You don't hear much about IBM these days, or I least I don't, which means I tend to forget that they are one of the powers-that-be. Iowa Andy prompts me occasionally with links to Bob Cringely, who writes about computers. I excerpted this bit from a story about how the IBM PC came into being. I suppose some people enjoy working at IBM. To me, it sounds like a horror story. Excerpted from
Accidental Empires, Chapter 7 — All IBM Stories are True, February 28, 2013.
With annual sales around $60 billion, IBM has a greater gross national product than most countries. It has a relatively stable population of around 380,000 workers. Throw in the spouses and their 1.8 kids each, and we’re looking at more than a million citizens of IBM.
Demographically, IBM is most like Kuwait, but temperamentally IBM is Switzerland. Like Switzerland, IBM is conservative, a little dull, slow to change, yet prosperous. Both countries are in the habit of taking in more money than they give out. Both countries learn slowly and adapt at their own pace. Switzerland and IBM can survive anything, or at least think they can. They may be slow, but don’t mess with them, because they will fight to keep what is theirs. And if pushed, they’ll fight dirty.
Like Switzerland, IBM is landlocked, though Big Blue’s barriers are regulation and internal rivalries, not geography. Instead of facing Austria, France, Germany, Italy, and Liechtenstein on its borders, IBM is surrounded by U.S. antitrust laws and a 1956 consent decree that somewhat limits its ability to wreak havoc upon the land. Even more limiting is the rivalry between IBM’s different computer divisions, each protecting its turf from incursions by the others. IBM’s mainframe division worries as much about competition from the top end of the company’s own minicomputer line as it does from any outside competitor. And there is no law or consent decree limiting the amount of infighting that can go on within the company.
The citizens of IBM didn’t invent the computer. They don’t make the most powerful computers either. The citizens of IBM just make more computers than anybody else. So just as Levis define blue jeans to a world that somehow survived Gloria Van-derbilt, IBM defines computers.
IBM computers don’t stand apart, but IBM people do. Of all the companies I’ve dealt with, the only two whose people consistently present a common front, a kind of unique company style, are those from IBM and Procter & Gamble. This comes from their hiring practices, the way they indoctrinate their workers, and the fact that both companies have had official songbooks. There must be something very unifying about getting together with a thousand other folks at a sales meeting in New York or Cincinnati and singing your guts out in praise of the Old Man.
The men and women of IBM have their own language and stick to it. A minicomputer is a mid-range system. A monitor is a display. A hard disk drive—a data storage device that has one or several magnetic platters and spins continuously at 3,600 rpm— is for some reason called a fixed disk, although it isn’t fixed at all. Sticking to these terms preserves the illusion that IBM’s $800 display is somehow different from Samsung’s $349 monitor or that IBM’s fixed disk drive, made under contract by Seagate, is somehow superior to the exact same drive sold for half price under the Seagate brand.
Like Rolex or Gucci, the people of IBM know that they are not really selling computers at all but the IBM name.
IBM people are a little smug, a little slow, and slightly overweight. Most IBMers are hired straight out of school and have never worked for another company. They are folks who drive Buick Regals and take them to the car wash every Saturday morning, paying extra to get the hot wax. Their contented middle-class style bugs the hell out of Silicon Valley entrepreneur types, who want to do business with IBM and yet can’t understand that there are folks in the world—even in the world of computers—who aren’t, like them, madly driven to have a fortune and a Ferrari before their midlife crisis.
IBMers aren’t in the business to become millionaires. How can they? These people are not sitting on stock options in some start-up, waiting for their penny shares to go public at $8. They work for a company that went public more than sixty years ago —the quintessential blue chip. Even IBM salespeople, who work on commission, selling computers that can cost millions of dollars, have carefully set quotas that effectively limit their earning potential.
Ross Perot, founder of Electronic Data Systems, was one IBM salesman who got fed up and left the company when he filled his sales quota for the entire year before the end of January and knew that he wouldn’t be allowed to sell any more computers—or earn any more money—for eleven more months.
The people of IBM don’t need to be rich. They either want the security of working for a company that will employ them for life, offering fringe benefits beyond those of any welfare state, or they want the sheer power that comes from eventually working up into the stratospheric reaches of the most powerful company on earth. Money and power are not synonymous at IBM, where power is preferred.
The price of both prosperity and power is compliance with the rules and the pace of IBM. The rules say that you go where the company asks you to go, do what the company asks you to do, and don’t talk about work with strangers. There is a class of company that won’t tolerate different behavior, and those companies sometimes suffer for it. IBM is like that. The pace is slow because it takes time to get 760,000 legs marching together.
Every IBM employee’s ambition is apparently to become a manager, and the company helps them out in this area by making management the company’s single biggest business. IBM executives don’t design products and write software; they manage the design and writing of software. They go to meetings. So much effort, in fact, is put into managing all the managers who are managing things that hardly anyone is left over to do the real work. This means that most IBM hardware and nearly all IBM software is written or designed by the lowest level of people in the company—trainees. Everyone else is too busy going to meetings, managing, or learning to be a manager, so there is little chance to include any of their technical expertise in IBM products.
Go back and read that last paragraph over again, because that’s why IBM products often aren’t very competitive.
IBM has layers and layers of management to check and verify each decision as it is made and amended. The safety net is so big at IBM that it is hard to make a bad decision. In fact, it is hard to make any decision at all, which turns out to be the company’s greatest problem and the source of its ultimate downfall (remember, you read it here first).
Except at the very highest positions in IBM, this corporate support system produces a class of executives with bovine, cud-chewing dispositions, who think only on command and typically rely on the company to tell them what to do and when to do it. Before beginning each new assignment, for example, IBM people are thoroughly briefed with all the information the company believes they will need to know in order to do their new job. The briefings are so complete that most IBM people don’t bother to do any outside reading or research of their own. If IBM marketing executives know how their personal computers compare with the competition’s, it is nearly always through their briefing books and hardly ever by actually using the other guy’s hardware—or even their own.
And at the top of IBM, where synapses do pop on occasion, and brain activity is usually, though not always, measurable, nearly all of that activity goes into playing corporate political games, as though competitors and even the global computer market didn’t exist.
It was corporate infighting, in fact, that finally made entry into the microcomputer market so attractive to IBMers grown tired of slugging out the next point of mainframe market share while at the same time engaging in internecine warfare with other company divisions. In the microcomputer business, there looked to be no divisional rivalries to worry about, no antitrust considerations, and, most imponant, the customers were all new, fresh meat, having never before felt the firm handshake of an IBM salesrep. Every sales dollar brought in to buy a microcomputer would be a dollar that would not otherwise have come to IBM. There was something pure about that, and the IBM executives who led the company’s assault on the microcomputer market knew that success on this new battlefield could eventually lead them to the real font of power: IBM worldwide headquarters in Armonk, New York.I was never "madly driven to have a fortune and a Ferrari before" my midlife crisis. Oh, it would have been nice, but I was more interested in finding in something interesting to do than in making money, though working less for more money was attractive. The portion of Intel I experienced suffered from an overabundance of meetings while I was there. On one hand it tended to keep the manager types occupied and out of my hair, on the other my failure to participate eventually caused me to be shunted to the sidelines. Just as well, meetings bore me to tears.
P.S. Bill Gates didn't do it all on his own. He came from money.