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Highlights—January 1, 2011

• Austin Statesman: Texas will end IBM data center contract. By Kate Alexander. Excerpts: The end is near for Texas and IBM Corp. The state gave notice to IBM this week that it will terminate the troubled $863 million data center consolidation contract. The process could take a full two years as the Department of Information Resources finds companies to finish the mammoth job and they take over the merger of 28 state agency data centers.

• Bloomberg: Related News: Dodging Repatriation Tax Lets U.S. Companies Bring Home Cash. By Jesse Drucker. Excerpts: At the White House on Dec. 15, business executives asked President Obama for a tax holiday that would help them tap more than $1 trillion of offshore earnings, much of it sitting in island tax havens. The money -- including hundreds of billions in profits that U.S. companies attribute to overseas subsidiaries to avoid taxes -- is supposed to be taxed at up to 35 percent when it’s brought home, or “repatriated.” Executives including John T. Chambers of Cisco Systems Inc. say a tax break would return a flood of cash and boost the economy.

  What nobody’s saying publicly is that U.S. multinationals are already finding legal ways to avoid that tax. Over the years, they’ve brought cash home, tax-free, employing strategies with nicknames worthy of 1970s conspiracy thrillers -- including “the Killer B” and “the Deadly D.” ...

  U.S. companies overall use various repatriation strategies to avoid about $25 billion a year in federal income taxes, he said.

  “The current U.S. international tax system is the best of all worlds for U.S. multinationals,” said David S. Miller, a partner at Cadwalader, Wickersham & Taft LLP in New York. That’s because the companies can defer federal income taxes by shifting profits into low-tax jurisdictions abroad, and then use foreign tax credits to shelter those earnings from U.S. tax when they repatriate them, he said.

  They’re aided by a cadre of attorneys, accountants and investment bankers in the tax-planning industry -- such as a panel of KPMG LLP tax advisers who held forth in a chilly hotel ballroom at a Philadelphia conference last month. There, they discussed a series of techniques for multinationals to return cash from overseas while avoiding or deferring the taxes. KPMG tax advisers Kevin Glenn and Tom Zollo used slides to describe several methods. One diagram resembled a schematic from the Manhattan Project. Another strategy would require certain “bells and whistles” to convince regulators of an actual non-tax business purpose, Glenn explained. ...

  President Obama, who campaigned in part against companies’ use of offshore havens to avoid U.S. taxes, asked Treasury Secretary Timothy F. Geithner to follow up on the issue with business leaders, according to a White House official who asked not to be identified because the discussions were private.

  The argument that a new tax break for offshore earnings would generate a domestic stimulus “holds no water at all,” said Joel B. Slemrod, an economics professor at the University of Michigan’s school of business and former senior tax economist for President Reagan’s Council of Economic Advisers. U.S. companies are already sitting on a record pile of cash -- $1.9 trillion in liquid assets, according to Federal Reserve data. ...

  U.S. drugmakers shift profits overseas far in excess of actual sales there. In 2008, large U.S. pharmaceutical companies reported about four-fifths of their pre-tax income abroad, up from about a third in 1997, according to a March article in the journal Tax Notes by Martin A. Sullivan, a contributing editor and former U.S. Treasury Department tax economist. Their actual foreign sales grew more slowly, to 52 percent from 38 percent. ...

  International Business Machines Corp. used a variation on the technique in May 2007, with an offshore unit purchasing the shares from a trio of banks, according to a company securities filing. That permutation wasn’t covered by the IRS in 2006. Two days after IBM’s disclosure, the agency announced plans for additional rule changes addressing stock sales to subsidiaries from shareholders as well as directly from parent companies.

• eMoneyDaily: Weekly News Roundup: IBM. Excerpt: Monday 20 December. GSIS has filed a suit against IBM. The Government Service Insurance System has filed a multi-million dollar damage suit against the software giant IBM. However IBM has not commented on this issue yet. GSIS president and general manager Robert Vergara said “the pension fund’s board approved the plan after he led a group of senior executives in meeting IBM Philippines officials to try to hammer out a mutually acceptable settlement package.”
• Boulder Daily Camera: Let's kill performance reviews. By Liz Ryan. Excerpts: Dear Liz, We're re-engineering our performance review process. Can I get your suggestions for our new program? Thanks, Janine R. Dear Janine, In most organizations I know, employee performance reviews are ineffective, take up weeks of staff time and involve tons of bureaucracy. Nearly everything about most performance reviews is pointless and/or insulting beyond repair, and I suggest that you scrap your process and create a new one from the ground up. To burden one annual, 60-or-90-minute meeting with six obligations (review past year's performance, set new goals, discuss professional development, cover pay changes and give feedback in both directions) is ridiculous. Saying to managers "Once a year, you'll sit down with your employees individually and talk about their work" gives far too many non-communicative managers confidence to avoid discussion of performance or other "touchy-feely" subjects at any other time. If we care about leadership, we can make regular feedback a cultural norm. ...

  If we care about culture and communication, we can pay people what the market demands based on the importance of their work to our cause -- not based on insulting one-word performance ratings like "Average" or "Excellent." These labels demean the talented people who work with us.

  When we demand that every manager designate no more than one-fifth of his team members as Excellent, Above Average, and so on, we say to the world "We don't believe that we hire the best people here, although our Web site says we do. We don't believe that the top people in the industry work here, although we told our shareholders just that. We don't even trust ourselves, the senior leadership team, to hire managers who will hire great people. We assume that 80 percent of our employees don't do great work."

  If that's not a message that screams "Fear Over Leadership," what is?

  For me, much of our conventional performance-review worldview comes from a baked-in Puritan construct, namely: Everyone Needs Feedback. We Must All Improve.

  I don't buy it. An employee who's good at her job at age 45 would be silly to try and change a stripe now (if she even could) to please the whim of a manager whose communication style might be different from hers. Self-improvement at your own direction is one thing.

• eWeek: Google, Apple, Intel Among 20 Best Tech Companies to Work for in 2011. By Don E. Sears. Excerpts: What tech company holds the key to your dream IT job? Here, eWEEK ranks the 20 best technology companies to work for, according to Glassdoor.com's "50 Best Places to Work" study. The Glassdoor list is based on data collected from real employees. In addition, while companies such as Google, Apple, Saleforce.com and Intel made the cut, many of the other firms are ones that fly under the radar. While the majority of companies on the list are tech, several others include design, traditional engineering, bio-technology, health care and consulting companies with major research and development, IT strategy and technical practices. For purposes of this presentation, the number associated with each company is where companies rank on the Glassdoor list and includes an overall company rating from 0 to 5, with 5 being the highest. Also included are CEOs and their overall approval rating as a percentage from employee reviews. "Glassdoor's Employees' Choice Awards recognize stand-out companies that have retained the support and commitment of their employees despite the tough economic climate," Glassdoor CEO Robert Hohman wrote in a statement. "For companies on the list, we typically get positive feedback on the company culture, benefits and open communication practices while we also tend to see high opinions of the chief executive." For a complete list of all 50 companies, please check out Glassdoor's Website.
• Wall Street Journal: Modest Pay Increases Expected in Year Ahead. Companies to Raise Salary Budgets a Median of 2.8%; Energy and Life Sciences to See Biggest Gain. By Joe Light. Excerpt: Raises in 2011 are set to be better than last year, but not by much. Companies plan to raise their salary budgets a median of 2.8% in 2011 after giving median 2.4% raises in 2010, according to a survey by management consulting firm Hay Group. "As long as the economy is sputtering, raises will gradually inch upward, but many companies will be conservative in increasing their base costs," said Tom McMullen, North American reward practice leader for Hay Group.
• Associated Press, courtesy of Yahoo! Finance: Where are the jobs? For many companies, overseas One key to unemployment puzzle: US companies send jobs overseas, where sales are surging. By Pallavi Gogoi. Excerpts: Corporate profits are up. Stock prices are up. So why isn't anyone hiring? Actually, many American companies are -- just maybe not in your town. They're hiring overseas, where sales are surging and the pipeline of orders is fat. ...

  The trend helps explain why unemployment remains high in the United States, edging up to 9.8 percent last month, even though companies are performing well: All but 4 percent of the top 500 U.S. corporations reported profits this year, and the stock market is close to its highest point since the 2008 financial meltdown.

  But the jobs are going elsewhere. The Economic Policy Institute, a Washington think tank, says American companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the U.S. The additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9 percent, says Robert Scott, the institute's senior international economist.

  "There's a huge difference between what is good for American companies versus what is good for the American economy," says Scott.

  American jobs have been moving overseas for more than two decades. In recent years, though, those jobs have become more sophisticated -- think semiconductors and software, not toys and clothes. And now many of the products being made overseas aren't coming back to the United States. Demand has grown dramatically this year in emerging markets like India, China and Brazil. ...

  Harvard Business School Dean Nitin Nohria worries that the trend could be dangerous. In an article in the November issue of the Harvard Business Review, he says that if U.S. businesses keep prospering while Americans are struggling, business leaders will lose legitimacy in society. He exhorted business leaders to find a way to link growth with job creation at home.

• Yahoo! IBM Employee Issues message board: "Re: Another thought on why outsourcing is occurring..." by "bits_bytes_and_bugs". Full excerpt: In my organization by executive mandate, the highest band an IT architect can be is a band 8. A band 8 IT architect can neither be promoted nor allowed to transfer to another organization to be eligible for promotion. You are stuck until your job goes offshore. Technical career path my ass.
• Yahoo! IBM Employee Issues message board: "Re: Another thought on why outsourcing is occurring..." by "sby_willie". Full excerpt: I know that quite a few band 8's have been "grandfathered" as a reclassified band 8 hourly worker with the conversion from salaried to hourly paid with that -15% pay "remix" (what IBM likes to call a blatant,unfair pay cut with forced OT) that took place a time ago. Curious that band 8 is now the glass ceiling for IBM technical careers. I knew Senior IT Architects that were band 9 in MBPS. I think even one or two were even band 10. I'm sure these folks have not been since debanded.
• Yahoo! IBM Employee Issues message board: "Re: Another thought on why outsourcing is occurring..." by "orsonbear". Full excerpt: sby_willie said: "Curious that band 8 is now the glass ceiling for IBM technical careers." Certainly this is not true for all divisions. I know several technical people with recent Band 9 promotions (Senior Software Engineer).
• Yahoo! IBM Employee Issues message board: "Re: Another thought on why outsourcing is occurring..." by "nguy4444". Full excerpt: I think this is too much of a generalization. It varies by division. In Sales and Distribution and Software Development I know lots of band 9 and 10 technical folks, along with DEs. It appears there is a lot more opportunity for advancement in a technical role in the S&D and other sales/marketing divisions, as opposed to the billable services divisions.
• Yahoo! IBM Employee Issues message board: "Re: Another thought on why outsourcing is occurring..." by "alwaysontheroad4bigblue". Full excerpt: I believe you're right. I volunteered to be "debanded" from band 9 to band 8 last year because I was having so much difficulty getting placed on projects. At one time experienced employees in consulting were valued, so it was possible for band 9's and even band 10's to get on gigs. Now, most of the job postings for consultants will ask for band 6's and 7's (and might take a band 8). Or, as is frequently the case they'll advertise for offshore or landed "global resources" only.

  There is not a career path in consulting for technical people...only for politically-oriented folks in the multiple layers of management.

• Yahoo! IBM Employee Issues message board: "Re: Another thought on why outsourcing is occurring..." by "trexibmer". Full excerpt: Unless you are a divisional manager or higher LIFE IN NOT GOOD in IBM. If you have technical skills it hardly matters since IBM doesn't value those skills anymore. If you have a hot skill today, tomorrow IBM will find a way to offshore it. IBM middle and upper management remain the special exception. You can't offshore them; no you can't, it just isn't allowed in the IBM business model.
• Yahoo! IBM Employee Issues message board: "Re: Another thought on why outsourcing is occurring..." by "netmouser". Full excerpt: In Global Services at least, IBM is offshoring management and executive jobs. And IBM imports many, many foreigners under the h-1b and L1 visas to fill team lead and many other positions. I understood, at least 2 years ago, that Project Managers were the next target.
• Yahoo! IBM Employee Issues message board: "Re: Another thought on why outsourcing is occurring..." by "alwaysontheroad4bigblue". Full excerpt: I'll confirm this. On most of my recent engagements, including a large outsourcing engagement I'm now on, the delivery manager, project managers, and nearly all the staff are working in the U.S. on L1 visas from IBM India. They are the "front" for the engagement with the bulk of the work being done remotely in Mumbai. Occasionally a U.S.-based executive drops by, but they're not permanently located at the client's office. I believe that IBM believes this model works best...that it is easier for Indians located in North America to manage the work that is being largely performed by their colleagues back in the home country.
• Yahoo! IBM Employee Issues message board: "Another thought on why outsourcing is occurring..." by "trexibmer". Full excerpt: Dino, so then the IBM Dual Ladder was a sham then all along? Why does an IBM employee have to go into management to make it in a career at IBM? If the only way to really advance your career in IBM is to go into management then most will chose to give up doing skilled, technical jobs which is needed for IBM to be an IT services company. IBM has to get back into being a skilled company for both management and non-management and it can't do it exclusively by outsourcing. IBM has to make a real investment in it's USDA workforce.
• Yahoo! IBM Employee Issues message board: "Re: Another thought on why outsourcing is occurring..." by "lastdino1". Full excerpt: The dual ladder was still there when I left a few years back but you got to a higher rung if you went the management route. If someone is being considered for a management job they usually have some leadership skills along with the technical background. I found and saw that salary and band growth was faster in management unless you were a technical giant (very few of them). The 1's and 2+ folks are the core techies that are manipulated to keep the business viable. Now days the management candidates that are being selected are the young 4.0gpa's who want to be CEO in a year. They play the game to get ahead regardless of the cost. This is the area that needs to be fixed. Just remember if you can do your job at home then it can be done somewhere in the world at a cheaper cost. If I had it to do all over again I would still take the management path. Money was great , pension is great and Life is Good
• Yahoo! IBM Employee Issues message board: "Re: Another thought on why outsourcing is occurring..." by "mr_quarkwrench". Full excerpt: And the walk is much softer on the backs of others.
• Yahoo! IBM Employee Issues message board: "Re: Where are the jobs? For many companies, overseas" by "Paul S". Full excerpt: Hmmm, keep in mind that guys like Sam Palmisano and others in high places have latched onto this notion that outsourcing and offshoring is happening due to a lack of technically educated young Americans. While that may be true in some geographies, I know the many colleges in the Hudson Valley, as well as the well-known technical schools like Clarkson, RIT, Union College - continue to turn out, I should say, churn out, qualified Comp Sci, Information Sciences, and Engineering graduates. These students are in many cases still looking for jobs.

  And many qualified 20 & 30-somethings that LOST their corporate jobs in I/T... and certainly not for lack of talent or technical degrees.

  Please stop giving the corporate plutocracy the slip by repeating the campaign of misinformation designed to make offshoring and outsourcing a natural and acceptable outcome. It's the cost of US workers compared to overseas workers, pure and simple. If your job can be done 90% from home, it can be offshored for pennies on the dollar.

  It seems Americans are only to happy to repeat the tired mantras of the corporate CEOs. Giving more and more credence to half-truths like "job killing regulations" and "skills-gap". The war is being waged in the media - owned by large corporations that side with the superwealthy interests in this country.

• Yahoo! IBM Employee Issues message board: "Re: Where are the jobs? For many companies, overseas" by "netmouser". Full excerpt: Right, it is all about cheaper labor. Good jobs increasingly go to offshore or imported workers on visas. Low pay and entry level jobs go to the 10 million, at least, illegal aliens. And our country continues to let in about 2 million immigrants each year to compete for jobs (roughly half legal and half illegal).

  Why does anyone wonder why unemployment remains high? It is clear as a bell.

  I recall a teleconference when at IBM, where the HR people were talking about an updated process to create your skills plan. Our annual performance review included skill building efforts, that we build an IDP plan. Another arm of IBM via our management eliminated budgets for any training. There is a clear disconnect within IBM. It is like an unfunded mandate by the US Government - you have to do it, but no one will pay for it. One woman on the call asked the HR person why training in the US was stopped for years now, while those in places like Brazil were getting training? The HR person had no idea. Someone else in IBM was making budget decisions.

• Bloomberg BusinessWeek: Twelve Signs Arrogance Is Running Your Company. Maybe you let talented players walk away or give yourself credit you don't deserve. You're setting up your business to backslide. By Alaina Love. Excerpts: My phone rang early one Monday morning. On the other end was a client, the president of the division of a multinational company for whom I've been providing human resources support services. He sounded breathless and worried. "Joe just resigned," he said frantically. "We've got to do something to talk him out of it. Can you get to his office right away?"

  I set out immediately and headed across campus for the long walk to Joe's office, all the while wondering why someone with such a bright future would forfeit an opportunity for the dream job that was within his grasp. He was a key player under consideration for at least four vice-president-level positions in the company's recently completed succession plan. The significance of Joe's impending departure was enormous, I realized. He'd grown up in the company, starting first in sales and eventually working his way up to a leadership position in marketing. Losing him would mean a tough blow for the organization, one from which recovery would be difficult and lengthy, if not impossible. With him would go years of irreplaceable institutional wisdom and history.

  I arrived at Joe's office and found him looking weary as he packed up his desk. Here I was, one in a long stream of visitors to see him that morning. His decision affected his team members the most; some had left his office in tears, and others felt betrayed. Through it all Joe felt lousy, yet remained committed to his decision.

  We sat down at his table as we had so many times before in the years we worked together. I asked why he was leaving. The question hung in the air like thick smoke after a fire, while he pondered his reply. After a long pause, Joe said, "I cannot sit idly by while this company trades the future for quarter-to-quarter results. We're not positioning ourselves for ongoing success, and I just don't think this way of operating is sustainable. I've done everything I can to convince leadership we should adopt a different approach, but they're not listening. They won't even sit down long enough to learn about the suggestions I have for changing things. I want out before this house of cards collapses." ...

  Here are 12 signs I've observed in other organizations that you might watch out for in your own business.

  1. You hire and develop great people but then fail to listen to their input if it is nonconformist thinking.
  2. Your company rationalizes its mistakes instead of learning from them.
  3. Your company focuses almost exclusively on financial success with little regard for legacy and social impact.
  4. Your company lobbies against sound regulations because they may add complexity to the way you operate.
  5. Your leaders pat themselves on the back when the company succeeds financially, even though success derived from market forces rather than actual performance.
  6. Your leaders believe the company can't fail.
  7. Your leaders dictate more than they listen.
  8. The company underestimates its competition and minimizes the success competitors achieve.
  9. Access to top leadership in the company requires wading through multiple layers of bureaucracy.
  10. There is a focus on amassing the trappings of success: large, well-appointed offices, chauffeured cars, private jets, and the like.
  11. Your company doesn't become a partner in a merger; it takes over, losing the value of the culture and learning the other organization might have provided.
  12. Your company suffers from "Not Invented Here Syndrome," believing it holds the monopoly on great ideas, so that innovations coming from the outside ("Not Invented Here") are deemed to hold little value.

• Glassdoor IBM reviews. Selected reviews follow:
  • IBM Anonymous in Somers, NY: (Current Employee) “Looking IN I wondered what the big deal was, now that I see "Management" talk, its really no secret.” Pros: 1) Global; 2) You could work a lifetime and not know all of IBM; 3) IBM Name Hype; 4) Diverse experience opportunities; Cons: 1) Global means you. 2) You can work 1 year and know all the management "BS". 3) Underpaid. 4) Benefits suck this includes cafeteria facility too. 5) Need to subscribe to Blue Culture. 6) Its like running a 4 x 4 relay, you do your bit and hand it over to your manager who passes it on and so on. Advice to Senior Management: Management only look out for top talent and PBC 1 performers, they make a fraction of the total IBM employee population. This strategy only works until the balance changes. Hope you can keep your talent when things change.
  • IBM Engineer: (Current Employee) “It's a huge human lab with lots of smart people looking to make a difference everyday.” Pros: Interactive learning, with various divisions and sectors that anyone can fall on for information on completing a task. Both experienced workers and some of the best young graduates work creatively together for smarter solutions for the world. Cons: Corporate levels of management are too many, leading to some level of bureaucracy when implementing new ideas or changing the ways things have worked in the company in the past. Advice to Senior Management: Management and subordinates need to interact more often, to improve leadership skills building and to provide insights into employee needs for increased morale and productivity.
  • IBM Anonymous in Madrid (Spain): (Current Employee) “I have no regrets.” Pros: Company flexibility for allowing employees from any place and method and bringing multiple opportunities. Cons: bureaucracy, global complexity, decision point far from reality. Advice to Senior Management: Lack of attention to people development, task vs people priorities. Management system drives our lives
  • IBM Staff Software Engineer in San Jose, CA: (Current Employee) “not happy experience.” Pros: Maybe your resume with IBM in it looks better. flexible working hours. Cons: Working 60 hours per week is normal; little to no appreciation; terrible management, especially first line manger; slow moving technology; you do not get things you interested to work on. Advice to Senior Management: Show more appreciation to good work. More couraging. People are quite frustrated.
  • IBM Staff Software Engineer in San Jose, CA: (Past Employee - 2010) “Management changes frequently.” Pros: The majority of engineers are great to work with.

    Cons: Management changes frequently. You have to prove yourself to a new hierarchy every year. If you don't already have clout, don't count on your voice being heard. Managers move up. Engineers are underpaid and undervalued. If you don't work as much as the workaholics, you will get a poor performance rating because of your "competition". Anyone in my business unit who had a flat screen monitor had to buy it themselves because IBM senior management does not understand the productivity value per square inch of monitor screen. Engineering is understaffed and overworked even when the business unit is making double digit profit for the company. Senior management only cares about the percent productivity rather than the bottom profit line.

    Advice to Senior Management: Managers need to listen to the pain points of their employees. Management needs to retain knowledge in large-scale applications. It takes years to learn the tools AND have a good overview of the code. Managers need to actually stick around to help implement change.

  • IBM Staff Financial Analyst in Beijing, Beijing (China): (Past Employee - 2010) “IBM is a great company to work for!” Pros: Advanced Technology and Motivated employees. Cons: Work overloaded in Asia offices. Advice to Senior Management: Good
  • IBM Anonymous in Armonk, NY: (Current Employee) “Opportunities abound, but don't expect to be paid.” Pros: Literally anything that you want to do, it is available here. There is a group working with just about every technology, business model, with teams around the world. Cons: Senior management views employees as a cost, not partners that they should be investing in. Internal processes do not allow for managers to properly compensate their employees. Advice to Senior Management: Competent young people are leaving the company because compensation is not aligned with the market. Last second attempts to keep them from leaving are too little, too late (and sometimes insulting, frankly).
  • IBM Anonymous in Markham, ON (Canada): (Past Employee - 2010) “Lots of meetings.” Pros: The Markham Software Lab is very big. This means that there are many people there that you can go to for questions or support. Cafeteria is fairly decent but the food does tend to get repetitive after 3 months of eating. Fairly generous about work hours. As long as you are there for your meetings or available on the phone/online, then you can leave the office if something comes up. Lots of rooms to switch jobs within the company if you're not happy with your current one.

    Cons: Lots of corporate red tape. While I worked there, they were doing come major cuts and so it was hard to obtain anything (e.g. software licences) unless you filed some forms and proved that you needed it for your job. Hard to get around unless you have a car. Traffic is really bad during rush hour. Too many useless meetings (but this really depends on the team you're on).

    Advice to Senior Management: Have teams write wikis on what to do when someone new arrives on the team. It's been twice now (I switched teams) that people were scrambling around trying to remember what mailing lists to put me on, what forms I needed to get licences and equipment, and what software I needed to install.

• LinkedIn: The Greater IBM Connection discussion: I actually miss working at IBM. Selected postings follow:
  • Most of us naturally have a emotional connection with firms we have worked with, since we spend half, if not more of our awake time working. IBM is no different than most others like HP, PWC, Xerox, GE, etc. Blogs of other companies are very much like IBM, if not more poignant of what they miss. For IBM employees the problem is more acute because of the magnitude of personnel IBM essentially got rid of in the last two decades and the way they were treated on the way out. Many IBMers were not ready for the massive purges and the sudden indifference the company treated them with once "Personnel and assets" became "HR and resources".

    What makes IBMers in general have strong ties to their firm is that in general most IBMers have had an insular lifetime experience due to the fact that they usually have not been at other firms where they could see and appreciate (or lament) what other business cultures have to offer. As one IBM executive told me once: "We are used up and cast-off brain-washed captives of the brand image, so to speak."

    I'm not sure I'd go as far as saying "if you ever have a chance to hire an IBMer - do it. Not only do I believe that, I would do it - wouldn't you? ". Just because a particular individual is an ex-IBMer does not automatically confer on them a high level of skills and education as it used to be of IBM employees of the 70's and 60's when the brand image was defined through extensive training, quality hiring and mentoring of ALL personnel.

    From the 90's on, a large number of what I would call "con artists", "word of mouth opportunists", "fast trackers" and "IT gypsies" joined the company, most of them at pretty high levels brought in by the Gerstner outsider team. Some, although very few, of these that fit in this category came from client technical and operations, brought in against their will and cultural fit because of Strategic Outsourcing's negotiations to hire selected outsourced personnel from client accounts or acquisitions.

    Many of these folks were problematic at best as management and leadership. I clearly recall one young lady in the late 80's that worked with me who had been let go as an advisory (level 57) SE after a spectacular public display of a failure of inter-personal skills with a client who suddenly showed up as a high-flying influential director in another part of the company in the mid-90's.

    There was even one entire operation which was led by these "new fast track outsiders" which was based in Indianapolis (I will refrain to give any more details for a lot of reasons) that essentially allegedly successfully cooked the books for several years until finally someone in Armonk figured it out and shut down the operation. I could give you dozens of names and stories like this. On the other side of the ledger, I was very close to a VP who was brought in fresh as a VP from AT&T where he instilled such good leadership in a then growth area of the business that he made his year's business objectives in 94 business days! He then took it upon himself to keep making money and wound up at 982% for the year but was then demoted because he had exceeded his operations' expense budget by 100%. An entrepreneur at heart, he just couldn't understand why he was being demoted for making 982% of plan at 202% of expense budget. He left to become a very successful competitor in another area of IT.

    So it could be construed that the older the ex-IBMer the better chance that the individual was given careful training, skills and mentoring. It also could be that the lower the level the individual served in the firm during their tenure the greater the chance their skills are truly genuine. It could also be said that a more recent tenure at IBM would logically produce a greater chance that they are adaptable and have unusual tenacity and business survival skills.

    Trust, but verify. Never assume.

  • There were a number of "fast-track" positions .... as previously mentioned ... I would never have been considered for any of them (having been repeatedly told over the years that I had no career in the company), however I would be periodically asked if I had any recommendations for fast-track positions. These were typically middle to upper management position where somebody would be placed for 6-12 months before being moved to the next position. It turned out to frequently be a disaster for the organization that would have its upper level management designated as "fast-track" position (with the frequent churn of people w/o experience passing thru the position.)
  • With respect to "fast track" ... it was at least going on in the '80s and numerous of the accounts of the Future System was that the failure cast a dark shadow over the corporate culture that lasted for decades.

    I mention in the "Boeing Plant 2" discussion about Boyd, "spook base", "$2.5B windfall for IBM", "Future System" and having sponsored Boyd's briefings at IBM in the '80s. This is quote supposedly from the dedication of Boyd Hall, United States Air Force Weapons School, Nellis Air Force Base, Nevada. 17 September 1999.

    "There are two career paths in front of you, and you have to choose which path you will follow. One path leads to promotions, titles, and positions of distinction... The other path leads to doing things that are truly significant for the Air Force, but the rewards will quite often be a kick in the stomach because you may have to cross swords with the party line on occasion. You can't go down both paths, you have to choose. Do you want to be a man of distinction or do you want to do things that really influence the shape of the Air Force? To be or to do, that is the question." Colonel John R. Boyd, USAF 1927-1997.

    The "To be or to do" has somewhat turned into a theme. Note however, the Air Force had pretty much disowned Boyd while he was alive and it was the Marines that were out in force at Arlington in 1997 ... and Boyd's papers and effects went to the Marine library at Quantico.

  • I started in 1995 with Advantis not expecting that I would end up being IBMer when IBM decided to buy out Sears' share in Advantis. It was fun working for Advantis. Once we became IBMers, the fun stopped. The variable pay went steadily downhill and the BS increased. I was downsized at the end of 2007. I am back as a contractor as of August 2010. The only thing I missed during the time I was looking for another position were the people I worked with. I did not miss CLAIM, PBC, IDP, the hollow promises about being able to get training, the back stabbing, bs about release dates and critical resource, etc. I learned quite a bit, but also found that I became stagnant because of the lack of mobility.
  • I totally agree with Gordon, I am still with IBM (35+ years) and like him, I do miss the way things used to be, we really were a family. Alas, change is inevitable. The people I work with are what IBM is to me today and I have met many wonderful friends over the years, and I continue to be a proud IBMer
  • I worked for IBM for 23 years, leaving in 2001 only because the general hiring and movement freeze prevented me from making a geographical move I needed for personal reasons. Like many here, if not most, I miss working for an IBM that no longer exists. Long gone by the time I left were the:
    • "Respect for the dignity and the rights of each person in the organization."
    • The commitment "to give the best customer service of any company in the world" and,
    • "The conviction that an organization should pursue all tasks with the objective of accomplishing them in a superior way."

    (Yes, I still have The Basic Beliefs on my wall at work.)

    Also lost by then were senior leadership's respect for the company's heritage (deliberately buried as part of the effort to change the corporate culture) and the sense of family that were part of the IBM I joined in the 1970s.

    Taken together, the loss of the corporate culture and identity made it much easier to leave. I may occasionally be nostalgic for the "old days" and for old friends, but that's all it is.

  • I have to reply to @Richard paragraph 4 (of 7!) that Gerstner himself was not only an outsider, but basically a non-IT person, faced with a company that was going out of business. Those may have been halcyon days in some ways, but they were also the days when there were 18 levels of mgmt, requiring months to make what amounted to some really stupid business decisions. OS/2 was a venture worth trying, but remember things like DISOSS? And TCAM? There is no one left in the computer industry like the company IBM used to be; the closest today might be Google or Microsoft. The thing that matters from the past is that IBM people had a well-deserved reputation for integrity. That doesn't mean that they have the skills to contribute today.
  • Gretchen, I speak now as an individual. Because I am a "closet historian" (and that's a long story in itself) and did have a most unusual (some call it unique) tenure at the firm, many have started asking me to write a history on IBM, one that doesn't hold back on the "truth", whatever it may be.

    You are right about Gerstner. I first met him in 1972, when he was a star consultant at McKinsey and looking for "stranded asset" expertise in the nuclear power biz. I next met him in 1989 while doing consulting for a retail company, which was a sister company operating under the umbrella of KKR. I made a comment to the KKR leadership which made headlines (and eventually became exhibit 1 in a lawsuit) when asked what I thought about IBM's role in their IT. I responded: "Throw the whole damned investment out. They and IBM misled you and it cost you millions." It made quite an impression with the then CEO of RJR Nabisco who was sitting in the room that an IBMer would actually volunteer to testify in court against his own company for the sake of doing the right thing. It wasn't really totally IBM's fault, but that's a long story for another day.

    Gerstner was the right man initially but became a problem. Greed overtook him and his team, IMHO. There were 22 levels of management from me to the CEO when he started and within 15 weeks of his arrival it was 4 levels (I reported to Marty Clague for a little while). By the time I called it quits in 2008 it was back to 16-18 levels. The BGC (Big Gray Cloud) of bureaucratic management and inertia won again.

    As to the "side sucker" called DISOSS it was built to induce the need for more and more CPU cycles. I have seen and written business plans that used the word "Mipness" as part of the business case. OS/2 was a brave attempt by Jim Cannavino but his temper and personality ruined the show. Jim was a great FE when he worked in Greensboro, and worked hard to be one of the few execs that had white socks underneath his black socks, but his personality finally got the best of him, IMHO. BTW, OS/2 , just like Token-Ring and other so-called IBM "inventions" where not at all invented initially at IBM, but that's also another story. They and many others are also examples of where the better technology lost in the face of better marketing.

    As for TCAM, if you're still in the WSC, you know that that product was totally funded by AT&T and BellCORE. It was a great product, and it took years to replace it (unlike VTAM, which was a pig and yes, I saw the loops in that code) but fortunately Hursley finally got it done with MQ which was the child of CCAP which was in turn the child of TCAM. It was tough work and it cost many marriages and destroyed the brilliant minds of some but it lives today in MQ Series and its children re-branded products.

    I was brand-blinded as to the integrity bit until I met a brave now ex-IBMer who showed me that not all of us acted with integrity all of the time. I agree with you that the majority of us had integrity but the BCG was built with many examples where integrity failed. The 1999 great pension debacle was, IMHO, for example, driven by one famous case that to this day it is questioned whether we committed tax evasion versus avoidance when it comes to international royalty payments.

    In summary, IBM deserved Gerstner because the leadership failed and some may say had a major integrity failure, especially in EMEA. However, the savior's delay in leaving due to Welsh's untimely death will eventually be recognized as corporate disaster.

    As to skills, IBM's greatest leadership tragedy is the abandonment of retraining and skills development because most employees, if not all, are looked at as disposable human resources, not human assets.

    Ahh the WSC. Such fond memories...every time I showed up in Gaithersburg IBM security was told I couldn't be allowed past the lobby unless the senior management came down to ask what I was up to.

  • Rich, as you may know, I was way in the periphery for some of the products you mentioned but you have definitely filled the void from my perspective regarding what I suspected was going on behind the scenes. In my opinion, one of the contributors for the decline of IBM was the lack of product openness; token ring is a great example. But for IBM it was a catch-22; profit margins and costs were high in IBM products, quality and support second to none in the day. Opening up products would have increased market penetration for the technology but competitors would have improved the products and sold them for less. Thus, Ethernet won out and token ring just faded away.

    Based on your comments here, you definitely need to write a book. Not so much to put IBM in a bad light but to bring out that in its greatness there were flaws, just like any other company.