IBM names Virginia "Ginni" Rometty as president and CEO of IBM to succeed Sam Palmisano, who remains onboard as chairman. Palmisano has displayed his legacy. What will Rometty's be?
Virginia "Ginni" Rometty
taking the helm of IBM
is no surprise.
IBM held out that there were three to
four front runners for the position, but Rometty was the clear leader. In fact,
at IBM's recent THINK Forum
in New York, Sam Palmisano, IBM's outgoing president and CEO, practically
thrust Rometty on the scene as his successor, playing her up and playfully
chiding her about a $300 million deal she completed without any input from him.
Effective Jan. 1, 2012, Rometty becomes
the boss at IBM. Palmisano will remain in office as chairman of the company's board
of directors. But the day-to-day decisions move on to Rometty.
Rometty, who also held a prominent
position in IBM's internal Centennial celebration to commemorate its 100 years
in business, represents a major step in the history of IBM, in that she is the
first woman to lead the company. IBM has a history of switching CEOs out after
they turn 60. Palmisano is 60 and has ceded the president and CEO roles to
Rometty while retaining the chairmanship.
Palmisano has been hugely successful at
IBM. Known for his execution, he initially executed on many of the ideas put
forth by former IBM CEO Lou Gerstner, and then he set his own path and began to
execute on it.
Palmisano reflects on IBM's first 100 years. Read more here.
Palmisano has seen IBM through times of
adversity, such as economic slumps and layoffs. Yet the company is currently the
second most valuable technology company behind Apple, beating out rival
Microsoft for that position.
Palmisano's insistence on focusing on
higher margin technologies and investing in initiatives such as growth markets,
Smarter Planet, cloud computing and analytics have paid off.
Palmisano also committed to preserving
the notion of an IBMer. He even revisited that notion and came up with a series
of new values for the company and the IBMer: "dedication to every client's
success; innovation that matters-for our company and for the world; and trust
and personal responsibility in all relationships."
What remains to be seen is what mark Rometty
will put on the company.
"Ginni Rometty has successfully
led several of IBM's most important businesses over the past decade-from the
formation of IBM Global Business Services to the build-out of our Growth
Markets Unit," Palmisano said in a statement. "But she is more than a
superb operational executive. With every leadership role, she has strengthened
our ability to integrate IBM's capabilities for our clients. She has spurred us
to keep pace with the needs and aspirations of our clients by deepening our
expertise and industry knowledge. Ginni's long-term strategic thinking and
client focus are seen in our growth initiatives, from cloud computing and
analytics to the commercialization of Watson. She brings to the role of CEO a
unique combination of vision, client focus, unrelenting drive, and passion for
IBMers and the company's future. I know the board agrees with me that
Ginni is the ideal CEO to lead IBM into its second century."
Industry analyst Rob Enderle said, "What
is interesting is that many of us thought Steve Mills was positioned and the
heir apparent. Rometty is actually a better choice because she has moved
around the corporation more and therefore has a greater breadth of knowledge on
IBM's various businesses. She'd be weakest on software but Mills remains
as her lieutenant and his is one of the most stable and well-managed
groups. Her choice was consistent with the century-long strategy of
putting people in the job with the strongest breadth and therefore the best
chance to do it well."
Charles King, an analyst with Pund-IT,
said, "Her immediate challenges will be to keep executing on the strategy
currently in place (not always as easy as it sounds in a $100B company), and to
prepare IBM, its customers and partners for evolutionary market and IT changes
ahead. She's taking on the CEO responsibilities at a time when many of IBM's
biggest competitors (HP and Oracle, particularly) are either in some disarray
or transitioning to new business models. That should provide some breathing
room in the short term, but you can't expect them to be fumble-footed for long.
"IBM follows a far more structured
and sustainable path in training its executives for higher position, including
president and CEO," King added. "Rometty worked in roles and business
units across the company, and has deep insight and responsibilities related to
virtually every major IBM strategic effort of the past decade or more. Along
with being a terrific choice to replace Sam Palmisano, Rometty is a great
example of IBM's managerial excellence and the company's deep executive bench."
Long known for its bench, IBM has had a
tradition of rotating top executives into and out of different positions in the
various company business units to immerse them in the company.