Ibm Case Analysis

• Akers came from IBM family of management development process who started his career as a sales trainee. He was a natural leader and had a great feel for the business.

• Even though there was no major crisis he felt change was necessary and started the transformation process in the company. He brought decentralization and started minor layoffs. This made it easier for Gerstner when he started making major changes and most of the employees were able to adapt to the change well. He recentralized the company, made huge layoffs and even restructured the board of directors .

• Akers implemented a statistical system Six Sigma and was more focussed on employee education.

• Akers decided to let go of mainframe when it wasn’t profitable but Gerstner went against it and revived mainframes which proved successful.

• Gerstner focussed more on cost reduction by employing Jerry York. Voluntary layoffs were reduced and some non-core business were sold off in his tenure.

• Gerstner had a fresh perspective being an outsider and used his previous experience to bring about major changes. He engaged in a variety of activities to get himself up to speed on IBM’s business.

• Since Gerstner did not have a technical background, he worked strategically to bring about the changes by focussing more on clients and bringing people from other companies to perform cost reduction and form strategic teams which proved beneficial.

• Gerstner invested hugely on advertising and implemented “Solutions for a Small Planet” campaign which received rave reviews for the company to change the perception of the company’s business difficulties.

• Even though Akers helped in few areas, we can conclude that it was Gerstner who led to the turnaround of IBM. Gerstner believed in execution and went against the plan of defragmenting and kept IBM as “one company” and solidified IBM’s recovery.

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