IBM Employees Respond to John Akers' Criticisms

Manhasset, N.Y. -- July 26, 1991 -- Only weeks after an angry talk given by IBM chairman John Akers on the company's performance was publicized, IBM employees held an electronic "town meeting" to discuss his comments. A digest of those comments have been obtained by InformationWeek and excerpts will appear in the publication's Monday, July 29, issue.

While a few of the participants in the electronic meeting - ranging from veteran executives to rookie programmers...believe IBM is making good progress, a great many more are disappointed with their employer, according to the story, titled "Backlash." IBM, the employees say, is made up of employees who are frustrated, middle managers who are too ambitious for the company's good, and senior executives who are out of touch. They say IBM's products are high in price and low in quality. Cooperation between divisions is rare, it not nonexistent, and management's attention drifts far from customer concerns. More than a few employees believe the root of IBM's problems is Akers himself.

As the magazine reports, the electronic conference - or "forum," in IBM lingo - was started by an IBM manager in late May to give IBMers a chance to comment on Akers' talk. Akers had made remarks earlier to an IBM Advanced Management Seminar; a manager who attended the class took notes and distributed them electronically to a group of colleagues. Those notes were later removed from IBM networks, but not before they had been publicized.

Akers, the notes reveal, scolded employees for allowing IBM to lose market share, for missing deadlines, for being "too damned comfortable at a time when the business is in crisis," for traveling too much and wasting too much time in meetings, and for producing low-quality work.

Akers would not comment directly on the employees' electronic forum. According to a company spokesman, he has already replied to the concerns through comments he made in a recent issue of Think, the company's in- house magazine. In that article Akers said, "Many IBM employees are executing perfectly, but I think there are some people who are still working what they perceive as a 'business as usual' environment."

Following is a selection of comments IBM employees made in their electronic forum that will be published in InformationWeek:

On John Akers:

He has resorted to laying the blame for IBM's predicament on the shoulders of others.
He has abandoned many of those things that have made IBM unique and have done a lot to earn industry respect over the years...If he won't take the responsibility for the empty politics and do-nothing performance of middle management, then who should?
He has no results to show - worse, he has presided over the most serious erosion of everything that matters...He would be respected more if he were to resign.

On IBM Management Practices:

The current system rewards non-technical middle managers who always report good news, always make their dates irrespective of quality, and grow their local empire.
Many of us in marketing are being asked to abandon all "strategic and long-term" projects and focus instead on increasing short term revenue, while we simultaneously cut expenses by as much as 50 percent. That is the kind of thinking that must have Toshiba and our other Japanese competitors grinning from ear to ear.
While we preach the new gospel of MDQ (market-driven quality), we treat the workers like dirt, managing not by wandering around but by terrorizing around. "You do that right now or I will report you for insubordination!" (to an engineer who questioned a technical procedure)..."Speak English! You are not supposed to speak a foreign language at work!" (to a Mexican-American worker talking to a co-worker)... "You'd better have those cards ready this afternoon, or you may be fired!" (to a temporary employee who was trying to learn how to perform a task correctly).

On IBM Products:

I was involved with a critical job to IBMize some public-domain code to meet marketing requirements. The number of problems we found was unbelievable. The product had already been announced, ship dates scheduled, etc., before we ever got it working. I pointed out problems (but) nothing was done...in fact, the senior manager's stated attitude was: "Get it out the door, we don't have time to find, let alone fix, all the problems. We'll fix them when/if a customer finds them and complains..." My response was to go to Open Door (a formal complaint procedure within IBM)...I won't say there was a happy ending, because there wasn't.
When speaking to some large banking and investment customers recently, I was told they perceived IBM's offerings as confusing AS/400, 3090, ES/9000, PS/2, and RS/6000....How was IBM going to deal with workstations that could outperform their mainframes?

On IBM And Its Customers:

My customer, like IBM, is in deep financial straits.(sic). What they "want" to do and "can" do are two completely different things. We have a new project starting up that has a budget of $24 million for PC hardware. Our "best" guess at the moment is that IBM hardware to meet the requirements will exceed this by some $9 million. How am I supposed to tell my customer to go back to their CEO and say, "Oops, we underestimated by 28 percent?"
Mr. Akers continues to put the needs of IBM stockholders ahead of the needs of IBM customers by focusing the attention of executives and employees on short-term profits and meeting schedules.
In reading the (Akers) quotes, I didn't notice any concern for customer satisfaction, which is the only significant factor in IBM's continued existence.

On IBM's Bureaucracy:

The emphasis on MDQ (market-driven quality) hasn't done anything to change the way the Big Grey Cloud operates...When solutions do get proposed, they face resistance almost immediately.
IBM's reputation among potential hires is very bad. Most computer science students state they will never work for IBM.
Too much empire building. When I presented the completed work to my manager, he was furious that I did the work in four weeks instead of one year.
I once had a manager who was afraid to make a decision about sending some paperwork to California (via) Federal Express when $30 million of revenue was at stake to the company.

On the Need for Change Within IBM

When the steam locomotive manufacturers tried to switch to diesel, not one of them managed to change their paradigms successfully. Each thought they knew best what their customers wanted and tried to ram it down their throats...If we can't figure out that the steam engine (mainframe, proprietary system, techie/politically driven planning) is one the way out, we will suffer the same fate -- making some of the most beautiful diesels (PCs, RS/6000s, OS/2 2.0, etc.) ever built, but dying nonetheless.
Organizational problems...are crippling IBM's ability to deliver solutions...The OS/2 database resides in Austin. The AS/400 database resides in Rochester. These development groups do not report even with the same division, much less to the same person.
This forum is the most amazing and hopeful thing happening ever. Many of us are discussing, thinking about things we had "archived" in our minds for too long.

InformationWeek, published by CMP Publications Inc., is the weekly newsmagazine targeted directly at those executives who oversee the computer and communications systems in the county's largest corporations. It has a national circulation of more than 170,000.

CONTACT: Laton McCartney, editor-in-chief, 516-562-5427, or Peter Krass, senior writer, 212-686-7851, both of InformationWeek