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Robert Cringley has just posted an extended essay on how IBM can be turned around.
If there's one company that Cringley understands, it's IBM. He's done his research on this company and apparently has dozens of contacts inside the company, plus many more former employees who departed either voluntarily or as part of an "RA" (Resource Action = layoff).
I expected Cringely to go ballistic when CEO Ginny Rometty dropped a three-part bombshell on the financial markets last week: 1) IBM missed its expected revenue and earnings estimates for the quarter by a huge margin; 2) IBM was selling its semiconductor manufacturing business to Global Foundaries; and 3) Rometty was giving up on the infamous "Roadmap 2015" to $20 earnings/share established by her predecessor, Sam Palmisano, which Rometty had been following diligently since she took over the reins in 2012.
Instead, Cringely reacted in a measured way, writing a pair of short analysis pieces for Forbes; the first on how the IBM server business (the high end business the company retained, not the commodity business sold to Lenovo) will be at a huge cost disadvantage over the next 10 years, even after the sale of the microelectronics division to Global Foundaries; second, how IBM's software and services businesses have been badly damaged by frequent waves of layoffs, so that opportunities for revenue growth too often come from tightening enforcement of software licenses and similar gadgetry.
Now, a week after the announcement, comes the longer reaction piece. Bear in mind that Cringley is a journalist and blogger, not a management consultant or financial analyst, so his advice won't be confused with a bound report prepared for management's eyes only by McKinsey & Co. Cringley's prescription follows...
1. Stop cutting staff, particularly in Global Services. The layoffs are damaging quality and alienating customers.
2. Look for Cloud Computing opportunities higher in the stack, in SaaS (Software as a Service) rather than in the commodity PaaS (Platform as a Service). Look for sales opportunities from smaller customers outside the Fortune 1000 (IBM's traditional customer base).
3. Acquire more business software companies (e.g. Intuit, Computer Associates) to obtain products that can be converted into SaaS offerings for the cloud.
4. Create a mobile app store, not to compete against Apple, Google and Microsoft, but rather to entice ISVs to develop mobile applications for IBM's enterprise and cloud software.
5. Fire Ginny Rometty as CEO
Ginni’s plan to save the company will involve further cuts. You can’t cut your way to prosperity.
6. Ask several members of the board to follow Ms. Rometty out the door.
This reminds me of a curmudgeonly quote made several decades ago by W. Edwards Deming, the statistician and quality guru who is credited for helping to revive Japan's industry after World War II:
Populating management with financially oriented people has ruined this country (USA).
Apparently some folks in Armonk, NY didn't get the memo.
(Score: 3, Insightful) by Thexalon on Tuesday October 28 2014, @01:20PM
In my experience, management works best when the managers in question understand the jobs of the people they are managing, and understand the primary expertise of the company.
So, for example, the best CFO of a car company is going to be somebody who really understands cars and also has a talent for making sure the books are in good shape. The best CMO of a software company is somebody who really understands software but also knows how to communicate about it to the public. And yes, that means that the best CEOs have a decent understanding of what goes on at every level of their company.
The reason this is critically important is that if you don't understand what somebody below you is doing in a hierarchy, you are:
A. Less likely to have realistic expectations about their performance, and
B. More likely to fall for that somebody lying to you about their job performance.
All of this is heresy in the Cult of the MBA, where management is supposed to be something that is in no way related to the actual task you are managing.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 2) by HiThere on Tuesday October 28 2014, @07:19PM
That's a good recipe for a medium sized company. For a company as large as IBM I don't think you can find anyone who understands the whole picture. So you need people in charge of the departments that understand their department, and are good managers. And you need at the top someone who can inspire those managers (and their subordinates, though largely indirectly) to do their best for the company. Even that's pretty tricky. You definitely don't want finance in charge, but you also don't dare ignore them. Engineering being in charge has much to recommend it for a strongly technical company, but it also builds in its own weaknesses. Ditto for Sales. And the guy at the top needs to have an idea of where he wants the company to go, and to be able to communicate it to all the top level managers, and preferably to the other people in the company too. And its best if he can get them all to buy into his vision...except that has the dangers of not hearing any warning signs when you forget something or make a big mistake. And design shouldn't be either subordinate to engineering, or dominant over it.
Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.
(Score: 2) by Hairyfeet on Tuesday October 28 2014, @08:02PM
According to Jim Sterling at The Escapist [escapistmagazine.com] the reason why we are seeing a billion ripoffs of just a handful of games while entire genres like horror and non military shooters get ignored is exactly this, game companies hiring CEOs from packaged goods companies instead of hiring...ya know, people that actually UNDERSTAND games or the games industry? So it looks like its a stupidity disease across all the industries.
ACs are never seen so don't bother. Always ready to show SJWs for the racists they are.