Sometimes, I admit to becoming a bit jaded. Put it down to my years as a reporter. Or, maybe, from being close to so many “revolutions” in industry and technology. I’ve seen (and helped create) my share of marketing slogans, themes, slug lines, ad lines, brochures and campaigns. Whatever the reason, I always look at “claims” with a critical eye. Usually, sad to report, that critical eye finds that most claims fail to live up to the boast.
Maybe that’s why IBM’s recent earnings report [see http://greateribm.typepad.com/web_log/2008/01/ibm-posted-grea.html] captured my attention the way it did.
Oh, it’s great that the company chalked up record earnings. IBM’s hit a few earnings milestones before. Worthy of applause (and a call to my broker), but normally I’d make note of the day and move on.
But something about this announcement stopped my multi-tasking fingers in their place.
Then I saw the Steve Hamm’s January 17th BusinessWeek article, “International Isn’t Just IBM’s First Name.” The deck on that article zeroed in on my interest: “Big Blue has built a global network for client services and in the past three years has hired 90,000 people in low-cost countries.”
Just a couple of weeks earlier, IBM had announced it would invest $1.6 billion on new marketing and sales programs in Southeast Asia, Latin America, Eastern Europe, Africa, and the Middle East – all part of a long-term strategy to expand marketing focus in fast-growing, developing markets. And in the past three years, the company has hired some 90,000 people in countries like Brazil, China, and India. [more on this story at http://www.ibm.com/ibm/greateribm/connections_article7.shtml ]
Hamm said of that investment: “the company is reorganizing around the principle that it will perform work for customers where the jobs can be done – tapping the right talent at the right price.”
And that's not the only investment that's paying off. IBM continues to be top gun in gaining patents – a pretty fair report card on the value of a $6 billion R&D investment.
And where our own R&D doesn’t cover the waterfront, the company’s been far from shy about investing in the bright ideas coming from others. IBM’s acquired more than 60 companies since early 2003 – and those acquisitions have added to the bottom line while opening opportunities in fast-growth business areas.
Put it all together and it sure looks to me as though IBM’s doing a pretty good job of converting strategy into reality. The results make a pretty good argument for regarding the company as a model for the globally integrated enterprise. Sure doesn’t look much like the “multinational” company I worked for. Remember when the organization chart for every country looked alike? Vertical departments and functions duplicated country by country were the norm. The new, horizontally integrated model may be challenging – but it’s obviously turning out profits.
We saw those profits reported in the earnings statement. (You can hear what Mark Loughridge, IBM senior VP and chief financial officer, had to say at http://www.ibm.com/investor/4q07/index.phtml )
If you took advantage of IBM’s stock purchase program while at IBM, you probably like the way things are working out. It didn’t escape me that while the worldwide stock market was going through gyrations and many large enterprises were struggling to report good news, IBM’s global operations were going strong. Maybe I’m not as jaded as I thought.
The BusinessWeek article quoted Rosabeth Moss Kanter, a professor at Harvard Business School, this way: “IBM is making real some new ideas about what it means to be global that were just a lot of talk before.”
Global opportunity. That sounds good to me. Now, where did I put that passport …
Now I have some questions for you:
What do you think about IBM’s global business strategy?
Is it working the way you think it should?
What are some of the challenges you see ahead?
The floor is yours. Please comment.
Submitted by Larry Phipps, a Greater IBMer since 2007
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