Backlash at Big Blue

IBM employees respond to chairman's critique with some anger of their own

"The fact that we are losing market share makes me Goddamn mad I'm sick and tired of visiting plants to hear nothing but great things about quality and cycle time - and then to visit customers who tell me of problems" John Akers, IBM Chairman, May 1991

Peter Krass
InformationWeek

July 29, 1991

IBM employees, to borrow a recent phrase from their CEO and chairman John Akers, are "goddamn mad."

Only weeks after an angry talk given by Akers was publicized, IBM employees held an electronic "town meeting" to discuss his comments. They are not a happy group, according to a digest of the employees' 55,000 lines of comments obtained by InformationWeek.

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. IBM, they 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, if 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.

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. "The fact that we're losing share makes me goddamn mad," Akers added.

The employee forum on Akers' comments was just one of many electronic meetings in which IBM employees can participate. Forums resemble electronic bulletin boards used on some electronic-mail systems; text files reside on a central disk drive, and users with PCs or terminals can read the files and add text of their own. Forums are administered by IBM employees; each day's comments are aggregated onto a central disk drive and redistributed to disk drives at various locations.

Akers will 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 in what they perceive as a 'business as usual' environment."

Following is a selection of comments IBM employees made in their electronic forum.

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.

* He is out of touch if he thinks "the tension level within IBM is not high enough." From where I sit, it's so high that management is paralyzed and doing their best to paralyze any employee doing useful, productive work by forcing them to do things that will "save our jobs," such as creating 90-day panic plans.

* The fact that I can't get John Akers' electronic-mail address and that I don't know any way to get my input to count at the executive level is an indication of a very serious problem. Not because my input is so precious, but anybody out there who has great ideas should be able to make them count.

* I have been told that I am the expert. I know how to do my job better than anyone else, so why is no one listening? Why is my CEO yelling at me . . . and telling me how to do my job? He seems to be saying no one is listening to him . . . . Join the club. No one's been listening.

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%. That is the kind of thinking that must have Toshiba and our other Japanese competitors grinning from ear to ear.

* The president of WordPerfect Corp. is able to arbitrate any technical decision that may come to his level . . . Ditto billion-dollar Bill Gates, founder of Microsoft. You don't have/dare to play politics on technical issues-[Gates] will shred you.

* How efficiently do you think IBM uses the knowledge of its individual employees? How many groups in one lab need some OS/2 C programming skills but don't have access to the tons of C programmers in IBM?

* How many of you have seen the fast trackers come in, spend a year or two, and leave the mess for someone else to clean up? There is no real accountability.

* 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].

* In the early '70s, T.W. [Thomas Watson] Jr. made a remark that what the company needed was more "Wild Ducks," people who weren't afraid to break from the flock to get things done . . . . Try it now and you'll get shot out of the sky!

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.

* We need more rapid-prototyping. Get the first version out the door into real customer hands. Let them tell us what improvements need to be made.

* Walk into a dealer near you and ask for OS/2. Be prepared to argue with them about why you want it instead of [Microsoft] Windows and then be told that they can "special order" it for you.

* It is becoming more and more common for IBM boxes to end up in heterogeneous environments. If IBM software (not business partner software) will only run on the IBM box, then customers are rarely willing to base their enterprise solutions on it.

* I owned two IBM ATs, and neither one broke. I bought a Model [PS/2] 70, and it did. Couldn't get an extended maintenance contract, so I now own a high-end clone with no problems. The same money bought double the speed and capacity, and no problems.

* 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. 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%"?

* 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.

* We can no longer succeed by marketing to the glass house or computer professionals. Everyone who deals with IBM is our customer.

* I am one of many IBM marketing representatives to my customer . . . . I would like to propose some solutions to my customers' business need. But I have a problem. If I propose what I think is best, IBM gets 0 dollars.

ON INFORMATION FLOW INSIDE IBM:

* The filtering of information works both ways. Last year, John Akers was scheduled to visit the test floor here in Poughkeepsie to see the new System/390 machines. His route was carefully mapped, the walls were all painted along the route, all was made spotless. . . . We fought to get to use the machine to get some work done, despite the attempts to keep us away (they wanted something running on the machine to show it worked, and couldn't face the possibility of the system crashing while we were using it for some real work).

* [Thomas] Watson Sr. had back stairs installed in his office in Endicott (or so I am told). He would use the stairs to get out of his office and into the plant without his handlers and spin doctors knowing about it . . . . Maybe we need some back stairs in Armonk.

* I'd really like to see John [Akers] pack his suitcase, get in his car, and go visit branch offices without the retinue. No advance notice, just show up.

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.

* I have never seen "deadwood" hired. "Deadwood" is a by-product of the current, bureaucratic system.

* When [an] issue was brought up, the typical excuses were made: "We have always developed on VM," "We have too much invested in VM to change," "That's the way we've always done it," etc.

ON IBM AS USER:

* Don't just demand that a vice president use the spell checker his division is working on . . . demand that the business process as a whole make intelligent use of modern computing and communication tools. As much as I recognize the $$ commitment that is going into things like the OfficeVision initiatives, I remain seriously disturbed by the blind pursuit of "efficient automation of that which does not need to be done at all."

* The need for development groups to use their products . . . cannot be overstated. It should be considered a must . . . it was the number one reason for the lack of success for the RTs.

* The PS/1 project was the first I ever saw in IBM where the management team used the product.

ON THE NEED FOR CHANGE:

* 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 on 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.

* IBM seems to expect managers, like employees, to be plug-compatible. "We don't need you any more in databases, so why don't you go develop word processors for a while?" So, to further their careers, managers skip across various segments of the company . . . and pretty soon, we don't have any more specialists (at least not where they are needed). Maybe the career track system needs to be revised to reward managers and employees who stick it out and achieve success in their area of expertise.

* IBM is never again going to make huge profits from not providing the best.

* Get rid of at least one level of management, creating closer contact between management and employee.

* I am leaving IBM this year . . . . I have at least five more years of good work in me, but I don't want to spend those five years on a six-month project.

* 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.

* We cannot continue to hold to the same thinking that has gotten us into this mess to begin with. Times have changed; IBM hasn't.