Sam Palmisano and the Future of IBM's Leadership

At a recent IBM event on leadership, company CEO Sam Palmisano showed why he is in charge and gave some indication of what to look for in his successor.

NEW YORK-At a summit on leadership, IBM's Sam Palmisano demonstrated why he is in charge of one of the most powerful technology companies, if not companies overall, in the world.

Palmisano opened a two-day conference known as the THINK Forum, or "A Forum on the Future of Leadership," by delivering a President Obama-like speech on what it takes to lead in the brave, new, highly instrumented, interconnected and intelligent world of devices and sensors in everything from roadways to buildings to bridges and a lot more.

With the United Nations General Assembly in town and both President Obama and First Lady Michele Obama roaming around Manhattan on separate missions, further snarling an already taxed and rain-soaked traffic grid with their security caravans, Palmisano enlisted attendees to sit down and prepare for a good show. Palmisano showed that he is part pitchman, part salesman, part diplomat and quite obviously a leader.

Palmisano literally had the crowd eating out of his hands as he introduced luminary after luminary. And he introduce them each as though they were personal friends in addition to being IBM clients, partners and leaders in their respective fields.

The conference convened more than 700 emerging leaders from government, business, academia and science from around the globe. It should have been dubbed "Sam gets together with 700 of his friends." With the UN in town, several high-ranking foreign dignitaries appeared. I was half expecting President Obama or at least the first lady to show up for a cameo, what with all the security and everybody else who dropped by.

A loose list of some of the luminaries that addressed the crowd at IBM's two-day THINK event included: Sir Howard Stringer, chairman, CEO and president, Sony; Professor Hirotaka Takeuchi, professor of Management Practice, Harvard Business School, and Professor Emeritus, Hitotsubashi University; Jamie Dimon, chairman and CEO, JPMorgan Chase & Co.; Dr. Victor K. Fung, Group chairman, Li & Fung Limited; Jim McNerney, chairman, president and CEO, The Boeing Company; Dr. Fareed Zakaria, CNN host, Fareed Zakaria GPS; Editor-at-Large, TIME; columnist, The Washington Post; and author; Thomas L. Friedman, Foreign Affairs columnist, The New York Times, and author; Pascal Lamy, director-general, World Trade Organization; Andrew N. Liveris, president, chairman and CEO, The Dow Chemical Company; Sunil Bharti Mittal, chairman and Group CEO, Bharti Enterprises Limited; Her Excellency Laura Chinchilla-Miranda, President, Republic of Costa Rica; Ellen Kullman, chairman and CEO, DuPont; Charlie Rose, executive editor and anchor, Charlie Rose; Joichi Ito, director, MIT Media Lab, Massachusetts Institute of Technology; Tina Ju, founding and managing Partner, Kleiner Perkins Caufield & Byers, China; His majesty King Abdullah II Al Hussein, King, Hashemite Kingdom of Jordan; His Excellency Felipe Calderon Hinojosa, President, Mexico; His Excellency Benigno "Noynoy" Aquino III, President, The Philippines; and Michael Bloomberg, Mayor, City of New York, to name a few.

In addition, on the first day of the THINK Forum all of IBM's senior vice presidents were in attendance, all sitting together in solidarity and support for the cause and for their leader. The perceived forerunners to replace Palmisano when he steps down were in attendance, including Rodney C. Adkins and Virginia M. "Ginni" Rometty. According to some IBM observers and various reports, Rometty appears to be the frontrunner to become IBM's next CEO. Rometty has been showcased at major IBM events, such as the company's Centennial Celebration in June and also at the THINK Forum where she introduced IBM's increased focus on its Corporate Service Corps and how it applies to IBM's leadership agenda.

Rometty also essentially shadowed Palmisano at the event. She brought to mind pop singer Ne-Yo's song, "Miss Independent," in that he says: "She walk like a boss, talk like a boss..." And "She made for a boss, only a boss. Anything less she telling them to get lost..." It is clear, Rometty, like all the IBM senior VPs, bleeds blue.

But it is also pretty clear that Palmisano, having reached the magic age of 60 when IBM CEOs are typically supposed to step down, is not going anywhere - at least not in the very near term.  Palmisano is right at home where it counts most for Big Blue: Mixing it up with IBM customers. He shared tales of learning personal responsibility as a second-generation Italian immigrant growing up in Baltimore. And he translates how those lessons shape his thinking about IBM as a corporate entity with responsibilities and obligations to its clients.

Moreover, his remarks at the THINK Forum are telling. He spoke of how many companies find it easy to stick with the things that made them successful rather than to adapt and change, as IBM has done over its 100 years in existence.

"History is a bone pile of enterprises, cities and societies that had great first acts, but were unable to achieve a second. Why? In most cases it is because they couldn't break their emotional attachment to what had brought them success in the first place."

Palmisano said leaders of today and of the future have to contend with the realities of global integration and of the new networked world, including the Internet of Things.

All of this is generating vast stores of information, he said. "It is estimated that there will be 44 times as much data and content coming over the next decade...reaching 35 zettabytes in 2020." A zettabyte is a 1 followed by 21 zeros, he said. "And thanks to advanced computation and analytics, we can now make sense of that data in something like real time," Palmisano said. "This enables very different kinds of insight, foresight and decision-making."

But perhaps most telling about Palmisano's leadership style is his willingness to collaborate.

He said one key to success for leaders is "to see yourself not only as a fierce competitor, but also as a broad collaborator. Don't get me wrong: Competition is essential as a spur to innovation. But in a world of increasingly interdependent systems...the Wild West of competition needs to be complemented by far more collaboration across old boundaries. Across academic disciplines, and industries, and nations, and even among competitors."

Perhaps that has something to do with why IBM has been able to supplant Microsoft as the second-most valuable tech company behind Apple. As of September 30, IBM had a market capitalization of around $214 billion and Microsoft had one of $213.2 billion. Apple's market cap is $362.1 billion.

Meanwhile, harking back to IBM founder Thomas J. Watson, but also making a point relevant to his own situation, Palmisano said, "How does an organization outlive its founder? We've learned that you should never confuse charisma for leadership. The first job of a leader is to enable the organization to succeed without him or her...and the key to that is to deliberately build a sustainable culture.'

Watson built that way of thinking when he developed the IBM culture way back when. Palmisano is just carrying on the tradition as he prepares to pass the torch.