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Shady Illuminations

The Three Virtues of IBM

by John Shade

Generic image illustrating the article
  IBM is 100 years old. That’s old, especially when you remember that it cryogenically freezes its CEOs at age 60.  

Last month IBM celebrated its 100th birthday. Did you break out the bubbly?

One hundred years. That’s old. That’s three digits. IBM is so old that if I made up some dumb joke about the wrecking ball tearing down the old Endicott Building, IBM would get it.

One hundred years. IBM doesn’t let its CEOs get this old. It cryogenically freezes them at 60, and keeps them around because you’re not allowed to leave.

Although you know, technically, last month was really the 100th anniversary of the formation of a company named C-T-R. That later became IBM. But we’re not going to quibble over a name change, right?

And of course Tom Watson wasn’t in charge yet, and until he was running things it wasn’t really IBM. Not the IBM of story and song. In fact, Watson named it IBM in 1924, so that makes IBM technically 87. But we’re not going to let petty technicalities overshadow the celebration, right?

A Virtual Orgy

And celebration there was: a virtual orgy of congratulation. Mostly self-congratulation. IBM’s web sites were taken over by lists of the company’s key patents, innovations, and milestones, temporarily bumping aside the white papers on how IBM’s cloud services are reshaping business. Watson (the program, not the man) was named Person of the Year by the Webby Awards and Lisa Kudrow. One journalist strained to imagine what it must have been like for IBM as a startup 100 years ago. Ignoring the fact that IBM was never a startup, but was formed by the merger of three established firms.

Or, actually, that’s how C-T-R was formed. IBM was formed by replacing the letterhead. But there I go raining on the party again.

And I’m going to go on doing it. Forgive me if I'm not as impressed as I’m supposed to be by this list of patents and inventions. If a significant percentage of the people who have ever worked in tech have been your employees, if you’re one of the biggest companies in the field and for decades were bigger than all the rest of the field put together, if you’ve been around for a century, and if you take credit for all the innovations of people working for you, then shouldn’t the lion’s share of the patents and inventions and such be associated with you? If they’re not, what the heck have you been doing for the past hundred years?

Or 87 in base ten.

Of course a lot of the innovation in IBM these days is buying young companies in order to connect their products and services with IBM’s customer base. And that’s not taking credit for the innovations of your employees. That’s taking credit for the innovations of other companies’ employees. So that’s different.

A Virtuoso Performance

But let’s be fair. IBM has racked up a pretty impressive record.

In the 1990s IBM achieved the biggest losses in the history of business.

It was once a giant, bigger than all of its competitors combined. The Seven Dwarfs, they called IBM’s competitors, while IBM was Snow White, because of the integrity of its sales staff and their impressive personal hygiene. Today, IBM is just one tech megacorporation among many, although its salespeople are still clean.

It has sold off whole market segments: Personal computers. Disk drives. Printers. Copiers and duplicators. Phones. Satellites.

What other company could have run up this remarkable record?

Of course there were some positive achievements along the way, too.

The floppy disk. The UPC barcode. The social secutity system. The Apollo space missions. A little googling tells me that those are a few of the trophies on the IBM mantle. (Although I’d never heard that IBM had invented the Apollo space missions. That’s sort of disppointing.)

I suppose the bottom line is, you can’t argue with success. Or so they say. I think you can. I think it’s survival that you can’t argue with.

And IBM has survived. Shrunken to a shriveled homunculus of its former obesity, it still survives. Prospers, even. It will probably survive another 87 years, and if it does, I predict that it will be because of IBM’s three virtues.

The Three Virtues

1. IBM knows how to articulate its vision.

Thomas Watson, Sr. was the consummate salesman, and IBM has never lost sight of the need to sell—ideas, technology, products, services. It has occasionally lost sight of its market. “Today we define our space as enterprise and global,” current IBM CEO Sam Palmisano said recently. “We don’t sell to consumers. We have in the past, but we don’t anymore."

Like the personal computer business. That was selling to consumers. Do you see how cavalierly Palmisano dismisses a whole industry and a whole era of IBM’s history?

As he should. IBM should never have been in the personal computer business. That the company was eventually able to see this and exit from what at the time looked like the center of the tech universe is impressive.

Palmisano tells the story of a Harvard professor who while researching a book interviewed IBMer around the world. According to Palmisano, she was impressed that they all said what he said—the message had gotten through. Get 400,000 people all saying the same thing and you have power.

And you have clear articulation of vision. When management can communicate the vision to the press, the customers, and the staff with no cognitive leakage, that’s impressively articulate.

2. IBM has always shown respect for intelligence: it likes bright people.

That seems to be a value across the board. IBM hired the greatest designers and architects to design its buildings: Eero Saarinen, Charles and Ray Eames, Paul Rand, Ludwig Mies van der Rohe. IBM branded itself internally and externally with the mantra “Think.” It prides itself on pushing the limits of machine intelligence, pitting computers against chess grandmasters and Jeopardy champions. Tom Watson, Jr., promoted non-discrimination policies explicitly for the competitive advantage this gave IBM in hiring purely based on smarts.

Brightness is an IBM value and virtue.

3. And then there’s the boring but earnest image.

If an IBM junior executive had shown up on your doorstep in the 1950s, imagining for the moment that you were alive in the 1950s and had a doorstep, your immediate reaction would have been to look him up and down and ask, “where’s the other one?”

Bill Gates and Larry Ellison and Steve Jobs and Scott McNealy and Filo and Yang and Brin and Page and other tech founders infused their companies with their personalities, and the companies are interesting as a result. IBM reflects the personalities of the two Watsons, the human ones, and is boring as a result. “We have learned not to confuse charisma with leadership,” some IBMer said somewhere. I don’t remember where. I should have taken notes, but honestly, it was just too boring.

That’s IBM: Boring but earnest. It’s an image and a value that the company promotes and embraces. And it’s not just the dress code. (Wikipedia: “A dark (or gray) suit, white shirt, and a ‘sincere’ tie was the public uniform for IBM employees for most of the 20th century.”) The dress code has relaxed, but the image hasn't changed. I’d call it clean.

Articulate and bright and clean: that’s a storybook, man.

John Shade was born under a cloud in Montreux, Switzerland, in 1962. Subsequent internment in a series of obscure institutions of ostensibly higher learning did nothing to brighten his outlook. Nor to make it cleaner or more articulate, for that matter. Send the author your feedback or discuss the article in the magazine forum.