The best CEO I worked for in my career was at RJR Nabisco; his name, Lou Gerstner. He was exceptionally smart and exceptionally principled. I watched his leadership closely and found many lessons that would guide my career over the years. So when he was selected to be CEO of IBM in April of 1993, I watched with great interest.
At the time, IBM was called a “dysfunctional company” in Business Week magazine . IBM had lost money for three quarters. Its stock had fallen 75% in 6 years. The culture of the company was referred to as arrogant and out of touch with reality. Its business strategies were clear as mud. So on Mr. Gerstner’s first day on the job, the press asked him to state a new vision for the company. He is famous for his answer: “The last thing IBM needs is a vision.” But his more important statement was not quoted as often: “What I’m trying to do is deliver results, not promises. The world is cynical about IBM’s promises.”
Nine years later when Mr. Gerstner retired, he was lauded for overhauling the company . He shifted the focus from hardware to software services. He changed the culture from lumbering and bureaucratic to nimble and responsive to the customer. Revenues increased from $64 billion to $86 billion. Income rose to $7.7 billion, from $3 billion. The stock price grew 800%.
The reason? Gerstner didn’t talk about vision with empty promises. He focused the organization on the customer, invested resources behind the solutions needed, and delivered results.
“Unless such commitment is made, there are only promises and hopes, but no plan.” —Peter Drucker
Leaders are responsible for taking the people to a daring destination, but the leader will have no credibility if they promise a bold new future to the people, and do not focus the organization and commit the resources needed to achieve results.
Consider these examples:
- In the corporate office, if I announce that we are going to advance our business planning productivity and then refuse to purchase the state of the art software to support that vision, the team knows that I am not serious about advancing our capability.
- In the restaurant business, a restaurant owner can tell the team to grow the business 10% per year. But when the owner fails to repair the equipment, buy new uniforms, or pay the bonus checks promised – the bold destination becomes a joke and the people lose faith in the leader.
The conviction of the leader is evident in where they put the resources.
A daring destination without the resources to make it happen? Promises, promises.
What would your team say today about the daring destination you have asked them to deliver? Is your conviction evident in the resources you have provided to them?
Live up to your promises, and create the conditions for superior performance.
 “Rethinking IBM,” by Judith H. Dobrzynski, BusinessWeek Archives, 1993.
 “Gerstner To Step Down as I.B.M. Chief in March,” by Steve Lohr, The New York Times, January, 30, 2002.
An insightful and interesting post. It highlights the importance of focus among management and the importance of the old saying “talk the talk, walk the walk”, meaning that a person/manager should support what he/she say not just with words, but also through actions.