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Monday, May 20, 2013

Blame Game: IBM CEO's Video Leaves Impressions

IBM's CEO, Virginia Rometty, took an unusual step recently in an effort to catalyze the company's recent disappointing performance: She taped a five-minute video in which she essentially told the company's 434,000 employees that they have to work faster and be more responsive to customers

Did Rometty do the right thing? Sort of. More on that a bit later.

The internal video message made a big splash after IBM shared it with the Wall Street Journal. The newspaper said the video "salted the praise for employees in [Rometty's] regular post-earnings pep talk with unusually blunt comments that the company needs to speed its shift to new computing models to get back on track."

In the video published on IBM's internal web site, the newspaper said, Rometty said, "Where we haven't transformed rapidly enough, we struggled. We have to step up with that and deal with that, and that is on all levels."

IBM has been struggling to adapt to new digital platforms, and its sales and earnings have been sluggish. In that environment, it can be especially damaging when a company misses out on big deals, and that's exactly what Rometty said happened during the first quarter when IBM salespeople failed to close on a number of valuable hardware and software contracts.

"We were too slow to understand the value and then engage on the approval and the sign-off process," Rometty said in the video. "The result? It didn't get done."

She went on to lay down new rules aimed at correcting the situation. If a client has a request or question, IBM must respond within 24 hours, Rometty said. "And if anything slows you down, call it out," she urged. "Engage management, engage leadership, and let's deal with it."

Was Rometty's direct broadside a good idea? It's probably easy for many within IBM to figure out exactly whom Rometty was calling out with her specific criticisms, in addition to her general upbraiding of the slow pace of the entire company. You can be sure those targets are now very engaged in trying to correct their failings.

As far as the company as a whole is concerned, we believe that Rometty simply said what needed to be said in her efforts, after 16 months on the job, to transform and encourage the organization toward exceptional performance. For that reason alone, her message will likely lead to higher engagement levels by IBM employees going forward.

However, Rometty apparently failed to make a broad invitation to her colleagues to invite their ideas, suggestions and potential solutions to the problem that she so clearly laid out. And that should have been a part of her prescription for getting IBM back on the right road.

Rometty's blaming exercise therefore left something to be desired. It'll be interesting to see if, even in its flawed form, her bombshell video message moves the needle for IBM in the months ahead.

1 comment:

Gexton said...

IBM's CEO, Virginia Rometty, took an unusual step recently in an effort to catalyze the company's recent disappointing performance:
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