Rear View From Chairman Lou

Could Lou Gerstner and only Lou Gerstner have saved IBM? And was the only way of saving the company to keep it intact instead of breaking it up? Well never know, but its tempting to speculate as Gerstner cruises the country on a victory lap in the form of a book tour.

His tome, “Who Says Elephants Cant Dance?” is worthwhile, but forget the title. Anyone who has visited a circus knows elephants can dance. Calling the old IBM an elephant is an undeserved compliment. A better title might have been “Can Dinosaurs Escape the La Brea Tar Pits of Their Own Incompetence?”

While someone from outside had to be brought in, it didnt have to be Gerstner, and other remedies could have been applied. While Gerstner dismisses the urge to merge as a common vice of top management and while he did avoid a single megamerger such as between Hewlett-Packard and Compaq, he did acquire plenty of companies, including Lotus, Tivoli, PricewaterhouseCoopers consulting business, Informix and now Rational. His point is that he made intelligent additions, rather than trying to mask problems by buying companies. So what about Lotus? The most you can say is that IBM overpaid for a nonstrategic company but did not suffer too greatly for it.

While Gerstner declined to pull the trigger on a big-bang breakup, he did divest plenty of businesses. He sold IBM Global Network to AT&T and the Federal Systems Division to Loral, outsourced most desktop PC manufacturing, and sold the low-end chip plant and disk drive manufacturing to Hitachi. Its still one company but a very different one.

With Gerstner gone, will IBMers, lemminglike, resume their dash to the sea? Or will they fully restore IBM to its former greatness? Gerstner says IBM still is not achieving its full potential. But what would that look like? In two decades, Ive yet to see it, and Im not sure Id want to. It might be scary.

After Lou, what will happen to Big Blue? Tell me at stan_gibson@ziffdavis.com.