By: Geoffrey Precourt, Warc
The timeline - as expressed through a series of Fortune magazine covers - tells the story of the last quarter-century of IBM sharply and succinctly. In 1984, the company was recognized as one of the world’s “most admired” brands. Eight years later, in 1992, it had become a “dinosaur.” But, by 2004, it was on the rebound. Although the editors of Fortune would not commit to a complete recovery, they were willing to ask. “Can IBM Get Smart Again?”
"We learned a hard lesson,” said Diane Brink, IBM vp/marketing/global technology services. “We were near extinction. And we had an acute need for leadership… to redefine what our business meant in terms of service to others.”
The leadership came with the arrival of Louis V. Gerstner, Jr. in 1993. And, with marketing helping him drive the enterprise, IBM’s transitioned from what Brink called “a company that sold components” to a “company that sold business solutions” - from a provider of hardware to a provider of consulting services.
As a company on the edge of disaster, Brink told delegates that IBM “had lost focus on our clients and our industry. But we survived that near-death experience. It was sobering. But we went through a series of inventions, constantly redefining who we are.”
Where IBM ended up was in a “smarter place,” with “clearer value to clients, and increased profitability,” Brink said. “We successfully remixed our portfolio, with 80 percent [of our business becoming] software and services that meet the needs of our clients.”
Performance metrics stand witness to the transformation. According to Brink, IBM experienced record revenue, profit, earnings per share, and cash flow at the end of 2008 - steady growth that, she added, has continued through the third quarter of 2009.
The company that had brought the world the PC, barcodes, and a massive amount of research on the human genome had refocused its efforts on a connection between business and humanity. And it had done so well in advance of its 100th anniversary on June 15, 2011.
Inside IBM, leadership embraced the cultural changes that would lead to increased value for IBM clients. For integrated marketing - the company’s largest business unit - that challenge translated to a three-point program, as articulated by Brink:
- “Focus on value”: Drill down on the company’s core clients, do more with less, and ensure that there’s a premium placed on value and innovation.
- “Embrace and exploit opportunities”: Be aggressive in the pursuit of opportunities and new strategic partnerships.
- “Act with speed”: Empower managers with capability and the culture to embrace change while transparently managing risk.”
“Our leaders, businesses and institutions have the opportunity to change the way the world works by focusing on these three things,” said Brink.
“The world is smaller and flatter,” she continued. “But being able to connect is just not enough. Our planet also is becoming smarter. We have the ability to apply intelligence to challenges and ambitions - to just about everything. We can build a case for changing progress, challenging the status quo, and creating new value for ourselves and for clients. Great things are possible if we bring a new level of intelligence to how the world works, how everyday systems interact. It’s a chance to do better, to be efficient.
IBM’s vision of a “smarter” planet includes instrumented people, interconnected companies and institutions, as well as intelligent combinations of man-made artefacts and nature’s systems. To achieve it, Brink explained, will require “back-end systems to leverage data and analytics to create real-time insights.”
And its applications will include fields as diverse as health-care management, transportation and infrastructure, water management, and oversight that includes the authenticity of pharmaceutical offerings as well as the security of currency exchanges.
To connect with so many diverse perspectives, IBM is relying on a strong digital presence.
“Just about a year ago, we started a rich conversation with the world,” Brink said. “Now is the time to fuse intelligence into literally everything to change the way the world works. With intelligence, we all will live and work better, in all sizes of institutions and in all kinds of organizations. Businesses require intelligence to make safer decisions.”
And IBM, she added, will be the service provider, even though its role will be less immediately visible: “No one really sees our logo any more. Our logo isn’t seen. But the substantiation of our mission - to create a smaller planet, to reflect global realities - is not just what we talk about. It’s what we are. Essentially, it’s all around us. It affects each of our lives…. We’re leveraging everything we have to be relevant, to have real-time conversations all over the world.
The marketing effort in support of the broad-based effort reaches throughout the corporation, from advertising to its client centers, recruiting, media relations, event-marketing, social media, business partners, employees and alumni. “We’re listening efficiently in real time,” Burke explained. “We need to speak to many different audiences, to convey who the brand is. [We’re talking] in new and innovative ways to C-suite managers as well as college students. We’re on LinkedIn, Facebook. Blogger, Tumblr, and Twitter. We want everybody involved in our conversations.
“Employees understand the role they have. For prospective employees, and our clients, we help them understand [our culture of] deep know-how, of being innovators, of embracing deep forms of discovery.”
And, in terms of turning the IBM brand around, she added, “We collaborate to think, to make the remarkable possible. There are no problems too big to solve. When everybody thinks, everybody wins.
“The key precondition for real change now exists. A period of discontinuity is a period of opportunity for those with courage and vision. We’ve established a point-of-view. The ‘smarter planet’ is relevant and gaining momentum. It’s who we are. It’s what we do.”