IBM's Rometty Delivers in First Public Speech as CEO

 
 
By Darryl K. Taft  |  Posted 2013-03-08
 
 
 

IBM's Rometty Delivers in First Public Speech as CEO


IBM’s Ginni Rometty gave her first public speech since becoming CEO last year and she totally delivered. Not to say I was surprised; I wasn’t.

Turned out in all black and subtly accessorized – to a T – Rometty did IBM proud, speaking for IBMers worldwide, chanting the company’s core values as eagerly and sincerely as an eagle scout would quote the scout’s oath. “Dedication to every client's success; Innovation that matters, for our company and for the world; and Trust and personal responsibility in all relationships,” she said at one point, quoting the company’s core values when asked about IBM’s culture.

In her  March 7 appearance at the Council on Foreign Relations (CFR) Rometty noted that IBM is one of the few companies in the world where the employees are universally known by the company name and wear the badge proudly. “They’re called IBMers,” she said. The company’s refocused values came after a 2003 “Values-Jam” initiated by then CEO Sam Palmisano, who called the IBMer the company’s greatest innovation. “"IBM has reinvented itself many times,” he said during his tenure. “But through it all, its DNA, its soul remained intact... IBM's most important innovation wasn't a technology or management system. Its revolutionary idea was to define and run a company by a set of strongly held beliefs."

Rometty carries that torch forward and so obviously holds that IBM DNA. For those of us who have observed the company for any amount of time, it’s no surprise that Rometty took the helm and has made a seamless transition into leadership. An un-kept secret about IBM is that it grooms its execs for leadership – both internally and elsewhere. And as it is the case in sports, at IBM it’s next person up. Your number is called and you go in and run the plays and make things happen.

However, Rometty is not just any interchangeable part. She is a true leader. And she “led” her way to the top – heading IBM Sales, Marketing and Strategy, establishing IBM’s Growth Markets organization (which is a winner for big Blue) and leading IBM’s successful integration of PricewaterhouseCoopers Consulting, among other things.

I was at a dinner recently where when asked what difference Rometty has brought to IBM thus far, the ranking IBMer at the table said he felt it was a stronger focus on the customer. I’m not so sure it’s any stronger, but it may be more nuanced. For instance, Rometty has made it plain that the new target for IBM is the chief marketing officer (CMO) or whatever that role is identified as in enterprises. Her first event as CEO was a symposium for CIOs and CMOs. And IBM has identified the CMO as a major target.

The CMO is a ripe opportunity for IBM and its thousands of business partners, said Jon Iwata, senior vice president of marketing and communications at IBM, noting that although the average tenure of a CMO in the U.S. is about 20 months, $1.5 trillion was spent on marketing and communications in 2011.

IBM's Rometty Delivers in First Public Speech as CEO


Marketing budgets are expected to grow about 8 percent in the next 12 months, which is two to three times that of IT budgets, and CMOs owned or influenced $148 billion in IT-related spending in 2012, Iwata said. That’s a lot of opportunity that IBM is targeting. Big Blue, however, is not going after that big piece of the pie on its own. I just spent time at the Adobe Summit, the company’s digital marketing conference, and the folks that brought you Flash and Photoshop are making a big play for those marketing dollars as well. And they have a different mix of skills and approach that is likely to appeal to some over others.

Although in her “speech” Rometty spelled out IBM’s approach, not just to marketing, but overall. “We are an enterprise company and that’s a choice,” she said. “We choose to work with enterprises, not consumers.”

Anyone who knows me knows I’m a proud Baltimorean, so I liked Palmisano – also a proud Baltimorean (just ask him). I can’t say that I knew him, nor would I claim anything more than having been born in the same neck of the woods. I wouldn’t begin to try to glom onto his world -- the man bought a crib up in Kennebunkport, Maine, next to the Bushes for goodness sake. But he also is the son of an auto mechanic. He went to Calvert Hall, a Catholic boys’ school known in Baltimore for its academics, culture and athletics. My son went to a competing school. So I know that mentality. I know where he came from. I know folks from his era and graduating class. My buddy Mike Curreri, an attorney turned tech CEO, graduated from Calvert Hall with Palmisano and remembers him as an all-around good guy with a quick laugh, a kind word and a brilliant smile. Hard work got him into The Johns Hopkins University, from which he graduated to become a salesman at IBM rather than a pro football player or professional saxophonist.

Palmisano counts among his friends numerous philanthropists, dignitaries and luminaries, including New York City Mayor Michael Bloomberg, also a Johns Hopkins alum -- where the school of public health bears his name. Bloomberg’s philanthropy has helped my hometown. He recently gave his alma mater $350 million just because – this after already donating $120 million last year to help build the new Hopkins hospital. In total, Bloomberg has donated more than $1.1 billion to Johns Hopkins, a standout institution certainly in Baltimore, but also the world. That makes him the largest living donor to an educational institution in the history of America. He is like Carnegie, like Mellon, like Stanford.

So, yes, I could identify with Palmisano, a man who holds the respect of a Michael Bloomberg and countless others. I liked Palmisano because he was a living example of what you can become through hard work, diligence and the right opportunities. I could point to him and tell kids in B’more this can be you. He came up right here.

IBM's Rometty Delivers in First Public Speech as CEO


But, that tangent aside, this is about Ginni. I was a Palmisano guy. And after watching how he transformed IBM and worked magic with not only the nearly half a million employees but also with IBM customers around the world – many of whom he knew personally – I was wondering who could rightly replace him. Well, Ginni is showing that she can carry it forward. No, one public speech does not a miracle make. Yet, it’s not just the speech; it’s the fact that she came up through the ranks watching and learning the IBM way, realizing the importance of the client, the responsibility to the shareholder and the value of the employee. Of course, many will argue that point.

On another occasion I lifted a line from Ne-Yo’sMiss Independent,” where when it was becoming clear Ginni was next in line for the head of the company, I said “She walk like a boss, talk like a boss…” At the Council on Foreign Relations she did just that. Though her interviewer, Richard Haass, president of the CFR, was pretty well prepared and obviously a seasoned, erudite guy, he was clearly overmatched by Ginni. After all it was her world – the world of Watson, big data, cloud, social, mobile and analytics -- the world where IBM is investing heavily.

In the end the CFR meeting was something of a love fest, with Haass as well as members of the audience asking Rometty some insightful questions, but also teeing up some fat, juicy ones that she could hit hard and drive deep.

“What keeps you up at night,” Haass asked.

“What keeps me up at night?” Rometty said, “In this industry innovation commoditizes. The biggest thing to fear in this business is you miss a shift.” She meant a shift in the way of doing things, an era, a phase. Rometty then described how IBM led in the era of the mainframe, but then lagged when the client/server era came around and the company almost lost its way and went under. However, IBM caught on big again in the era of the web and was on time in seeing the opportunity provided by open source, and is now a leader in the new wave of big data analytics and is making strong strides in social, cloud and mobile.

As Rometty responded to all manner of questions, I found myself nodding along, saying “that’s right” and “go ‘head on!” She didn’t miss a trick. She didn’t cheese for the camera or strike a pose of false humility or joke around like some would. She was sharp, cordial and ready for business, but also fun and engaging. She had an answer for every question and didn’t dodge anything, even citing the issue of “nation state-sponsored” cyber attacks, when IBM has major customers in China, which has been accused of sponsoring cyber attacks against the U.S. government and corporations.

Perhaps one of the more salient things she said – for me – was that one of the best things for any company to be able to do is to merge their business goals with corporate social responsibility. Despite some fallbacks, IBM has been doing that for some time and the hope is it will continue to do so under Rometty.

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