Old Hand Takes I.B.M. Helm
By David E. Sanger
The New York Times
Armonk, N.Y. -- January 27, 1985 -- On Friday, John F. Akers will take a quick weekend trip to Europe to address a conference on spurring entrepreneurship in a giant company.
When he returns Monday morning, movers will have shuttled his oval desk 50 feet down the hall, to a corner office, and Mr. Akers will begin what will likely be a decade-long career as the chief executive of the rapidly diversifying International Business Machines Corporation.
Anyone who misses the movers, though, might not immediately notice the change: The 50-year-old Mr. Akers, only the fifth person to take the helm of I.B.M. since its founder, Thomas J. Watson Sr., has been the consummate inside man, a veteran of I.B.M.'s ruling inner circle.
''I worked under Frank Cary and John Opel for 15 years,'' a relaxed, confident-sounding Mr. Akers said in a recent interview, referring to the company's two previous chief executives. ''I've had just about every experience in the business - service, marketing, Federal business, world trade.'' Flashing a broad smile, he added, ''I feel pretty well prepared.''
But if the rite of passage at I.B.M.'s headquarters later this week appears seamless - Mr. Akers has been with I.B.M for 25 years, the last two as its president - few doubt it will mark a major new era for the giant of the computer industry. John R. Opel will remain chairman but under company policy he had to step down as chief executive when he reached age 60. Mr. Opel served four years in the top job after a decade as Mr. Cary's right- hand man.
Mr. Akers will not turn 60 until late 1994, time enough to bring a host of new I.B.M. ventures to fruition, including I.B.M.'s push into personal computers, software and telecommunications.
In a broad interview, Mr. Akers predicted that within a decade I.B.M. would pass $180 billion a year. Last year it earned about $6 billion on revenues of $46 billion, making it nearly twice the size of the company Mr. Opel took over four years ago.
''The industry will be in 10 years probably the biggest industry in the world,'' Mr. Akers said. With some understatement, he added, ''The I.B.M. company, given the success I forecast for it, will be a very significant enterprise.''
It may also be a very differently managed one, because, by all accounts, Mr. Opel and Mr. Akers have somewhat contrasting personalities and operating styles. ''Opel is somewhat ill at ease in public, but has a terrific knowledge of the company, a huge compendium of technical facts,'' said one associate who knows both. ''Akers is a great people guy, super as a manager, who can convey a broader sense of vision, of I.B.M.'s role.''
Indeed, on first meeting, Mr. Akers (pronounced acres) appears as a charismatic champion of what he terms a ''new I.B.M.'' who openly discusses how fundamentally the company has changed since its sole business was giant mainframe computers. Mr. Opel, in contrast, stressed in an interview last month the themes of continuity in the company.
Moreover, Mr. Akers indicated that he plans to devote more time to explaining I.B.M.'s actions. ''The people who have been giving me advice about the next 10 years, and,'' he laughed, ''there have been lots of them, say I should be prepared to spend maybe as much as half my time in external affairs as opposed to internal management. That's not a bad way to think about how I should spend my time.''
But both Mr. Opel and Mr. Akers apparently share some common approaches to the company's management. Both, for example, are known for a habit of seeking information by calling employees far down in I.B.M.'s bureaucracy, circumventing levels of executives. Both have been steeped in a distinctive I.B.M. approach to problem solving, say associates.
''To me these guys are incredible,'' said William H. Gates, the chairman of the Microsoft Corporation, a leading personal computer software company. ''They are terribly powerful but they are very rational. There is a whole I.B.M. way of approaching things that they share - a methodical way of going through the challenges and opportunities. It is not political, or power-oriented.''
Mr. Akers takes office at a time when a broad shakeout in the computer industry - involving new companies and established ones - has prompted numerous charges about I.B.M.'s market power.
Expressing some frustration about the renewed debate over what he termed ''the size and supposed power of the I.B.M. Corporation,'' Mr. Akers said critics of the company should take note of the outcomes of the extensive investigations connected with antitrust actions that plagued his predecessors. The United States Government's suit against the company was dropped in 1982, and the Common Market's action was resolved last summer, requiring little change in I.B.M.'s practices.
'Clean Bill of Health'
''A review of our business practices in the laboratory, in the pricing manual and in the marketplace has given us a clean bill of health,'' he said.
Moreover, he said, the computer industry is thriving. ''It's a mistake to suggest we are going to be left with A.T.&T., I.B.M. and the Japanese,'' he said.
''The characteristic of an industry that is dominated by a single company includes relatively long times between product introductions, prices that are stable or rising, an environment in the company of relaxation,'' he said.
''Do you see people coming in here at 9:30 in the morning and putting their feet up, wondering what they are going to do, as a monopolist would?'' he asked. ''We are just trying to stay even with the industry, and we are working like the dickens to do it.''
The company, he said, had become a fiercer competitor in recent years by changing tactics, and realizing that to get into new niches of the computer market ''you have to do something different, in an incubation way, as opposed to an incremental way.'' He pointed to I.B.M.'s independent business units - essentially separate companies set up to explore new markets - as an example of the way ideas are now ''incubated.''
''Chances are, you are going to fail in some of those,'' he said of the new ventures. ''In fact, you ought to fail in some of them.'' But without taking the risk, and bringing in new technologies from outside companies - such as Rolm, the telecommunications equipment maker that I.B.M. bought last year for $1.25 billion - I.B.M. would be unable to keep up with industry upstarts.
Where I.B.M.'s chief American competitors - known as the Bunch, an acronym for Burroughs, Sperry's old Univac division, NCR, Control Data and Honeywell - failed, Mr. Akers said, was in their inability to ''incubate'' new technology.
''It's not that I.B.M. has taken care of the Bunch,'' Mr. Akers said. ''The marketplace has just been captured by companies that were not around 20 years ago. That's not bad for the market or the consumer.''
On a separate topic, Mr. Akers said the company had not abandoned efforts to build a personal computer plant in Mexico despite Mexico's rejection of a second plan.
Speaking of the rejection, he said, ''Part of it is economic, part of it is political.'' He added that the comany would make additional proposals ''and they will be more attractive from their point of view.''
Like virtually all of his predecessors as chief executive, Mr. Akers rose through I.B.M.'s sales ranks. His succession seemed assured two years ago, when he edged out Paul Rizzo, now the company's vice chairman, for the president's job.
An Ivy Leaguer
But unlike most top I.B.M. executives, who usually joined the company after graduating from a Middle Western college, Mr. Akers is a Yale man, class of 1956, who spent four years as a Navy pilot, landing single- engine planes on aircraft carriers.
''I had a wonderful time,'' he recalled. ''But it is a lousy way to try to live a long life.''
As a student, Mr. Akers had taken considerable coursework in engineering. But his father, an M.I.T. graduate who had to abandon engineering in the Depression for a job in insurance, urged him to reconsider.
A job in ''technical sales'' at I.B.M. appealed to him as a good compromise, and he rose through the ranks quickly. He soon moved east with his wife and three children, and by the end of the 1960's he headed the I.B.M. office that sells computer systems to communications and advertising companies in New York. Later he became head of I.B.M.'s data processing division, and in 1981 took command of the company's key information systems and communications group.
Looking back, Mr. Akers remembered his father's advice to abandon engineering. ''He was right,'' Mr. Akers said. ''I would have been a miserable failure as an engineer.''
GRAPHIC: photo of John Akers
Copyright 1985 The New York Times Company