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The three areas of complexity that IBM faced during its reorganization were related to its customers, technology, and employees. Given IBM's wide range of offerings, it could serve any type of organization on the planet, which led to a lack of clear customer segmentation. The rapidly changing technology industry of the early 1990s also posed a challenge, as new technologies brought new competitors and standards. Lastly, managing IBM's hundreds of thousands of employees, all of whom were smart, opinionated, and highly educated professionals, added another layer of complexity.
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Attempting to reorganize any company is a gigantic feat, but even more so in the case of IBM due to its complexity. Three areas of complexity were at play: customers, technology, and employees. Given IBM's offerings, it could serve any type of organization on the planet, from startups and corporations to non-governmental organizations and schools. There was no clear customer segmentation. Also, given the fact that it was a technology company in the early 1990s, it was operating in an industry that was constantly changing. As new technology popped up, new competitors and standards did too. And lastly, IBM was complex with regard to its employees. While most companies have a corporate headquarters that gives direction to distributed locations like franchises, retail stores, or factories, all of IBM's hundreds of thousands of employees were smart, opinionated, and highly educated professionals.
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Learn from one of the best turnaround leaders of our time, Lou Gerstner of IBM. Take a page from Gerstner’s playbook on how to reinvigorate a quickly...
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