Orlando, Fla.—IBM Corp. Chairman-CEO Samuel J. Palmisano used his keynote at the American Marketing Association’s inaugural mPlanet conference Thursday to outline what he called an “extraordinary time in international business” and how IBM is racing to adapt its business and organizational structure to the emerging trends.
“Your generation of leaders, not mine, are going to deal with the realities of globalization,” he said in a wide-ranging speech that specifically zeroed in on IBM’s business in China and India, two countries he called the “epicenter of a massive economic and demographic shift.”
IBM recently relocated its global procurement center to China and its global services delivery operations to India. In India, IBM is now the largest global employer, he said, having increased its staffing there from 4,000 four years ago to more than 40,000 today.
In the 1970s, Palmisano said, the company had country-by-country “IBMs,” duplicating support organizations such as human resources, IT, marketing and finance. This has been replaced, he said, by a global perspective, with centers of excellence around the world connected over networks.
This structure is not only more efficient, it enhances expertise and openness, including collaboration with business partners and customers, he said.
Openness has become a hallmark of IBM’s market push, as it adopts open standards such as Linux, shifting its value to customers from products to industry-tailored services.
Companies such as IBM, he said, recognize that sustainable competitive advantage cannot be based on one product or service, which tend to be comoditized. Rather, innovative business models are the new playing field, he said, noting that a recent IBM survey of CEOs found 30% of respondents agreed with this business strategy.
Just before his keynote, Palmisano was presented with the first Sheth Medal for Exceptional Leadership, which the AMA will award annually to a current or former CEO who has made a long-term, transformational contribution to the marketing field.