.

Gerstner put forward three new corporate core values ​​of “victory, execution and teamwork”, and carried out a series of business and management system reforms and adjustments for IBM. These three core values ​​have finally evolved into IBM's new performance management system, and all IBM managers and employees develop their “Personal Performance Commitments” around these three aspects each year. “Personal Business Commitment” (PBC) And list the actions that need to be taken in the coming year to accomplish these three tasks. In line with the annual PBO's commitment to personal performance, IBM has also designed a corresponding employee skills development system called IDP (individual development plan), which is a personal growth plan.

After taking office, facing the criticisms inside and outside the company, Gerstner insisted on drastically cutting costs, laying off 35,000 people, and divesting low-margin businesses such as DRAM, network, personal printers and hard drives, and investing heavily in software and Service and acquired Lotus software. Gerstner led IBM to attack the PC market and eventually moved from mainframe to distributed computing systems, including personal computers. Thinkpad became the first choice for users, especially business people.

Two years later, IBM revived its former glory and its turnover exceeded 70 billion for the first time. From 1993 to 2002, Gerstner helped IBM's share price turn about 9 times.


In 2000, the Internet bubble broke out; in 2002, Gerstner retired. After that, IBM experienced two transformational transformations: one from Smarter Planet to CAMSS, and the other from ongoing CAMSS to “Cognitive Solutions+Cloud Platform”.

In the first quarter of 2002, IBM experienced a decline in profit and revenue for the third consecutive quarter, the decline was the highest in ten years. This year, Samuel Palmisano succeeded Gerstner as CEO of IBM.

After taking office, Peng Mingsheng proposed to fully enter the service market of knowledge services, software and consultants, and provide customers with any solution for any needs. Peng Mingsheng has integrated IBM's global work system, which is to redesign and allocate its own resources and operating systems on a global scale, which will greatly reduce IBM's operating costs and optimize resource allocation.

In 2002, IBM acquired PricewaterhouseCoopers for $3.9 billion and acquired Rational Software for $2.1 billion. This gives IBM a variety of back-office services, such as consulting for customers, rather than being limited to IT product services. The move marks IBM's move from hardware science and technology to providing information systems services, enterprise management and operational consulting services. IBM's in-depth consulting, software and technical services also enhance global execution capabilities and define a high-value business model driven by software, hardware, IT services and consulting services.


Peng Mingsheng's most memorable decision made by many Chinese people was to decide to sell the personal computer business to China's Lenovo Group in 2004. At that time, Peng Mingsheng, the CEO of the company, proposed the strategy of “on demand”: withdrawing from the PC (selling to Lenovo) hardware industry and transforming the company from providing strategic consulting services to integrated service companies. Wharton management professor Mark J. Zbaracki commented on this: "IBM's strengths have always been to reinvent itself. ”

By 2006, the transformation of IBM's annual operating income reached $91.4 billion. Three years later, IBM's revenues further reached $103.6 billion.

In 2008, Peng Mingsheng released their new direction: Globalized human society transformed complex natural systems into complex business and social systems based on a unified and intelligent global infrastructure. To this end, IBM launched the famous "Smart Earth" strategy. The introduction of this strategy can be said to accurately grasp the technological development of the Internet of Things, cloud computing, big data, and mobile, pointing out a new direction for the development of the IT industry. This has led to the development of several industrial chains, such as smart cities, smart healthcare, smart energy, smart transportation and so on.

In order to substantially promote the strategy of “Smart Earth”, IBM has successively launched the first supercomputer (Watson) and the supercomputer “Watson” in the name of the founder, Old Watson. & rdquo; (Watson). Watson defeated two human champions in the US veteran knowledge quiz TV show "Jeopardy!" and was hailed as a great breakthrough in computer science and artificial intelligence in the 21st century. Thus, the term “artificial intelligence” began to enter people's field of vision on a large scale.


In 2012, IBM was the largest employee in the United States with 345,000 employees worldwide. At the same time, in the year, he joined IBM's 20-year-old Gini · as a systems engineer; Virginia C. Rometty began as chairman, president and CEO. She is the first female CEO and chairman of IBM history.

She took over the banner of her appointment and was transforming IBM from a traditional hardware, software and services company to a company that provides cognitive solutions and cloud platforms to its customers. In her view, “cognitive computing is a technology that changes everything. ”

We can't judge the success of this ongoing transformation, but looking back at IBM's more than one hundred years of history, the company's classic transformation in times of crisis has given us confidence. So far, IBM should be the most strategically successful giant in the IT industry. Every strategic transformation has embraced the trend of the development of the technology industry, thus winning the opportunity and wealth for itself.

The enterprise is also a living body with its own life cycle. IBM's history from crisis to return to the prime of life tells us that for companies in the aging phase, transformational change requires courage and wisdom and vision. IBM's journey of change is far from over. This courage, wisdom and vision will continue to inject vitality into this century-old store.

China IT News APP

Download China IT News APP

Please rate this news

The average score will be displayed after you score.

Post comment

Do not see clearly? Click for a new code.

User comments