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Reflections on a century

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Sam Palmisano, chairman, and president-CEO of IBM Corp., gave a speech in February at his alma mater, Johns Hopkins University, in which he reflected on the company's 100-year history. Palmisano, who joined IBM in 1973 and was named president in 2000 (becoming CEO in 2002 and chairman in 2003), provided insight into some of the key transformations IBM has been through and how it is preparing for the future. Following are excerpts from his speech: “People who are familiar with our history are often struck not merely by our longevity but with the fact that we have continually changed. We started off making clocks, scales and cheese slicers, in addition to the punched-card tabulator. After that, it's a blur: typewriters, vacuum tube calculators, magnetic tape, the first disk drive, the memory chip, FORTRAN, fractals, ATMs, mainframes, minicomputers, personal computers, supercomputers, services, software, analytics. Also, we've gone from operating in one country to more than 170. In some respects, we're only now becoming a truly global enterprise . ... “In IBM's case, the need for continual forward movement is part of our business model. IBM's value proposition is to create and provide innovative solutions to our clients—solutions they can't get from anyone else. And because the frontier of what is truly innovative keeps moving, that compels us not to sit still. It is a constant reminder never to define ourselves by the things we make, no matter how successful they are today. ... “A decade ago, when I came into my job, we identified several shifts that would play out in the coming years—big shifts, tectonic-plate shifts, changes that would test the mettle of every company in our industry. A new computing model would sweep aside the PC-centric one. Globalization would reorder economies and markets. Our clients would have entirely different expectations for technology—not just as a tool for productivity but as a tool for transformation. ... “Quite honestly, I wondered if the management team and our employees in finance were ready to take this on. This is why we decided, nearly a decade ago, that returning IBM to greatness required getting back in touch with our DNA. So one of the first things I did as CEO was to initiate an effort to re-examine our core values. ... We came together online, as a global population, over 72 hours in what we call a "jam.' I guess we'd call it social media today. It was messy, passionate and contentious. But in the end, IBMers embraced a new set of values, because they themselves had shaped them. “I truly believe that none of our work since—remaking IBM's portfolio of products and services, globally integrating our company, even launching our Smarter Planet agenda in the depths of the global recession—would have been as effective or sustainable if we had not first gone back to basics, back to our roots, back to the foundation of our culture. ... “Today, there are 2 billion people on the Internet; but systems and objects can now "speak' to one another, too. This is what some call the "Internet of things.' Think about the prospect of a trillion connected and instrumented objects—cars, cameras, roadways, pipelines, even livestock and pharmaceuticals. All of this is creating vast amounts of data. And through advanced analytics and ever more powerful supercomputers, we can turn that data into insight. ...You miss this if you see technology merely as a succession of gadgets, websites and "next big things.' It's much more. It's the way our world works. “And therefore today's leaders, those who want to keep moving to the future—have an obligation to understand it—not its mechanics, but its implications—and to incorporate it into how they build their organization, not just processes but culture.”
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