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  • Topic: IBM, Louis V. Gerstner, Jr., Samuel J. Palmisano
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  • Published : March 11, 2011
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Who Says Elephants Can’t Dance?
Leading a Great Enterprise Through Dramatic Change

Louis V. Gerstner, Jr.

This book is dedicated to the thousands of IBMers who never gave up on their company, their colleagues, and themselves. They are the real heroes of the reinvention of IBM.


Foreword Introduction PART I-GRABBING HOLD   1 The Courtship   2 The Announcement   3 Drinking from a Fire Hose   4 Out to the Field   5 Operation Bear Hug   6 Stop the Bleeding (and Hold the Vision)   7 Creating the Leadership Team   8 Creating a Global Enterprise   9 Reviving the Brand 10 Resetting the Corporate Compensation Philosophy 11 Back on the Beach

vii 1 7 9 18 29 41 49 56 73 83 88 93 103

PART II-STRATEGY 12 A Brief History of IBM 13 Making the Big Bets 14 Services—the Key to Integration 15 Building the World’s Already Biggest Software Business 16 Opening the Company Store 17 Unstacking the Stack and Focusing the Portfolio 18 The Emergence of e-business 19 Reflections on Strategy PART III-CULTURE 20 On Corporate Culture 21 An Inside-Out World 22 Leading by Principles PART IV-LESSONS LEARNED 23 Focus—You Have to Know (and Love) Your Business 24 Execution—Strategy Goes Only So Far 25 Leadership Is Personal 26 Elephants Can Dance 27 IBM—a Farewell APPENDICES Appendix A—The Future of e-business Appendix B—Financial Overview Index

111 113 121 128 136 146 153 165 176 179 181 189 200 217 219 229 235 242 253 259 261 277 287


have never said to myself, “Gee, I think I want to write a book.” I am not a book writer. Until now I haven’t had the time or the inclination to lean back and reflect on my thirty-five years in business. I haven’t had the patience it takes to sit down for a long time and create a book. Throughout my business life I have been wary of telling others how to manage their enterprises based on my personal experiences. And, frankly, I wasn’t sure if anyone would be interested in reading my thoughts. I read a lot of books, but not many about business. After a twelve-hour day at the office, who would want to go home and read about someone else’s career at the office? I have always believed you cannot run a successful enterprise from behind a desk. That’s why, during my nine years as Chief Executive Officer of International Business Machines Corporation, I have flown more than I million miles and met with untold thousands of IBM customers, business partners, and employees. Over the past two years, after people began speculating that my retirement might be just around the corner, I thought I’d get a lot of big-picture questions that outgoing CEOs get about the economy, the world, and the future. Instead, I have been surprised by how many times—at big meetings and small ones, and even at private sessions with CEOs and heads of state—I was asked: “How did you save IBM?” “What was it like when you got there?” “What were the problems?” “What specific things did



you do to bring the company back to life?” “What did you learn from the experience?” They wanted to know, many of them said, because their own companies, organizations, or governments faced some of the same issues IBM had encountered during its very, very public near collapse in the early 1990s. Businesspeople outside the United States, confronted with the need to transform tradition-bound enterprises into tough and nimble players in a world economy, seemed particularly interested in the subject. More recently, after I had announced my intention to retire, I was amused to read an editorial in an American newspaper, USA Today, that said, in effect, it hoped Gerstner was going to do something more useful than write a book and play golf. Nice thought, but since the announcement, I got thousands of letters and e-mails, and the most frequent sentiment was, again, that I should tell what I had learned from my tenure at IBM. (I was also...
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